Core Concerns

Oct. 2, 2016
Managing inventory, cores, credits and returns should be critical to your business

Fear. Anger. Rage. Frustration. Disappointment. Depression. Disbelief. Disgust. These are just a few of the emotions, albeit the darker ones, on the color wheel of human emotion. They may all appear on the same palette—and we’ve all likely experienced these emotions at one time or another—but they are rarely seen on the same canvas.

Unfortunately, these are all emotions that have appeared on my canvas over the past few weeks as I’ve been forced to deal with that crooked letter that lives at the end of the alphabet: why? Why is the industry so badly broken? And why won’t anyone do something about it?

This time, it started when our “first call” entered into a strategic partnership with a local oil distributor. At first, it seemed like the ultimate win-win: great products at great prices delivered in a timely manner by a local company committed to the same high quality service we’ve come to expect. What could be better? Well, what could’ve been better was the billing nightmare that followed.

After delivering the oil and filling our bulk tanks, the company left us a bill of lading specifying the kind of oil and the number of gallons, but no pricing. That’s not much of a problem until you have to add the oil to inventory and there is no invoice, invoice number or cost per unit. The simple answer is always, “Don’t panic! The invoice will follow.” And it did—after countless phone calls and days spent anxiously waiting.

You may be thinking to yourself, “Well, that’s enough to get anyone upset. But it’s no reason to drop off the deep end into a bucket of dark emotions.” And you’re right; it isn’t the reason I’m over the edge. I’m over the edge because I’ve been told that no one else purchasing oil this way seems to think failing to receive an invoice number and/or a unit amount is important to their bookkeeping or inventory. That has to be it; otherwise there would be a solution by now!

You could argue this is still not enough to drive someone into the funk I’m in right now. And again, you would be right. But let’s add the experience I had this morning looking at one of the leading software management systems and I think you’ll understand why the canvas is so dark and frightening.

Inventory, cores, credits and returns are critically important to me. That’s why I’ve remained committed to the company we’ve been with through two very different products, three operating systems and almost 30 years. When we migrated to their system, we discovered almost $2,000 worth of lost or missing cores, credits and returns. That was $2,000 in 1985—just over $6,000 today—floating around and not in our checking account.

Ever since that realization, I’ve been obsessed with keeping track of cores, credits and returns. And, quite frankly, I believe everyone else should be just as neurotic about this as I am.

Cores, credits and returns are a critical component of our supplier relationships. And yet, the salesman could not demonstrate how his system monitored, tracked or even recorded what happened to them after they were received and/or returned. Can that be accomplished manually? Of course. But I’d be willing to bet that isn’t happening at most shops across the country. Otherwise, it would have been an integral part of the demonstration.

When I asked the product specialist why something so important was omitted, he simply replied that in all the demos he’s ever done, no one had ever asked him about credits, cores and returns and how they were managed. Shop owners might understand the importance of this, but the real question is if they’re doing anything about it.

This might come as a surprise, but I have no bone to pick with the software provider for not including something so critical in their product offering. It’s not there because they don’t think it’s important and they don’t think it’s important for two very understandable reasons: First, they don’t own a repair shop and don’t have to deal with lost cores, credits and return; and, second, because no one is demanding they include it.

In fact, the salesman suggested less than 2 percent of all shop owners he sees or has ever seen would comprehend its importance. That is what has left me feeling all those difficult emotions. Two percent of all the shop owners out there isn’t enough to ensure the industry survives and shops like yours and mine remain financially viable. It’s going to take a majority.

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