One in Four Parts Has Marginal Demand: What the Data Says About Forced Stock

Parts Managers spend a lot of time thinking about obsolete inventory. But the data presented in our latest PartsEdge webinar suggests the problem often begins much earlier.

Across the dealership inventory analyzed for the webinar, 27.8% of inventory consisted of parts with two or fewer sales during the previous 12 months. Put another way, roughly one out of every four parts fell into what PartsEdge categorizes as forced stock or unfulfilled demand.

That matters because those low-demand parts are closely connected to what happens later as inventory ages.

Where Forced Stock Comes From

For the purposes of the webinar analysis, PartsEdge classified a part with two or fewer sales during the previous 12 months as forced stock because it would not have met a traditional three-sale phase-in criterion.

During the webinar, Chuck Hartle identified six common causes:

1. Technicians overordering parts while diagnosing customer issues, particularly warranty repairs.
2. Returns from wholesale customers, especially body shops.
3. Manufacturer automatic stock replenishment (ASR) programs.
4. Customers who order parts but don't return to complete repairs.
5. Parts Advisor ordering errors.
6. Speculation stocking based on instinct or technician recommendations rather than proven demand.

The first four were identified as the primary sources of forced stock.

Think about a technician who orders three possible parts for a repair. One fixes the vehicle, and two are handed back to the Parts Department. The customer is taken care of, but those remaining two parts may immediately become idle inventory.

95% of Technical Obsolescence Came From Low-Sale Parts

Here's where the numbers become even more important.

According to the webinar analysis, 95% of the parts reaching seven months with no receipt—the point identified in the webinar as technical obsolescence—came from these low-sale parts. Only about 5% came from previously fast-moving parts that later slowed down.

That changes the conversation around obsolescence.

Instead of waiting for inventory to become old enough to appear on an obsolete inventory report, Parts Managers can pay attention to the inventory that never established strong demand in the first place.

Catch the Problem Earlier

The webinar's takeaway wasn't that every low-sale part can be avoided. Manufacturer programs, warranty repairs, customer behavior and other factors all influence what lands on dealership shelves.

But dealerships can still manage what happens around those programs.

Strengthening special-order controls, following up with customers, reviewing suggested stocking against actual demand and identifying low-demand inventory earlier can give Parts Managers more visibility before those parts have months to age.

Want to see the complete data behind the numbers? Watch the full PartsEdge webinar, The Ultimate OEM Inventory Showdown, to see how 223 dealerships and 15 manufacturers compared. And, register now so you don't miss other informative webinars for parts managers.