Most frequently asked parts management questions

We get lots of questions about how to improve inventory health and how PartsEdge helps. Here are the most common questions and answers plus tips and tricks for further optimization.

Q: What should we do with really old, non-returnable obsolescence?

A: We suggest first trying to sell the parts on Dealermine, RevolutionParts, or a similar service where you can list these parts online to at least get some money back for the junk parts. Likely, this won’t get rid of all your bad parts, but it is worth a shot. For all remaining parts, we recommend setting up an accrual account to start writing the parts off and throwing away and/or donating them to a local auto school.

Q: What should we monitor the closest in our parts inventory?

A: We recommend monitoring forced stock (parts on your shelf that have had 2 or fewer sales in the last 12 months),  technical obsolescence (parts 7 months to 12 months No Sale or No Receipt) and obsolescence (parts that are 13 MNS and 13 MNR). You want as few parts in these categories as possible and you want to minimize allowing these types of parts into your inventory.

Q: How often should we be doing bin checks/reconciliations?

A: Ideally, every month. In our experience, most do this once a year. The more often you reconcile, the easier it is to catch GL and Inventory discrepancies before they get out of hand. It’s also easier to check frequently, it can become a daunting task when done yearly.

TIP: If you have two stores of the same make, try comparing your obsolescence with parts that are actively selling at the other store and vice versa. For example, X part is obsolete at Store 1, but is active and selling at Store 2. We recommend doing this quarterly or as often as you can depending on how far apart the stores are.

Q: How much obsolescence is acceptable in my inventory? 

None. Parts age and some obsolescence is unavoidable. But having a goal of zero obsolescence and an aggressive plan to meet it always produces the best results.

Q: My parts department has a great handle on inventory, why would I need PartsEdge?

A: You know firsthand how much work it takes to maintain a great inventory. How much more effective could your operation be with someone else doing the grunt work for you? 

Q: This sounds like my Factory ASR Program, why would I use PartsEdge? 

A: PartsEdge is designed to yield the best results for you while factory programs which are usually designed to build the best results for the factory. These programs guarantee what they are suggesting to stock and, though most of it does sell, we have found that these programs tend to over-stock dealerships. Even if you can return it, why not minimize overstocking the part in the first place? PartsEdge works closely with your DMS so you can stock parts for the true demand of your market. Our service and technology is customized to your specific operational needs. 

Q: Can PartsEdge help save time with Stock Orders? 

A: With our setups, your DMS will create a highly accurate stock order that you can actually trust and submit directly to your manufacturer with little-to-no work on your part.

Q: Does PartsEdge save me time on my Returns? 

A: Yes! We have an in-depth understanding of every manufacturer’s return policies and can generate optimum return lists for you in minutes.

Q: Can PartsEdge create Customized Reporting on my Parts Inventory? 

A: Absolutely! We take pride in providing quick and informative inventory reports.

Q: Do I have to make a long-term commitment? 

A: No. Our standard contract is month-to-month. 

Q: How long does it take to get setup with PartsEdge? 

A: 2-4 weeks.

PartsEdge saves Parts Managers hundreds of hours each year by taking all the guesswork out of DMS management, sourcing setup and optimization allowing them to focus on creating a successful operation.  Our expert team is available on-demand to guide your operation to record success. 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 power tool to work, send us a message! Our testimonials speak for themselves.

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Propane Vehicles | The Future of the Industry

According to the US Department of Energy, Propane Vehicles (also known as liquefied petroleum gas (LPG), or propane autogas) is considered an alternative fuel with roughly 60,000 on-road propane vehicles with certified fuel systems in the United States currently. While these vehicles perform similarly to conventional gasoline cars, their fuel economy is lower than gasoline and they boast lower maintenance costs due to low carbon and oil contamination. Does the propane car market have the viability to grow in the future market? Read on to hear our take!

What are propane vehicles? 

Propane vehicle engines have been around since 1913, invented by Carl L. Schmidt. While not a new technology by any means, pressure to find alternative fuel sources has brought them back into a more mainstream discussion. Propane fuels’ carbon content is lower than that of gasoline and diesel resulting in benefits to greenhouse gas emissions- dependent on many factors. Propane vehicles fall into two categories: dedicated and bi-fuel. While dedicated systems run exclusively on propane, bi-fuel systems enable the car to use either propane or gasoline.

The pros

Propane can be a renewable energy source if the byproduct of the creation of renewable diesel, but is currently the byproduct of refining natural gas, ethane, methane, and butane. Since it is a byproduct, its carbon footprint is lower than most alternatives. Because of this environmental incentive, propane is used in many delivery fleets and shuttle services. While MPG fuel economy is similar to gasoline, propane has a lower cost per gallon and, depending on fuel prices, can result in huge fuel savings for owners. Propane can also be a good choice for folks living in colder climates as it is completely gaseous and can help avoid cold-start issues associated with diesel. 

The cons

Similar to hydrogen vehicles, a major challenge for propane cars is a lack of fueling stations. With only 1,882 stations across the US and Canada, these cars would likely not be a viable option for most rural-dwelling individuals as they can tend to have a shorter range. Though rigorous crash tests have made propane as safe as gasoline, there is often concern about explosion risk for consumers. While the production of propane can be renewable, propane still releases emissions that in part are contributing to issues.

