Parts Manager Sample Lesson by RV Learning Center

LEARNING GUIDE PROGRAM TITLE: Parts Specialist* DUTY: Manage Parts Inventory

COMPETENCY C-1: Maintain Inventory System INTRODUCTION: Appropriate inventory system maintenance ensures that the parts database is kept current and accurate in order to provide reliable information. This guide will provide you with general knowledge and skills on how to maintain the inventory system for your store. As a Parts Specialist, it is important to understand the principles and procedures for maintaining the inventory system and related tasks. This guide will help you become aware of the steps you can take to successfully maintain your inventory system.

PERFORMANCE OBJECTIVE: Given the need to manage parts inventory, maintain the inventory system so as to meet the RVDA standards of excellence outlined in the Performance Test on pp. 21-22.

ENABLING OBJECTIVES: 1. Practice using a parts information database. 2. Practice inputting parts information into the database. 3. Practice determining inventory requisitions.

PREREQUISITES, IF ANY:  Knowledge of required parts information for the database  Knowledge of POS and system database software  Knowledge of past sales performance for stocked parts

*This competency is also required of Parts Managers.

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LEARNING EXPERIENCE #1 ENABLING OBJECTIVE #1: Practice using a parts information database. Learning Activities

Special Instructions

Read the Information Sheet titled “Inventory Database Overview” on pp. 3-5. Demonstrate your knowledge of your dealership’s parts information database by completing the Self-Check on p. 6. Check your answers against the Self-Check Model Answers on p. 7. Practice with a co-worker using your dealership’s parts information database. Ask your co-worker to use the checklist titled “Using the Parts Information Database” on p. 8 of the Practice Exercise as a guide for assessing your progress.

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Ask your mentor to suggest a coworker who can observe and help you with your practice sessions and the Practice Checklist.

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INFORMATION SHEET INVENTORY DATABASE OVERVIEW While some dealerships still use manual systems, most use computer software to maintain a database of their parts information. The advent of reliable computer software makes the job of entering and obtaining accurate parts inventory information much easier and more efficient compared to manual record keeping systems. There are many different brand names of computerized inventory databases on the market today. Some of the considerations a dealership takes into account when selecting what brand they will use include:      

Compatibility with other computerized systems and applications User friendliness Capability for future expansion Service and version updates provided by the software manufacturer Dependability Cost

A parts information database can store and process information entered by system users to provide the following information:            

On-hand quantity of a particular part Location where you can find the part if it is in stock Lost sales due to not having the requested part in stock Average cost of the part when it is received Selling (retail) price of the part Installed price of the part Supplier of the part (vendor code and vendor part number) Part number Part description Minimum and maximum inventory quantities carried Management reports that analyze information in the database to help make decisions Purchase/selling unit of measure

As you enter information into the parts database, you need to know what your dealership’s system requires so that accurate information can be retrieved when it’s required. On the following pages are some of the specifics that most systems require.

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INFORMATION SHEET (continued) Part Number Your database software may be set up so that certain vendors have distinctive methods of labeling part numbers. Examples of some common vendors include:  Coast —uses five digits (e.g., 37649)  Stag Parkway—uses two digits followed by four digits (e.g., 11-3587)  Newmar—uses “N” followed by five digits (e.g., N26641)  Fleetwood—uses six digits (e.g., 907737)  Leisure Time—uses six characters with the fourth and fifth being letters (e.g., 419AG2)  Cummins—uses three digits followed by a dash and four more digits (e.g., 556-6711) You should always try to use the part numbering methods characteristic to each vendor when entering parts into the system. Part Description It is very important to be as specific as possible when entering a part description. This will make it easier to locate parts in the future. For example, you should use “upper circuit boarddomestic” instead of “circuit board.” The former is much more descriptive. Case Quantity A case quantity is the amount sold in quantities rather than the amount purchased. Wire, for example, is usually purchased as one 1,000 foot roll but is sold by the foot. Thus, every time you enter a case quantity of 1, you will have 1,000 feet on hand to sell. The selling unit of measure (U/M) is “each” while the purchase unit of measure (U/M) is “feet” (1,000 in this example). Retail Price Usually the suggested retail price of a part is provided by the primary vendor. If it isn’t, you can calculate the retail price of items costing $500 or less by dividing the cost by 0.6. Example: A part costs $250 but doesn’t have a retail price provided by the vendor. The retail price you would enter is $416.67 ($250 divided by .6). For items costing more than $500, mark up the cost by 30% to determine the retail price. Example: A part costs $600 but doesn’t have a retail price provided by the vendor. The retail price you would enter is $780 ($600 times 1.3). If you are entering a part purchased from a manufacturer, the warranty price is used rather than the retail price. The warranty price is determined by using that manufacturer’s warranty mark-up percentage applied to the cost of the part.

