Is It Time To Do The Heimlich Maneuver … On Your Inventory?
Do What? So you’re in a restaurant and the guy at the next table starts choking. What will you do? Hopefully, something. Hopefully, that something is the Heimlich maneuver. Hopefully, that guy at the next table gets to finish his dinner because of your quick action.
And what does this have to do with our inventory? I think we are much more efficient at selecting parts to be dismantled and stored in our buildings today versus 10 - 15 years ago. Would you agree? However, that doesn’t mean that we have developed a system for consistent verification and purging of old stock, hence the choking analogy. Many of our warehouses are chock full of aged parts that do not stand a good chance of selling, preventing us from bringing in fresh inventory which will sell. Quite frankly, we are choking.
- Do you know how full your warehouse is by percent?
- Do you have an inventory of your rack positions?
- Do you know how much of your warehoused inventory is 30 - 60 days old, 61 - 90, 91 - 120, 121 - 180, 181-plus?
You may have to drill down with your YMS to figure these numbers out but it would be well worth the time. Do you think Amazon knows? Large companies spend millions of dollars on logistics and supply chain management systems to ensure that their customers receive the correct product at the right time and place. I believe this is the auto recycling industry’s Heimlich moment. We must learn to run our operations as lean and efficiently as possible.
Putting up another building to warehouse inventory is not a bad idea; just don’t put up the new building until you have done the Heimlich on your current facility. Also, keep in mind that only you can determine what is old and what should be discarded. Late-model yards will have a very different profile than a mechanical yard in terms of inventory.
It is critical to evaluate which parts will be warehoused versus stored in the vehicle. Part value, turn and space requirements are several criteria that you should base your decision on.
Quick Facts about Inventory:
- Lost or missing parts cost you money in lost time and resources. We all know the frustration in tracking down a “missing” part.
- Lost or missing parts cost you customers due to high levels of stress.
- Lost or missing parts steal motivation from your sales people.
- Overstocked shelves reduce your ability to verify inventory.
- Overstocked warehouses limit your ability to have “fresh” stock cycling through.
- The higher the fill rate, the more confidence your sales people will have to sell your inventory which means more money in their pocket, as well as yours.
- Your customers will consider you a “preferred vendor” because of your reliability.
- Managers spend more time managing versus searching for lost sheep.
What’s Your Plan?
- Make data integrity and inventory control a core mission for your company, which means that you need to step up and make it a priority.
- Use any available tool from your YMS company, i.e. bar code system, to be part of the plan.
- Create a schedule for inventory audits and make it an ongoing process. It is easier to manage a project like this in smaller bites versus an annual event which never gets completed.
- Identify the proper team members who are focused, detail oriented and are consistent in completing projects.
It truly adds up to planning, procedures and allocation of resources to get the job done.
Getting back to our story, choking is a real danger. Take the time to familiarize yourself with the fairly simple but effective Heimlich maneuver in the event someone ever needs your assistance. And let’s hope that with good planning, procedures and adequate resources you never have to use it on your inventory.
Paul has been in the business for 27 years. He and wife Lynn D’Adamo are the owners of Recycling Growth, a consulting, coaching, training company that serves the auto recycling industry. Former owners of Bill’s Auto Parts in Cumberland, R.I., they sold their award-winning company in 2013. Contact firstname.lastname@example.org or 401-458-9080.