hardware

[jeff f]

I WOULD LIKE TO HAER WHAT OTHER PARTS MANAGERS DO ABOUT HARDWARE NUTS BOLTS ETC. DO YOU INVENTORY THEM AND SELL THEM TO THE SHOP ON A PER USE OR DO YOU CHARGE THEM TO SHOP SUPPLIES WHEN THEY ARE RECIEVED .I HAVE A PARTS DIRECTOR THAT INSISTS THAT THEY BE INVENTORIED AND THIS HAS BEEN A NIGHTMARE TRING TO KEEP TRACK OF THEM

[Chuck Hartle]

Hi Jeff,

You can do it both ways. The ideal way to do it is to inventory them and put them in parts. It can be a nightmare only if you let it be.

Who do you use for a hardware vendor? If you use Basics, Bowman, or Kars they have a pricing master (just like your manufacturer) that allows you to keep your pricing up to date.

By putting them in parts and accounting for them you turn a expense into an asset and you can at least make a profit on an item that used to go unaccounted for and was usually abused. You also can run a stock order yourself instead of letting the nut and bolt salesman come in and do the visual stock orders that always produced excess inventory.

Chuck Hartle'

[jeff f]

WELL I USE LAWSON AND I DO HAVE A PRICE TAPE LOADED , BUT I GUESS MY CONCEARN IS THAT I HAVE INHERITED THIS STUFF FROM PREVIOUS MANAGERS AND WE HAVE COMBINED TWO STORES TOGATHER AND NOW I HAVE 15,000. IN INVENTORY
AND AT LEAST 6000.00 OF IT SHOWS NO MOVEMENT
AND I HATE TO WRITE OFF OR THROW AWAY HARDWARE LIKE THAT BECAUSE AS SOON AS I DO IT WILL BE A NUT BOLT OR SOMTHING THAT SOME ONE NEEDS I HAVE THOUGHT ABOUT PUTTING IT ALL UNDER 1 OR TWO PART #S SO IT WOULD SHOW MOVEMENT AND LOWER MY OBSOLESENCE .I AM USING ADP SYSTEM WITH LAWSON PRICE TAPE
THANKS JEFF

[prtzmgr]

The strategy you suggested is a form of mental masterbation. You have what you have and it is what it is.
Keep the parts in inventory under individual part#s and track movement. Do what you can to get rid of truly obsolete parts.
Hardware items are just more parts to keep track of. Treat them as you would "regular" parts

[Chuck Hartle]

Jeff,

ptzmgr has the right idea. However, DO NOT treat them like other parts....

Yes, add the numbers to your system in a separate source. Set your days supply very low (5-10) days. Remember you nut and bolt inventory will move very slowly. Make you phase-in around 6 in 12. Your phase out should be somewhere around 1 in 24. If you set your phase-in on nuts and bolts to 0 in 6 or 1 in 12 you will have 80% of your nut and bolt inventory on AP status by the time you hit 7 months.

Remember how nut and bolt companies sell their products, BY THE POUND. When you sell your last 10 bolts and you reorder, the minimum quantity will be 50 or 100 and you will again have a 5 year supply.

One suggestion here is that you go through your 'hardware' and find things that no one has every used and work out a return for credit to the company. Then you can apply purchases toward the credit rather than get a refund. This will help you to eliminate the real junk and show that you are still willing to work with the company.

Good Luck,

Chuck

[jagman]

I agree that nuts and bolts should not be a
expense,however most auto parts stores don't
carry a huge amount of nuts and bolts even
ones with repair stalls.If the parts dept
is to take charge of these for service,they
should be allowed to make a profit so that
a acct can be set up to absorb write offs.it's better that charging against svc gross.also,what do you do when a tech comes up and wants 1 bolt that you don't carry?
buy q qty pack of 50 and stock them?

[Chuck Hartle]

Hi Jagman,

Let's clarify the nuts and bolts. It should be made very clear that nuts and bolts would be sourced and excluded from any normal type of sales and tracking measurements. I promise you that you will have 80% of your nut and bolt inventory obsolete by common inventory standards of 12 MNS and greater and excess inventory. While you will deal with a lot of numbers, you really are dealing with a very small investment.

We had just under $5,000 worth of Bowman hardware in our inventories which gave us 95% coverage. Of the $5,000 in hardware, over $3500 of this would be considered excess and obsolete.

Of course, you should have your hardware making a profit! In fact, we made sure to apply a generous matrix to these parts and
make a nice little profit. It also made it easy on warranty claims to show proof of the small parts.

In answer to your question of "do you buy a bolt for a tech" who needs just a single one; Where can you buy just one anyway? The hardware stores usually don't carry a strong enough grade and when we bought them from the auto parts store they weren't cheap either (they probably matrixed them to us). So, in essence, I would really try to judge if it was a standard type bolt or a odd purchase before deciding to stock them. We usually found that if it was an odd ball type of part that we could usually get the OEM part number and purchase it in much smaller quantities.

Any other questions or thoughts?

Chuck Hartle'

[Dan Daigle]

We apply the cost for hardware directly to our shop supplies account. Specialty nut and bolts and other items get put into inventory. We charge our customers a shop supplies charge on every repair order to cover the costs of these items. We collect enough in a months time to still end up with a $1500.00 credit each month. If you are billing out nuts and bolts and charging out shop supplies to the repair order aren't you double dipping. Today's customers are wiser and pay attention to what they are paying for. Don't get yourself in that situation.

[jeff f]

thats a good point DAN and we do charge shop supplies to ro,s and we have a shop ticket that we bill hardware to
thanks

[jnecci]

My thoughts on hardware are somewhat accounting/balance sheet driven. The balance sheet lists the value of the parts inventory as an asset. It increases the value of the company. The need for nuts and bolts is constant, it will never go away. I do not agonize over the perceived obsolete hardware items because we have to have them. I use Curtis Industries, they have a pricing tape to keep the prices current. I also have the Curtis Reps come in and count the inventory for us once a year. All hardware is sold by part number and tracked by the system.

Charging the hardware to an expense account or as a cost of sale to the shop materials account decreases the profitability of the company. It also shows a distorted picture of what is actually happening, showing a gross profit percentage that is actually lower than what is being achieved due to many of the items expensed not being used.