 

Parts inventory databases can vary considerably from company to company and may vary from the above descriptions. Therefore, refer to your company operations manual for the specifics of your store’s system.

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INFORMATION SHEET (continued) Other There may be other unique requirements of your dealership’s parts information database. You should find out what they are and learn them so you will be able to enter and retrieve accurate parts information from the database. Inaccurate Database Information—There may be occasions when you discover that some items may be listed incorrectly in the database (e.g., stocking quantities, part locations, etc.). Make sure you write these down on a piece of paper and give them to the person responsible for making corrections to the parts information database. This will ensure accurate information for all users in the future.

TOOLS, EQUIPMENT, MATERIALS, AND SUPPLIES NEEDED The following tools, equipment, materials, and supplies are needed to successfully use a parts information database:  Computer with POS software  Manual parts system (in the absence of a POS)  Parts information provided by vendor/supplier

WORKER BEHAVIORS Worker behaviors play a key role in accurately and efficiently using a parts information database. Accuracy and efficiency will depend on whether you demonstrate the following behaviors or personal attributes:  Conscientious  Attention to detail  Communicative

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SELF-CHECK DIRECTIONS: Check your knowledge of parts databases by responding to the following questions. For True/False questions, circle “TRUE” if the statement is correct and circle “FALSE” if the statement is incorrect. For multiple choice questions, select the response that is most correct. For short answer questions, write a brief response to the question. Check your answers with those on the Self-Check Model Answers page that follows. 1. A part description should be entered with a general description to conserve space. TRUE FALSE 2. If you are entering a part purchased from a manufacturer, the warranty price is used rather than the retail price. TRUE FALSE 3. A part with the number N94457 is most likely provided by which of the following vendors? a. b. c. d.

Coast Cummins Newmar Leisure Time

4. The retail price of a part that costs $300 (if not provided by the vendor) would be: a. b. c. d.

$390 $500 $600 $650

5. The retail price of a part that costs $800 (if not provided by the vendor) would be: a. b. c. d.

$1,333 $1,040 $1,435 $1,000

6. What are some of the considerations a dealership takes into account when selecting a parts information database system? 7. What type of information can usually be obtained from a parts inventory database?

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SELF-CHECK MODEL ANSWERS DIRECTIONS: Compare your answers to the Self-Check with the Model Answers provided below. 1.

FALSE

Part descriptions should be entered with as much specificity as possible.

TRUE

Newmar includes an “N” in their part numbers.

For parts costing under $500, calculate the retail price by dividing by .6 ($300 divided by .6).

For parts costing more than $500, calculate the retail price by marking up the cost by 30% ($800 times 1.3).

Considerations include: POSSIBLE RESPONSES:  Compatibility with other computerized systems and applications  User friendliness  Capability for future expansion  Service and version updates provided by the software manufacturer  Dependability  Cost

A parts information database provides: POSSIBLE RESPONSES:  On-hand quantity of a particular part  Location where you can find the part if it is in stock  Lost sales due to not having the requested part in stock  Average cost of the part when it is received  Selling (retail) price of the part  Installed price of the part  Supplier of the part (vendor code and vendor part number)  Part number  Part description  Minimum and maximum inventory quantities carried  Management reports that analyze information in the database to help make decisions  Purchase/selling unit of measure

Level of Performance: Your responses to the items on the Self-Check should match the Self-Check Model Answers. If you missed some points or have questions, review the Information Sheet, or if necessary, consult with your mentor.

