Inventory & Purchasing

About the Course

Often times an organization may not realize the impact of not having the proper amounts of parts and supplies in the correct locations as well as the amount of waste due to obsolete inventory. Many times the impact of inefficiencies in these areas can be in the hundreds of thousands of dollars! While we expect that approximately 10 – 12% of service calls may involve hold for parts returns, we must also realize that when the percentages rise above these numbers we are effectively doubling the cost of labor on these calls as well as potentially reducing customer satisfaction. As populations change we must know which items in both parts and supplies must be ramped up to maintain adequate inventory levels. Conversely we must also know which items need lesser quantities to avoid obsolescence. The result of obsolete inventory is all too often simply throwing the items away and taking a loss.   In essence, your service department’s success depends on having the right stock in the right place at the right time. The two parts of the organization are effectively joined at the hip and have a direct effect on profitability. Not enough inventory causes hold for parts calls while excess risks obsolescence. It is truly a balancing act that must be monitored closely. We have seen many time where full time technicians address nothing but hold for parts calls at a cost of hundreds of thousands of dollars a year.   

Course Topics

  • The impact of inventory inefficiencies on the organization 
  • Reports needed for proper monitoring of inventory efficiency 
  • Inventory Turns What is it, how is it calculated What good looks and what is BAD looks like Reordering from vendors How often & how much, how to reduce the need of overnight freight 
  • Restocking technicians 
  • What should each of them have and how much 
  • How often should we restock inventory 
  • How often should we cull out inventory 
  • Planning for obsolescence 
  • Finiancally reserving for write offs 
  • Using BEI’s AIM program to determine levels 
  • Setup of the ERP system 
  • Creating and updating information in the ERP 
  • Minimizing obsolescence in both parts and supplies 
  • Choosing the best Aftermarket Supplier
  • Purchasing discounted items & Selling non-used items from inventory 
  • Conducting inventories How often should they be conducted 
  • Warehouses and Technicians 
  • Acceptable standards for variances 
  • The impact of said variances on purchasing and restocking 
  • Developing an Action Plan for logistics optimization