March 2023: " Is Anyone Fact Checking Your Stock Order?"

As we move on to March of this fairly new year, we are going to ask a question that has probably never been asked before of the Parts Manager. Why would any Parts Manager have to ask this question which is the title of this month's issue of ACG "Smart Parts"?

After all, it is one of the primary duties and responsibilities of the Parts Manager to "manage parts", which includes ordering, stocking and receipting automotive parts to sell.  One of the main differences in managing a Parts Department today versus years ago is that there are many more factors that come into play in having the right mix of parts.

For one, there are many, many more part numbers to manage in today's automotive parts inventory in order to provide for many more vehicle applications and manufacturers. Also, the life span of automotive parts today is much shorter than it ever used to be.

We have to trust the "facts" when creating and reviewing our Stock Orders. This means we have to trust the initial set ups and parameters that go into creating an accurate Suggested Stock Order to begin with. Are these set ups and parameters "factual" in giving us the results we want to see?

Even if these set ups and parameters are "factual" and accurate, are we going to trust that information and make the right decisions? Are we going to override what we see, or are we going to go with what we see? The answer to these questions have many variables that lead us to our final Suggested Stock Order decision.

Here's just a few questions that run through the Parts Managers mind...

• What if the part doesn't sell and becomes obsolete?
• Is the part too expensive or too big to stock?
• Do I need to stock that many of that part when I can get it overnight?
• If the part is on Back Order, do I wait until it becomes available?
• What if I get stuck with those "package quantity" parts that I can't return?
• I know I've sold a few of those, but do I really need that part?

If any one of these questions looks familiar, then you are not alone because these are some of the most common Parts Manager questions that run through their minds as they review their Stock Orders, especially if we are running our own Stock Order on our DMS.

The sad thing though is when the Manufacturers Vendor Managed Inventory, (VMI) Suggested Stock Order comes up, we tend to let it go through because it's so called "protected". The myth there is that many Parts Managers don't realize that they are just buying many of these parts just to hold and send back down the road.

Whether all of the above mentioned is either truth or speculation, then why do these two following questions come up over and over again in the Parts Department?...

"Why don't we stock these parts that we are selling all the time?"

"Why do we keep running out of this same part we are selling all the time?"

It's time to do some "Fact Checking"...

Let's start out with some "facts", or perhaps you could also say "truths" about our automotive parts industry, which doesn't make it any easier for the Parts Manager. Whether we are managing a Parts Department today, or many years ago...

1.) We will never have, or stock all the parts we need at any given time. That's why we report Lost Sales to begin with in order that we may achieve a First Time Off Shelf Fill Rate, (FTFR) of 75% - 85%. Reporting those Lost Sale Demands is the only way to achieve the right inventory "breadth" and FTFR.

2.) All parts will eventually become obsolete as obsolescence is and has always been a thorn in the side of most Parts Managers. It's not a matter of parts becoming obsolete, it's more a matter of how we manage obsolescence before and after it happens.

3.) There have always been and will always be backordered parts, even though we have more now than ever before. In my opinion, backorders are becoming more of an excuse for not doing our jobs as Parts Managers. Though frustrating and time consuming, managing backordered parts has to be a mindset where when they happen, our job has not ended...it's just beginning.

4.) Having the Proper Set Ups & Controls in any DMS, or Manufacturers Vendor Managed Inventory, (VMI) is crucial to getting the right "facts" out of any Suggested Stock Order. Phase-In/Phase-Out Parameters along with the right Source Ranking by Piece Sales Set Ups is where the math meets "facts" in determining accurate results, no matter today or many years ago.

And now...the million-dollar question!

"I'm the Parts Manager, why do I need anyone Fact Checking my Stock Orders?"

Earlier, I mentioned six common questions that go through the Parts Managers while reviewing a Suggested Stock Order, even though there are perhaps many more. As Parts Managers, our thought process, or Behavior Patterns are generally different from other department managers. We tend to be Critical Thinkers and perhaps "over-think" many things.

This most common Parts Manager "Behavior Pattern", or Personality Profile is both a blessing and a curse when reviewing any Suggested Stock Order. Reviewing all this Suggested Stock Order data requires a lot of research and math before making the right decision.

A blessing in a way that a Parts Manager has to be a Critical Thinker when managing the Parts Department as it involves managing several thousand part numbers as well as managing the dealers second highest asset in most dealerships. There are more transactions in the Parts Department in a single day than in the entire dealership in whole month.

It's also a blessing because we tend to be overprotective, non-trusting, cost conscious, and anti-obsolescence minded and that's a great thing! Especially in the eyes of the dealer because the dealer has to trust the Parts Manager, just like the Office Manager, or Comptroller.

On the other hand, our personality could be a curse as Parts Managers with this Personality Profile tend to "over-think" many things as logic tends to weigh heavily in their decisions. If things aren't "black & white", this tends to lead into "over-thinking" many decisions, which isn't a bad thing, it's just the way it is.

This "over-thinking" is very evident in the six questions I mentioned earlier that run through a Parts Managers mind when reviewing their Suggested Stock Orders. The "what if" always comes into play when trying to predict outcomes that we haven't experienced yet.

So!...Who should be fact checking the Stock Order with the Parts Manager?

Being that many Parts Managers look at things one way as we have reviewed, we need another set of eyes to get a different perspective. What better choice than the Service Manager, or perhaps the Lead Counterperson? The Service Manager tends to see trends of what jobs are selling and the Lead Parts Counterperson because of the several number of transactions they experience each day.

In order for this to be a success though, the relationships between the Parts Manager, Service Manager, and/or the Lead Parts Counterperson has to be one of trust and openness. Personally, I have always welcomed that second pair of eyes in order to get the best results from what I'm stocking on the shelves.

Many Parts Managers are reviewing their Stock Orders, primarily looking at total demands, history, price, type of part, make, model and year usage, return status, etc., but the Service Manager looks at what they are selling up front and overall Service Cycle Times.

Just to be clear though, we are not suggesting that the Service Manager be the final say as to what the Parts Manager should be ordering, we are just looking for another set of eyes to give the Parts Manager a second opinion on the facts that lie within the Suggested Stock Order.

The Lead Counterperson is looking at repetition, trips to the same bin location, stock outs situations, Lost Sales entries, chasing the same parts, in-coming phone calls, etc. All of which play a big role in what we are experiencing each day versus what we are seeing on that Suggested Stock Order.

Ultimately, it should definitely be the Parts Manager that has the last say on what the final verdict should be when actually placing the final edit version of the Stock Order. Offering suggestions, adding input, listening to our customers, and communicating back to the Parts Manager is where the "fact checking" is defined as "assisting" in the Stock Order Review.

The same goes for the Service Manager when developing, adding or modifying their Labor Ops and Service Menus. The Parts Manager should be "fact checking" and assisting in those decisions as well, especially on final "out the door" pricing on Service Menus and Labor Ops. 

In my opinion, we need to humble ourselves and let our pride out the window and welcome these other sets of eyes, even though we are ultimately responsible for the parts inventory asset, controlling obsolescence and parts profitability. We cannot be closed minded when it comes to maximizing our opportunities.

After all, Parts Inventory is not an expense that we need to trim down, it's an asset that the dealer expects to turn several times a year, especially Parts True Turn. In my opinion, it's time to share this information and stop trying to predict potential future results that we have no control over.

If you want to learn more about ACG Smart Parts "Eight Habits of Highly Successful Parts Managers", visit our website @ www.smartpartstraining.com, or...just pick up the phone and call me at :

(786) 521 - 1720...After all, not knowing is not worth not "fixing" it...