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PRACTICE EXERCISE DIRECTIONS:  First, review your knowledge of your parts information database using the following checklist as a guide.  Discuss with your co-worker the fundamentals of your parts information database.  Practice using the parts information database.  Ask your co-worker to use the checklist to evaluate your use of the database.

Using a Parts Information Database Level of Performance

Topics

Yes

With Help

When using the parts information database, the learner… 1. Identified the considerations in selecting a parts information database. 2. Identified the type of information that usually can be obtained from a parts database. 3. Described the distinctive parts numbering method used by at least three different vendors. 4. Described how to determine the retail price of part based on its cost: a. If the cost of the part is under $500. b. If the cost of the part is over $500. 5. Identified any other unique requirements of the store’s parts database.

Level of Performance: When you are finished with this Practice Exercise, you should be able to comfortably discuss and perform any of the actions included in it. Your ratings on the checklist for this Practice Exercise should be Yes for all items. If you received With Help or No ratings for any items, review your performance with your mentor.

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LEARNING EXPERIENCE #2 ENABLING OBJECTIVE #2: Practice inputting parts information into the database. Learning Activities

Special Instructions

Read the Information Sheet titled “Inputting Parts Information” on pp. 10-11. Demonstrate your knowledge of inputting parts information into the database by completing the SelfCheck on p. 12. Check your answers against the Self-Check Model Answers on p. 13. Practice your skills in inputting parts information into the database while an experienced co-worker observes and offers help, as needed. Ask your co-worker to use the checklist titled “Inputting Parts Information into the Database” on p. 14 to assess your progress.

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Ask your mentor to suggest a coworker who can observe and help you with your practice sessions and the Practice Checklist.

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INFORMATION SHEET INPUTTING PARTS INFORMATION Occasionally, you may determine that new parts need to be entered into the database. This usually occurs when:    

You begin using a new vendor/supplier. You see that the demand history for a part warrants stocking it. You realize that you are losing sales opportunities by not stocking parts customers want. Your special order history makes it more cost effective to stock the part rather than special ordering it.  A vendor/supplier changes the part number.  New parts become available from an existing supplier/vendor. When it becomes necessary to enter new parts into the database, follow these steps: 1. Identify the new part(s) number(s) to be entered into the database. 2. Gather the necessary information for the parts record, including: a. b. c. d. e. f. g. h.

Cost Vendor Store part number Part description List or retail price (calculate if not provided by vendor) Case quantity (if appropriate) Purchase/selling unit of measure Vendor part number (if different than store’s part number).

3. Enter the gathered information into the database, making sure to complete all data fields properly. Use your keyboarding skills to enter the information accurately and efficiently. You can obtain the necessary parts information from any one of several sources:  The vendor/supplier parts catalog  The vendor/supplier website  The vendor sales rep may be able to provide a parts file on disk or CD that can be downloaded

into the database if you ask for it



Company procedures for entering new parts into the database can vary considerably from company to company and may vary from the above descriptions. Therefore, refer to your company operations manual for the preferred steps when entering parts information into the database.

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INFORMATION SHEET (continued) TOOLS, EQUIPMENT, MATERIALS, AND SUPPLIES NEEDED The following tools, equipment, materials, and supplies are needed to enter parts information into the database:  Computer with POS software  Manual parts system (in the absence of a POS)  Parts information provided by vendor/supplier

WORKER BEHAVIORS Worker behaviors play a key role in accurately and efficiently entering parts information into the database. Accuracy and efficiency will depend on whether you demonstrate the following behaviors or personal attributes:  Conscientious  Attention to detail  Accurate

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SELF-CHECK DIRECTIONS: Check your knowledge of inputting parts information into the database by responding to the following questions. For True/False questions, circle “TRUE” if the statement is correct and circle “FALSE” if the statement is incorrect. For multiple choice questions, select the response that is most correct. For short answer questions, write a brief response to the question. Check your answers with those on the Self-Check Model Answers page that follows. 1. Parts information may be directly downloaded to the database from a disk or CD. TRUE FALSE 2. Manual database systems may be used in lieu of a computer with a POS. TRUE FALSE 3. When entering new parts information into the database, it is important that you: a. b. c. d.

