Shifting Focus from “How We Used To Do It” to “How We Do It From Now On”
In today’s competitive business landscape, efficiency is paramount. Paul D’Adamo, an auto core industry expert, shares insights on smarter recycling practices, which include efficient part identification, pricing strategies, inventory optimization, and data-driven decision-making.
One of the first things I tell potential Customers is that I am more frugal than they are with their time and labor. I often get sneers at this statement, but it is true. Countless recyclers will call, and they first ask for a list of cores, usually alternators, starters, and a/c compressors. UGH!! Those products are certainly a staple of the auto core world, but first, are you asking for a list? How 1970’s. As a focused, organized businessperson, the last thing you want to do is look up parts by lists. Strike One on the Time Meter.
Rapid Look Up by VIN
We want fast look-up by VIN or other electronic means, with results quickly presented in an organized fashion and ready to assemble in a work order. The second part of the statement is extremely limiting. I love alternators, starters, and a/c converters. Still, their core pricing hasn’t changed much, and by focusing on those three-part types, you miss all the other part types like ECMs, electronic steering rack & pinions, instrument clusters, temperature controllers, ABS units, etc. Set a minimum price, and don’t get bogged down on lower-price parts. Cherry Pick where you spend your precious time and labor, and don’t be afraid to core out vehicles while dismantling.
Scrap and Converters Are More Volatile
Why wouldn’t you want to maximize this revenue stream by cashing out your Auto Cores? They provide steady monthly revenue without the high volatility of scrap and converters. Have I mentioned my obsession with old and overstocked parts? I have been to yards that have parts piled up in the aisles because they refuse to part with old stock. This disorganization creates more MIAs of sellable parts, causing more people and time to chew up the clock looking through the old parts. And another thing (don’t stop me, I am on a roll): I reviewed a few yards inventory recently where there were ZERO-dollar parts in their system—lots and lots of them. I practically had a heart attack in my chair. Reviewing old inventory allows you to see out-of-date and zero parts prices.
Managing Old and Overstock Parts Creates Lean Inventory
Most of us don’t have acres of building space and racks to store every part pulled since the 1960s. Most core companies give you access to data, allowing you to clear out old and overstocked parts from inventory, clearing the way for newer inventory. If you have a good inventory person, they should be charged with entering the latest inventory from recently purchased vehicles and managing your loose parts inventory on the shelves. Our systems provide excellent reference data like “DOH – days on hand” and “QOH – quantity on hand.” Use this data to make good decisions and not get buried through “paralysis by analysis.”
OOPS! Did I write “Work Harder, Not Smarter” as a headline? My apologies. Maybe it was an intentional misdirection to get you to read this. Y’all know I am obsessed with helping recyclers put more Cha-Ching on the Bottom Line. Call me if you want to make a change in your business. Paul D’Adamo 401-458-9080 or firstname.lastname@example.org. I’ll be waiting for your call.