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Product Inventory Management

by

For the last 25 years, I’ve experienced and have learned some pretty valuable lessons as a manager and a professional detailer. At my company, Forza Detailing, training and consulting is a huge part of my business. Visiting various shops and seeing how they operate gives you the ability to see and learn a lot from them. Picking up on best practices and others that make up the reasons for my visit. One of the most common things I work with my clients on is efficiency and most often how it relates to the products they use and how they are being managed.

Product inventory management is something that is highly important on every level in detailing. From the DIY detailing enthusiast to the biggest shops in the country, we all have to maintain our relative inventory of products to get the job done. In this article, I want to share some helpful tips and concepts to help you from running out of products on your next project, maintain efficiency and decrease waste/expense.

The Scenario:

Many of us have seen or experienced this scenario, there’s a detail project that is being worked on and only to find out that they won’t have enough product to get the job done properly. Now it becomes a four-alarm critical situation and a call or order is made for more product. With a complete disregard for the high expense of next day air delivery, they later learn that their package will not be arriving in time due to an unforeseen shipping issue. Worst, the items might not even be in stock to begin with. Now there is no way this detail project is going to be done in time. So they reschedule the detail project, delay the deadline or worst, cancel completely because the client may not be willing to reschedule. Now there’s a gap in the work week which costs dearly in lost revenue. So how did this happen?

It’s easy to identify that someone didn’t keep enough product on hand to complete the project. As simple as this seems, add to this scenario countless of other factors that played a role as to why this happened in the first place. Granted, things happen in this e-commerce age that are out of our control. Let’s look at why this happened and give you some helpful tips to help avoid this scenario.

Common Product Inventory Issues

Just In Time Inventory:

“JIT” as it is commonly referred to in manufacturing, is the strategy of receiving products as they are needed to manufacture or complete a task. This is typically done to help reduce the cost of inventory. While this strategy has been proven to be successful in the manufacturing process, it can rarely be an ideal strategy in detailing. This approach is something that is commonly found in regard to coatings and paint protection film inventories.

This JIT approach is often favored by small shops, individuals or DIY enthusiasts where expenses are on a limited budget. And while this size operation may be limited in its budget, its important to recognize that an inventory requires management, no matter how small. This JIT approach is especially risky with large operations. Having numerous detailers working in a shop will make it harder to manage a small inventory of crucial products. I’ve seen first-hand larger operations that constantly keep crucially low on products that are absolutely necessary and run out of them occasionally. Keep in mind, that if you choose to manage your product inventory this way, you run the highest risk for problems and issues.

Inventory: Coatings & Paint Protection Film

As a former rep for a popular coating company, I always suggested to installers that you have to make sure you keep the appropriate stock in your inventory. Understandably, coating installers always start out with the minimum or essentials necessary in the beginning. However, as the pace keeps improving and the volume increases, so must the inventory. If you are up and running with coatings, always keep a stock that is appropriate for your shop. In one of my old shops, I always kept a minimum of 3 to 4 with a max of 6 to 8 of each coating product required to successfully coat a vehicle. This protected against any shipping issue, a backorder or running out of product. Needless to say, we never had an issue.

Speaking of coatings, installers go through a lot of applicators and towels. Always keep a healthy stock of these. With numerous installers in a shop, you will certainly go through a lot of applicators and towels. I would always buy them by the hundreds and never ran out. Today as a freelance detailer, I always keep at least a minimum of 3 dozen applicators at all times. As for coatings, I keep a minimum of 2 or 3 of each product I need to coat a vehicle.

inventory

Example of stock for a one-person operation

For paint protection film or PPF, the same rules tend to apply. Everyone starts out with the bare minimum, but eventually, you will have to stock a few rolls of 60 inch film, 36 inch, 24 inch, etc. The last thing you ever want to happen is to take have vehicles coming in for PPF and run out during an install. Again, PPF is expensive but that roll of 60 inch would’ve paid for itself with the full front clip job you couldn’t do because you didn’t have enough film.

