Wednesday, January 31, 2024

February 2024: Dealer Management Systems, (DMS) Rankings for 2024

In my opinion, one of the most challenging decisions that today's dealer owner has to make is which Dealer Management System, (DMS) is right for their dealership.

It was much easier years ago as their where just a handful of DMS Vendors out there such as Reynolds & Reynolds, ADP, (Now CDK), UCS, Coin Convergent Systems, and perhaps Arcona, which evolved into today's Dealertrack DMS.

The pricing of these Dealer Management Systems was just what it was as dealers didn't really have many options as DMS competition was held pretty tight with just a few systems out there.

Dealers had to have a Dealer Management System, so the choice of which system to purchase became just a matter of preference. Price wasn't a major factor on which system was eventually selected as being familiar with system operation was the priority.

Fast forward to today, Dealers have lots of options, in a way, maybe too many options. It has led to choices being made based on price, or perhaps, Office Manager, or Comptroller preference, no matter what the price.

Office Managers and Comptrollers often dictate which DMS the Dealer will choose, regardless of the price due to Conformity and Accountability to their standards they are familiar with in basic Dealer Accounting.

That being said, if Accounting is a main priority, with price coming in second, what about usability in all other Dealer Departments? What affect does this choice of which DMS have on the Fixed Operations Departments, primarily the Parts Department?

It's Time to Find Out....Let's Do This!

I will say that the choice made definitely impacts both the Parts & Service Departments. Some are better than others and many lack basic needs of each individual department.

In this issue of ACG "Smart Parts", we will break down each individual DMS out there with their "pros and cons". There may be more systems out there that are not mentioned, but for the most part, we will cover all but a few, if any.

We will not list these Dealer Management Systems in any order of personal preference as many dealers are perfectly fine with their choice. We will simply list the positives and negatives with each system out there from a Parts Perspective.

So, let's get started with our own ACG "Smart Parts" Perspective on what these Dealer Management Systems have to offer and what they lack. 

If we had the opportunity to put the best of each system wrapped all into one DMS, we would then have the perfect Dealer Management System out there, which someday, I would personally love to be a part of.

Each DMS that we review will be in alphabetic order and will not be listed in any order of preference. We will list our "Thumbs Up" and "Thumbs Down" on each DMS most utilized by Dealers today in 2024.

Although, ACG "Smart Parts" will "rate" each DMS with our "5-Star" Rating, One Star being the lowest rating, all the way up to our highest rating with Five Stars.


Let's Begin...

Adams: ★

👍: Thumbs Up

Adams Dealer Management System is not widely utilized but is an efficient DMS overall. It does provide ABC Source Ranking by Piece Sales and the basics as far as integration with Accounting are there and provisions for Matrix Pricing Options. 

Somewhat User Friendly but does require a lot of extra keystrokes to go from program to program, but not a major issue. Parts and RO billing is fairly easy, and Source Management is manageable and basically effective on Best Reorder Points and Best Stocking Levels.

Lost Sales Reporting is available but requires too many extra steps to get them recorded. Also, there are no prompts to report Lost Sales if parts aren't stocked initially.

👎: Thumbs Down

One of the main "Thumbs Down" in Adams is a lack of Reporting Options. Most of the "canned reports" lack enough significant information for daily operations. 

"Drill Downs" are just not there on Parts Gross Profit Issues, Parts Detail Information, Parts History, Supersession Links, Special Orders, Source & Batch Moves, etc.

Constant manual updating is also required for most information such as Best Reorder Points and Best Stocking Levels as real time updating is lacking.

Not a bad choice if you are a smaller dealer and just want the basics as we will see in many other DMS Options as we continue forward. 

A detailed Special Order Program is also lacking in Adams, almost like an afterthought with little detail and links to Customers and Open Repair Orders and Appointments.

AutoMate: ★★★

👍: Thumbs Up

I will say that AutoMate has come a long way in the last several years. They have "upped" their game to become a significant player in today's DMS battle.

Definitely very "User Friendly" with a very simple dashboard to direct anyone to where they need to go. All the key elements are there that a Parts Manager needs. 

Source Management with ABC Source Ranking, Batch Moves, Parts Matrix with Cost Plus, List Plus and List Pricing Options within the same Matrix, which is not common, but beneficial. Very good DMS overall with a few drawbacks they need to work on.

Lost Sales Reporting does take a couple extra keystrokes which will tend to lower the actual true Lost Sales numbers due to that extra step, but Lost Sales are easy to post in AutoMate.

👎: Thumbs Down

As mentioned, AutoMate has made many improvements, especially in Parts over the last several years. One of the items they need to work on is Parts Receipting.

In AutoMate, Parts receipts are either for Stock, or whatever else. In another words, there is no breakdown in Supplemental Stock Orders, "In & Out" Orders, Other Orders, etc.

AutoMate also lacks their own "Report Generator" that can be utilized by dealer personnel. They do have "Report Mate" where AutoMate can generate specific reports for the dealer at an additional cost.

AutoSoft:

👍: Thumbs Up

AutoSoft is very "User Friendly" with Parts Counter Tickets and Repair Orders very easy to navigate. Moving parts from RO to RO, or line to line very easy.

AutoSoft is probably one of the easiest to learn, primarily due to the fact that it's extremely simple to navigate through. The Action Buttons and Menu Driven Software is easy to read through and figure out.

AutoSoft does offer Source Movement by Piece Sales that is updated automatically in Sub-Source Management, but with limited levels of Source Movement by Piece Sale Ranges.

👎: Thumbs Down

Unfortunately, there are many negatives with AutoSoft, especially in Parts starting with the reporting. Monthly Management Reports are not updated automatically. If the Parts Manager does not archive the Month End Report?...they are lost forever.

AutoSoft has limited ABC Source Ranking Levels with only six levels offered. The minimum amount of ABC Sourcing Levels required based on the math requires at least eight levels.

Same goes for the Parts Matrix as only twelve levels are offered with no ability to add more based on different sales ranges. Monthly Management Reports lack lots of information needed for properly managing the Parts Department.

Unfortunately, there are many disadvantages with this DMS are far as Parts & Service goes beyond what we could list in this issue. They have a long way to go, but it's much more affordable for the Dealer with adequate Accounting Integration options.

CDK - Drive: ★★★★

👍: Thumps Up

Formally ADP, CDK Drive is still one of the most prominent, popular and longest lasting Dealer Management Systems out there today for many reasons.

CDK offers everything for all Dealer Departments, especially in Parts. ABC Source Ranking, Parts Matrix Pricing, Parts Ordering from Stock Orders, Supplemental Stock Orders, In & Out Purchases, E-Purchases, Lost Sales Reporting, etc.

