After owning my Chevy dealership for only a couple of months (purchased after I retired from the corporate world), I had my parts department staff take a complete inventory. Much to my surprise and dismay, there had been significant slippage in the total inventory value. It was worth quite a bit less than it should have been.

A few months earlier, during the process of buying the dealership, I had arranged for some auto parts professionals (parts department personnel from a couple of nearby Chevy dealers) to do a complete inventory of the parts department. I wanted to know exactly what I was paying for. It proved to be a good thing, too, as the actual value of the inventory was considerably less than what the selling dealer had listed on his books. And we learned there were a number of obsolete and slow-moving parts that the pros recommended I not only exclude from the dealership overall purchase price, but consider pitching out. Based on their input and reduced parts inventory value, the overall purchase price of the dealership was reduced to reflect this difference.

Now, just a few months later, the inventory value was again dramatically lower. Furthering my concerns, the parts manager reported in a staff meeting that when he or his team would go to pull some parts for over-the-counter sales or in-house service work, sometimes the items were not there even though the computer listed them as available. I decided then to start a quiet but intense investigation to see why the parts inventory dollars were not what they should be and why parts were missing when the computer inventory showed them in stock. Continue reading Keep Your Parts Inventory Safe →