Car manufacturers and dealers have improved their inventory management system, resulting in less money lost on idle cars and trucks. It appears their financial problems have motivated them to increase efficiency and cut expenses through manufacturing inventory software.
I heard about this trend in the Automotive News article “Carmakers turn into inventory control freaks.”
It’s great to see that car manufacturers and dealers have cut their inventory to 2.1 million cars and trucks. That’s a 56-day supply at the current sales rate, which is much healthier than the 69-day supply the industry has averaged for the past 19 years.
By cutting down on the inventory they have on hand, car companies are saving a lot of money on interest payments, storage costs and other expenses. They’re wise to cut their inventories and run leaner during this hard time.
How have car manufacturers and dealers been able to manage their inventory so effectively? Here’s how one expert who was interviewed in the article answered that question:
Tony Schnurr, CEO of the Larry H. Miller Automotive Division, a 39-dealership group based in Salt Lake City, says manufacturers have helped dealers reduce inventory.
“All of them are managing inventory better than they ever have. And so are we,” he said. “We have developed better tools, like internal dealership reports we didn’t have before and more actively monitoring supplies of specific models.”
If I’m not mistaken, it sounds like manufacturing inventory software is at work here. How else would they be able to generate detailed dealership reports and closely monitor their supply of car models? Carmakers have wised up to the fact that manufacturing inventory software is the way to quickly and effectively manage their huge inventories.
Let’s hope this trend continues long after the immediate fiscal troubles subside.
Be sure to visit the QuickBooks manufacturing software page to find out how to improve your company’s inventory management.