In our second issue of the New Year, we will be doing a Follow Up to our first issue which was our "Top 10 Parts Hot Topics for 2026". In that first issue, we made our predictions to what we may expect going forward concerning the topics mentioned.
As a follow up, we thought it would only make sense to explore how we might handle each one of the topics. Going "Inside the Mind of Today's Parts Manager" will allow us to get in the right mindset.
After all, we may agree or disagree with on how each one of us might handle the 2026 Parts Hot Topics. Even though we may all experience what we predicted last month, our results may differ depending on our mindset and how we approach them.
That being said, we chose to dive into our own minds here at ACG "Smart Parts" as to how we would approach these "Top 10 Parts Hot Topics for 2026". Even though our mindset and approach may be different from other "Smart Parts" Managers, we will approach them from our end.
All we ask is that we all have an open mind to perhaps doing our own self-evaluation and allow a little change that may make a difference. As we have mentioned in the past, Parts Managers have a unique Personality Profile that leans more to the cautious side versus being a little more aggressive on some of these topics.
Even though our opinions may differ, I think we could all agree that we all want to get better and we all want to succeed. Our mindset and our approach will determine how much better we will be and how well we succeed in achieving our overall goals.
So!...we will start out by giving all of our "Smart Parts" Readers our disclaimer to our February Issue of ACG "Smart Parts" in hopes that we all achieve and perhaps exceed our goals and expectations for 2026!
"The opinions and recommendations expressed in this issue of ACG "Smart Parts" are those provided by ACG "Smart Parts", a division of Automotive Consultants Group, Inc. and does not guaranty results as individual dealer results may vary based on dealership size, location and personal preferences".
There!...now that we got that clarified, let's see how our mindset and approach to this year's "Top 10 Parts Hot Topics of 2026" can actually impact our results going forward into 2026!
It's Time to Go "Inside the Mind of Today's Parts Manager!
Let's begin...
Last month, our first Hot Topic was DMS Conversions, (Dealer Management Systems) and how they impact all of us going through this transition. Nobody likes the idea of this change, but I will say that we have to accept it and move forward.
The first thing we have to do is forget about the old DMS and try not to compare one with the other. Every DMS does some things better or worse than the previous one, it's just the way it is. Keeping an open mind during this transition is crucial to understanding it going forward.
I will say that it is okay, and I highly recommend that we ask lots of questions as we try to "translate" one DMS Language to another. This is exactly how I got to learn 14 different systems, knowing what I needed and where I can find it in the new system.
I never accepted "no" for an answer until I found the right answer from the right person.
Also, and especially in Parts, we need to question the math on initial Set Ups & Controls. Unfortunately, many Parts Managers don't question the math as they may feel that the Install Team must know what they are doing, which may not be the case.
Going through this transition from the standpoint of those installing the new DMS is very challenging, tedious and "deep". Mapping one DMS to another requires precision, communication and accurate information.
If you are a "Smart Parts" Manager that will be going through a DMS Transition in 2026, you will need to have an open mind, positive attitude and not be afraid to ask as many questions as you need.
Lastly, get the old system out of your head and be more attentive to how the mapping looks and making sure that all the info carries over to the new system accurately. Common areas are Parts Pricing & Assignments, Stocking Status, Parts Sources and Parts Movement Capabilities.
Our second Parts Hot Topic we discussed last month was Parts Reconciliation Issues. No matter what system we have, we need to be doing this "practice" monthly along with periodic bin checks daily, weekly and monthly.
Meeting up with the Accounting Department and comparing numbers weekly or monthly is a good practice to keep variances at a minimum. The "Smart Parts" Manager also needs to have basic Accounting Skills to know how parts are accounted for from a sales and cost of sales standpoint and how Parts Sources are mapped in Accounting.
The sooner we discover any parts variances in Accounting the better as opposed to waiting until after the Year End Parts Physical Inventory has been performed. Tracking these variances each day and each month will minimize discrepancies overall as well.
A simple Parts Monthly Reconciliation Form can be used by the Parts Manager that tracks the Controlled Parts Inventory in the DMS, (PAD Inventory) compared to the Ledger Balance Parts Inventory.
We went on last month with our third "Top 10 Parts Hot Topic for 2026" which was Parts Obsolescence Control.
