Inventory management is no one’s favorite task but, thanks to digital solutions, it’s never been easier. Gone are the days of check-in/check-out sheets and those illegible post-its left on your admin team’s desk to track items down are, mercifully, a thing of the past … But is that really true? Let’s sit down and see a few parts inventory management best practices!
Skip to what matters most to you:
1. What is spare parts inventory management?
2. The benefits of a good parts inventory management strategy
3. Best practices for keeping track and managing parts inventory
4. The takeaway on parts inventory best practices
Turns out, one of the most popular questions we still get from our many field service clients is how to manage spare parts well. This is why we’ve put together this quick list of parts inventory management best practices. Read on to find out more!
What is spare parts inventory management?
To make sure we’re all on the same page here, we’re just going to spell it out: having a shelf at the back of the office with nuts and bolts lying loose inside boxes is not the same thing as holding inventory. If that’s your set-up, you probably don’t need an inventory management strategy just yet. This is probably the only scenario where a spreadsheet will do the jobs just as well.
However, if you have a separate room or building where you’ve centralized parts storage, you’re on the right track. At first, it might be possible to keep records accurate by having an excellent storeroom manager, but as time goes by and your stock quantities increase, you’ll find more and more errors showing up, with some of them carrying dire financial consequences.
The benefits of a good parts inventory management strategy
Understanding your inventory flow (what type and how many parts are most likely to be necessary at a certain time of the year) will empower you to negotiate contracts with vendors who may give you access to more advantageous prices and, finally, economies of scale. For all that, you do need a trade service inventory management system.
Best practices for keeping track and managing parts inventory
1. Hire a storeroom manager
At the very least, make sure there is a designated, dedicated person acting as one. If anyone can waltz into the storeroom or warehouse and take out whatever they want with little more than a post-it left on the counter, then you’re not onto a great start with your inventory management strategy.
2. Record the items in your system regularly
Preferably, record them as soon as a delivery truck arrives. The easiest way is to have a barcode scanner that connects to your inventory management system. This way, your admin doesn’t put off recording items because it’s too much of a hassle to input every reference number manually into a spreadsheet or – worse – in a notebook.
3. Create reports regularly
Good inventory management practices are worth their while because this is typically where a lot of companies leak money. Therefore, plugging those leaks is an opportunity for good managers to secure additional profits. Regular reports point out potential issues before they become real problems. Additionally, comparing reports helps create statistics which, in turn, lead to forecasts that can save you from under or overstocking your inventory, both of which are expensive situations to find yourself in.
4. Integrate your inventory system with your other management tools
Keep things smooth by building an inventory management system that plays well with your business management tools, such as your scheduling system or your accounting software. Otherwise, your admin team will be stuck inputting inventory information every time they need to create an invoice or attach spare parts to a work order.
5. Stay in touch with suppliers and keep an eye on purchase orders
One of the best practices for parts inventory management is to integrate purchase orders with your stock levels and put in place notifications that let you know when an item is low in stock so that you can send off a PO to your preferred supplier. This way, you can also show them proof of past purchases and negotiate better prices in the future. Additionally, because you ordered a part in time, the supplier doesn’t have to schedule emergency deliveries, which makes for a happy business relationship, which can sometimes lead to discounts.
6. Build a system that’s accessible anywhere, anytime
More than ever, field service managers have been persuaded to consider whether a digital tool comes as a hard install or a cloud software and our advice is to always go with the latter. The option to work remotely is a great bonus when recruiting, while the peace of mind that comes with knowing that no matter what happens to the physical office or wherever your employees happen to be, they can easily access their inventory information and keep the business running.
Additionally, inventory is one of those things (like scheduling) that you really want to update in real-time so that everyone has the same information.
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7. Account for the fact that you might have multiple storage units at some point
Whenever you invest in a new tool, it’s important to consider if it will help your business in the future, as well as right now. Future-proofing is a great way to ensure you keep growing rather than start stagnating or having to buy a different inventory management tool in 6 months’ time.
Also, let’s be honest here, your trucks will, inevitably, become mini-warehouses at some point, no matter how tidy your technicians are so you might as well account for it from the get-go and invest in an inventory management tool that accommodates multi-location storage.
The takeaway on parts inventory management best practices
It’s easy to get so caught up in the details of trades service inventory management that you forget the purpose behind it all: Serving your customer so well that they come back to you again and again. Faster service, better prices thanks to friendly suppliers, and more accurate invoices are all benefits that make customers happy.
If you’d like to see which solution is the best for you, download the checklist below. You’ll find a list of 7 must-have features your solution should have. Don’t jump the gun on a software if it doesn’t tick all the boxes!