successful p&a inventory management presented by: steve jones
TRANSCRIPT
SUCCESSFUL P&A INVENTORY MANAGEMENT
Presented by:
STEVE JONES
SUCCESSFUL P&A INVENTORY MANAGEMENT
WELCOME!
• Who is Steve Jones?
– Started in dealerships 100 years ago
– Worked in most dealership positions
– Rider/racer (20 years of broken bones)
– Worked for OEs as a Field Tech Advisor and a DSM
– Dealership on-site consultant and trainer
– Write column for MPN mag and edit other GSA columns & articles
– Senior Projects Manager for GSA
SUCCESSFUL P&A INVENTORY MANAGEMENT
WELCOME!
• Who is GSA?
– Powersports consulting & training company
• Dealership on-site assessments and training
• Develop training solutions for all of the major powersports manufacturers
• Conduct market research for industry clients
– Largest provider of 20-group services in the powersports industry
• Collect and analyze industry data
• Keep current with best business practices
– Over 30 years of experience in this industry
SUCCESSFUL P&A INVENTORY MANAGEMENT
Current Benchmarks (Metric)• Road Signs to Profitability
– Parts Gross Profit Margin 36%
– Accessories & Clothing Gross Profit Margin 32%
– Total P&A GP PVS $700 -800
– Personnel Exp. % of DGP 34%
SUCCESSFUL P&A INVENTORY MANAGEMENT
Benchmarks (cont’d.)
• Road Signs to Profitability
– Monthly GP $ per Employee $10K +
– % of Inventory Obsolete 15% or less
– Parts Inventory Turns 4-5
– Access. & Clothing Inv. Turns 2-3
SUCCESSFUL P&A INVENTORY MANAGEMENT
Six Steps to Reducing Losses & Improving Profits1. Stock what sells
– Categorize it so you can measure it
2. Increase efficiency
– Use bin locations
3. Reduce shrinkage & improve inventory accuracy
– Implement cycle-counting
4. Control the inventory dollars
– Implement an open-to-buy system
SUCCESSFUL P&A INVENTORY MANAGEMENT
Six Steps (cont’d.)
• Open-To-Buy Example
TOTAL INV OE PARTS CLOTHING ACCESS.
Max Inventory Level 246,000.00 74,000.00 62,000.00 110,000.00
Current Value 225,000.00 67,000.00 58,000.00 100,000.00
Add On-Order Value 15,500.00 4,500.00 5,000.00 6,000.00
Projected Value 240,500.00 71,500.00 63,000.00 106,000.00
Open to Buy 5,500.00 2,500.00 -1,000.00 4,000.00
SUCCESSFUL P&A INVENTORY MANAGEMENT
Six Steps (cont’d.)
5. Identify & control obsolescence
– Slow-movers report
– Non-movers report
– Obsolete Parts, Clothing & Accessories don’t go up in value!
• What options do you have for selling it?
• 3D: Discount it, Donate it, Dumpster it
• Turn this into fast-moving stock to increase your profitability
SUCCESSFUL P&A INVENTORY MANAGEMENT
Six Steps (cont’d.)
6. Measure it so you can manage it:
– % of inventory obsolete
– Total inventory valuation
– PC&A GP % (separate if possible)
– Total GP $ PVS
– Personnel expense % of DGP
– GP $ per employee
– PC&A inven. turn (separate if possible)
– Compare YTD with previous year
SUCCESSFUL P&A INVENTORY MANAGEMENT
Thank you!!
Contact:
Steve Jones
208-922-5995
www.gartsutton.com