Use the numeric pad on the computer for efficiency. Verify part numbers with the vendor/supplier. Complete all data fields properly. Print a hard copy of entered records as back-up.

4. A reliable source of information about a new part is: a. b. c. d.

Your supervisor The store owner RV Technician (trade magazine) The vendor/supplier’s parts catalog

5. Describe three situations where it would be necessary to enter new parts information into the database. 6. Identify four different pieces of information you will need about a part before entering it into the database. 7. Identify two other sources of information you could use to obtain the information you need to enter into the database.

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SELF-CHECK MODEL ANSWERS DIRECTIONS: Compare your answers to the Self-Check with the Model Answers provided below.

TRUE

All data fields need to be completed when entering information about a new part.

The parts catalog is a very reliable source.

POSSIBLE New parts may need to be entered when: RESPONSES:  You begin using a new vendor/supplier  You see that the demand history for a part warrants stocking it  You realize that you are losing sales opportunities by not stocking parts customers want  Your special order history makes it more cost effective to stock the part rather than special ordering it  A vendor/supplier changes the part number  New parts become available from an existing supplier/vendor

POSSIBLE Information needed includes: RESPONSES:  Cost  Vendor  Store part number  Part description  List or retail price (calculate if not provided by vendor)  Case quantity (if appropriate)  Purchase/selling unit of measure  Vendor part number (if different than store’s part number)

POSSIBLE Sources of information include: RESPONSES:  You can check the vendor/supplier website for the information.  You can contact the sales rep and request a parts file on disk or CD that can be downloaded into the database.

Level of Performance: Your responses to the items on the Self-Check should match the SelfCheck Model Answers. If you missed some points or have questions, review the Information Sheet, or if necessary, consult with your mentor.

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PRACTICE EXERCISE DIRECTIONS:  Observe an experienced co-worker inputting parts information into the database.  Practice your skills in inputting parts information into the database while an experienced coworker observes and offers help, as needed.  Ask your co-worker to use the checklist below to evaluate your strengths and identify areas for improvement. Practice on more than one situation, if possible, until a Yes rating is achieved on all items.

Inputting Parts Information into the Database Level of Performance

Topics

Yes

With Help

When inputting parts information into the database, the learner… 1. Identified the new part(s) number(s) to be entered into the database. 2. Gathered the necessary information for the parts record, including: a. Cost. b. Vendor. c. Store part number. d. Part description. e. List or retail price (calculate if not provided by vendor). f. Case quantity (if appropriate). g. Purchase/selling unit of measure. h. Vendor part number (if different than store’s part number). 3. Entered the gathered information into the database, making sure to complete all data fields properly. Level of Performance: When you are finished with this Practice Exercise, you should be able to comfortably discuss and perform any of the actions included in it. Your ratings on the checklist for this Practice Exercise should be Yes for all items. If you received With Help or No ratings for any items, review your performance with your mentor.

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LEARNING EXPERIENCE #3 ENABLING OBJECTIVE #3: Practice determining inventory requisitions. Learning Activities

Special Instructions

Read the Information Sheet titled “Determining Inventory Requisitions” on pp. 16-17. Demonstrate your knowledge of inventory requisitions by completing the Self-Check on p. 18. Check your answers against the Self-Check Model Answers on p. 19. Practice your skills in determining inventory requisitions while an experienced co-worker observes and offers help, as needed. Ask your co-worker to use the checklist titled “Determining Inventory Requisitions” on p. 20 to assess your progress.

Ask your mentor to suggest a coworker who can observe and help you with your practice sessions and the Performance Checklist.

Arrange to complete this Learning Guide titled Maintain Inventory System by asking your mentor to evaluate your performance using the criteria in the Performance Test on pp. 21-22.