No matter what the size of the dealership, CDK will provide all the needs. Daily & Monthly Reporting is outstanding in both Parts as in Service. Installing Parts Set Ups, though not easy and recommended for the average user, they are there.

CDK is still evolving over to their "Drive" format, but the old "Green Screen" is still required in certain Parts Set Ups. Most Parts Set Ups are fairly easy in their MSSO and IRO Set Up Functions.

CDK also provides "Weighted Price Averaging" which allows parts sales history to be "weighted" over the last twelve months. This provides the most recent sales information, especially on parts seasonal sales, not offered by many Dealer Management Systems.

👎: Thumbs Down

One of the more "pricier" systems out there, and as mentioned above, CDK is still evolving from their "DOS-Based" System from years ago over to their newer Windows Based Drive System. This process is still on-going and hopefully will be completed in the near future.

CDK does not allow the "mixing" of a Cost-Plus Parts Matrix with an "out of grid" default to List as AutoMate does, which is a great option. CDK also does not have a "Flat Price" override to Matrix Pricing as Dealertrack offers.

Flat Pricing can only be utilized by moving Flat Priced Parts into a different Source but doing that will sacrifice ABC Source Ranking & Movement. Source Ranking Movement also requires running the SCS Function Daily to allow Source Movement as it is not done automatically.

Dealerbuilt: ★★★

👍Thumbs Up

This DMS, in my opinion is one of my "Sleepers" on our list of Dealer Management Systems. I was actually surprised when I first started working with this system as it does what a basic, affordable DMS should do.

All departments will benefit from this system in a general way, but without the detailed information available in other systems like Reynolds & Reynolds, CDK and perhaps Dealertrack.

On the Parts side of things, it is pretty much complete in all aspects although some Applications require several extra keystrokes, but overall...a "good bang for the buck" in all dealership applications.

👎: Thumbs Down

Dealerbuilt does lack detailed report information if you are a manager that likes to "drill down" information as the "canned reports" have limited information, other than the basics.

Having the ability to create "specific" reports with "specific" information provided in other systems, whether Report Generator, Advanced Reporting, Dynamic Reporting, or an "English Statement" back in the old ADP days.

Today's Dealer Managers require more than just the "canned reports" that are provided by most Dealer Management Systems. Dealers in general are requiring their managers to "drill down" more and perform at an even higher level than years ago.

Dealertrack: ★★★★

Dealertrack, in my opinion, and from the Parts side of things has become one of the top, more affordable Dealer Management Systems available. Even though they are still lacking some key components as we will list, they are climbing that DMS ladder rather quickly.

As far as DMS Conversions, and in the hundreds of dealerships that I have visited over these last five years, Dealertrack has taken over more systems out there, with few converting from Dealertrack to other systems.

This alone makes a statement about this system in general. User friendly, great "drill down" features, Parts Set Ups & Controls without adding additional Sources, (Stocking Groups) for Source Ranking by Piece Sales.

Dealertrack also has one of the best Special Order Parts Programs available with great detail, more than any other system out there in my opinion.

Weighted Parts Averaging, Simplified Parts Matrix, Pricing Strategies, Lost Sales Reporting, Stocking Group Management, Parts Ordering, etc. are all top notch and easy to navigate. Definitely one of the best systems out there for Parts.

👎: Thumbs Down

As with any new Product, or Service out there, there are still some "growing pains" to work through. One of which is that Dealertrack still does not have a "Batch Move" function in a "canned report" feature.

They can do Dynamic, or Advanced Reports specific reports such as Batch Moves. In other words, we can't move all parts from one Stocking Group, (Source) into another Stocking Group. Dealertrack has to build and perform these specific reports individually. 

It requires downloading parts into an excel document and reloading into another Stocking Group, (Source). This may not sound like much, but it is a HUGE inconvenience for Parts Managers.

They also don't have a lot of Order and Receipting options with only NG, (Negative) SO, (Special Order), EP, (Emergency Purchase), or Stock Orders. The NG, or Negative Purchase Sales also have to be managed as they will remain at a negative quantity without constant maintenance.

In their Sales Analysis Section, Dealertrack does not separate Customer Pay Service Repair Orders from Collision Center Customer Repair Orders as they are looped into the same report, even though they can be separated in Accounting on the Financial. 

Lastly, Dealertrack does have great reports, but they do not have one "catch all" Parts Monthly Management Report as most all Dealer Management Reports have. Even though all the information is available in separate Monthly Reports, they are not inclusive on one Parts Monthly Management, or Monthly Inventory Management Report.

Dominion/VUE:

👍: Thumbs Up

To be quite honest, and in my opinion, this DMS is definitely lacking in so many areas, but on the positive side of things, it is a Menu Driven, Windows Based System that is easy to navigate.

It does offer ABC Source Ranking by Piece Sales, but parts that meet Phase-In Criteria have to be "manually" posted as Normal Stocking Parts as "Automatic Phase-In" is not available.

Dominion/VUE does offer all the basics such as Matrix Pricing, Lost Sales Posting, Special Order Program, Daily Sales & Gross Information and pretty much all that a DMS needs to offer, but not to any great depth.

👎: Thumbs Down

Dominion/VUE Parts Manager Reports are extremely vague and they lack the simplest information. For example, they do not have a Parts Ordering and Receipting Report at all. 

In other words, we do not know what parts were receipted as Stock Orders, Special Orders, Emergency Purchases, In & Out Orders, Other Orders, etc. 

Stock Order Performance is a Key Performance Indicator for Industry Guidelines and is not available on this system. Many of their Parts Monthly Management Reports contradict each other and lack trustworthiness.

For Parts, we could go on and on with the "Thumbs Down" categories for this system. Although, these comments do not reflect potential benefits for other Dealer Departments and Accounting, but from a Parts perspective, this system lacks quite a bit, even the simple things.

PBS: ★★★

👍: PBS is my other DMS "Sleeper" out there as this system, much like Dealerbuilt has everything a Dealer would need in a Dealer Management System for the most part at an affordable price.

It does have a few flaws in the area of Parts, which we will discuss, but overall, and for the price, there is value in this system versus the big guns like Reynolds & Reynolds and CDK.

Parts Monthly Reporting is also very complete and the reports provide all necessary reporting information, or Parts Key Performance Indicators required for Industry Guidelines.

Accessibility, User Friendly and ease of all aspects of Parts Billing, Ordering, Receipting, Lost Sales Reporting have ease of functionality. For the money, one system I would consider.