Often, Installers are quick to get upset and blame companies for not getting their products to them promptly. Unfortunately, this is usually as a result of the installer’s inability to manage a proper inventory for their shop. I’ve heard first-hand situations such as “I have a car coming in tomorrow, can you next day air me these? I’ll need them first thing in the morning” as the call comes in at 3pm. Add in the shipping company (who knows whos hands the package will be in during its journey), shipping restrictions on some chemicals, various shipping times depending on the distributor’s location, increasing shipping costs, etc. this JIT strategy can backfire. Remember, keep a proper stock at all times, and these situations will be a thing of the past. Trust me, your customers are going to love you for it and your business will always keep moving forward.

What to Keep More of

For anyone detailing, there’s always going to be certain products that you are always going to go through more quickly. For these type of products you always want to keep a good inventory and purchase wisely on sizes. For example, you may go through a lot of Iron-X at your shop and you might want to consider keeping 2 of the Iron-X 4 Liter size bottles on hand. In my experience, I’ve seen numerous shops that still buy small bottles when it just makes sense to buy in bulk and save money while helping maintain a proper inventory. Every shop is different of course and its difficult to make a list that will be the same for everyone. Go through your supply list, markdown those you use and order most often. Keep in mind that if there are any red flags, there might be an issue that might need to be addressed. For example, a shop I was working with was using about 4 gallons a week of Chemical Guys Honeydew Snow Foam in their wash bay. This was definitely a red flag considering the low volume they had for washing cars, reading the product directions also helps.

One tip is to make sure that the product you are buying in bulk is something that is a mainstay go-to product that you don’t foresee changing anytime soon. I often see detailers asking if a product is available in a 55-gallon drum before even trying it. Hardly a great example of product inventory management. Microfiber towels are something we all go through, especially if you are installing coatings. For example, my good friend Drew Thomas at Polish Works Auto Detail buys microfiber in bulk and for a larger volume shop such as his, it’s always best to have a healthy supply. For smaller operations, your supply maybe a few dozen towels, depending on your volume of business.

Some examples to keep more of may include:

Towel Stock

Pictured here at Polish Works Auto Detail, an example of a healthy stock of microfiber towels for coatings.

What to Keep Less of

Another common thing I come across is detailers that can’t help themselves but to buy every product that comes along and even worse, buying in large quantities. Soon their shop is full of products that they don’t use, which is wasteful and negatively affects expenses. Another negative effect of this is that these shops are now trying to manage too many SKUs because each employee favors a particular product. Keep it simple!! People are always surprised as to how little products I have in my cabinets. I keep things simple and this makes it easier for me to manage my product inventory.

Clean Cabinets

Keeping it simple makes for cleaner cabinets and easy inventory management.

We all like to try the latest and greatest, but I suggest a best practice of purchasing the smallest size available and only purchasing one to start with. Secondly, keep these “test” or new products in a separate area away from your operational inventory. Once you’ve used them and determine whether they will replace an existing product, use up the remainder of the existing product before introducing the newer product. If not, your employees will immediately use the newer product and now you’re left with old product sitting somewhere and eventually thrown out.  This scenario plays out time and time again in so many shops. I also recommend that at least twice a year, go through your supplies and eliminate products that are no longer being used in production. Avoid being a product hoarder and by keeping your inventory simple and effective, managing it will be so much easier!

Some examples to keep less of may include:

Polishing pads can sometimes fall into this section as I’ve seen shops that carry pads that are rarely used or are in very poor shape. I’ve seen pad inventories at various shops that are excessive, complex and confusing to the employees working there. Applying the above-mentioned tips, design a simple inventory of pads that you simply can’t live without and separately store pads that are being tested. Keep it simple!