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INFORMATION SHEET DETERMINING INVENTORY REQUISITIONS OVERVIEW Determining the exact quantity of parts to order and have on hand for sale is not always easy (unless you have an accurate crystal ball!). If it were, dealers would never have parts that become obsolete, have to be returned or ever run out of stock to sell.

An inventory requisition is an order placed with the supplier for specific products. Inventory requisitions may be:  Seasonal products that sell only during particular times of the year (e.g., window deicer only sells during the winter)  Promotional items to take advantage of a supplier’s special promotion to sell large quantities at a lower price  Regular products that are ongoing orders placed throughout the year to replace inventory sold. Determining inventory requisitions requires careful planning. Historical sales information is one tool to help determine how much of a particular product to order. This information is obtained from the monthly sales report. Many parts managers will use monthly sales data to determine each month’s sales as a percentage of the annual business. Entering this information by month into an Excel spreadsheet is the easiest way to calculate each month’s sales as percentage of the annual business (see Fig. 1).

Sales $

Jan. 745,655

Feb. 614,732

Mar. 785,631

Apr. 977,612

May 1.017

June 2.685

July 2.311

Aug. 2.198

Sept. 1.677

Oct. 1.501

Nov. 963,487

Dec. 826,949

TOTAL 16.303

4.6

3.8

4.8

6.0

6.2

16.5

14.2

13.5

10.3

9.2

5.9

5.0

100

Fig. 1—Monthly sales as a percentage of total annual sales (Excel spreadsheet)

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INFORMATION SHEET (continued) Seasonal products (deicer, air conditioners, etc.) can add greatly to annual sales and profits. The past sales history report is an excellent tool to help parts managers identify what stocking levels of seasonal products are required. Vendor specials are another opportunity to add sales and profits. Vendors often distribute flyers with their specials advertised. Parts managers must review these for potential sales opportunities. Of course, you must determine if the special will sell in your location, or if it is something new you should try. If asked, vendors will often recommend stocking levels for their specials for your particular circumstances. You will probably have to order their minimum quantity in order to take advantage of the special pricing. They may allow you to return any unsold product when the promotion ends. You should always verify the terms before requisitioning any product(s). As stated earlier, the goal is to order the exact amount of product you will sell to meet customer demand. As you learned in another lesson, overstocking inventory costs the company money, results in product having to be returned to the vendor, or product obsolescence. 



Use your sales history, your knowledge of the market and your customers, and input from your vendors and your management to determine which products to requisition and the quantity of each. Don’t rely solely on your crystal ball!

TOOLS, EQUIPMENT, MATERIALS, AND SUPPLIES Determining inventory requisitions requires the following tools, equipment, materials, and supplies:      

Monthly sales report Excel spreadsheet Past sales history report Vendor specials flyer Vendor suggested stocking list Purchase order

WORKER BEHAVIORS Worker behaviors play a key role in your success to accurately determine inventory requisitions. Success will depend on whether you demonstrate the following behaviors or personal attributes:    

Conscientious Attention to detail Diligence Consistent

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SELF-CHECK DIRECTIONS: Check your knowledge of determining inventory requisitions by responding to the following questions. For True/False questions, circle “TRUE” if the statement is correct and circle “FALSE” if the statement is incorrect. For multiple choice questions, select the response that is most correct. For short answer questions, write a brief response to the question. Check your answers with those on the Self-Check Model Answers page that follows. 1. Seasonal requisitions are orders for products that sell during a particular time of the year. TRUE FALSE 2. Inventory requisitions for vendor specials should consider their suggested stocking levels. TRUE FALSE 3. An inventory requisition is a(n): a. b. c. d.

Count of product in stock Request to complete an inventory Order placed with the supplier for specific products Forecast of product sales

4. The goal in determining inventory requisitions is to: a. b. c. d.

Order the exact amount of product you will sell to meet customer demand. Maintain minimum inventory levels as determined by management. Meet stocking levels recommended by vendors. Provide enough seasonal products for customers.

5. Parts sales in March were $1,000, $5,000 in April and $8,000 in June. Total parts sales for the year was $50,000. What percentage of annual sales occurred in March, April and May respectively? a. b. c. d.