👎: Thumbs Down

Parts Set Ups & Controls as we all know are crucial to getting the right information out of any system. PBS does lack the "ease" of implementing the right Phase-In/Phase Out Parameters, Low & High Days Supply, also referred to as Best Reorder Points, (BRP0 and Best Stocking Levels, (BSL)

If not done properly, as the "language" of this system is quite different from most other systems will lead to improper Suggested Order Quantities, especially in Source Ranking by Piece Sales.

Reynolds & Reynolds - Ignite: ⋆⋆⋆⋆⋆

👍: Thumbs Up

Even though this DMS is our last one listed alphabetically, it is our ACG "Smart Parts" choice as our 5-Star recipient of Dealer Management Systems available, even though, most likely to be the most expensive one out there.

Much like CDK, Reynolds & Reynolds is still transitioning over from their old "Blue Screen", DOS-Based System over to their new Windows Based Ignite Program. Even though there really isn't a perfect DMS out there, this one is the closest in my opinion.

From all the existing features still in the old "Blue Screen" to the newer on-screen features and dashboards in Ignite, they have it pretty much covered.

Order Types, Receipt Types, In & Out Receipts & Sales, Lost Sales Reporting, Batch Move Capabilities, Source Ranking by Piece Sales, Advanced Reporting all are available and more in Reynolds & Reynolds.

Their Special Order Program and Reporting is only second to Dealertrack in my opinion. The ability to bill Parts to Appointments and track by the customer is also a plus.

Reporting in Reynolds is far superior to most systems as well with their sheer number of custom, canned reports are at a very high level. This allows Parts Managers to drill down more than most other systems. 

The addition of Ignite has allowed Reynolds to become more User Friendly without all the excessive keystrokes required in the old "Blue Screen" version.

👎: Thumbs Down

The biggest downfall to this Dealer Management System is price. With new ownership in Reynolds a few years back, they have gotten even more expensive with contract requirements to system updates and even higher prices which has driven many loyal customers to other systems.

The other drawback is that Reynolds still requires the addition of Parts Sources to implement ABC Source Ranking by Piece Sales. Updating is still required manually by running Program 2105 to update Source Movement in the old "Blue Screen".

Other than the continued conversion of the remaining, old DOS Screen Programs, they still have most of what the Parts Department needs, no matter what the dealership size.

Other Systems Available: ★★★

Other Dealer Management Systems that I am familiar with include Quorom, Lightspeed, UCS and Dealer Socket. All of which, even though I am familiar with have had limited usage overall with Dealers, but with the same "Thumbs Up" features and "Thumbs Down" lack of features.

Tekion is the newest to enter into this mix of systems available.  From what I have seen thus far, they are pretty much have everything with some nice features with more they are still working on. That being said, the jury is still out on what this system will reveal going forward.

Lastly, no matter what DMS you currently have, the overall "Utilization Factors" on all of them is a staggering 20% - 25% of what they are capable of. This all reverts back to proper Installation and Training.

Challenge is, and from my experience, these DMS Vendors need to start with their own people, training them on what they are actually installing. In my opinion, many don't even know their own product well enough to the point where they are more concerned with "functionality" instead of what the system is "capable" of doing.

 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...























 













Wednesday, January 10, 2024

January 2024: 2024: "Thoughts & Predictions"

First & foremost, we would like to wish all of our ACG "Smart Parts" Readers a Very Happy, Safe & Prosperous New Year as we march into yet another year with our 166th Edition of ACG "Smart Parts". Thanks so much for your support and constant dedication to Parts Excellence!

Our first issue of the New Year, as in each year, is devoted to looking ahead to get some idea of what we may expect going forward. As in previous years, we gather our personal data along with other industry analysts to give our readers a condensed and concise analysis of what may lie ahead.

First of all, our title of our first issue of 2024 cannot be simpler. We all have our own opinions, whether based on facts, personal experiences, previous results, or whatever. Bottom line, we all could answer this simple question...

"What Do You Think Will Happen?"

The answer to that question ends up being our title of our first issue. Everyone seems to have their own "Thoughts & Predictions" of what may happen in the future. Hopefully, we can provide some insight and perhaps help shape your own "Thoughts & Predictions".

Our goal in this month issue of ACG "Smart Parts" is to provide our readers with the latest data and insight so we can all shape our own thoughts, opinions and predictions as to what may lie ahead in 2024.

How much will Battery Electric Vehicles, (BEV's) and Fuel Cell Electric Vehicles, (FCEV's) impact our future, not only in Sales, but also in the Service & Parts Departments?

The Answer to These Questions and Many More!...

Let's Begin!

We will start with research from our well-respected team of industry analysts on their forecast of New & Used Vehicle Sales, including the rise of Battery Electric Vehicles, (BEV's) and Fuel Cell Electric Vehicles, (FCEV's) in 2024.

The "rise or fall" of BEV's and FCEV's, no matter how you look at it will change our whole perspective of these vehicles in the Aftermarket. How will we be servicing these vehicles and what parts will we need? What additional safety and training will our technicians require?

When we add in these BEV's and FCEV's into the mix of our overall up-front Sales Forecasts, and eventually the Aftermarket, it's pretty obvious that the impacts will be felt overall.

Before we get the impacts of BEV's and FCEV's, let's take a look at what forecasters and analysts think about Front End Sales in general for 2024.

Analysts at Edmunds.Com forecast and expect "Clashing Market Forces in the New Year, and Forecast 15.7 Million New Vehicles Will Be Sold"

Their December 13th, 2023 article goes on to say...

"The car shopping experts at Edmunds say opposing market forces are expecting to keep new vehicle sales relatively steady in 2024, forecasting that 15.7 million new cars will be sold. The Edmunds data represents a 1% increase from their estimate of 15.5 million new vehicle sales in 2023. EV market share is expected to tick slightly higher to 8% of total new vehicle sales in 2024, up from 6.9% in through November of 2023."

Jessica Caldwell, Edmunds Head of Insights also goes on to say...

"2023 experienced improved inventory levels from pandemic-era lows combined with pent-up demand to deliver strong sales estimated up 12.7% year over year. While the year ahead holds the promise of further increased inventories and enticing deals that consumers have eagerly awaited even though 2023's interest rates are expected to linger..."

Lastly, and based on their data, "Edmunds experts put together their list of three biggest industry trends they predict will shape the road ahead in 2024, along with some direct consumer shopping guidance."

