Every Dealer has their own ideas and protocols regarding Inventory Locations, and that is fine,

because every Dealer is slightly different. It is hard to have a one size fits all approach to this subject,

we have to be flexible. However, there are some Industry Best Practices that we would like to

introduce for your consideration.


Your Dealership may already have adopted some or all of these, and that is great. But we regularly

encounter Dealers that feel frustrated and have lost control of their Inventory, and this usually leads to

a profit leak in the future when a Stocktake process does not go as expected.


To be effective, your Inventory Management processes require an orderly and logical approach, but

most of all scrupulous discipline.


Just like a house with poor foundations, so too your Inventory management will “fall over” if the

foundations are weak. This is why we start at the beginning and get the structure of your Inventory

Locations strong. To achieve this, we must have:


  • Single point control of who is responsible for setup and editing of Locations
  • A logical labelling protocol for the locations. Something that helps guide people to what part of the

    Dealership this location will be at

  • Avoid using Vendor or product names in the location name, as these come and go with market
    shifts over time

  • Ensure the system incorporates the need to move mobile displays around the showroom and not
    lose a logical identity in the name

  • No reference to CO status or activity. Once a part is removed from Inventory on a CO, then it is no
    longer linked to the location. Try not to use labels like “CUSTOMER PICKUP”, “STOCK UNITS”, “FOR
    WORKSHOP” etc as a location label. You will have these “holding places” as part of your operations,
    but they are no longer an inventory management concern once picked

  • A Map of the Dealership accessible to all staff that identifies where these locations are

  • Enough locations to ensure a maximum of approximately 20-line items per physical location

  • Space on each location to allow for line-item volumes to move up and down without creating
    clutter, as well as additional line items that may need to be added at a later date

  • The physical location has a label attached to it EXACTLY how the Location is laid out in Blackpurl.
    NOTE: this is critical for mobile displays in showrooms as they tend to be constantly rearranged

  • Keep location names as short as possible without deviating from your system. Just saves
    unnecessary keystrokes on computer

All of these points address basic “housekeeping” issues that you will face from normal Dealership

Operations. We have great explanations of WHY these points are important and WHAT problems can

occur if not followed. We are happy to pass on this knowledge to those who are interested, but to keep

this presentation brief we have left that out. Trust us, we know how it works!



Examples


How about we set an example Dealership floor plan for your reference. This will help you decide on the

Location Label protocol you want to follow, and then when complete it is your map. We will keep it

simple.


Now we have a good understanding of the layout of the store, let’s think about a logical naming system.

We highlight the term SYSTEM. Whatever we start with needs to be systematic and able to grow with

the inevitable growth of physical locations when the Dealership increases turnover or adds a new

vendor to stock.




Suggested System


Use logic and common sense.

  • If a location was on a wall, then we can differentiate it from other locations by starting with WALL,

    or W. We like WALL, because it is descriptive of where it is. A new employee would just know it is

    on a wall and not in the storeroom

  • In our example we may call each Panel WALL1, WALL2, WALL3 etc, as we move around the
    showroom wall. For Dealers who have adjoining showrooms may decide to number the showrooms
    S1 and S2. This would create locations like S1WALL1, S1WALL2 and S2WALL1, S2WALL2 etc. There
    is no limit to how this could expand, as long as it is systematic

  • Location is on a stand placed on the showroom floor. It is a floor display. So, we could use FD for
    short, or the whole words FLOOR DISPLAY. For example, FD1, FD2 or FLOOR DISPLAY1, FLOOR
    DISPLAY2 etc. The same situation would apply as above for multi showrooms. S1FD1, S2FD2, or
    S2FLOOR DISPLAY2 etc

  • Location is in the Parts Storeroom. We have to think a bit more about this, as the locations are

    generally a row of bays joined together with multiple shelves in each bay. We suggest using a

    method where the first digit is a number is the row number of the bays. The second is a letter for

    the bay, then lastly a number for the shelf in the bay (top to bottom). For example, 1A3 is row 1, Bay

    A, shelf 3 from top. Then move to the next row of shelving 2A1 etc

  • You could use S at the beginning to denote STOREROOM, or just start with 1. Option would be S1A3

    or 1A3, or ROW1A3, it is a personal preference, but remember to stay systematic. In the event of

    multiple storerooms, then use the same methodology as the showroom. For example, S1 or

    STORE1. In this event we suggest using the word ROW, so that there is a logical break between the

    Store and Row labelling. For example, S1ROW1A3, or STORE1ROW1A3. NOTE Whatever you decide

    here, just be careful to stay consistent.

  • Impulse Items on Counters. This is easy, they are on a counter. There should never be more than

    20-line items, otherwise your Counter will look untidy and difficult to work off. For example,

    COUNTER, or if multiple counters PARTSCOUNTER, MERCHCOUNTER, SERVICE COUNTER etc, or

    COUNTER1, COUNTER2, COUNTER 3.

  • Bulk Storage. Avoid terms like WORKSHOP, BULK, LEFTOVER etc. These are not descriptive

    enough. Is it on Pallet Racking in the workshop, or side of the building? Maybe in a shipping

    container? Use imagination and the same logic we have applied above. For instance, WPR1 would

    work for-workshop pallet racking bay1. EBOPR1-East building Pallet racking bay 1, C1Row1A1,

    container one, row1, bay a shelf one. It is up to your imagination, but be systematic

  • You now have the ability to quickly go to a location that a part should be at, print a count sheet to check

    that location if something looks amiss, and so much more. We hope this article has been helpful, so

    you can DESIGN YOUR OWN location management system