The key role of parts management

One of the most significant areas where workshops can improve efficiency is in parts management says MaxMyProfit business coach Ben Fewtrell.

In the fast-paced world of smash repairs, efficiency is crucial. Not only does it affect the bottom line, but it also impacts customer satisfaction. One of the most significant areas where workshops can improve efficiency is in parts management. Streamlining the process of sourcing, storing, and utilising parts can lead to faster turnaround times, reduced costs, and improved overall workflow. Here’s how to achieve it.

1 Optimised Inventory Management

Implementing an inventory management system can help workshops keep track of parts in real-time, reducing the chances of running out of regular used parts, holding on to parts you won’t use or overstocking common parts. 

This system should: Automate Orders or create order prompts: Set up automatic reordering or reminders for frequently used parts. If you specialise in certain vehicles, it could be beneficial to stock common parts that are replaced during a repair to reduce wait times. The downside is you can end up with capital tied up in parts inventory.

Track Usage: Monitor parts usage trends to give you an idea of what parts are being ordered most often. This will help you understand the flow of parts through your business and give you better control over parts management.

Minimise Waste: Identify slow-moving pre-ordered parts and phase them out, and make sure unused parts are returned for credit. This is vital to free up storage space and capital.

2 Supplier Relationships

Building strong relationships with reliable suppliers is essential. It ensures great service and competitive prices. 

Here are 3 key strategies to implement. 

• Negotiation: Regularly negotiate terms and prices to ensure the best deals. Its easy to get complacent and end up paying more than you should. You should review all supplier agreements every 90 days. 
• Diversification: Where possible, have multiple suppliers to avoid dependency on a single source.
• Partnerships: Develop partnerships with suppliers to get priority service and access to preferred pricing.

3 Streamlined Ordering Process

A streamlined ordering process can significantly reduce wastage and downtime waiting for parts. Make sure your business has a systemised approach to parts ordering. 

Where possible, use supplier online portals for quick and accurate ordering.

Consolidate orders to reduce shipping costs and streamline the receipt of goods.

4 Effective Parts Storage Solutions

Proper storage of parts can prevent damage, loss and make it easy for your team members to locate the parts ensuring they are readily available when needed.

Some areas to focus on.

• Organised Layout: Arrange parts logically and label storage areas clearly. Marking floors and creating parts bins per job may help in keeping your workshop efficient.
• Protection: Use appropriate storage solutions and policies to protect parts from damage. 
• Accessibility: Ensure parts are easily accessible to reduce the time technicians spend looking for and retrieving them.

5 Just-in-Time (JIT) Inventory

Adopting a Just-in-Time inventory approach can reduce storage costs and preserve cashflow. 

This involves:

• Demand Forecasting: Accurately forecast demand to order parts just before they are needed.
• Reliable Suppliers: Work with suppliers who can deliver quickly and reliably.
• Efficient Communication: Maintain clear communication channels with suppliers to adjust orders on the fly.

6 Technology Integration

Leveraging technology can revolutionise parts management. Some workshop management software such as iBodyshop has specific parts and inventory control add-ons, it’s well worth investing in these to help.

Barcoding and RFID: Some programs use barcoding or RFID tags to quickly identify and track parts within your workshop. This will enable technicians to access the parts database via mobile devices and locate them quickly.

Data Analytics: Utilise data analytics to gain insights into parts usage and management.

7 Training and Accountability

• Ensure your team is well-trained in parts management processes. Accountability is key to maintaining efficiency.
• Regular Training: Conduct regular training sessions on inventory and parts management best practices.
• Clear Procedures: Establish and document clear procedures for parts handling and inventory management.
• Performance Metrics: Set performance metrics (KPIs) and regularly review them to identify areas for improvement. 
• Efficient parts management is a cornerstone of a productive and profitable smash repair workshop. These steps will not only improve the speed and quality of repairs but also contribute to better financial performance and higher customer satisfaction.