  • "The Covid-19 pandemic spurred a series of significant price hikes...but Edmunds data reveals pricing has peaked, as we improved inventory has driven incentives back into the market."
  • "Shoppers seeking options on the affordable side of the new vehicle market...according to Edmunds, days-to-turn data, vehicles transacting below 50K are selling more quickly, (30 days) than vehicles above the threshold, (47 days), which is a reversal of that trend from the fall of 2020 through the fall of 2021"
  • "Lastly - Consumer Callout: Edmunds experts say 2023 models will be selling out sooner than expected as many automakers have rolled out 2024 models early and aggressively..."
So, from our perspective here at ACG "Smart Parts", we can expect a continuation and a slight rise in New Vehicle Sales in the year ahead. This news just fuels our Aftermarket Parts & Service Sales as vehicle maintenance will still be on the fore front.

But, what about Used Vehicle Sales?...

A recent blog by Anthony Allen at www.boltontechnology.com that more vehicle owners are buying older cars...

"In recent years, there has been a noticeable shift of vehicle owners, as they are increasingly opting to hold on to their vehicles for extended periods of time. However, what's even more intriguing is the buying behavior of consumers. According to industry experts, there is a projected surge in used car sales, with a robust growth rate of 9% expected between 2019 - 2025."...As a result, there is a steady and continuous demand for maintenance and repairs, creating a lucrative opportunity for service shops."


Now we come to our portion of our "Thoughts & Predictions" for 2024 as we delve into the Auto Parts Aftermarket and Service Repair side of things looking ahead.

As Anthony Allen was closing out his recent blog, he also mentioned that "as we approach 2024, it's crucial that technicians, service advisors, dealership owners, and repair shop owners stay ahead of the curve in a rapidly changing industry."

I think most of us are pretty aware of Anthony's comments, but how will the "rapidly changing industry" effect our future Parts Sales? Where will our Parts Sales come from?

Our last contributor and industry analysts may just have those answers we are looking for, databridgemarketresearch.com has provided us with some interesting facts the consider...

The global auto parts manufacturing market attained a value of 701.57 Billion in 2023, driven by a rising demand for passenger vehicles. The market is expected to witness a further growth in the forecast period of 2024-2032, growing at a Compound Annual Growth Rate, (CAGR) of 5.7% - 6.1%

The article goes on to say...

"Major factors that are expected to boost the growth of the auto parts and accessories market in the forecast period are incentives taken by the government and the rise in the regional demand. Furthermore, the easy availability of raw materials is further anticipated to propel the growth of the auto parts and accessories market. On the other hand, a global slowdown is further projected to impede this growth in this timeline period..."

"Global auto parts and accessories market was valued at 660.21Billion in 2022 and is expected to reach 877.12 Billion USD by 2030, continuing to register CAGR rates of 5.7% - 6.1%."

We also have to consider or keep in mind that these projected increases in Parts Sales also includes BEV's and FCEV's as front-end sales increase on these vehicles, so will the need for replacement parts & service.

For a more detailed report on this "EV Revolution", you can visit our website at smartpartstraining.com where all past issues of ACG "Smart Parts" are available and since April 2010. Our March 2022 issue titled "The Parts Department in the EV Revolution" was devoted completely to this new wave of vehicles.

From an ACG "Smart Parts" perspective and experiencing the "in the trenches" view with Parts & Service Managers all over the country this past year, I believe there is still more to these "Thoughts & Predictions".

Although we appreciate the expert opinions and analysis from these great sources, in my opinion, we need to include more based on what we have been experiencing now for the past few years since Covid-19.

The everyday experiences of Parts & Service Managers over these past few years can't go unnoticed and to some degree, I believe will continue into 2024, in order to keep our customers satisfied.

Supply chain issues for some manufacturers, back orders, chasing parts, continuous parts price increases, having enough techs, maintaining competitive and profitable to industry guidelines, etc. will be on-going in 2024 in my opinion.

There is no doubt that even though the future looks positive from an industry standpoint, our jobs as Dealers & Managers will continue to be tougher than in previous years.

Our "Thoughts & Predictions" are surely important as the research can surely shape them, but what's most important is how we end up at the end of it all, in this case, December of 2024 when we do it all again!

Happy New Year from ACG "Smart Parts!"

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...


Wednesday, December 6, 2023

December 2023: The Year In Review - "What Have We Learned?"

What a year it has been again for ACG "Smart Parts" Managers, and for our industry in general. From Sales, to Service, Collision Centers and our Parts Departments, 2023 has dealt quite a hand to all of us, whether dealing with the UAW Strike or not.

The UAW Strike just added to what many of us were already going through prior to and have been going through now for quite some time dating back to Covid-19. Although, I have noticed that during these last few years, we have definitely changed how we manage our dealerships, especially in the Parts Department.

The "status quo" has changed and is much different today than it was just a few short years back. In my opinion, the culture in the average automotive dealership is where the big change has evolved. Dealership managers have become even more sharper and more educated than prior years.

Department Managers are becoming more involved in other departments in multi-lateral ways and support. Parts Managers learning more about Service, Service Managers becoming more involved in Parts, and lastly, and more importantly, Dealers becoming more involved in Fixed Operations than ever before.

I'm not talking about Dealers just getting involved from the financial side, I'm talking about getting involved literally in the Parts & Service Departments. In the Parts Department, they are actually learning how to run reports and create Stock Orders. When has this ever happened?

More importantly, what have we really learned these last couple years, especially this year that has taken this all to a new level? What has changed us, and perhaps for many years to come on how we manage and run the Parts Department?

It's time to review this last year and finish it off with a bang with our December 2023 issue on the "Eight Essential Habits" of the New Generation ACG Smart Parts Manager!

Let's Begin!...

In this issue of ACG "Smart Parts", we will detail what I refer to as the New "Eight Essential Habits" of the New Generation ACG "Smart Parts" Manager. We will learn from a collective of new "tricks of the trade" from dozens and dozens of Parts Managers that I have had the privilege of working with over this past year during these tough times.

In the Parts Department, it all starts with providing the part. When that technician, advisor, customer or manager comes to that counter looking for a part, our job has just begun. The tough part is yet to come as hopefully we have that part 75% - 85% of the time, but either way having the part, or finding the part is always our challenge.

Believe it or not, this simple process is not so simple anymore as we start with our first "Essential Eight Habits" of the New Generation ACG "Smart Parts" Manager!...

#1.) Parts Ordering/Acquisition

Whether we are ordering the part from the manufacturer, or trying to locate the part, this simple task has changed enormously. This simple task just got more complicated as we now have to know what "order type" will get us that part more efficiently.

Ordering parts through our normal channels doesn't get us that part anymore as we have to now know the new "tricks of the trade" in order to acquire certain parts. Otherwise, they may just sit on back order for weeks and even months.