Our prediction

With increased fuel pricing pressuring many car buyers to consider alternatives, propane just may have a larger role in the future of alternative vehicles. While it seems unlikely that it will surpass EV/Electric cars in popularity, there are enough incentives to consider it a permanent fixture in the vehicle fuel options. 

What’s your take on propane cars? Leave a comment below!

We’ve created an extensive library of free e-books, DMS education, parts inventory education, and more editions of this series exploring industry trends and helping you prepare for the future of the industry.

Thoughts, questions, or opinions? Get in touch!

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Parts department trends of 2022

With staffing, parts, and new car shortages, increasing costs, and ever-changing protocols, parts departments have evolved immensely since 2020. 2022 was no exception with constraints leading to innovation, breakthroughs, and new priorities across the board. Here are the top trends we witnessed in 2022 and our take on how dealers might use them to inform a successful 2023. 

A shift in thinking

One trend has become crystalized this past year: across the country dealers and owners have grown a new understanding and appreciation for the value in their parts departments. We think this change has happened for a few reasons. Firstly, new car sales have been deeply affected by shortages, while parts and service maintenance have remained relatively stable. According to data from S&P Global Mobility,

the average age of an American vehicle has hit a new record at 12 years and 2 months old- meaning folks are holding onto their vehicles longer resulting in more demand for regular maintenance and repairs. With online part sales a viable route to extending parts department sales far beyond geographic markets, it appears upper management has begun to grasp the truly unlimited expansion potential in parts sales. Thirdly, with ongoing part shortages, having the right parts and replenishment settings has become a powerful avenue for selling to competition and outpacing parts departments with a less optimized inventory. Parts departments also maintain customer relationships. According to a Cox Automotive survey, 55% of consumers said they “go to a dealership because its service personnel knows their vehicle better.” Make 2023 the year you translate understanding the value in your parts into actionable support and investment.

Increasing obsolescence 

2022 continued a trend we’ve been witnessing for a number of years across manufacturers: increasing obsolescence.  There are a number of factors that are contributing, but one seems to be underlying in almost all cases: Parts Managers don’t have enough time to be proactive in their inventories. Maintaining a healthy inventory requires ongoing auditing and optimizations. Without monthly reconciliations and regular physical inventories,  there’s simply no way to know where things are going wrong and how to stop the obsolescence domino effect. Obsolescence over 15% that keeps coming back is a major red flag. Ultimately, your goal should be 0%- we’ve seen it! If you can get a handle on your obsolescence in 2023, the possibilities are truly endless. 

Support shortages

This past year saw a remarkable increase in new-to-the-position parts managers and parts and service department employees. With this influx came a demand for parts department training and support. Even for seasoned employees, the industry changes so quickly that ongoing education should be part of the plan for every dealership. Though, as we previously discussed, understanding of the value that lies in the parts department has increased, dealers are still struggling to find and engage the support and education that is required for success and expansion. 

PartsEdge saves Parts Managers hundreds of hours each year by taking all the guesswork out of DMS management, sourcing setup and optimization allowing them to focus on creating a successful operation.  Our expert team is available on-demand to guide your operation to record success. 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 power tool to work, send us a message! Our testimonials speak for themselves. 

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Navigating manufacturer programs

Manufacturer ASR Parts Programs are typically advertised to dealerships as a way to achieve higher levels of service and potentially higher profits with the promise of less work for parts management. Some manufacturer programs guarantee the returnability of suggested parts in the future if the dealership will stock them now. On the surface, terms like these can appear to be good for business, but are they really?

Looking deeper

While each manufacturer is different, we’ve seen time and time again that programs force dealerships to give up some return allowances and other financial incentives in exchange for a returnability guarantee. More than a few have been known to significantly overstock dealerships or regularly guarantee parts that,  due to demand, are unlikely to ever get sent back on a manufacturer return.  Why would a manufacturer do this? Some speculate that ASR’s like these are really more of a shell game where the manufacturers have cleverly shifted the costs of storing some parts whether they sell or not, out to the dealerships.

How to manage

First, you’ll want to make sure you’re tracking your manufacturer’s ASR program as two separate inventories: guaranteed and non-guaranteed. The key is staying compliant enough to avoid major penalties while rejecting all parts you don’t really need. A guaranteed return on a part you didn’t really need is better than nothing, but with estimated holding costs for retail inventory in the US ranging from 21-36% per year, that expense adds up pretty quickly. Dealerships should make the effort to avoid holding too much depth in their inventory if they want to improve the health of their parts and service departments.

With PartsEdge clients, we separate parts into sources based on their manufacturer program codes. Then, we treat guaranteed and non-guaranteed parts as separate inventories with separate objectives for Productive, Forced, Excess, and Obsolete stock.  Finally, we work with our parts managers to set perimeters so we can review the manufacturer program proposals every day, denying and accepting the right amount of parts to keep compliance without stocking any more of the questionable parts than necessary. 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 power tool to work, send us a message! Our testimonials speak for themselves.

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