In Summary: Inventory Management Tips

Managing product inventory is also important to the detailing enthusiast. I’ve trained many DIY enthusiasts and upon inspection of their inventory, I’ve found many products that haven’t been used in about 20 years. The tendency to keep products because of the “I might use it someday” scenario is all too common for the DIY user. Shelf-life is also something to consider as these products are not used as frequently as those of a professional detailer. While buying in bulk makes sense in certain instances, for the home DIY detailing enthusiast, it might be tougher to justify the need to buy a 5 liter of polish. Be wise when it comes to buying properly sized products. Some companies offer “nano drums” or concentrates that can make gallons and gallons of product. Consider these to save money and space at your shop. One thing I recommend doing is to go through your cabinets and inventory to do a little Spring cleaning. I suggest you do this at least twice a year and you will be surprised at what gets accumulated in your product inventory that is either taking up space, is no longer used or has gone bad. Be honest during this process and avoid keeping things that will just end up in your cabinet for another 6 months without being used. I’ve seen numerous detailers post pads or products they no longer use for sale on the internet. One person’s trash is another one’s treasure, so that’s one idea if you are convinced those old products are “still good”.

Keep the following tips in mind when managing your inventory;

  1. Don’t rely on a “Just in Time” inventory system, keep on hand a stock that is appropriate for your shop size or home garage. Especially for larger shop systems.
  2. Keep a shopping list or save a cart online. Update it as needed to avoid running low on inventory.
  3. Keep a stock of must-have crucial items and maintain these inventory items with priority. (coatings, PPF, applicators, MF Towels, etc.)
  4. Keep your inventory neat and organized.
  5. Store “test” items away from production used inventory.
  6. Avoid keeping empty boxes or bottles as this may give a false inventory.
  7. Avoid buying large bulk sizes for brand new products. Buy in bulk when it makes sense to do so.
  8. Clean your cabinets and inventory at least twice a year and discard any unused, old or empty products.
  9. Plan ahead for upcoming large projects that may require additional inventory.
  10. As business volume increases, adjust your product inventory accordingly.

I hope these few tips will help you with managing your product inventory at your shop or garage. Creating new norms in a shop can be challenging, but with a bit of organization and commitment, the scenario of running out of product begins to be a thing of the past.

Mike Cardenas
Forza Detailing
Northeast Indiana
Website Coming Soon
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6 comments on Product Inventory Management

  1. MoroCurtis says:

    It often happens that after the work done there are many half-empty bottles that as a result fill the space of the entire warehouse. Is it possible to transfer the remains of identical liquids into one large bottle to save space? Does this affect their properties?

    • Mike Cardenas says:

      That a great question MoroCurtis. The majority of the shops I work with tend to fill smaller bottle versions of something larger they commonly use. For example, they may use Sonax CutMax and have it in the smaller bottle version on the shop floor and fill from the larger bottle as needed. Chemically, if the products are the same exact product being poured or put back in, in my experience I’ve never had an issue. Something separated, old, etc. I wouldn’t suggest placing back into the larger container.

  2. Mike @ DI says:

    Great article Mike! You nailed a lot of great points on inventory management. I’d highlight the point that you made about the factors that are out of your control. It is very important to take into account the unforeseen shipping and supplier issues that you have no control over.

    • Mike Cardenas says:

      Thanks Mike! Unfortunately things happen that are out of control. Its often the case for people to blame the distributors for things that are out of their control such as shipping issues, customs issues, delays, inventory issues by the manufacturer, etc. Forecast big sellers or items that you’ve had problems with in the past with inventory. For example, if you know there’s a new wonder product being promoted and released soon, chances are it may sell out quick so don’t bank on having that for your shop. Or something commonly used by most is another thing to consider. Distributors do what they can to keep items in stock, but its the responsibility of the shop to keep plenty of stock to help with delays or backorder when placing an order for products.

      • Mike @ DI says:

        Your example there is a really good one to keep in mind. You have to take into consideration the entire supply line, all the way to the raw material that could affect the supply delivery times. When finances are under control stocking up a little bit for back up will prevent a lot of headaches and help you run your business better.

  3. Orlando says:

    Excellent article. As a starter on the business, sometimes we ended buying a lot of products to make our test. Before buying a bunch of products, I recommend to make a research on others persons experience. You will be saving some money and time.

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