On locating parts, we now have to have all the necessary links like D2D Link, OEConnect and all the latest vendor lists to find those parts that are not available from the manufacturer. Price has become no object as cycling jobs through the Service Shop and the Collision Center has taken center stage.

Parts Departments are going out of their way more than ever to acquire parts, and Service, Collision Centers and Dealer Principle should show their appreciation for their efforts. This is also a "culture change" from what we have been used to seeing in many Parts Departments in the past.

#2.) Increasing Stocking Levels

Here's another "culture change" that has hit us these last few years, especially if you are a dealer that just endured the last UAW Strike. Even if your manufacturer was not involved, Parts Stocking Levels of fast-moving parts appear to be on the rise.

The industry guideline of 45 Days Supply is slowly increasing due to Supply Chain Issues, Strike, or no Strike. Emergency Purchases are rising as well as this industry guideline of 10% or less is also rising, Strike, or no Strike.

All of a sudden, just getting or having the part is the Number One Priority, and quite honestly, it should have always been the Number One Priority. It seems for years, and I hate to say this, but many Parts Managers have never had that "sense of urgency" until recently.

#3.) Hoarding/Hiding Parts

This new "Eight Essential Habit" has now become an "Eight Essential Daily Habit". Parts Managers have now learned how to acquire certain parts that maybe other Parts Managers have not, thus the "hoarding" begins. After all, why sell a part to another dealer that we worked hard to get at less than retail?

The New Generation "Smart Parts" Manager has also learned a new "trick of the trade" on how to hide these parts from E-Commerce sites, OEConnect and D2D Link as well in their Dealer Management Systems, (DMS) under different Parts Sources, or other means hidden from view on these websites.

This new practice is actually not uncommon for many dealers as they want to make sure that their customers are not compromised during these times, Strike, or no Strike. Thus, only releasing these parts to other dealers that "scratch each other's back" so to speak.

#4.) Profitability

Profitability in itself is no new concept and one might ask why this is our Number Four new "Eight Essential Habit", but what is new is that many, many of the Parts Managers I have worked with this past year have sustained, or even gained gross profit retention through all this.

How can that be when we have to pay more for parts we have to chase, or even pay more for shipping, drivers, different order types or any other added cost in acquiring parts?

We've all heard the term of passing on our costs down to the consumer, but we can't do that in many cases, especially on warranty repair orders. This sustainment or increased gross profit retention that these New Generation "Smart Parts" Managers are attaining simply comes from Smart Pricing Strategies.

They are always up to speed on manufacturer and vendor pricing increases and updating competitive parts, menu parts, and price matrices and modifying when necessary. It's still amazing to me that even though parts, oil and tire prices keep rising, many dealers do not adjust their prices to compensate for these cost increases.

#5.) Manufacturer Loyalty

Here is another huge culture change in our industry these past few years. In my opinion, it's actually a cultural change that has gone viral on the extreme side with both parties. Many manufacturers have expanded their grip on the dealers by requiring more qualifiers in their programs.

They are tightening their belts by requiring more parts coverage, or "breadth" by the dealer. So called "Inventory Protection" is no more than a "Return Policy" as not all purchased parts in these programs are "protected". 

If they were "protected", I wouldn't see so many obsolete parts on dealers' shelves that were purchased on these Vendor Managed Inventory, (VMI) Programs. All because they didn't "qualify" for return, resulting in increased dealer parts obsolescence as well as increased acquisition and holding costs.

Many manufacturers are also increasing their penalties for noncompliance if they don't comply. This has resulted in a lot of "pushback" from many dealers and many of these dealers have actually "backed out" of many of these programs in defiance. 

Many dealers have actually done the math and weighed the cost versus the benefits and realized that the Return On Investment, (ROI) was simply not there. For many, the added cost from the penalties was far less than the added risk of Parts Inventory Over Stock and Obsolescence.

#6.) Holding Obsolescence

Speaking of obsolescence, our Number Six "Essential Eight Habits" has to include Obsolescence Control now more than ever. With Parts Life Cycles shorter than ever and the cost of holding parts inventory rising, ridding and controlling obsolescence has moved to the forefront.

In the past, many dealers wouldn't sell their obsolescence, especially on pennies to the dollar. This is a huge "culture change" that is a welcome change for any Parts Managers. This "Monkey on the Back" for many Parts Managers is now finally being addressed.

Dealers are finally seeing the actual cost of holding obsolete inventory that prevents them from obtaining industry guidelines in areas such as Inventory Gross & True Turns, First Time Off Shelf Fill Rates and Normal Stocking Parts Percentages just to name a few.

#7.) Parts Storage Capacity

Our Number Seven "Essential Eight Habit" pertains to our ability to "house" the Proper Inventory Levels needed to meet customer demand. Often times, I witness that Parts Managers actually hold back from ordering the proper amount of parts inventory due to space restrictions.

This, to me is one of the biggest "Cardinal Sins" that a dealer could commit or allow to happen. In dealer "layman's terms", I'm quite sure if the dealer was selling lots on New & Used Vehicles, but did not have a big enough lot, they would either buy, rent or lease additional land to park these New & Used Vehicles.

Same goes for the Parts Department, and finally, we are seeing more dealers "see the light" on this issue by actually working on better parts shelving capacity. Actually, many Parts Departments already have enough "air space". They just need to be a better plan on utilizing that air space more efficiently.

There are actually many Shelving Companies out there that will perform an onsite "laser" evaluation of the existing air space in the Parts Department. Often times, existing Parts Inventory can be shelved and stocked in 40% of the existing air space utilizing more efficient, modern shelving equipment.

#8.) Management Training

Our Number Eight "Essential Eight Habit" of the New Generation "Smart Parts" Manager is probably the most essential. In my opinion, and if we look back prior to Covid-19, Parts Managers were hardly ever involved in Parts Manager Training, or Dealership Training.

Parts Managers were rarely invited to 20 Group Meetings, reviewing Composite Information, or even involved with the overall status of the dealership as a whole. Parts Managers, unfortunately, and in my opinion, were not in the same class as other dealership managers.

Parts Manager Training was also on the back burner and low on the dealer's priority list. After all, how difficult can it be to manage a Parts Department? The answer to that question has drastically changed as dealers today are definitely changing their culture and thought process, especially in the Parts Department

This welcome culture change has, in my opinion, can now bring the whole dealership into full circle. Now, the dealer's second biggest asset can now work for them with the right training, personnel and overall inclusion, along with Sales and Service.

Are you a New Generation "Smart Parts" Manager and are these "Essential Eight Habits" Part of Your Playbook?...

If Not...It's Time to Join the New Generation of "Smart Parts" Managers!"

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...






