inventory

 

inventory

I am searching for information on the benifits of owning your inventory versus consignment.  

Anonymous (not verified)
Anonymous's picture

Here's my two cents of having an outside parts vendor such as napa controlling your in-house parts operation.

First you have no obsolete parts to pay for or find ways of getting rid of them, you have no inventory to control, and since most companies are there to repair vehicles why put yourself up for failure when most are not in the parts business, let the experts control parts and inventory.

Anonymous (not verified)
Anonymous's picture

Thanks for your two cents, what process are you using or have you used to get rid of old parts?

Anonymous (not verified)
Anonymous's picture

We had a consigned inventory for many years.  Most of our purchasing is done on a credit card and we found the administrative burden of removing the part from inventory, processing the credit cards, and posting the part to the fleet management system to be overwhelming.

We went back to an owned inventory.

Anonymous (not verified)
Anonymous's picture

In the past when we owned our parts inventory we would try and get the vendor that we had purchased the parts from to buy-back inventory, usually they would not or if they would it would be penny's on the dollar, another way was to just take a loss and sell parts at an auction that we would host and still you get very little return on the dollar.

Thats one reason we went with an in-house vendor, we went out for bids and NAPA won the bid and that was 10 years ago.

Anonymous (not verified)
Anonymous's picture

I have done inventory both ways but found owning it to be the most cost effective.  Consignment doesn't mean free.  The supplier still has a carry cost that he passes on to you whether it is done overtly or covertly.  It is true that you do have to manage the inventory processes, but with most software systems that is fairly easy to do using turn ratio and slow turn parts reports.