download PDF - DealersEdge

6 Killer Parts Inventory Reports
for Dealers, General Managers
and Controllers
With
Chuck Hartlé, President of PartsEdge
Moderated by
Mike Bowers, Executive Editor at DealersEdge

Chuck Hartlé is president of PartsEdge (www.PartsEdge.com), a
dealership parts department consulting firm in Poway, CA. PartsEdge
offers innovative inventory management services to help dealers maximize
parts department profits. Chuck is also the editor of the nationally
recognized newsletter DealersEdge Parts Manager. Previously, Chuck
spent more than 30 years as a parts manager then parts and service
director for a multi-franchise dealership group. He was also one of the
founders of the Mopar Master Parts Guild. He has been a featured speaker
at NADA's Annual Convention and Dealer Academy as well as at dealer
Twenty Groups, regional parts manager meetings, and factory-sponsored
training seminars.
Since forming PartsEdge, Inc, Chuck has participated and spoke in front of
many workshops, seminars, 20 Groups, and Dealer Associations.
We are located in Poway, California, a town located in San Diego County.
You can contact us by phone by calling our toll free number at (800) 825-
7562. Our office address is 12925 Pomerado Road, Suite E, Poway, CA.
92064. You can contact us by email at operations@partsedge.com.

A Dealersedge Webinar Presentation
October 22 nd , 2009

Six “Pulse” Reports to Measure Your
Parts Inventory Health
•Special Order Parts (parts that have not qualified for stocking yet) are the number one cause
of obsolescence in the parts inventory. Returns from Wholesale customers, over ordering,
and just plain lack of control spells disaster for the typical parts inventory.
•Forced Stock inventory is based on the unfulfilled demand from special order parts that never
qualified for your stocking criteria.
•Excess Inventory is the hidden culprit in lack of inventory productivity. These are parts
where the on hand quantities exceed the system generated best stocking levels.
•True Obsolescence needs to meet two criteria, not just one! We call it the 13 / 13 rule!
•Measuring your complete inventory movement of non returnable parts is so critical for
today’s parts operation with dwindling return reserves and discounts.
•Commonly referred to as the “Month’s No Sale” to “Month’s No Receipt” report, this helps to
identify over purchasing issues and depth in the inventory.

Pulse Report # 1 – Special Order Parts (ERA)
Substitute Your default bin location found
in Program 2322 or the group of bins
used for special order parts in the
“VALUE” (SP-ORD) fields above and below.
Remember, no matter what,
the PROD.MASTER file is what wins
when it comes to physical
reconciliation time.
Special Order Files for the ERA system
are “independent” of the actual Part
Number file SPEC.ORDR and
PROD.MASTER
“Ideal Pulse”
Special Order Value is 3-5% of
overall inventory with nothing
over 60 days old.
Ideal reporting option would be
to reconcile the
2253
Special order report with this
6910 report monthly.

Pulse Report # 1 – Special Order Parts (ADP)
FROM FUNCTION CODE: ENG
? LIST PART-NO. MNR PART-ID DESC8 BIN O.H. COST MFG-2 YRSL MNS MNR SS SO
? TOTAL OH.VALUE WITH BIN EQ “SP-ORD” AND WITH O.H. GE “1” AND WITH P-U
? BY-DSND MNR BY PART-ID ID-SUPP (P)
(P) Sends report to the Lineprinter
(N) Sends report to the Screen
Substitute Your default bin location for
the value
“SP-ORD” for your special order parts in
the English Statement above.
Remember, no matter what ,
the PART-NO. file is what wins when
it comes to physical reconciliation
time.
Special Order Files for ADP system
are also “independent” of the
actual Part Number file. The File
Name is SOR-LINES.
“Ideal Pulse”
Special Order Value is 3-5%
of overall inventory with
nothing over 60 days olds.
Ideal reporting option
would be to reconcile the
Standard “RAS”
Special order report with
the Above English
Statement.