The most important part of controlling parts obsolescence is to tackle it early on. Waiting until it's too late after 12 months is not the way to control it as we need to know what's coming down the pipe.
Attacking it sooner also allows us to get the most Return on Investment, (ROI), as these parts that have just dropped down may still be desirable in other Dealership Parts Departments, or for some of these Parts Obsolescence Vendors.
Parts Obsolescence was, still and will be a Hot Topic for many years to come. We need to have a combination of Parts Obsolescence Vendors, Proper Phase-Out Parameters and an In-House Parts Scrapping Program in place to tackle this beast.
Lastly on this topic, we need to start phasing these parts out sooner and getting these lists out to Vendors, or scrapping them around the 10th month, No Movement Category. Waiting will only make it worse, and we could be using this money to stock more parts that are moving much more frequently.
Right along with Parts Reconciliation, our fourth "Top 10 Parts Hot Topic of 2026" was Parts Core Values, both Dirty and New have created a new Parts Nightmare. Especially with the higher values, we need to separate the Core Values in Parts Accounting Ledger Balance to track them separately.
Due to the cycle time of these cores and the fact that they tie up the dealers' cash, keeping this turnaround time to a minimum is crucial. This makes it much easier to reconcile and relieve these values if we try to keep them within 30 Days as much as possible.
Not only do we have to keep them within these 30 Days, we also have to make sure that when these Dirty Cores leave the building, the DMS needs to be updated and relieved as well. The Dirty Core Report in the DMS should always reflect what we really have on site.
Our fifth "Top 10 Parts Hot Topic of 2026" was our Parts Gross Profit Goals for 2026. Having a goal of any kind requires change or modification going forward. Depending on where we ended up the previous year and if we achieved those goals, we have to do the math all over again.
Modifying the Matrix is one thing, but the most time-consuming part of setting Parts Gross Goals is making the proper modifications to our Service Pricing Menus. Many Dealerships Parts & Service Departments really don't update the Service Menus often enough.
We should be looking at and perhaps updating these menus at least twice a year. Parts prices are always going up and if we don't keep up with these parts price increases without updating our Service Menu Prices, we will only lose gross.
Moving on to our second half of our "Top 10 Parts Hot Topics of 2026" and with our Number Six, let's get into the ACG "Smart Parts" brain with Supply Chain Issues. Even though many say that it's getting better, it's still nowhere near where we would like to see it.
In the opinion of the ACG "Smart Parts" brain, we have the opinion that we need to get the parts that we need, no matter what. Backorders, Restricted Parts or parts that appear to be unavailable have to be out there somewhere.
VIN Specific Parts are a different issue, and we all have to deal with them. But if we could minimize the overall Supply Chain Issues by working harder on those "hard to find", or backordered parts, we can deal with those VIN Specific parts a little easier.
We understand that we won't find every part that we need, we still need to have the mindset that if the part is selling and the math supports it, we need to get it. Not only do we need to get them, but we also need to go find them as soon as we find out they are not readily available on first notification in our DMS.
Chasing down Backorders is much easier when we see them on a Stock Order as opposed to waiting until we need them on demand when the vehicle is on the lift. Early notification allows us to chase them down with less pressure and we may even have more options where to get them.
This is definitely another "mindset" issue and we can't wait until they show up eventually, even if we may have to pay a little more up front. Paying a few dollars more is better than tying up lifts, lowering productivity and losing total repair dollars just to save a few bucks.
If a part "appears" to be not available, that's when the work starts as our job doesn't end when we get that backorder notification, it's just now beginning. We have to remember that the Service Department is our Front Line, and we need to support them.
Moving on to our seventh, and I really love this one as we will give our take on the Manufacturers Controls, Promotions and Programs. The most important mindset that we need to have on this one is that we work "with" the Manufacturer and not "for" them.
Believe it or not, there are many Parts Managers out there that put the Manufacturer first and foremost, even over their own dealer who pays them. Being "compliant" is one thing, but being "obedient" is another.
We have to do what's right and in the best interest of our dealer. Even though we may feel that we are helping our dealers by following the Manufacturer's Recommendations, the overall negative impacts can be devastating.
They love selling more parts but buying obsolescence up front and overstocking the Dealers' Parts Inventory is not helping the dealer. It's really simple as there are Industry Guidelines on Days Supply and Managing Obsolescence and that's where our focus should be.
