Inventory tracking, be it for received goods or finished auto parts, is perhaps one of the most tedious and time-consuming tasks. Streaming it can significantly boost a business’s bottom line.
An inventory often includes lots of information about parts like cost, location, amount, etc. Most small and mid-sized businesses often manually enter and track this information, which is time-consuming, costly, and prone to human error.
A parts tracking system works to improve inventory efficiencies and save time. It gives businesses control over their inventory, eliminates repetitive manual tasks, and automates regular processes. Also, it works with other critical functions across a business to better understand a company’s assets and information.
Below are a few ways a parts tracking system can help businesses save money:
1. Knowledge of PAR Levels
A Parts tracking system helps businesses know the minimum amount of stock they should always have on hand to meet their customers’ needs, both current and future. Most companies refer to this as PAR levels, which means Periodic Automatic Replacement Levels. But some know it better as Replenishment Balance or Minimum Stock Level (MSL).
Knowledge of PAR levels helps a company plan ahead to ensure their parts never run out of stock. Otherwise, they will be driving their customers into the arms of their competition. A parts tracking system will alert a company whenever its current inventory levels drop to low. This way, they can stock up on the parts customers need.
2. Better Fore-casting
Most inventory decisions made by companies are based on projections for customer demands. However, demand forecasting is mostly guesswork, meaning if a business gets the projections wrong, it will most likely end up overstocking or understocking auto parts. This can be costly for the organization.
With inventory tracking software, businesses can enjoy accurate product forecasting. The system integrates with other business solutions (CRM software and sales systems) and uses machine learning and historical data of a company’s past sales to get a more accurate picture of customer demand.
Accurate demand forecasting means a company can avoid understocking or overstocking of products. As a result, they can save money and reduce costs.
3. Automatic Recording
As said earlier, parts tracking software can track stock levels in real-time, factor in lead time in new parts ordered, and identify the ideal point to re-stock products.
Businesses with multiple locations or sales channels can also use the software to track the stock levels for each location. It can also alert them when replenishing products by transferring stock from one location to another or re-ordering.
As such, companies can save money by avoiding parts shortages or overstocking. Besides that, this system can help business owners calculate EOQ (economic order quality) to ensure their businesses achieve the perfect balance between stock ordering costs and storage costs.
4. Reduces Storage Costs
Besides automatic recording, a parts tracking system can help companies save space on product and supply storage. That’s because the software gives businesses an accurate forecast of the inventory they need.
This means they can avoid the high storage costs that come with overstocking. The system also applies the EOQ formula to businesses to help them identify the perfect time to reorder parts. Therefore, they don’t have to pay more for storage than necessary.
Moreover, a parts tracking system can allow a company to manage those products they don’t always want to stock but want to ensure they are available to customers when they need them.
An excellent inventory tracking system can support drop shipping. This means businesses can send parts directly to their customers without investing in storage space.
A parts tracking system can help a business reduce costs significantly and save money. The software facilitates accurate demand forecasting so companies can avoid costs resulting from inventory understocking and overstocking.
In addition, it helps businesses, irrespective of their size, to reduce storage expenses. So, get a parts tracking system today if you wish to increase your business efficiency and save money.
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