Obsolete inventory gets a lot of attention in dealership parts departments. But by the time a part reaches 13+ months without a sale or receipt, you’re looking at the end of the problem, not necessarily where it started.
During our latest PartsEdge webinar, Inventory Isn’t A Guessing Game, we dug into the relationship between forced stock and obsolescence. One of the biggest numbers from the discussion: 95% of the value that eventually becomes obsolete inventory comes from forced stock, or unfulfilled demand.
Forced stock consists of parts sitting in inventory that never met normal phase-in criteria. During the webinar, several common sources were discussed, including technicians ordering multiple parts to diagnose a problem, wholesale and body shop returns, manufacturer stocking programs, customers who don't return for repairs, ordering errors, and speculative stocking.
The important connection is what happens next. Forced stock ages into obsolete inventory.
That's why managing obsolescence shouldn't begin when a part reaches 13 months. Better control of special orders, returns, and other sources of forced stock can help Parts Managers address the problem much earlier.
This was just one of the topics covered in our latest PartsEdge webinar on how pricing and source structure inside the DMS can directly impact margin and inventory control.
Watch the full webinar replay to hear the complete discussion and see the strategies shared during the presentation.
And don't miss our NEXT PartsEdge webinar, where we'll continue digging into the data behind dealership parts inventory and how Parts Managers can use it to make better decisions.