Streamlining Spares Procurement and Inventory Management: A Methodical Approach

In my years of actively managing vehicle repair workshops, I’ve encountered my fair share of challenges, particularly in spares procurement. These potential leakages and areas for fraud demanded a rigorous and structured approach. Through painstaking effort, we devised a system that became the cornerstone of our operations, seamlessly integrated into our Shop Management System with dashboards and alerts.

Step 1: Material Requisition Note (MRN)

When there’s a need for specific spares, the service team initiates an MRN, providing key information such as the relevant Repair Order or specifying if the procurement is for STOCK.

Step 2: MRN Approval to Purchase Order – A Critical Step

The approver meticulously reviews the MRN, evaluating crucial details:

  • Are the requested parts truly required based on the services listed?
  • Are any of the requested parts already available in Inventory?
  • Are the details for each part accurate (e.g. part specifications, part number, etc.)?
  • Has the correct supplier been selected?
  • Is the margin/discount structure correct?
  • Is pricing consistent with previous purchases of the same part?
  • Availability and pricing are reconfirmed with the Supplier(s).

This meticulous process ensures that unnecessary duplications or overstocking are avoided, and the right parts are procured at the right time and price.

Once the MRN gains approval, it evolves into a Purchase Order. The Shop Management System automatically dispatches this Purchase Order to the supplier via email.

We upheld a steadfast rule: no parts are procured without a valid Purchase Order. Suppliers are well-informed that only orders dispatched through the registered company email will be honored. This stringent policy ensures transparency and accountability.

A Purchase Order carries a clear deadline (e.g. 7 days), instilling a sense of urgency. This policy ensures that orders aren’t left in limbo. If cancellation becomes necessary, it’s executed promptly, and the supplier is notified forthwith via a Purchase Order Cancellation, also sent automatically by email to the Supplier.

Step 3: Goods Received Note (GRN)

Upon part delivery, a Goods Received Note (GRN) is essential.

  • The GRN is linked to a corresponding Purchase Order for easy traceability.
  • Parts are promptly inspected upon arrival, with a decision made: acceptance or return. This scrutiny covers potential issues like damage, incorrect fitment, brand mismatches, or pricing discrepancies.
  • Every Goods Received document is entered into our Shop Management System on the day of receipt. Data entered includes Part Number, Purchase and Selling Price, Part Brand, and specific Vehicle Application Data.
  • Vendor invoices are meticulously tagged with vital information: Vehicle Registration Number, Job Card/Repair Order Number, and an inward security stamp.
  • If parts are acquired for stock, this is explicitly mentioned on the Purchase Invoice.
  • The GRN initiates either an inventory update or the creation of a Parts Cancellation Note.
  • Returns are processed swiftly within 24 hours of generating a Parts Cancellation, ensuring streamlined inventory management.

This systematic approach maintains inventory integrity, ensuring a seamless process that upholds our commitment to excellence.

Step 4: Accountability and Purchase Invoices

Precise invoicing and diligent record-keeping are the cornerstone of financial accountability. We ensured the following with Purchase Invoices received from our Suppliers.

  • Referring the Purchase Order: Every vendor invoice must correspond directly to a Purchase Order. This step guarantees that every item billed has been officially requested and authorized.
  • Multi-Invoicing: We understand that partial item supply is sometimes necessary due to availability constraints. We accommodate this by allowing multiple invoices against a single Purchase Order.
  • Meticulous Invoice Standards: We left no room for ambiguity and ensured that every purchase invoice is held to a standard:
    • Purchase Order Number: This serves as the invoice’s cornerstone, linking it directly to the request and approval process.
    • Line Item Details: For every item listed, we require precise information: Part Number, Brand (e.g. Purolator), Maximum Retail Price (MRP), Discount, Tax Rate, Tax Amount, and Tax Code (if applicable).
    • Synchronization with Shop Management System: Part pricing and tax details in the Purchase Invoice must mirror the entries in our Shop Management System.
  • Timely Documentation: The invoice must be entered into the SMS on the very day it’s received. This swift action ensures that our records are always up-to-date and accurate.

Step 5: Sales Invoice to Customer

When spares are procured specifically for a particular vehicle against a Repair Order, the system must efficiently incorporate them into the Sale Invoice. Any removal from the invoice must warrant explicit approval, after which, the items are automatically reintegrated into the inventory. This process ensures meticulous tracking, precise allocation of parts and ensures that every part procured is sold.


As I reflect on this journey, from handling Material Requisition Notes to Purchase Orders, Goods Received Notes, and precise Purchase / Sale Invoices, I saw the transformation it brought to our workshops. This led to precision and accountability, ensured that every component found its rightful place, and every transaction was meticulously recorded.

A proficient Shop Management System can be a game-changer. It simplifies complexities, eradicates inefficiencies, and seals potential leakages that can often plague manual or paper-based systems. It also arms us with real-time insights, guarantees spot-on record-keeping, and liberates us to do what we do best – serve our customers.

It’s crucial to note that the adoption of these procedures should be tailored to the scale and size of the workshop. In the case of a network or chain of workshops, a rigorous process like the one outlined here becomes absolutely essential. It ensures uniformity, efficiency, and accountability across all outlets. On the other hand, for an owner-managed single workshop, minor adjustments can be made to align with specific conditions and requirements. This flexibility allows for a balanced approach that suits the unique dynamics of the operation. 


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