As we move on into the latter half of 2025, I want to hit on a topic that has really bugged me over the years. I still see and hear Parts Managers referring to their DMS as a real person. How many times do we hear..."The computer says..." and it goes on from there.
What's worse is that blaming the DMS has become commonplace, or perhaps an excuse for why we either ran out of a part, or never even stocked the part in the first place. In defense of Parts Managers everywhere though, we are used to taking the blame.
Either we don't have the part, we ran out of the part, the wrong part came in, or the Parts Department ordered the wrong part seem to common excuses. Another common excuse is the Parts Department forgot to order the part.
Even though there may have been a misdiagnosis by the technician, it seems to always fall on the Parts Department. Either way, the eventual outcome is the same, it seems that no one takes a step further to ask why we may not be seeing what we want to see.
Communication and the DMS play a huge role in these outcomes other than the technician misdiagnosis. Keep in mind that we don't have the right part for only two reasons...either we ran out of the part, or we never stocked the part to begin with.
So how does this all play out when we talk about our DMS and how it seems to "talk" to us, and why do we often times refer to our DMS as a real person? Why do we seem to "blame" the DMS when the blame falls on us or the Parts Department in general?
More importantly...
"Why do we seem to trust the DMS as opposed to questioning why we are seeing what we are seeing and fixing it?"
The reason is simple...we have to understand that the DMS is putting out what we put into it. It's calculating the set-up data and producing the mathematical results. What's missing in all this is what the DMS cannot do.
Let's Begin!
Our DMS does not have common sense, does not have the ability to reason and cannot perform critical thinking theories. Even though we are headed into the New Age of Artificial Intelligence, (AI), we are not there yet with our Dealer Management Systems, (DMS).
Even with AI is coming on strong, we will still need to do what the computer does not know. The DMS does not know if a part is on backorder, it does not know if it is a restricted part, and it does not determine recommendations by the cost of the part.
In other words, if we run our Suggested Stock Order, it will recommend the part based on the set-up criteria for "phase-in" and demand history. Even though these demands can be "weighted" over a period of time, the cost of these parts are not measured for Phase-In and Stocking Levels.
If it meets the demands based on the set-ups, the DMS does not care what the cost is and will make recommendations based on demands. Even if the proper math is used in our set-ups, we will still have to make decisions whether to stock the part or how many to stock.
Perhaps we have significant demand and Stock Order Recommendations on parts we do not intend to stock in the first place like engines, other high dollar parts or even collision parts that we do not want to stock. Even though demand has been met, we "choose" not to stock them.
The DMS doesn't know these exceptions as it's giving us raw data based on set-up parameters. The DMS does not know a part is on back order or restriction, and we have to take from there as our job is over, it is just beginning.
Unfortunately, many Parts Managers just stop and wait on backorder situations and don't take the effort needed to "find" them. We already know that we need them as the math, (if set up correctly) has revealed this whether it is available or not.
If we, as Parts Managers believe the part is on backorder and not available, then that's what our expectations will be. In my opinion, I believe that someone out there has to have it, and I have to find it. Even if I fail on some occasions, I will still succeed more often than not as it's the "mindset" that needs to change in my opinion.
Unfortunately, we tend to find out a part is on backorder when the customer is already there, and the vehicle is on the lift. Wouldn't it be great to had that backordered part already on the shelf before the vehicle is on the lift when it was on our Stock Order?
So, let's talk about when the DMS "says" we need to order parts we don't agree with, or the amounts recommended, or even why we don't have them on the shelf. Even if the DMS "says" we should have it, and we don't, or perhaps it "says" we need to order more or less than we think we need, we still need to ask why.
First of all, we cannot try and "outthink" the DMS as it is just giving results based on input. So, talking to it, or telling others what the DMS is saying is really an admission to guilt on us. If we don't question why we are seeing these incorrect results or takes steps to fix it by the math, we will keep talking to the DMS and eventually ourselves.
Sales Demands over the last 12 months can also get the Parts Manager talking to the DMS as these annual demands can vary throughout the year. Especially in areas of the U.S. where they actually experience all four seasons.
Many Dealer Management Systems "weigh" sales demand over the last twelve months which is also something we have to consider. In other words, we could sell a part 24 times over the last year which could be 2 per month over 12 months. Or we could sell 24 in just one month over the last 12 months which makes a big difference in the DMS recommendations.
This is actually huge because if your DMS does not have the ability to "weigh" most recent sales demands by percentage versus the total demand over the course of the last 12 months, it can give Parts Managers a "false reading" on the current Recommended Stock Order.
If the DMS has this feature to "weigh" parts demands over the most recent period of let's say 3 months, it can highly impact having the right part at the right time. An example would be if we lived in Minnesota and we sold 12 AC Compressors over the last year, that would mean that we sell on average 1 per month.
