Automotive Industry

Aftermarket Parts Distribution Center Audit for National Auto Parts Retailer

Comprehensive inventory audit across 12 regional distribution centers for a leading automotive aftermarket retailer, validating 2.8 million SKUs and identifying $14.2M in inventory discrepancies.

12
Distribution Centers
2.8M
SKUs Audited
99.4%
Audit Accuracy
8 Weeks
Project Duration

Client Overview

A national automotive aftermarket retailer with over 6,000 stores needed to conduct a comprehensive inventory audit across their distribution network. With significant inventory discrepancies impacting store replenishment and financial reporting, they required an accurate baseline of their distribution center inventory.

Industry
Automotive Aftermarket Retail
Facility Network
12 regional DCs totaling 4.2M sq ft
Inventory Value
$487M across all distribution centers
Aftermarket Parts Distribution Center

The Challenge

The client faced critical inventory accuracy issues across their distribution network, impacting operations and financial reporting.

Inventory Discrepancies

Significant variances between system records and physical inventory, with estimated accuracy below 85%, leading to stockouts and overstock situations.

Store Impact

Frequent out-of-stock situations at retail locations due to inaccurate DC inventory data, resulting in lost sales and customer dissatisfaction.

Financial Reporting

Unreliable inventory valuations affecting financial statements and requiring significant audit adjustments each quarter.

Operational Constraints

Need to conduct audit without disrupting daily operations and store replenishment activities across the distribution network.

Our Solution

We deployed a phased audit approach using advanced scanning technology and a team of 180+ trained auditors across all 12 distribution centers.

Phased Execution

Staggered audit schedule across facilities to minimize operational impact while maintaining audit quality and consistency.

  • 3 DCs audited simultaneously per phase
  • Night and weekend shifts to avoid disruption
  • Rolling team deployment across regions

Advanced Technology

Utilized high-speed barcode scanners and mobile devices with real-time data validation and exception flagging.

  • 180 mobile scanning devices deployed
  • Real-time data upload and validation
  • Automated discrepancy identification

Quality Assurance

Multi-level verification process ensuring audit accuracy and identifying root causes of inventory discrepancies.

  • Blind recounts for high-value items
  • Statistical sampling validation
  • Root cause analysis for variances

Audit Methodology

Phase 1
Pre-audit planning, system data extraction, and team mobilization
Phase 2
Physical count execution across all locations with real-time validation
Phase 3
Discrepancy investigation, recount verification, and root cause analysis
Phase 4
Final reporting, system adjustments, and process improvement recommendations

Results & Impact

The comprehensive audit provided accurate inventory data and identified significant opportunities for operational improvement.

$14.2M
Total inventory adjustments identified
99.4%
Audit accuracy achieved across all DCs
2.8M
SKUs physically verified and validated
Zero
Days of operational disruption

Key Achievements

Accurate Baseline
Established reliable inventory baseline enabling improved forecasting and replenishment planning
Process Insights
Identified 23 process improvement opportunities to prevent future inventory discrepancies
Financial Clarity
Provided accurate inventory valuation supporting clean financial reporting and audit compliance
Operational Continuity
Completed audit with zero impact to store replenishment and customer service levels
"The audit team's professionalism and efficiency were outstanding. They completed a massive undertaking across our entire distribution network without disrupting our operations. The insights gained have been invaluable in improving our inventory management processes and financial reporting accuracy."
Vice President of Distribution Operations
National Automotive Aftermarket Retailer

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