High parts inventory? Low parts availability?
Inventory is at the heart of every successful aftermarket parts and service business and if your business is carrying too much inventory, then this is not the kind of problem that happens overnight. If it did, it’s highly likely that you’d know what caused it and could therefore eliminate it just as quickly. So if you’re struggling to understand what is causing your inventory problems and/or struggling to reduce it fast enough, the chances are that it is caused by a combination of factors and that you have a number of related symptoms too.
It’s much the same as if you were overweight – you didn’t get that way just by eating one big meal – you got that way by buying the wrong foods, eating the wrong things, eating too much, not exercising enough, having a sedentary job, eating too much sugar, etc. So it is with inventory.
Much like being overweight for too long can lead to poor physical health, blocked arteries and ultimately fatal consequences, high inventory usually comes with:
Too much excess and obsolete stock
Dwindling storage capacity, lack of floor space and material left out in the yard
Rapid business growth and poor inventory control
Poor parts availability and high customer backorders
Slow inventory turns and constipated cash flow
And without cash flow, the lifeblood of your business…well, you know what happens to your business next! Even if your business is not in intensive care yet, it’s best to eliminate your bad business habits before it gets to that stage.
To help aftermarket parts businesses to eliminate their bad inventory habits, convert their excess and obsolete inventory into positive cash flow and recover operational availability performance, Servispart Consulting has developed a highly effective “Parts Inventory Optimiser Programme” with a suite of diagnostic, modelling, planning and improvement features.