Pulse Report # 2 – Forced Stock Inventory (ERA)
You won’t find any “canned” DMS reports on this area of your inventory…
The Average Dealership has 24% of
the inventory tied up in Forced
Stock inventory. What is your % ?
Implement these reports to track
forced stock on a weekly basis.
“Ideal Pulse”
Forced Stock Value is
less than 15% of the
overall inventory.

Pulse Report # 2 – Forced Stock Inventory (ADP)
You won’t find any “canned” DMS reports on this area of your inventory…
FROM FUNCTION CODE: ENG
? LIST PART-NO. BREAK-ON SO PART-ID DESC8 BIN O.H. COST MFG-2 YRSL MNS MNR SS
? TOTAL OH.VALUE WITH YRSL LE “2” AND WITH MNS LE “12” AND WITH O.H. GE “1”
? AND WITH P-U BY SO BY PTNO ID-SUPP (P)
“Ideal Pulse”
Forced Stock Value is less
than 15% of the overall
inventory.
FROM FUNCTION CODE: ENG
? LIST PART-NO. BY MNS BREAK-ON MNS SPACE TOTAL OH.VALUE SPACE
?TOTAL CORE.VALUE SPACE TOTAL O.H. SPACE TOTAL #ITEMS
? WITH YRSL LE “2” AND WITH MNS LE “12” AND WITH O.H. GE “1”
?AND WITH P-U ID-SUPP DET-SUPP (P)
Forced Stock inventory
leads to 85% of the
obsolete inventory
issues in today’s parts
operations. Controlling
Special Orders &
returns daily is the key
to keeping forced stock
low!

Pulse Report # 3 – Excess Stock Inventory (ERA)
Are you ordering too much, over-riding
your actual quantities?
Are your days supply settings to high?
Has demand slowed and best stocking
levels retreated while sales stalled?
“Ideal Pulse”
Excess Inventory Value should
be 20% or less of total
inventory value.
Consider Isolating Excess
Parts into a separate source
or group and fix the MAX/FB
(Full Bin)setting to not
exceed the BSL, keeping
days supply the same. Don’t
forget to remove Full Bin
settings when target on hand
is reached!

Pulse Report # 3 – Excess Stock Inventory (ADP)
Suggestions:
By changing the “Days Supply Settings”
to a lower or higher number in a
source, you automatically change the
Reorder Points and Best Stocking Levels
of those parts, creating more or less
excess inventory prematurely!
“Ideal Pulse”
Excess Inventory Value should
be 20% or less of total inventory
value.
When a lot of parts are in the
same source or group, you
only have one days supply
setting for many parts that
have completely different
movement and sales history.
Break them out!

Pulse Report # 4 – True Obsolete Inventory
Following the 13 / 13 Rule
Suggestions:
Aging Reports, such as in the
Month End Management
Reports, by Just Months No
Sale, can be misleading; not
taking into account excess
inventory value and forced
stock issues.
“Ideal Pulse”
True Obsolete Inventory
in the 13/13 should be
Zero!
FROM FUNCTION CODE: ENG
? LIST PART-NO. BREAK-ON MNS MNR PART-ID DESC8 BIN O.H. COST MFG-2 YRSL SS SO
? TOTAL OH.VALUE WITH O.H. GE “1” AND WITH MNS GE “13” AND WITH MNR GE “13”
? AND WITH P-U BY-DSND MNS BY-DSND MNR BY PTNO ID-SUPP (P)
The 13 / 13 Rule:
Parts must be both 13
months since the last sale
and 13 months since the
last purchase (receipt).
This report should be run
monthly!

