February '19

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50 • RV PRO • February 2019 rv-pro.com B U S I N E S S named PAIRS (Parts & Accounting Inventory Reconciliation System). To document each of the many proce- dures contained in PAIRS, I created a PAIRS manual. One of the procedures documented in the PAIRS manual relates to another essential process that could ensure an accurate P&A inventory and this is … supplier data updates. Supplier Data Updates Most suppliers of goods will pro- vide periodic updates to their catalogs. These updates could be via paper or dig- ital media and the frequency of updates offered could range from daily to yearly. I suggest that for each of your primary suppliers, you determine the: • Frequency of data updates • Method of providing those updates • Data that is provided in these updates and • Party responsible for processing the updates The most common bits of data that are provided in supplier updates are: • Item cost • Superseded information • Stock status – current, pending obsolete, obsolete • Suggested selling price and • Package quantity Regardless of what information is updated, it is important that you implement a procedure to apply that updated information to your database and, to report any cost changes to your accounting manager so adjustments to the general ledger can be processed. If you don't advise accounting of cost changes, then the equivalency of the accounting value and of the inventory value for the P&A inventory will most likely decrease in accuracy. These three essential inventory man- agement processes combine to enhance the fourth essential process which is … what and how much to stock. What & How Much to Stock By maintaining an accurate, current value of your P&A inventory, your parts manager enhances the opportunity that she can provide better service to her cus- tomers, both internal and external. Perhaps an example could explain and support my statement in the pre- vious paragraph. Having developed a cohesive, main- tained bin location system, your parts manager can easily verify the quantity on hand of each item in her P&A inven- tory. By processing each supplier's data- base updates when they are provided, she is aware of any supersessions that might impact her decisions as to what items she should be stocking and in what quantities. These database updates also could make her aware of changes to package quantities, which could impact her ordering decisions. And, having imple- mented a perpetual inventory procedure, she can be confident that the quantities reported in the DMS database are accu- rate, which impacts the efficiency of the parts associates and increases her confi- dence in the reports and the suggested orders that are generated by the DMS. Given that the DMS tracks demand of items by transaction date, yet another essential process is identified – seasonality. What Are Your Seasons? Each of you reading this column probably operates your dealership rel- ative to the four seasons of the year: spring, summer, fall and winter. How- ever, depending on the geographic loca- tion of your business, each of the four seasons might have a different impact on your operations and on the stock depth and mix of your P&A inventory. If your RV business is in Calgary, Alberta, then winter might require you to focus on maintenance and updates to your RV customers' units in prepa- ration for use of those RVs in the spring and summer. The type of and volume of goods your parts manager might decide to stock during the winter could be dif- ferent than the inventory required for other times of the year. Moving south, a dealership in Quartzite, Ariz., could be focused on maintenance supplies for RVers camped there for the winter. These supplies might include chassis items such as tires, sanitary system supplies, and pow- ertrain parts and materials such as oils and filters. By tracking all demand for P&A goods (and this includes lost sales) throughout each year, your parts man- ager can identify the seasonality within her market; and, order appropriate levels of the needed goods in preparation for each season. As it is now February, for what season should your parts manager be preparing his P&A inventory? Other Essential Processes Are there other essential processes? Yes. Some of these other essential i n ve n t o r y m a n a g e m e n t p ro c e s s e s relate to the P&A goods while others might apply to the transaction of those goods. A list of these processes could include: • Management by exception – identifying those goods that are not operating within the acceptable parameters desired by the parts manager • Gross turn tracking – evaluating the several areas of your P&A inventory to determine if each is providing a satisfactory return on investment (ROI) • Staff training – determining what training needs are required for each of your parts associates and your parts manager • Detailed written procedures (DWP) – developing a documented procedure for each process within your RV business; for each of your departments In future columns, perhaps we will address some of these other essential inventory management processes. For now, I will leave you to process the con- tents of this column.

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