DealersEdge Professional Forums

Is there an "industry standard" to how many times your inventory should turn? We are a small,single line dealer. We've got 300K on the shelf and turn about 8 times.

If you are getting (8) Shelf Turns, you're doing a Great Job! Just make sure you are measuring "Shelf Turns" correctly!
Garry House
NCM Consulting Division

$300,000.00 inventory turning 8 times a year calculates to over 2million a year at cost.
if this is correct, you are not such a small dealer that you think you are.
industry standards are 4-6 gross turns a year, and 3-5 true turns per year.
Months of supply is 1.5-3.0 annually.

Bohl has the right figures for benchmark standards and Gary has the right idea for making sure "off the shelf" is being calculated correctly.

Gross turns of 8 times could be skewed if you have a few parts with large quantities making the lion's share of the sales.

The best way to really make sure your turns are at a true 8 turns is to look at your excess inventory and the total days supply you have on the shelf. If you have a 55 to 60 day supply of parts and no obsolescence and your turning your inventory 8 times annually your in a class of elite managers..

Speaking form the service side, 8 true turns is a great job. However, I would probably think your service department might be alittle unhappy because of excess parts ordering. But if your service department is happy, and your CSI is good, then congratulations is in order for a outstanding job.
Mike White

[This message has been edited by Michael White (edited 07-20-99).]