Inventory Organization: A Place for Everything, and Everything in its Place

[Counterman]

Like many parts professionals, I’m a little bit OCD. My coworkers might tell you that’s an understatement. Organization has always been a pet project of mine, from designing and implementing planograms for the retail floor to maximizing storage space in the areas behind the counter. 

For the retail areas of our stores, we receive a great deal of support from the various manufacturers that make up our line cards. Corporate planograms, signage and other materials not only make it easier for us to effectively display retail products, but these professionally designed merchandisers also serve as advertising for the manufacturer. Having a particular category or brand offering consolidated in one place makes it more convenient for a customer to find what they need with minimal assistance, and the manufacturer can display the items they feel showcase their brand more effectively and profitably. 

The “back of house” area is an entirely different world when it comes to inventory organization. Warehousing and other non-public-facing storage areas need not be visually appealing to attract customer dollars, but they should be designed to maximize inventory dollars per square foot, and to encourage safe and efficient workflow when picking orders and restocking products.

With products from multiple vendors sharing warehouse space, a simple and logical method of organization is to group items first by manufacturer/brand, and then alphanumerically. For most of our manufacturers, this works well because their product offerings are often similar in size and packaging. For manufacturers with varied product lines, this becomes a bit more challenging. A chassis parts inventory will include a wide variety of package sizes and shapes, making it difficult to store long items like drag links in the same space as a relatively compact ball joint package, or the large irregular shapes found when organizing boxed control arms. A well-defined part numbering system can help alleviate some of these storage issues, but there always seems to be one or more outliers, leaving the stock clerk to figure out how to shelve them effectively.

In the OEM dealership world, parts generally come from a single source. With a single “brand,” and often cryptic part numbering systems, the alphanumeric inventory method becomes nearly impossible. Consecutive part numbers could (theoretically) be as varied as a bolt, a set of brake pads and a door shell, none of which would sensibly be shelved together. For most dealer parts departments, a “bin location” system is necessary to customize and maximize storage. Each part number is assigned a location code, corresponding to a specific shelf, drawer or bin somewhere in the warehouse. 

The “bin location” method offers flexibility, but adds another level of complexity to organization. Shelving units are more uniformly organized, with like-sized items stored together regardless of function or category. As parts transition through their natural life cycles, they can be added to and removed from their locations, keeping faster-moving parts closer to the counter for ease of picking, or moving a part’s location to accommodate larger stocking quantities of that item. In some cases, it also can allow for items that are frequently sold together to be stocked in the same location. Finally, location coding allows for less-experienced warehouse personnel to find items simply by finding a location and verifying the part number on the order, rather relying on someone’s memory of “where we keep that widget.”

The drawback is in the duplication. Each part number must be assigned additional information when it is initially stocked, and some store-level inventory systems are not designed to accommodate a field for location. Further, if a location code is entered incorrectly, never assigned or a part is mis-stocked somewhere in the warehouse, it easily becomes “lost,” and can be nearly impossible to find until an inventory is performed. Most dealerships maintain a perpetual “bin count” schedule, checking a few bins each day to keep up with this task, making corrections as necessary.

No matter your organizational method, keeping a sense of order is important when designing your back of house area. Minimizing the amount of empty space (not including that reserved for future expansion) maximizes the value of your inventory per square foot. Physical characteristics of some parts will often dictate their unique storage needs, but wherever we can streamline the process of stocking and retrieving parts, we increase efficiency and worker productivity.

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