Thursday, November 2, 2023

November 2023: Electric Vehicle, (EV) Sales: "Rising or Falling?"

For the past couple of months, we have been focused on the latest UAW Strike from a "Parts Perspective". As Parts Managers, this is pretty obvious, but how is this UAW Strike effecting New Vehicles Sales from the interruption of New Vehicle Production & Manufacturing?

Parts Distribution is not the only interruption caused by this latest walkout as it also included assembly line workers as well. You would think that this assembly line interruption would eventually lead to fewer and fewer new vehicles on our lots at the dealership, much like we felt during Covid-19 and the computer chip shortage.

In this month's issue of ACG "Smart Parts", we are going to focus how this UAW Strike is affecting our New Vehicle Sales and especially how it's effecting Electric Vehicle, (EV) Sales in particular as new EV Sales have been on the rise even before the UAW Strike.

In a recent article in NADA Headlines, written by Automotive News, our dealers' New Vehicle Inventories are continuing to build despite these production interruptions from the UAW Strike. 

The article also reports that consumer new vehicle shopping has also remained robust through the third quarter of this year. Cox Automotive estimated that automakers began October with 2.1 million vehicles, up 150,000 from September.

Seems like the Automakers did pretty much what we did and stocked up before the UAW Strike hit in mid-September. That being said, it looks like, for now anyway, that dealers have an ample supply of New Vehicles for customers to choose from.

But, when you break this number of New Vehicles down, from Combustion Powered Vehicles versus Electric Vehicles, (EV's) and Battery Electric Vehicles, (BEV's), there appears to be some very different perspectives in the marketplace happening right before our eyes.

So!...What About Electric Vehicle, (EV) Sales?....Are They Rising or Falling?

Back in March of 2022, ACG "Smart Parts" focused on the Parts side of this EV Revolution with our issue titled "The Parts Department in the EV Revolution". In that issue, we focused on just what parts we may be stocking for these EV and Hybrid Model Vehicles.

Now, in this issue, we are going to focus where this "EV Revolution" is, and where industry analysts are saying it may be headed from a few different perspectives. We will see that there are very different takes on this and from there, we can come up with our own conclusions.

There is no doubt that EV's are and have been on the rise over the last several years. A recent article published by cleantechnica.com shares the following....

"With more electric vehicle choices than ever, EV Sales in the U.S. are hitting new heights. In just the first half of 2023, over 670,000 EV's were sold with over 80% of those being fully-electric battery electric vehicles, (BEV's) . It took over 8 years for the first million EV Sales, but now more than a million have been sold over the last 12 months."

From this statement alone, one would believe that this EV Revolution is going to keep rising and rising each year. We would also perhaps believe that we will see EV Charging Stations continue to rise as well.

But could this rise of the EV Revolution perhaps be rising a little too fast?

As we all know, there are always two sides to every story as the Wall Street Journal also reported in the latest edition of NADA Headlines as follows...

"The auto industry's push to boost sales of electric vehicles is running into a cold hard reality that buyer's interest in these models is proving shallower than expected. While EV Sales continue to grow, rising 51% through September of this year, the rate has slowed from a year earlier and unsold inventory is starting to pile up for some brands..."

Business Insider.com even adds their take on the current EV market and where it may be going with these statements...

"Car dealers have a warning for their manufacturers: the day of early-adopter electric vehicle sales are all but over. For years, early EV adopters are more fickle. More and more often they are comparison shopping EV's against hybrid and gas-powered vehicles.

That's leading dealers to use more aggressive sales tactics on "plug-in" models. They warn this could make EV demand appear more robust than reality, and make it harder for car manufacturers to predict demand"...

 "More dealers now are really pushing EV's off their lot, which probably distorts the reporting manufacturers are looking at says Vince Sheehy, a car dealer in the Washington, D.C. area, told Insider. Vince Sheehy also went on to say that he believes EV Sales are even lower than they actually understand them to be"...

"The warning bell from dealers is the latest sign that after years of exponential growth, the electric car segment is facing a looming plateau. Already, car companies seem to be reacting to changes in demand, after overshooting their EV predictions for this year."

Overall, when combining all New Vehicle Sales thus far this year, and according to Kelley Blue Book, in an article at NPR.com, the average transaction price for a new vehicle in July was $48,334.00, a slight dip from June and only a 0.4% year-over-year increase.

The article continues to say that this could present an opportunity for those who have been waiting for prices to cool before purchasing their next ride, even as interest rates remain high.

All of this said, many are saying that we are headed into a "deflationary market" where patience may be rewarded. If we wait to buy tomorrow, we may actually get a better price than if we purchase today.

It appears that we definitely have two sides of this story and a few different perspectives for sure. The UAW Strike appears to be a non-factor thus far as we look at New Vehicle Sales in general, and how EV Sales have weathered all these up and down swings in the current marketplace.

That being said, Charlie Chesbrough, Senior Economist and Senior Director of Industry Insights at Cox Automotive, which owns Kelley Blue Book in this same article at NPR.com warns...

"Be aware of what are the offers out there, do your homework, because manufacturers are certainly going to be more willing to negotiate on price today than they were a year ago"...

So I guess when we asked the question early on if Electric Vehicle, (EV) Sales are Rising or Falling?....I guess that answer would be a resounding Yes!

And don't forget "Smart Parts" Readers, you can download and read any of our past 163 Monthly Articles, dating back to 2010 at our website at:

www.smartpartstraining.com

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...





Thursday, October 5, 2023

October 2023: "Why Does It Take a Strike to Spark the Fire?"

Striking a match to light a fire is a pretty common thing, but when referring to the current on-going UAW Strike, this word can be used as a noun and a verb. In last month's issue of ACG "Smart Parts", we released our September issue a little earlier so we could all get prepared for what was to come.

We discussed how we could use our Dealer Management Systems, (D.M.S.) to actually add extra "Days Supply" to extend our inventory coverage for however long we needed to endure the UAW Strike. Much like preparing for a storm as we all hit the stores for added "Days Supply" of the necessities such as food and water.

Now here we are, in the midst of this current UAW Strike and it's time once again to endure another crisis like we did with Covid-19 and the previous UAW Strike. To me, what's most important is not to just endure the current crisis, but what we learn from it.

In this month's issue of ACG "Smart Parts", we are going to do a little follow up to last month's issue, but with a little twist. I have actually witnessed a "Culture Change" within our automotive dealerships this time around.

After talking with and working with literally hundreds of dealerships via online webinars, or in-dealership training, I've actually noticed quite a few things during this Strike Preparation. A shift in how we actually operate and consider the Parts Departments role in the dealership.

