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No business wants to experience a supply chain shortage, especially dealers in the auto industry. When on-site inventory starts to run low, it can be a scramble to find new suppliers and ensure a consistent customer ordering experience. Experiencing low stock can have a cascading effect on your bottom line, leading to unhappy customers and loss of revenue. Keep reading for tips to better manage your inventory during supply chain shortages.
Build Relationships with Multiple Suppliers
While this isn’t always an option, one way to mitigate the impact of supply chain shortages on inventory is to develop relationships with multiple suppliers. This way, if one supplier is experiencing a shortage, you can source inventory from another supplier. Diversifying your supply chain can reduce risk and keep your business running smoothly during shortages.
It’s also important to research potential suppliers thoroughly. Ensure they are reputable and have a good track record of meeting customer needs before placing a large order with them.
Lastly, stay in communication with your suppliers. You’ll keep updated on their current inventory levels and any potential disruptions that could impact your business. This also allows you to build a strong relationship with them that could pay off in the future – after all, everyone enjoys working with people they trust and know well.
Prioritize an Accurate, Real-time Inventory Count
Effectively managing your inventory starts with real-time visibility into your current lot inventory levels. While obvious, it's surprising how many dealers don't have accurate and readily available inventory counts for their lots. Knowing how many vehicles you have on hand at any time allows you to better forecast future needs and avoid potential shortages.
Be careful, however, about relying on daily manual counts to provide this critical information. Not only because they can be subject to human error but also because of the labor time it takes to conduct such counts – which increases your operational costs. Investing in a solution that automates this onerous task will pay off in more accurate – and easily accessible – data that will benefit your entire operation.
Optimize Inventory Levels
A clear look at your current inventory combined with a strong understanding of current trends better positions you to gain a higher return on your inventory on hand. With real-time insight into your inventory, your teams can more efficiently and effectively redirect buyer attention to similar styles and options that are immediately available.
Additionally, as the frequency and value of OEM incentives are affected by various market dynamics, it’s even more critical to stock your lot appropriately – carry too many units and you might jeopardize new model shipments; carry too few units and you’ll lose sales. An intelligent inventory management platform will help you determine your inventory sweet spot to maximize profitability.
Smarter Inventory Management
As global supply chain shortages continue to impact automotive OEMs and available inventory, businesses are searching for ways to overcome these shortages and meet market demand for vehicles. One way to do this is by using inventory management software like Cox 2M’s LotVision platform to better track and manage current inventory.
Designed to meet the specific needs of automotive dealers and auction houses, LotVision gives businesses like yours increased visibility into inventory levels while improving forecasting and planning and reducing labor costs associated with manual inventory management.
Want to learn more about LotVision? Click here to schedule a demo and see how it can help you meet automotive inventory challenges caused by supply chain shortages.