What are the Best Tips for Parts Inventory Management?

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  • Written By: Osmand Vitez
  • Edited By: Kristen Osborne
  • Last Modified Date: 03 October 2019
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Parts inventory management is a requirement for companies that sell or produce materials that individuals or companies use to repair other items. Computer repair shops, automotive stores or repair locations, production equipment stores and many other businesses have a need for parts inventory management. The best tips for this process are to create bins and locations for all parts, separate parts by type, implement cycle counts, use business technology for tracking parts and institute internal controls.

Most companies need large spaces to store and manage parts inventory. Additionally, small parts should be kept in bins or other types of storage to ensure they do not fall between storage racks or get lost. Installing tall racks that allow for the use of bins is essential in parts inventory management. Companies also need a system that uses numbers or letters to accurately place and later locate individual parts. Using this set up also allows companies to separate parts inventory by type. For example, an automotive parts store may place all water pumps in a certain sections of shelves. This allows for the quick identification of parts and can be easier for workers to remember where individual parts go when restocking inventory.


Cycle counts are another important part of parts inventory management. Most companies must count their inventory periodically for federal tax purposes. While some companies can use an annual inventory count, others may desire cycle counts. Cycle counts require employees to review a specific section of the company’s inventory storage bins and count all parts according to computer readouts. This allows the company to manage parts inventory and ensure it has accurate numbers when ordering new inventory. This counting process will typically allow a company to count its inventory several times a year, satisfying annual inventory count requirements.

Business technology is a boon for companies needing to overhaul their parts inventory management. Companies can institute an electronic barcode on inventory that allows companies to track inventory electronically. Using handheld scanners, the company can instruct employees to scan inventory for regular inventory counting or whenever employees sell or move the items. Computer programs allow for easier record keeping and other parts management activities away from the company’s parts locations.

Internal controls help prevent inventory misuse by employees. Allowing one employee to order inventory, requiring management authorization for inventory orders and movements, locking high value inventory securely and constant inventory reconciliations are the standard internal control procedures. Companies can also institute internal controls by only hiring reputable employees. This involves conducting background checks on employees and only promoting individuals with a record of acceptable behavior.


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