I've never seen actual dealer participation in the overall Parts Operations as much as I've seen these last couple of months in anticipation of the UAW Strike. Don't misunderstand, I'm not saying that the dealer doesn't "drill down" the Parts Department like any other department in the dealership, it has just gone much further than that.

What have we learned so far in this UAW Strike and how much more will we learn as we progress through it?

Let's look at the "Seven Culture Changes" in the Parts Department since we started preparation and are now experiencing in our latest automotive industry crisis. Seven Culture Changes that most may not even be aware of.

Let's begin once again "Smart Parts" Managers!....

The first of these Seven Culture Changes that I have noticed is that we, in the Parts Department are no longer at the bottom of the Totem Pole. For years, the Parts Department just existed as a "Necessary Evil" for the dealer.

As a matter of fact, back in the day, many dealers wish they didn't even have a Parts Department, or even a Service Department for that matter as all they were interested in was selling New & Used Vehicles. They didn't even want to deal with the customer after the initial sale.

Over the years, dealers have evolved to a degree as "Service Absorption" became a key part of the dealer's profitability. The "back end" now needs to carry much of the dealers' overall expenses with less New Car Dependency.

So, we have actually climbed the ladder quite a bit since those older days, but we have actually gone up a few more rungs on the ladder since Covid-19 and now this current UAW Strike.

I am actually seeing dealers, (which I never have before) take part in learning how Parts Set Ups actually work. They are now looking at the math and how Phase-In/Phase-Out works, and Reorder Points, (BRP) and Best Stocking Levels, (BSL).

I've never seen dealers go that far in the past as they are even looking at the Parts Managers Stock Orders! I've even seen some dealers actually "run" the Stock Order in their D.M.S. and going another step further by looking at how the Vendor Managed Inventories, (V.M.I.) works, such as RIM, ARO, PartsEye, etc.

The second "Culture Change" that I have witnessed is that Parts Managers in general are finally "getting it". Again, not saying that Parts Managers are not doing their job, it's just that they are gaining more confidence as dealers get more involved in their dealership roles.

So many Parts Managers are "gun shy", worrying about overall Parts Inventory Amounts, especially with the burden of carrying too much obsolescence. Unfortunately, many Parts Managers feel that the Parts Inventory is an expense, not an asset that needs to have several "Annual Turns".

Therefore, they tend to hold back from the parts they actually need in fear that the owner will get on them for spending too much on Parts Inventory. When in actuality, I haven't heard of many dealers preventing, or limiting the Parts Manager from ordering any parts.

Of course, the dealer wants his/her Return on Investment, but they really don't prevent the Parts Manager from ordering any parts. In the Parts Manager's mind though, he or she knows that ultimately, they are responsible for their actions and choices.

The third "Culture Change" that I have witnessed is that Parts Managers are getting more informed about their overall Stocking Levels. They are getting more aware of what the "math" tells them and adjusting where necessary, especially now with the current UAW Strike.

Kind of a contrast of what we thought before versus now as dealers are actually encouraging Parts Managers to come out of their shell and get the parts we need, no matter what the cost. After all, there is so much at stake in our Service & Collision "Cycle Times" waiting for parts.

Number four Cultural Change is Parts Managers are getting more "proactive" instead of "reactive". One example is parts backorders today versus in the past when a part went on backorder, we, as Parts Managers just said that the part is on backorder, and we would have to wait until it became available.

Now, fast forward to today, especially because of the UAW Strike, when a backorder hits, our job is just beginning, not ending. In other words, we have to take action when that backorder hits, we can't just sit and wait to see when it ever comes in.

Our Number Five Cultural Change is a follow up to our Number Four Cultural Change is that Parts Managers need to address parts backorders before they need them for the customer. In other words, when a part goes on backorder on the initial Stock Order, that's the best time to address it. 

Why wait until the customer needs that part before we address it. If we chase down that backordered part when it comes up on the Stock Order, we will have it when we need it when the customer has demand for it.

I can tell you from experience that it's always easier to handle a backordered part on a Stock Order versus when the pressure is on when the customer vehicle is tied up in the shop. The pressure is always on us when Service is held up for a parts issue.

Stocking Parts to "Avoid" Backorders...What a Concept!

Our sixth Cultural Change that Parts Managers are now getting hungry for Gross Profit! Again, not saying that they never were concerned about being profitable, it's just that they seem to be more "bought in". 

Overall Parts Profitability as far as Retained Gross Profit Percentage is at its highest peak, in my opinion then it ever has! Just achieving the basic industry guidelines of let's say 40% on Customer Pay Parts Sales is now going to the next level up towards 45%!

I guess they key word is that it seems that more and more Parts Managers are taking "ownership" of their departments. Dealers are learning more and more of the importance of how much the Parts Department plays a role in all other dealer departments.

Dealers are also incentivizing more Parts Managers to achieve higher levels and giving them more "clout" in their dealership operations. Parts Managers are no longer hiding in the back are are becoming more a part of the overall dealer operations.

This is why we are seeing more and more Parts Managers attending 20 Group Meetings as the excuses piled up. Service Departments saying that they couldn't achieve their goals because they simply didn't have the right parts.

Finally!...the Parts Department Means Something!...What an Eye Opener!

Lastly, our Number Seven Cultural Change is that more and more women are becoming Parts Managers which is a huge, welcome change. Even though it doesn't matter to me who the Parts Manager is as long as the qualifications are there, I have noticed that more and more women are becoming Parts Managers.

Not only does this add diversity, but it also most importantly adds another wealth of the people available for this position! Now, the Parts Manager position, as opposed to years ago, is not just a position that we give to for the next person in line because they have been with the dealer for many years.

It's not a position that we give to a Counter Person because they are loyal and after all, we are just talking about Parts here. Handing out parts can't be that difficult...anyone can do it...Right?

Finally, I welcome all this "deserved" attention to today's Parts Manager and what it actually takes and means to get through these times or even normal daily operations. It's about time that Dealers and Dealer Principles actually see what it takes and what's involved with managing their second highest asset.

The Parts Manager Position is one the most important manager positions in the dealership...especially today.

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...















Wednesday, August 23, 2023

September 2023: Pandemics, UAW Strikes, Backorders..."How Do We Deal with All of This?"

Here we go again with yet another crisis, especially for Parts Managers as we face this impending UAW Strike. In my opinion, this is actually much worse than what we dealt with during the Pandemic. 

During the Pandemic, we all had to deal with the effects of what Covid-19 dished out with employee shortages, supply shortages, and prices sky-rocketed effecting our whole economy and daily lives, whether at home or at work.

