How does Autosupplies manage its inventory?

In the third segment of our article on effective stock inventory management, Autosupplies’ managing director, David Clarke, chips in with his views.

Head up the motorway for a couple of hundred miles, there sits Autosupplies Group, an employer of 200 staff, and its managing director, David Clarke. David has been an ambassador and contributor of the magazine over many years – I’ve interviewed him at least twice! – so I was confident he would be willing to add his views to this particular piece. He didn’t let me down!

Starting by quizzing David on any successful tactics to optimise inventory, improve cash flow or streamline operations, he pointed to investment as being key in the business.

He said: “We’ve made investments in stock availability, people, high quality products and importantly, getting products to customers on time to help manage inventory, cashflow and our operations to meet our ultimate goal of being a one stop shop.

“Add to this competitive pricing, excellent customer service and resolving issues in a professional manner, we have been successful in turning the business into one of the nation’s leading – and most popular – independently-owned motor factors.”

Another important part of Autosupplies Group’s investment strategy is David’s commitment to visiting customers, which he does every Monday. He also spends time out on the road with the external sales team to “ensure we are all fully invested” in customers’ successes. It also allows David to listen and act on feedback and recommendations.

David highlighted increased stockholding as another key strategy due to “poor stock availability from some suppliers”, which means the motor factor “always has an option for our customers”.

Autosupplies recently renovated its Leisureways of Rotherham offices and retail area, installed new van bays to grow its van fleet from 10 to 20, all in the name of improving customer satisfaction and meeting demand. David believes it is “all part of our commitment to continuous developments to help optimise inventory, improve cashflow and streamline operations”.

Reducing dead stock

While increased stockholding plays a pivotal part in Autosupplies’ operation, what about decreasing the amount of obsolete stock? David, like Steve and Jane, acknowledged the importance of regularly reviewing stock turnover rates and identifying slow-moving items:

“Minimising dead stock is an ongoing focus for us to ensure we maintain an efficient and profitable inventory. By leveraging sales data and trends, we can proactively flag products that aren’t performing and take appropriate action – whether that’s offering promotions, bundling them with more popular items, or negotiating return options with suppliers.”

David highlighted the “close relationships” with Autosupplies’ suppliers to “maintain flexibility in ordering and returns”, which allows the motor factor to adjust its inventory more effectively.

Regular stock audits and clear communication internally are crucial; doing so ensures that the business isn’t overstocking items that may become obsolete due to a change in demand or product updates.

David added: “Regular stock cleanses with every one of our suppliers is another key strategy to help manage our inventory. We are continually analysing and amending our ordering points and stock ordering regularity – this includes daily stock orders with our mechanical suppliers and twice a week with others. This all helps to reduce our dead stock.”

Forecasting demand

To David’s point about changing demands of product, I was curious to ask him about any data-driven approaches that are implemented to assist the motor factor with inventory requirements. He’d already acknowledged its use in helping reduce dead stock, but what about new stock potentially coming in?

He responded: “We have great relationships with our suppliers and receive regular new-to-range updates, showing the car parc and suggested stock to keep. We offer at least two or three backup suppliers per product group to ensure availability is always at a premium for our customers.

“We look at both sales and stock – and as a motor factor that has a pick rate of 9.5/10, so more than 90% availability – we have to make sure that all popular parts are stocked first and foremost, and, secondly, that they are sold. We do this via a lost sales log, where we look at lost sales and decide whether to keep the product in stock or not.

“There’s a traditional statistic that 25% of what’s on the shelf is not sold. Suppliers have to work together with distributors to make sure they have the greatest availability of the most popular parts – that works in favour of both parties. And that is important for us at Autosupplies to ensure we are managing our data to help forecast demand today and in the future.”