Fixed Ops Journal - April 2021 - F12

FIXED OPS JOURNAL

Management system helps boost parts profits

tephen Webb admits he had doubts
when Priority Hyundai started using
PartsEye to manage its parts inventory last fall, about three months after he came aboard as parts manager for the
dealership in Chesapeake, Va.
" Parts managers hate giving up control, " he
says. " So I was very skeptical at first. "
But now Webb is all-in on the remote inventory management system that recommends
which parts dealers should buy. It bases recommendations on purchase data collected
from the store's dealership management system demand history, then compares it against
purchasing trends at many similarly sized local and regional stores that sell the same vehicle brand.
" Some suggestions early on were mistakes -
parts we would never stock, like windshields

or engines, " Webb says.
" But PartsEye worked with
me to make some changes
and now we accept about
90 percent of the recommendations. "
Webb gets a parts order,
removes what he doesn't
want and submits it. The
Webb: More time
whole process takes about
for training staff
15 to 20 minutes instead of
the 90 minutes to two hours previously. This
gives Webb " more time to train my people or
even visit wholesale customers, which helps
us make inroads into increasing gross profit. "
Gross profit on parts sales has increased 2
percent since the store implemented PartsEye. Part of that increase stems from wholesale customers who order parts because they

know they probably will be in stock.
" Customers see that they can rely on us, " he
says. " And the more they buy, the more we
stock. "
The off-the-shelf fill rate has increased,
while lost sales have declined. Tracking lost
sales makes PartsEye more effective, Webb
says, noting his benchmark is one lost sale per
$1,000 in parts sales.
" It's critical to post lost sales, or inventory
becomes stagnant and obsolescence increases, " he explains.
" New parts are always coming out, and if we
don't have them when customers need them,
then I want it on our shelves. "
The remote inventory management tool,
Webb says, has kept his department " on top of
the crest of the demand wave, not behind it. "
- Ken Wysocky

PARTS

continued from Page 11

number to make sure stock was being
replenished, " he says. " It took a half hour to an
hour every day to go through the list. "
Now it takes him about 10 minutes with
PartsEye.
That gives him more time to do things such
as attend to technicians, make phone calls
and help service writers and other managers
throughout the dealership.
As for tangible metrics, Joyce says the store's
off-the-shelf fill rate is just above 92 percent
and the percentage of inventory for stock - a
figure that goes hand-in-hand with the offthe-shelf fill rate - is 96.5 percent. So essentially all of the store's parts inventory is used to
fulfill regular demand, he says.

Disruption ahead
Looking at the big picture, Crossin says
parts-purchasing practices generally suffer
from a lack of innovation. Historically, many
parts managers have relied solely on their
DMS to track trends and order parts accordingly. But remote inventory management
technology could eventually morph into a
full-blown artificial intelligence solution for
parts managers.
" Parts departments are ripe for disruption, "
he says. " If Amazon can predict when I might
be running out of toothpaste and show me an
ad for it, I think that in the near future, RIM
could have endless possibilities. "
Manufacturers likely know what vehicles

PAGE 12

Ganley Westside Subaru Parts Manager
Joe Joyce, right, with technician Darrin
Vandergrif, says inventory metrics are up.

and how many are operating in a dealer's primary market area. And telematics data can
show them the average miles of those cars and
- in combination with national warranty data - the failure rates of parts, Crossin says.

" So with all that data, " he says, " AI and machine learning could make almost perfect recommendations about what parts stores
should stock rather than looking backward
only at what's been sold. " 

APRIL 2021

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Fixed Ops Journal - April 2021

Table of Contents for the Digital Edition of Fixed Ops Journal - April 2021