1, 5, 8 2,10,16 4, 20, 32 8, 40, 64

6. What factors should you consider when determining what products to requisition and the quantity of each?

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SELF-CHECK MODEL ANSWERS DIRECTIONS: Compare your answers to the Self-Check with the Model Answers provided below.

TRUE

A requisition is an order.

The goal is to order the exact amount of product you will sell to meet customer demand.

When you divide each month’s sales by the annual sales ($50,000), you get 2% for March, 10% for April, and 16% for May.

Factors to consider include: POSSIBLE RESPONSES:  sales history  knowledge of your market and your customers  input from vendors  input from management

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PRACTICE EXERCISE

DIRECTIONS:  Observe an experienced co-worker determining inventory requisitions.  Practice your skills in determining requisitions while an experienced co-worker observes and offers help, as needed.  Ask your co-worker to use the checklist below to evaluate your strengths and identify areas for improvement.

Determining Inventory Requisitions Level of Performance

Topics

Yes

With Help

When determining inventory requisitions, the learner… 1. Identified seasonal business trends (i.e., each month’s sales as a percentage of the annual sales) to assist in determining total inventory level. 2. Identified seasonal products needed and stocking levels required for each. 3. Reviewed vendor special opportunities for stocking as appropriate. 4. Reviewed supplier suggested stocking levels, past sales history, seasonal trends and management limits to determine appropriate stocking levels. 5. Placed order by appropriate means (PO, fax, computer, phone).

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PERFORMANCE TEST Learner’s Name

Date

Competency: C-1 Maintain Inventory System

1st

Mentor’s Signature/Approval

Test Attempt 2nd 3rd

OVERALL EVALUATION

Directions: Your mentor will provide you with one or Level more opportunities to maintain the inventory system. Achieved You are to perform the actions needed to deal with the situation(s) in a way that meets company requirements and ethical business practices. Your mentor will evaluate your performance using the criteria listed below.

PERFORMANCE LEVELS 4 – Can perform this skill without supervision and with initiative and adaptability to problem situations. 3 – Can perform this skill satisfactorily without assistance or supervision. 2 – Can perform this skill satisfactorily, but requires some assistance and/or supervision. 1 – Can perform parts of this skill satisfactorily, but requires considerable assistance and/or supervision. Mentor will initial level achieved.

PERFORMANCE STANDARDS For acceptable achievement, all items should receive a “Yes” or “N/A” response.

Yes

N/A

When working with the parts information database, the learner… 1. Identified the considerations in selecting a parts information database. 2. Identified the type of information that usually can be obtained from a parts database. 3. Described the distinctive parts numbering method used by at least three different vendors. 4. Described how to determine the retail price of part based on its cost: a. If the cost of the part is under $500. b. If the cost of the part is over $500. 5. Identified any other unique requirements of the store’s parts database.

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PERFORMANCE TEST (continued) PERFORMANCE STANDARDS For acceptable achievement, all items should receive a “Yes” or “N/A” response.

Yes

N/A

When inputting parts information into the database, the learner… 6. Identified the new part(s) number(s) to be entered into the database. 7. Gathered the necessary information for the parts record, including: a. Cost b. Vendor c. Store part number d. Part description e. List or retail price (calculate if not provided by vendor) f. Case quantity (if appropriate) g. Purchase/selling unit of measure h. Vendor part number (if different than store’s part number) 8. Entered the gathered information into the database, making sure to complete all data fields properly. When practicing determining inventory requisitions, the learner… 9.

Identified seasonal business trends (i.e. each month’s sales as a percentage of the annual sales) to assist in determining total inventory level

10. Identified seasonal products needed and stocking levels required for each 11. Reviewed vendor special opportunities for stocking as appropriate 12. Reviewed supplier suggested stocking levels, past sales history, seasonal trends and management limits to determine appropriate stocking levels 13. Placed order by appropriate means (PO, fax, computer, phone)

Level of Performance: All items must receive a YES or NA response. If any items receive a NO response, consult with your mentor to determine what additional activities you need to achieve competency in the weak area(s).

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