In retrospect, comparing this impending UAW Strike to the Covid-19 Pandemic has a much different feel to it as it will put the Parts Manager on center stage. The Covid-19 Pandemic had everyone on center stage as we all had to bear the brunt of effects, whether in Sales, Service or Parts.

On the other hand, from a Parts perspective, we will most likely have to handle this UAW Strike much like we did during the Covid-19 Pandemic. We are actually still feeling that Parts impact as we are still dealing with Supply Chain Issues and never-ending Back Order Situations.

Hard to believe that things may actually get worse as the projected 45 - 60 Day UAW Strike predicts that Back Orders will multiply. Chasing parts once again will be the normal each and every day during this UAW Strike.

How we manage our way through this may have us looking back a few years ago to see how we did it the last time, but in my opinion, we have to be much smarter than the last time. History should have told us that we need to prepare better when these times hit us.

So!...How Do We Deal with All This?...Again!

Let's Begin!...Again!

One thing for sure is that the lessons of the past should always help us in preparing better in the future, even though this particular crisis puts Parts Managers on Center Stage with the fingers only pointing in our direction.

That being said, we have to keep logic on the forefront in managing our way through this and fortunately we have math on our side. Unlike other dealership departments, the Parts Department's Inventory Performance is highly dependent on history, math and algorithms.

Much like preparing our families for impending storms, whether hurricanes, winter storms, or any other impending weather issue, preparation is key. Once we get wind of what's coming, we all head to the grocery store for extra supplies and food.

Preparing for this UAW Strike is no different in nature, except for the fact that we are looking at a Parts Inventory of anywhere between 3,000 to 8,000 different parts numbers that sell at various Annual Piece Sale Rates.

That's much different than making out a grocery list and increasing our normal supply of milk, eggs, bread, water and other supplies in preparation of upcoming weather events. Having that many part numbers to prepare for in this event requires the right math on Lead Times and Days Supply.

It also requires proper modifications in the DMS to accommodate the added Days Supply needed to survive, in this case, an additional 45 - 60 days of the UAW Parts Strike Shutdown. In comparison, we have to plan on an extra 45 - 60 days of food and supplies to get through this storm.

Talk about preparing for a storm!...

The only way to prepare for this accurately is to use our DMS to do the math for us. Problem is, most dealership DMS Set Ups do not have ABC Source Ranking Set Ups installed into their DMS.

Even if they do, often times the math is not set up correctly based on Annual Piece Sales. Most DMS's are set up to one overall default settings on Low Days Supply, or Best Reorder Point, (BRP), and High Days Supply, or Best Stocking Level, (BSL).

ABC Source Ranking allows us to set the proper Best Reorder Points and Best Stocking Levels of all parts that sell at different rates throughout the year with the proper math. Parts sell at different rates and numbers, thus requiring different Reorder Point and Best Stocking Levels.

Having just one Default Setting for Best Reorder Points and Best Stocking Levels does not allow for parts that move at a different rate. For example, a part that sells 100 times a year is due to sell on average every 3.65 days or rounded up to every 4 days.

In other words, if an oil filter sells an average of 10 a day, that would mean that when this oil filter gets down to a 4 Days Supply of 40, the DMS would kick in at the Best Reorder Point and order that oil filter back up to it's Best Stocking Level of at least 100% at 80 for the Best Stocking Level.

Compare that to a part that sells only 12 times a year, with an average sale every 30 days, which requires a different BRP and BSL, (see above). In other words, that particular part can sell down to zero before ordering back to a Stocking Level of one based on current Lead Times.

The whole key is Lead Time Days as we have to allow at least 4 Days of Lead Time. One day to order, one day to receive, one day to stock the shelf and one day of Safety Stock. Even though in most cases, we receive them overnight, or in a couple of days.

If the dealer only has one "Default Source", then only one set of Stocking Levels can be applied, which is usually set to a Low Days Supply, (BRP) of 15 Days and a High Days Supply, (BSL) of 30 Days.

Having just one set of these Stocking Level Parameters leads to stocking too much of what we don't need and not enough of what we do need. This makes this whole UAW Strike battle even worse to overcome.

Having ABC Source Ranking allows the Parts Manager to simply add the number of Days Supply predicted in the UAW Strike. In other words, and using the above example of the oil filters, we would just need to add 45 - 60 days to our High Days Supply, (BSL).

Even though the Reorder Point never changes based on how many Annual Piece Sales, we can adjust the High Days Supply, (BSL) to include the added days of the UAW Strike Shutdown. 

So, instead of when those oil filters get down to a 4 Days Supply of 40 and reorder up to 80, (100%), we would just add another 45 - 60 Days, bringing the High Days Supply, (BSL) to 85 - 100 to allow for the Extra Days needed during the UAW Strike.

This math would apply to all ABC Source Ranked Piece Sale Ranges, especially the Fast-Moving Piece Sale Ranges above 50 Piece Sales Annually. These ranges include 50 - 74 Annual Piece Sales, 75 - 99 Annual Piece Sales, and 100+ Annual Piece Sales.

We can now see how important ABC Source Ranking is, especially when preparing for this impending UAW Strike, but what do we do if we don't have ABC Source Ranking installed into our DMS? How do we adjust all the Annual Piece Sale Ranges with only one Default BRP and BSL?

Well?...if you haven't figured that one out yet, then you might as well just plan on doing the added Days Supply needed during this UAW Strike manually. Although, I'm not just saying to use the SWAG method that I mentioned earlier.

There is a "right" way of doing it, even though we may not have ABC Source Ranking installed into our DMS. That method would be what we did "back in the day" and that's setting Minimums & Maximums, otherwise referred to as MIN/MAX Set Ups.

By reviewing history for each of the Faster-Moving Parts, which I would recommend running a Parts Piece Sales Ranking Report which is available in most systems to determine which parts are selling the most annually.

After determining these faster moving parts in Parts History, we can then pull up each individual part number and set the MIN/MAX numbers, (especially the minimum) to accommodate the added predicted Days Supply needed during the UAW Strike.

Keep in mind though, whether we add the Days Supply via the MIN/MAX method or adding Days Supply via ABC Source Ranking, we need to "reset" these parameters back to their original settings after creating the Stock Orders to accommodate the UAW Strike.

This is definitely a procedure that we don't want to "set & forget" because the ramifications after this crisis could get even worse in an adverse effect as adding more inventory when it is not needed may lead to over stocking and additional obsolescence.

As mentioned, preparation is the key to success and surviving yet another crisis depends on the math in this case and should never rely on guessing our way through which may just lead to over stocking and future obsolescence as mentioned.

We got through this before and we can do it again!

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...