Pulse Report # 5 – Non Returnable Inventory
Do You know where your Manufacturer Return Codes are listed and what they mean?
“X” = Research Your Return
Code based on the Manufacturer
Suggestions:
There are 12 positions in the
MFG-2 (A.B.C.D.) field. These
fields have manufacturer defined
information that is very valuable
and critical to identifying specific
groups of parts, such as non
returnable flags.
“Ideal Pulse”
Anything over the
13/13 rule should be
zero.
FROM FUNCTION CODE: ENG
? LIST PART-NO. BREAK-ON MNS MNR PART-ID DESC8 BIN O.H. COST MFG-2 YRSL SS
? SO TOTAL OH.VALUE WITH O.H. GE “1” AND WITH MFG-2 NE “^^^^^^^^^^^^”
?AND WITH P-U BY-DSND MNS BY-DSND MNR BY PTNO ID-SUPP (P)
“^” (Carat - Shift 6) = Research Your Return Code
based on embedded code(s) in the MFG-2 field
Be very Pro-Active in
Measuring the non-returnable
parts in your inventory. Do
you accrue dollars from
purchase discounts or gross
profit to offset and purge these
parts?

Pulse Report # 6 – Purchase to Sale Ratio
Last Time
You Sold
a Part
Total Inventory Value = $112,921
•This inventory shows that they have sold $25,989 more than
they have purchased in the last 3 months. A 23% difference
in purchase to sale ratio. Parts could be selling down the
critical parts that make the money and leaving nothing but the
parts that don’t sell.
•In the Obsolete categories, comparing 13 MNS and 13 MNR,
there is more than double the amount of obsolete inventory in
the receipts category compared to the sales category
($11,400 difference). This is a 10% difference or going from
a 9% obsolete problem to a 19% obsolete problem.
Which is the most critical of these two reports? Aging by Sales,
or aging by Receipts?
Last
Time
You
wrote a
Check
for a
part
“Ideal Pulse”
Staying under 10% in
comparing active month
categories 0-6
and within 3%
comparing inactive
month categories 7 and
up
Run two reports:
Aging based on Months No Sale
over 13 months, then Aging by
Months No Receipt over 13
months, to find the difference.
ADP MGR
The “Monthly Summary”
Report has them both together.
ERA 2213
Run 2213 by Default for Sales
By MNS; then go into Program
2321, Option 35 and flip the flag
to “Y” and rerun the 2213
report for sales by MNR.

A “Cornucopia” of
Report Processing

Introducing “PlayBook”
Using the “PlayBook” software application to “simplify the process”

The “PlayBook” Process
x x
o
A Software Application designed by Automotive Professionals for
Automotive Parts with years of dealership experience.
A program that “levels out” parts information, regardless of the DMS
platform.
A “easy to use” application that doesn’t take hours of time to compile and
extract inventory information.
A tool to help “Coach” every aspect of your inventory on a daily, weekly, or
monthly basis.
PlayBook recognizes most Manufacturer information from return codes, to
movement codes, and promotional information.
PlayBook eliminates the need to be a “DMS Specific” query expert, as
reports can be accomplished with just several mouse clicks.

Full Screen Shot of PlayBook
Filter Icons
Inventory Specific Dashboard
Purchase to Sale Ratio
Dashboard
Green Bar Detail Area

The Dashboard Fields
= The Total Value of the current inventory on hand quantity.
= Active inventory where sales are current and the on hand is
less than or equal to the best stocking level of a part.
= Inventory that has slowed down and/or has excess value.
The parts value is based on on-hand and BSL being equal.
= Inventory where the on hand quantity is greater than the
best stocking level, regardless of special status code.
= Simply defined as parts that have not qualified for stocking
using a “3 sales in X months” phase in guide. (X = 6 to 12 mo)
= True obsolete inventory, where sales (months no sale) and
purchases (months no receipt) are over 12 months combined.

The Months No Sale /
Months No Receipt Dashboard
The first dashboard report of it’s kind to put the information of sales and
purchases side by side where you can capture sales and receipt data from your
DMS system!
This report can point out inventory
strengths and weaknesses simply by
comparing similar month groupings, as
shown above.
(From the actual demo file).