But we actually sell most if not all those AC Compressors during the 3 Summer Months. This would mean that we would run out in the summer and have them on the shelf in the winter. If the DMS has this "Weighted Daily Demand" feature, we would be able to have those parts when we need them.
This "Weighted Daily Demand" feature kind of confuses many Parts Managers as they could be looking at a Stock Order and the first thing we all look at is Annual Piece Sales. One Parts Manager called me all confused as he had a part on his Stock Order that had sold 21 times over the last year and the DMS Weighted Average Recommendation was to order 14.
He did not agree with that recommendation because he thought it was way too many and like most Parts Managers, he wants to protect himself from potential future obsolescence. This is a perfect example when I referred to trying to "outthink" the DMS.
What he did not realize is that 17 of those last 21 Annual Piece Sales were in the last 2 months as this part is on the rise. He was going to chop that order down to 3, but as I explained to him that if he only ordered 3, he would run out.
As an added note, I had him look at another part that was on this same Stock Order that had a similar Annual Piece Sale total that was recommending "less" than what he would order. He found one part that sold 25 over the last year, but the recommendation was for only one.
I asked him if he agreed and of course he said no and wanted to order 6 as he knew the part number by heart. After he told me what the Weighted Daily Demand average was, I told him to look at his Annual Piece Sales and he had only sold one of those parts in the last 8 months.
The system calculated the drop in Annual Piece Sales and reduced the recommendation. The results "would have been" bad if he trusted himself over the math as that part was on its way out and he would essentially be "purchasing" obsolescence.
We need to let these parts Phase-Out and understand what the system can do for us if we understand it as well as the math if set up properly. Unfortunately, most of the obsolescence that is accrued is because of poor decision making to prevent it in the first place.
Speaking about the math, if not set up properly, here are a few areas that can cause undesirable results...
- Incorrect Phase-In Phase Out Criteria
- Incorrect Stocking Levels based on Incorrect Math being set up
- Improper Use of Weighted Daily Demand Percentages, (if available)
- Seasonal Sales not being Updated
- Changes in "Lead Times" and/or Supply Chain Issues
- Supersession Links not being updated on Superseded Parts
The results are that we are actually seeing and getting is due to what we put into it, or as it's been said for many years..."Garbage In - Garbage Out". That being said, if the results aren't what we expect, something was set up wrong in the first place or changed along the way and has to be fixed.
Unfortunately, and again, many Parts Managers have not been trained or taught about these basic set ups based on the math or even where to go to fix them. After all, "How Do We Know What We Don't Know?" In my opinion this is where the Parts Manager starts referring to their DMS as a person.
Here's why computers can't do what we can do, even with AI, someone has to input data parameters or what I call the "what if" situations. In order for the computer to even have a chance to "reason through" these math problems, it's still requiring input data by a "real person" for the computer to "process" through.
We have to use our ability to reason, utilizing common sense, and thinking through all the things that a DMS cannot do is what we have to do. We have to know current Supply Chain Issues, changes in Parts Lead Times, or even what type of parts we want to stock.
In my opinion, common sense is not so common in many situations. If we would just start out by questioning why, we would be on a better path to better results in taking away this DMS person...maybe we should give our DMS a name!
I didn't learn 14 different Dealer Management Systems without asking a LOT of questions along the way. What I did know that led me to learning all these systems was that I knew what I was looking for and didn't give up until I found out.
Even though it may have been in a "different language" from one system to another. The basics are all the same from Phase-In/Phase Out Parameters, Annual Piece Sale Ranges, Weighted Daily Demand, Pricing Strategies, etc.
We just have to know what we want and where to find it, then implement the right math in order to get the most out of each system. Most importantly, if the results are not what we expect, we have to do the research, find out why and fix it.
Many don't know that the math in our DMS, (whether right or wrong) also translates to the Manufacturers Vendor Managed Inventories, (VMI). That being said, if your DMS is not set up correctly, then your Stocking Levels from the Manufacturer will also be incorrect. Maybe the Manufacturers VMI is also a person that we talk to?
My fear is that with all this new Artificial Intelligence, (AI) and new products and programs out there that will do the job for us, we will lose our own ability to reason and figure things out for ourselves.
Simple reasoning and math concepts have seemed to slip away from us, and we have become so dependent on computers and new innovation to replace the ultimate computer which I believe is the human brain.
Even though all these new innovations help us to expand our knowledge and achieve new levels of our own intelligence, in my opinion, we cannot let them replace our own abilities. Especially the basics of math, common sense, our ability to reason and utilizing our own critical thinking skills.
Lastly, if your DMS is a person, why not just give it a name, but keep in mind that what you see is a direct result of what is or was put into the system. Nothing will change if we don't ask why and get it fixed. Otherwise, we might as well be talking to ourselves and the ceiling every night...
"Does Your DMS Person Have a Name?"
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...
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