Automotive Consultants Group Inc.
  "Smart Parts"
E-Newsletter 
 February 2011 
Parts Shelves


 
Issue
8-February 2011
 "Smart Parts"     with   Dave Piecuch, ACG Inc. 
                                                                                                   "Maximizing Your Manufacturers' Inventory Management Programs"
 

Hello "Smart Parts" Readers! 

    

  Welcome to February 2011! Hopefully, all of you are well on your way to having your "Best Year Ever!"  If January is any indicator of how our industry will fair in 2011, I believe it will be a GREAT year! The excitement and positive feedback that I received speaking at an NADA 20 Group meeting this past month AND looking at some of the numbers from our "Smart Parts" dealers in January, 2011 is starting off with a "bang"!
 

  This month, we will be focusing on how we can maximize our factory sponsored stock replenishment programs. I realize that not all manufacturers' offer these programs, but we still need to look at how we can improve our "First Time" Off Shelf Fill Rates to maximize our Service Department Productivity. As far as the factory sponsored stock replenishment programs, we have to "partner" their programs to our own DMS Systems, instead of "replacing" our own program with theirs. 

 

As always, don't forget to take advantage of our FREE "Take-Aways" each month. If you have just joined our "Smart Parts" Team and haven't received your FREE "Take Aways", simply visit our website at SMARTPARTSEZINE to request this month's as well as past issues. Just enter "Past Issues" in the comment box. Remember, sign up is FREE, so don't miss your opportunity to access these helpful tools that can increase your Parts Department's profitability and performance!

 

   
Sincerely,
 
Dave Piecuch
Vice-President
Automotive Consultants Group Inc.
 
IN THIS ISSUE
"Smart Parts" Readers Welcome
"Smart Parts" Tip Of The Month - Maximizing Stock Replenishment Programs
"Ask Dave"

"Smart Parts" Tip Of The Month

    
   
    It's still amazing to me, when I talk to Parts Managers, how so many of them have replaced their own DMS Re-Stocking Programs with the factory sponsored stock replenishment programs. Even though these factory sponsored programs offer many  enhancements and features such as inventory protection, added discounts and return reserve, they do not "totally" measure individual dealers' sales performance and overall marketability. Let me explain further....           
  
    All these programs, as well as our own, measure sales in "total parts demand", but the difference is that their programs are measured in "group demands" as opposed to individual dealer demands even though the individual demands are included in the overall picture. This being said, your "Days Supply" may be affected by the group demand resulting in positive or negative adjustments in daily stock orders. In most cases, "plus adjustments" may not be protected. One other fact is that your store may be stocking parts that have little or no demand, but because of compliance levels, we stock them anyway, even though they are protected.
   
    If you are on a Manufacturers Sponsored Stock Replenishment Program, ask yourself these two question....
 
1.) Do you have any stocking parts with steady demand in YOUR dealership
      that ARE NOT currently qualified parts and ARE NOT protected by your
      Manufacturers' Stock Replenishment Program? 

2.) Do you currently stock parts that are still "fast moving" in your inventory,
      but have been dropped from your Manufacturers' Stock Replenishment
      Programs and are now NOT PROTECTED?
 
    If you answered "Yes" to any or both questions, I have to ask you this question...."When was the last time that you created a Stock Order on your own DMS System?"
 
    Get the best of both worlds by utilizing your Manufacturers' Stock Replenishment Program AND your own DMS System! Your DMS System helps you control your own Days Supply by utilizing Source Ranking Set Ups. Also, running your own Stock Orders once or twice weekly will help keep YOUR customers demands met. If you are not part of any factory program, Source Ranking, Days Supply and Phase-In/Phase-Out Parameters need to be monitored or modified at least on a quarterly basis.
  
Our FREE "Take-Away" of the month is our "Smart Parts" Source Ranking & Days Supply" Set Ups. Even though this FREE "Take Away" was available in a previous issue, maybe you are a new member and may have missed it. We still need to revisit these Set Ups OFTEN in order to prepare for YOUR "Best Year Ever"!!!
          
 
   To receive your February FREE "Take-Away"! just sign up at
 
 
 or if you are already a member, simply visit our website at
 
  
 
 

"Ask Dave"

   This month's "As Dave" question was actually asked of me by many Parts Managers at a recent NADA Parts Conference in Las Vegas, NV

 

  "Why should I be concerned about stocking a qualified part on my manufacturers' stocking program if it's going to be protected anyway...I can just return it if it doesn't sell after fifteen months at no cost"?
 
   It's not often that I like to answer a question with a question, but here goes..."Before this program, would you EVER stock a part, regardless if it has protection or not IF it doesn't have sales history or demand for FIFTEEN Months"???

It seems that we have gotten way off track these last few years on the reasons why we have stocking parts in the first place! We are more concerned about stocking parts to meet manufacturers' "Stocking Compliance" and "Purchase Discounts" instead of providing the "Right Parts the FIRST Time" to OUR customers.

Quite honestly, I would rather be concerned about SELLING parts instead of keeping them on the shelf and NOT have to worry if they are "protected" or not if they DON'T sell. If we do our jobs as Parts Managers, we wouldn't have to worry about it in the first place! NADA's Guidelines for Parts Sales Activity in 0 - 3 months is 75%! Parts Sales Activity for 4 - 6 Months is 23%!...So, in actuality, 98% of my Parts Inventory should have movement every six months!

   The answer to the question? You SHOULD be concerned if you are stocking parts for as long as FIFTEEN months with no sales, regardless of what program you are on. There are many costs that tend to go un-noticed such as acquisition costs, holding costs and additional personnel expenses just to "manage" your inventory, even IF it is protected.

    Lastly, we order parts every single day for customers that ARE NOT protected, often times without Special Order Guidelines, so why should this be an issue in the first place?

    
Don't forget to send in YOUR question in to: Ask Dave! for a chance to win YOUR FREE 60 Minute webinar with Dave!

Got "Service" Absorption? 

 
For more information on ways YOU can increase YOUR "Service Absorption"....visit our website at: www.smartservicetraining.com 
and see how ACG can help you make 
"This Year Your BEST Year Ever!"