Pulse Report # 1 – Special Order Parts
Step #1 / Select Quantity
Step #2 / Select Bin
Step #3 / Sort, Review, and Print
Did we forget to
mention PlayBook is
“NOT” DMS specific?

Pulse Report # 2 – Forced Stock Inventory
Step #1 / Click in “Forced” Dashboard Column
Step #2 / Click the “ON HAND” Filter
Step #3 / Click and Sort by any of the Column Headers below / drag the Columns around too
Talk about
being easy to
isolate sources
that might
have special
source
accounting ,
pricing, or
days supply
settings?

Pulse Report # 3 – Excess Stock Inventory
Step #1 / Click in “Excess” Dashboard Column
Step #2 / Click the “ON HAND” Filter
Step #3 / Review the Dashboard
Step #4 / Sort / Review / Print the Detail
Both the Watch and Excess Fields
are populated. The “Watch” parts
are the excess parts value where
the on hand value meets the best
stocking level.
Sort Multiple Columns by simply holding down Ctrl
Key and clicking the mouse on the columns.

Pulse Report # 4 – True Obsolete Inventory
Following the 13 / 13 Rule
Step #1 / Click in “13/13” Dashboard Column
Step #2 / Compare it to the Values in 13+ MNS-MNR Categories
Step #3 / Sort-Review-Print (Notice how the columns were moved
around and sorted by descending MNR)
Notice:
The MNS 13+ and MNR 13+
have $10,595 in common
with each other.

Pulse Report # 5 – Non Returnable Inventory
Take the guess work out of the non-returnable thinking.
Our process has practically every Manufacturer return code equation built in!
Step #1 / Click in “On Hand” Dashboard Column,
then the ON HAND Icon
Step #2 / Holding the Ctrl Key Down ; click on
“Filters” ; then Non-Returnable; then “APPLY”
2
2
1
Step #3 / Sort-Review-Print… This is done by MNS in sample
1
Anytime you want to start
over with all of your
inventory data, you simply
“click on the “CLEAR”
button to reset the data file.

Pulse Report # 6 – Purchase to Sale Ratio
No Longer Do you have to “Switch Settings” to compare on paper! The purchase to sale ratio is built right into the
“Dashboard” for easy review and “mouse click” comparison.
•The Months No Sale Report Alone can be misleading and a poor
indicator of inventory performance if that is your only measurement
•The Months No Receipt Report Alone is a better management tool to
measure inventory performance, but not the only way to view it
•Comparing both Sales and Receipts (Purchase to Sale Ratio) is the
only way to effectively track the pulse of the inventory!

PlayBook is not DMS Specific!!!!!
The fields your DMS Provider has can allow processing in PlayBook
FIELD NAME
FIELD NAME
Part Number
Description
Bin Location
Quantity On Hand
Manufacturer
Source or Group
Cost
Months No Sale
Months No Receipt
Entry Date
Sales in Last 12 Months
Best Stocking Level
Return Code Field
Manufacturer defined field such as
(ABCD or DETAIL field)
Last Receipt Date
Special Status Codes (AP / DP / NS)
If your DMS Provider has the fields listed above (or even most)
; and you can capture a text file or CSV file to your hard drive,
then Partsedge can process your file into the PlayBook
Application. Talk to your DMS provider to learn how!!!

Playbook Introductory Price!!!
Download and Work with the
Playbook Application for 30 Days
with No Obligation or Cost to
you.
Work with the Demo File briefly to get the “feel” of this simple application
Call our 800.825.7562 number to schedule a training session, if needed.
Download your own inventory and open it with the Playbook program.
Begin processing, reviewing, and managing your inventory without having to be a
query expert to identify critical areas of your inventory!

Click Here
Downloading Playbook
Go to www.partsedge.com

Starting Demo Inventory File
Click on “File” ; then
the “Load Demo File”