Measuring the "Performance" of the Parts Inventory can only be detailed and illustrated by the Dealer Management System's, (D.M.S.) Parts Monthly Management Reports. Depending on which D.M.S., these reports have many titles and may or may not contain the same information, or in some systems, not enough information.
In addition, with some Dealer Management Systems, the end of month parts analysis information may be on more, or perhaps several end of month parts reports. The important thing is to know what we are looking for and what we are measuring in the area of "Parts Inventory Performance".
The other important aspect of measuring what we see on these reports is accuracy. What we see on these reports may not be accurate as it depends on how information is entered into the D.M.S. that dictates the outcome on these reports. As the old saying goes...garbage in, garbage out.
Other than what we see as far as sales and gross profit information on the dealer financial, there are several Key Performance Indicators, (K.P.I.'s) that need to be measured and tracked on these end of month parts management reports.
The true "Performance" of the parts inventory asset cannot be seen on any financial page and can only be measured by an accurate, detailed Parts Monthly Analysis Report, Inventory Management Report, Benchmark & Trends Report, or whatever name the D.M.S. labels it as.
Industry Guidelines actually dictate what these Key Performance Indicators, (K.P.I.'s) are, telling us what we should be looking for on these Monthly Analysis Reports. Even though there is a "ton" of information on some of these reports, the most important are as follows;
- Overall Off Shelf Fill Rates, or Level of Service
- Cost of Sales Analysis, (normal stock parts vs. non-stock parts)
- Inventory Analysis, (normal stock vs. non-stock)
- Lost Sales & Emergency Purchases Reports
- Stock Order Performance
- Inventory Adjustments, (plus/minus)
- Annual Parts Gross & True Turns
- Parts Sales Activity