Are Your Part Numbers Costing You Money?

Chances are your parts department is leaving money on the table and doesn’t even realize it.  The majority of dealers that I have visited simply use supplier part numbers for parts in their inventory, and might even take the time to slap a barcode on the items before shoving them on a shelf somewhere.  This is the non-labor-intensive method which many dealers employ.

However, if you have the time to invest in your parts inventory, there is a better way.  Your parts department should be taking the time to create its own part numbers (which I detailed as a benefit in a prior article, “Running a Brick and Mortar Store in the Age of Amazon”).  This allows you to disguise your inventory and make it more difficult for customers to “cross-shop” your part prices, either online or with your local competitors, for a cheaper price.  If you take the time to do this correctly, it can have other benefits as well.

A competent parts system or Dealer Management System (DMS) should allow you to associate multiple suppliers with a single part number (but to be sure you will need to talk to your software provider to make sure it can support this functionality).  By taking the time to link all of your vendors’ part numbers with your own part numbers, you will simplify your inventory.  Instead of four different part numbers in your inventory for the same part, you will now have a unified number.  No longer will your parts clerk be staring at a part, wondering if it is from vendor A or vendor B before nervously keying in a part number.

On top of inventory simplification, your system should now allow you to compare prices between vendors.  A common part number linked to multiple vendors will enable you to effortlessly locate the vendor with the best deal for the given item at that time. Now your parts manager can easily tell if your primary vendor is really giving you the best price, or if there is a cheaper vendor you should be buying your parts from.

To make all of this happen, there is a price to be paid — the price in this case is time.  Your parts staff will first need to create their own parts numbering system and then apply it to their inventory. This is easier said than done as you will have to attach multiple part numbers from various vendors to a single dealer-generated part number in your inventory.

There are ways to mitigate this cost; for example, it doesn’t all need to be done at once. You can convert a few parts at a time into your dealer-generated part numbers.  Start with your high volume items and work from there.  You can also use the expertise of your parts system or DMS provider to consolidate part numbers where it is easy to establish a relationship between part numbers.

Once you’ve invested the initial time and effort to generate and apply your own part numbers, you will need to maintain them for any new parts added to your inventory.  But the payoff in savings on both the retail and supply sides should more than offset your investment.