Have you thought about categorizing your Fill Rate into distinct sale areas? If you haven’t, now might be a good time to start.
Typically, fill rates are manipulated in several of the DMS systems and when you really think about fill rates, we like to think of them is distinct sale areas;
1) Customer Pay Maintenance (usually 98%)
2) Customer Pay Non-Maintenance (usually high 80’s or low 90’s percentage)
3) Wholesale (typically 50-60%)
4) Internal (typically in the 50% range)
5) Warranty (If you can break 35% on this, you’re doing good!)
Unfortunately, the DMS systems do not look at breaking out Off-The-Shelf or
Same-Day Fill Rates by each Profit Center. The reality of our business is managing “reactive retail” inventory with a large proliferation of part numbers.
How you set phase-in and phase-out criteria will make a huge difference in your inventory performance. Setting your phase-in criteria too tough will make your fill rate suffer and if you set it too loosely, it will create excess inventory. Fulfilling true demand, no matter where it comes from should be the objective of any changes you make to these settings.
We suggest that a 90% to 95% fill rate as a long-term goal for high off-the-shelf levels of service to your customers.
If you want to know how to improve your fill rate:
- Look at your phase-in /phase-out guides
- Look at your days supply settings
- Look at your excess inventory report
- Review how your department tracks true demand
If you’re interested in more tools for your parts operation, get in touch! We’re passionate about creating successful inventories and providing part education for all dealerships.