By Dean Devore — Posted in Best Practices – Rural Lifestyle Dealer
As a parts manager you make a lot of decisions. The most important decision you make is which parts to stock. Deciding how many to stock is second on the list. If you don’t get the first decision right, the second one doesn’t matter.
Aside from initial stocking lists provided by manufacturers, dealers typically stock parts for two reasons:
- Instinct/Gut Feel: You know which parts are going to wear out or get damaged, but this can be dangerous. It can be hard to tell the actual lifecycle of a part by comparing it to similar parts. You may be dealing with an improved design or material. You also need to consider the installed base of machines using that part. Remember the phrase “the road to hell is paved with good intentions”? Along that road are several landfills full of parts that were stocked and scrapped because of someone’s gut feel. I have the utmost respect for anyone who knows the product well enough to predict wear patterns, but there is a better way to make stocking decisions.
- Repeating Demand: Many parts wear out and some are replaced during a maintenance interval. Other parts are the victims of stupid human tricks or natural disasters. Maintenance parts and wear parts will have repeating demand patterns. If we watch for repeating demand patterns, we can be confident in our stocking decisions.
We use the term “hits” to describe the number of times a part was sold. In your system it may be called hits or demands or sales or bin trips or lines. Hits during a set timeframe will allow us to create a stocking parameter. That parameter will decide if we stock the part or treat it as a special-order part when customers need them.