Higher Profits Through Improved Parts Management
OPN has created a software tool called Advanced Inventory Management (AIM) to help dealers easily understand, monitor and manage their inventory. AIM provides a quick view of overstocked and/or obsolete parts in each warehouse location including technician’s car stocks. Indicators within AIM will help parts managers quickly identify opportunities to control overstocked and obsolete parts. Beyond those indicators, AIM also displays parts not meeting yields based off of national averages helping to identify warranty opportunities, technician training opportunities, or potential customer misuse, allowing the organization to recapture additional profit and revenue. This software provides a number of other reports designed to help companies better manage their inventory. AIM is offered at no cost to dealers participating in OPN who continue to provide BEI their service and parts data on a monthly basis.
Proven Study Results
BEI studied 184 dealers who supplied the needed parts files and identified approximately $19 million in parts that are either overstocked or obsolete. Using this same list of obsolete items, BEI recognized there were other dealers installing these same parts to the tune of approximately $91 million of usage in the last 90 days. In other words, parts that are obsolete at one dealer are often still used at other organizations. By bridging this gap, OPN provides a one of a kind service that gives dealers a cost effective way of eliminating obsolete and overstocked items while giving those dealers that still need those same items a substantial discount over their current costs.
During the study, many of the dealers were contacted to validate the findings of their inventories, and BEI Services found a number of consistencies within the dealer community that contributed to the abundance of overstocked and obsolete parts. The lack of easy to use tools for obsolete part identification along with the lack of logistics training has led to this abundance of inventory.
“Proper parts management is critical in maintaining higher profitability,” says Bud Karakey, VP of Operations at BEI Services. “In many cases we’ve seen dealers not completely aware of their inventory status, so we created a host of software reporting tools to help. The integration of these tools with OPN has automated the process of identifying and purchasing overstocked and obsolete parts, providing dealerships an avenue to avoid writing off thousands of dollars of obsolete inventory. All of us would agree that many parts will become obsolete at some time. Our goal is to help identify and manage those parts, helping organizations reduce the risk of write off. For the parts that become obsolete to an organization, we use our database to locate other dealers still using them so they can buy them at discounted prices. And the cool thing about this program, is all of this functionality is FREE!”
Example
At a typical well-run dealership we found the following.
$12,013 consisting of 143 SKU’s (425 parts) with no MIF that could use those parts.
$31,643 (1188 parts) not used in 6-12 months.
$18,833 (829 parts) not used in 12 -18 months.
$73,234 (3714 parts) not used in over 18 months.
How It Works: Selling overstocked and obsolete parts
BEI Services processes the dealer’s service and parts data monthly and identifies aged, or overstocked parts, and places them in 4 categories: (bucket A) parts not used in 6-12 months, (bucket B) parts not used 12-18 months, (bucket C) parts not used more than 18 months, and (bucket OVR) parts that have more than 125% of 6 months need. Based on the entire network usage statistics, OPN offers to purchase these parts from dealers. The dealer then selects the parts they are willing to sell and ships them to OPN’s warehouse. After the parts are validated, a check is sent to the dealer for the agreed price.
How It Works: Buying overstocked, obsolete and recycled parts
Every night BEI will look at the inventory available at Overstockpartsnetwork.com and Recycledparts.us. BEI will then query usage stats for those parts at each dealership participating in the network. When a match is found, the dealer will be notified of the parts available to purchase from Overstockpartsnetwork.com or RecycledParts.US at significant discounts. The dealer will click the link provided, and login to the website to purchase parts in pre-populated shopping carts.
Testimonials
“BEI analyzed our obsolete inventory identifying the specific location of each of these parts allowing us to better manage our obsolescence. They also reviewed this information with our team providing ideas to fine-tune our process in order to reduce our risk of future write-offs. To our surprise we were able to sell over 183 parts to the Overstock Parts Network freeing up space and cash.”
Mike Woodard, Oasys Inc.
“Finally, we’ve been given a great tool to economically deal with obsolete and overstocked inventory avoiding costly write offs, and preventing us from disposing parts into landfills.”
Gifford Silver, Copiers Northwest
The Companies
BEI Services has been providing service performance benchmark data for dealers for more than 20 years. Their products include Advanced Comparative Reporting, the most widely used performance based Technician Compensation Program in the industry, and their patent pending Effective Workload Distribution (EWD) territory management with technician car stock creation.
RecycledParts.US has been in business harvesting used parts from copiers and printers and selling them online for years. They continue to provide a viable alternative to the high cost of OEM replacement parts. www.recycledparts.us provides an easy to navigate website that provides 40% – 70% savings off OEM wholesale pricing on an extensive line of machines and manufactures.