Keep in mind that we are not saying that the Manufacturers' Controls, Promotions and Programs are all bad overall, we are just saying that we need do the research. A Wiper Blade Program may look good, and may have added discounts, but we never realize these discounts until we sell them.
Parts Posting Procedures was our Number Eight last month and though it may seem to be a minor topic, it's actually very huge from an Accounting standpoint. Ordering, Receipting and Posting parts to the wrong Parts Source or Stocking Groups can have huge ramifications if not done correctly.
We can't just assume that our Parts Staff knows that Parts Sources, or Stocking Groups are "mapped" and connected in the DMS to certain inventory and sales accounts. Any Parts Employee that is allowed to perform posting procedures has to know how to properly order, receive and post to the proper Parts Source or Stocking Group.
In 2025, this simple topic was near the top of the list of concerns and questions that I received over the last year. The damage it causes goes beyond what many may think from Pricing Issues, Lost Gross, Bin Count Errors, Outstanding Parts Orders and Increased Discrepancies on Parts Reconciliation just to name a few.
Coming in at our Number Nine was Parts First Time Fill Rates which is always confusing as there are actually many fill rate definitions out there. Even though at Number Nine, I believe it should be our Number One Goal as "Smart Parts" Managers.
First and foremost, Overall Fill Rate is not First Time Fill Rate!
Most often confused with Overall Parts Fill Rates, which most use as their number, we could actually have a high Overall Parts Fill Rate without even stocking a single part on our shelf. Overall Fill Rate simply means that the order was "filled" minus any Lost Sales posted against it.
Actually, having a high Overall Fill Rate just means that we are not reporting Lost Sales at Industry Guidelines. In effect, having a very high Overall Fill Rate is not a good thing, it's actually a bad thing.
Overall Parts Fill Rate also doesn't mean we filled it today as we could fill a parts order today, tomorrow, next week or next month and it would still count in that Parts Overall Fill Rate Percentage. To me, providing that part on first request is most important and is the true indicator on how well we stock our shelves.
Having a "First Time Off Shelf Fill Rate" at 75% - 85% should be our first and primary mission as "Smart Parts" Managers. We also have to protect and keep obsolescence at a minimum while providing this high First Time Fill Rate.
Our job is to do both and if we put Obsolescence Protection first while sacrificing a high First Time Fill Rate, we are defeating our purpose. Any Parts Manager can protect against obsolescence by just stocking the fast-moving parts and ordering everything else.
It never fails, when I see a Parts Manager that does a great job Controlling Obsolescence, they often have a Low First Time Fill Rate right along with it. Only the great "Smart Parts" Managers do both and it can be done.
The opposite may also happen with some Parts Managers as they may actually nave a good First Time Off Shelf Fill Rate, but their Obsolescence may also be high. The only way to have the best of both worlds is to have the right Set Ups based on the math right up front.
Finally, and at Number Ten, let's peak into the ACG "Smart Parts" Manager mind to see how we would manage our Parts Days Supply going forward. Keep in mind that the Industry Guideline on Days Supply is 45 Days.
This also includes ALL Part Inventory such as Obsolescence and Overstock Quantities as it is a total overall dollar figure of the Parts Inventory. This is extremely important to know as I've seen dealers with a High Days Supply, but when I backed out the Parts Obsolescence, they actually had a Low Days Supply of the good stuff.
If we keep Parts Obsolescence to Industry Guidelines, we could actually afford to keep a few extra Days Supply of the parts we need the most. Having a little extra of the parts we need most is not a bad idea to avoid potential "stock out" situations.
We all know that even fast-moving parts can go on backorder and we never want to be on that end of the spectrum. Fast-moving parts are called that for a reason and if we keep the inventory clean, we can protect ourselves even better.
Looking ahead into a New Year is always exciting, but we all know that "Preparation Is the Key to Success". Our first month of the year we revealed our "Top 10 Hot Topics for 2026" based on what we experienced in 2025.
This month, we took it to the next step and revealed what's on our minds and how we would approach these "Top 10 Parts Hot Topics for 2026".
In our opinion, one thing is for sure, if we keep doing the same thing the same way, we will get the same results. If we aren't getting the results we want or expect, then something has to change.
The question is and more importantly....
"What's Inside Your Mind and How Will You Approach our Top 10 Parts Hot Topics for 2026?"
f 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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