Having bearings stocked in your shop can make your job easier, but there are pros and cons to having parts stored in inventory. The pros include faster turnaround times on projects and better customer service, while the cons include less liquidity and higher operating costs. By weighing the pros and cons, you can decide whether or not you should stock bearings in your shop.
Faster Turnaround Times
Turnaround times on projects define how much money your shop makes – pure and simple. If you have bearings at your disposal, you can cut back on the time spent ordering bearings, which is considered a non-value-added activity to your customers. You can also reduce the types of waste, including over-processing and delays, simply by having bearings in the right spot within your shop. Efficiency and effectiveness are what can make or break your business, and inventory on hand can increase both.
Better Customer Service
If you have parts in stock and your customers have to wait less time to get their vehicle, they’ll be happier with the service. This can inspire loyalty and repeat business. You also look credible to your client base when you’re able to pull the parts you need from your stock room, verses having to flip through a catalog to look for bearings. If you look like you know what you’re doing and you’re prepared, your clients will likely recommend you and your service.
Cash Tied Up in Inventory
A drawback of purchasing bearings and keeping them in inventory are the sunk costs. This means that it can be difficult to liquidate your inventory, if you all of a sudden need cash. While bearings are not the most expensive parts in your stock room, they can still take away from your working capital. You have to take into account your financial position if you’re going to stock your shop with bearings and other important parts.
If you’re going to store bearings and other parts in your shop, you need to have storage space. This can cost you money in a number of different ways. First, by having a large storage area, you’re using space that could otherwise be used for revenue-generating activities. Also, you may be forced to spend money creating your storage area and putting shelving into it.
Stocking bearings in your shop can improve your project turnaround times, allowing you to complete more projects and make more money. So you must determine whether having money tied up in inventory and allotting storage space is justified.