INVENTORY VALUE

[FixedManager]

I'll dumb it down for you:

1) Never, ever, ever change cost on a part.
2) I/O is never to be used with a factory part or stocking items.
3) All parts that go over the counter need to have a bill (even credits).
4) All parts belong in a proper bin location.

Most DMS's will allow you to turn off I/O but it creates more work for the Parts Manager or Inventory Control Clerk. The $37.00 is nice but it only means the on-hand count values were even, the real test is the GL to Parts Inventory values (Pad to us old guys). I would be shocked if you came back and told us your GL variance was at or below the guide of 1.00%.

I would recommend a meeting to discuss the four inventory rules with all Parts Associates. Consider having a printed memo to document this and have all sign it. If they still do not follow departmental policy write them up while asking if they need more training on the subject. I agree with the aforementioned advice and by the third write-up it will be clear they do not wish to comply and termination should occur. If this occurs you will find others in the department rush to comply with the rules when they see the consequences of not doing so.

[Mike Nicholes]

Common problem; common solution; it is two fold. First: get in the habit of counting the fastest moving numbers (200-300) by location monthly. If the count in the bin matches the count on the shelf your inventory is physically secure. Second: go to www.partsconsulting.com, downloads and download the reconciliation and the key to understanding the reconciliation; it is free and no email addresses are captured to harass you with mail you don't want. this form and the explanation is the accounting side of the monthly reconciliation; the parts manager does the top part; the office manager does the bottom part and then you know if, or if not, there is a problem. Annual physical inventories are usually demanded by the dealership's CPA for tax purposes; the problem with an annual physical is it is "annual" and from there you don't really know much until a year later. Questions on this process: miknik@aol.com

Mike Nicholes