Successful parts Inventory management is a delicate balance of having all the parts you need without overstocking and holding onto obsolete parts. Your fill rate can be a fantastic indicator of whether your inventory has enough width in the right areas to support a high-functioning, fast-moving operation. In today’s economy of immediacy, having the right parts right away can establish strong customer relationships and result in consistent, loyal business. Online part sales have become a viable and helpful revenue stream which has only increased the importance of accurate inventory forecasting for parts inventories. Here’s how you can improve your fill rate.
Finding your fill rate
Finding your fill rate can be tricky as there are many ways to manipulate the number depending on how you receipt parts into your system. For example, if you have a large wholesale operation and do lots of work within warranty, you’re likely to have a much lower fill rate than a small dealership that does very little wholesale, little warranty, and lots of maintenance work. A better way to get a sense of how often you have the parts you need would be through calculating the off-the-shelf level of performance or job fill.
Making an impact
Inventory settings will always be changing as the demand changes and evolves, but getting a handle on your fill rate starts with phase-in and phase-out criteria. Find the balance between setting phase-in criteria that defends against parts you don’t need without hurting your fill rate and necessary inventory breadth. Fulfilling true demand, no matter where it comes from should be the objective of any changes you make to these settings. Other levers that can influence and reveal fill rate factors are days supply settings, the excess inventory report, and how your department tracks true demand. We recommend a 90-95% fill rate long-term goal for high off-the-shelf levels of service to your customers.
PartsEdge has helped countless dealerships increase their fill rate through custom matrixes and daily optimizations. Our powerful monthly parts inventory optimization tool was designed by a Parts Manager and a DMS specialist who witnessed the gap between the demands on Parts Managers and the lack of resources to get everything done. PartsEdge saves Parts Managers hundreds of hours each year by taking all the guesswork out of DMS management and sourcing setup and optimization allowing them to focus on creating a successful operation. As a result, our clients see an average 20% drop in total inventory, 15% less idle inventory, a 50% increase in ROI, and a 20% increase in parts sales. If you’re ready to put our parts powertool to work, send us a message! Our testimonials speak for themselves.
Will Fill Rate be similar to Availability?
Yes- similar but not exactly the same.