If you have your own business and it requires product and order management, you know that stock management can become a real headache.
Discover the 5 most recommended workshop stock management practices that will help you maintain a smooth workflow.
Stock management: 5 practical tips for auto workshops
Whether you already have a structure in place or you’re preparing to open a workshop, there are some stock management practices that will put you on the right path. Retailers, workshop owners, suppliers… almost all entrepreneurs and companies can benefit from the stock management tips we are going to present to you.
Start taking notes:
1. Prioritize inventory
Sorting your stock into groups can help you understand what you need the most, how often you need it and what products are the most important to your auto workshop.
Generally, experts suggest the “ABC Curve” – a way to classify the inventory in groups, from the most important products to those that are less important. According to this classification, 20% of the items are considered ‘A’ (and correspond to 65% of the annual orders value), 30% of the items are considered ‘B’ (25% of the annual orders value) and 50% of the items can be classified as ‘C’ (corresponding to 10% of the annual consumption value).
Although these percentages may vary from company to company, it is important to understand that, based on this principle of stock management, a small percentage of items is responsible for a large percentage of the orders value or the company’s annual consumption – it is the Pareto’s Law.
Group A products are therefore considered to be of higher value, and of which you will need a smaller stock; Group C products are usually the cheapest and whose stock tends to run out quickly; Group B products are those that are moderately priced and are consumed slower than products from group C, but quicker than products from group A.
2. Focus on stock quantities
The best way to identify the amount of stock you need is to keep minimum quantities stored.
The minimum stock is the nominal amount of safety stock that you want to keep on hand before restocking. This amount is never fixed and must be adjusted according to the circumstances.
The goal is to find the ideal stock balance – in which you have the lowest possible quantities – to maximize the growth and profitability of your business. A healthy balance.
Stock reviews can be full of inaccuracies if performed manually on paper. One of the best ways to reduce errors and mistakes is by automating your stock management processes. You should invest in a good software that controls everything for you. You will be able to keep a record of all products, categorize them, count the available quantity and transfer them to other places. In addition, depending on the program, you will also be able to place new orders with your suppliers in order to easily replenish your stock.
3. Consult the stock in real time
In order to do good stock management, you should make sure that you keep a record of the product information. The information must include SKUs (Stock Keeping Unit), barcode, suppliers, products’ quantity and status of the parts. You can also consider consulting the cost of each product over time to control factors that can alter its price, such as the fact that product is no longer a trend or even that there’s a new or improved version on the market.
Consulting your products in real time through a good stock management software allows your workshop to update the system automatically, according to the products that enter and leave the company.
4. Forecast of sold out products
When you run out of stock of a product without realizing it, it can become a big problem to your company. Being able to predict when a product’s stock will be running low, helps you manage cash flow and effectively maintain regular operations.
Whether you have extra stock or you do not have enough to fulfill orders, you are losing money. This is one of the principles of stock management that must always be taken into account.
5. Use a “cloud” stock management system
Automate the stock management process as much as possible.
The most important thing you can do when it comes to managing stock is using cloud software that can do the job for you and your employees – from creating repair tickets to stock management, and more. It is a smart way to optimize work processes and keep the company growing.
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