August, 05 2020

What are the metrics for effective inventory management?

Ivan Mishanin
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When communicating with clients, do we often hear requests to explain how to evaluate the performance of the inventory management system? Are there any metrics on which we should focus to ensure that if the system achieves the goals that the supplier company promised? 

 

Recently, we have started to offer our post-paid system solution so that the client can understand if the system adequately addresses the goals that we promised. In this post, we will help you to understand how to evaluate the performance of your solution. Below, I will detail the top 5 metrics on which we suggest you focus. 

 

Top 5 metrics to evaluate the performance of your inventory system

 

Today, waiting, even for a short time, causes irritation to the client who came to the vehicle test drive. Because people have become accustomed to online shopping during the lockdown, today, we suggest using the number of test drives as the first metric. Compare this number with when the system was not installed and when it appeared. Inventory allows you to locate test-drives in a minute. Each connected car OBD2 device includes a tracking mechanism so that the sales team can find specific vehicles with just a few taps. 

 

Time is also an important metric for the inventory system. It is important to understand how much time it takes to search by VIN, stock number, year, make, model, and more and know exactly where each vehicle by using GPS — whether it is on your lot, off-site storage, or with a customer. Time is a very valuable resource for both you and your customer.

 

Preparing cars for a test drive, we believe, is one of the components of the sale because a vehicle’s empty tank or dead battery can easily lose a possible sale. The efficiency of the inventory management system can be tested to see if your vehicles are ready for a test drive. Low fuel and battery alerts enable dealerships to refuel and recharge in advance, and the sales team will not have to delay a test drive and make the customer wait.

 

The year 2020 has brought quite a few challenges to the automotive market. One of them is an increase in the number of car thefts. That is why I propose adding a little topicality to the list of metrics and discussing the means of preventing car thefts, thanks to the system. We have written a detailed post about how it works here. In addition, one of our clients told us in detail how the inventory solution helped us avoid automobile theft

 

The last metric of your inventory system efficiency, but one of the most important, in my opinion, should be focused on money. You can see sales potential or how your monthly profit will be increased using your inventory management system. We know how to increase monthly revenue by $500,000 because we work directly with dealerships and offer our customers detailed calculations. These calculations focus on one of the financial indicators and can be used for one of the metrics.

 

Despite everything that’s going on in the automotive market, consumer demand has remained robust. This means that this window of opportunity should be used as efficiently as possible. We hope these metrics help you improve your fleet management. 

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