Blog - PartsEdge

Smarter Parts Inventory Strategies for Enhanced Profitability

Written by PartsEdge | Jan 15, 2025 9:45:00 AM

When it comes to parts inventory, there’s one thing we can all agree on—it’s not a perfect science. That’s why in our latest webinar, we dug deep into the balancing act of stock orders, special orders, and profitability with two of the industry’s sharpest minds: Blake Featherly, Inventory Specialist at PartsEdge, and Chuck Hartle, Co-Founder of PartsEdge.

Here’s what we unpacked—and what every Parts Manager should take to heart.

 

The Big Picture: Minimize the Bad, Maximize the Good

At the 30,000-foot view, managing inventory is about staying proactive, not reactive. It's about putting strategies in place that help you avoid being buried in obsolescence and empower you to make smarter stocking decisions—especially when manufacturer programs like ASR (Automatic Stock Replenishment) can lull you into a false sense of security.

“Just because it’s guaranteed doesn’t mean it’s going to sell,” Blake reminded attendees. “And just because a system is doing the ordering, doesn’t mean you should stop managing.”

 

ASR Pitfalls: The Danger of False Comfort

Chuck pointed out a common issue with programs like GM RIM and Chrysler’s Arrow: they control about 40–50% of your inventory. But what about the rest? Special orders and unprotected parts are often the silent profit killers—especially when there’s no strategy to manage them.

“We’ve seen dealers lose profitability and spike obsolescence because they assumed the ASR program was doing it all,” Chuck said. “But those unprotected parts, they age quickly, tie up working capital, and become a drag on the department.”

 

Special Orders: The Root of All Obsolescence?

You’ve heard it before—technicians overorder, service doesn’t return unused parts, and all of a sudden the parts department is left holding the bag. But what if we stopped treating special orders like a service vs. parts battle?

Blake challenged attendees to flip the narrative: “When parts and service operate as one department, with a shared strategy for handling special orders, everyone wins—especially the customer.”

From technician training to manager alignment, the key is process and discipline. Without it, parts age out, profitability dips, and CSI takes a hit.

 

Real-Life Example: Turning Strategy into Success

Blake shared a powerful case study from a GM store working with PartsEdge. By first eliminating obsolescence and then building strategic breadth with non-guaranteed parts, the manager earned trust to reinvest.

The result?

  • Inventory grew by $250K,

  • Protected inventory rose from under 50% to nearly 60%, and

  • Sales increased because the right parts were finally on the shelf.

The kicker? ASR started picking up those fast-moving parts as “protected” once the dealership proved their value through proactive stocking.

 

DMS Pro Tips: Don’t Let Outdated Reports Fool You

Many DMS platforms (looking at you, CDK and Reynolds) still use outdated metrics like “True Turns,” which subtract emergency and daily orders from turn calculations. Chuck emphasized modernizing your approach: “You want actual turn rate—cost of sales divided by inventory.”

If you need help calculating real turn rates or day supply, PartsEdge has a simple two-slide PowerPoint we’re happy to send. Just reach out!

 

Final Thoughts: Build a Strategy. Stick to It. Measure Everything.

Whether you’re working in a Toyota store with lightning-fast depot deliveries or managing through the limitations of ASR, the goal is the same: stock smart, reduce waste, and support technician productivity. And the only way to do that is with a clear, team-wide strategy—and the discipline to follow through.

"Taking care of the customer is the goal, but taking care of your inventory is how you get there,” Blake said.

Watch the recording here: https://www.partsedge.com/webinars

 

Want Help Getting Started?

Have questions about your DMS setup, ASR strategy, or how PartsEdge can help? Contact us anytime—we’re here to help you take the guesswork out of inventory management. Email us or schedule a call today.