NS stocking status syndrome

[Chuck Hartle]

Thanks David, Well said!

[joe r]

Great forum!! I have found that one of the most overlooked lost sales is the fast moving maintainence part purchased from the local jobber store. If the sale is not logged as a lost sale under the factory part number it will delay the stocking of a potentially fast mover and will result in more purchases from the jobber or other dealers.
To get my back counter people to post these sales I started requiring them to put the factory part number on the jobber invoice and spot checked the lost sales.
Joe R

------------------

[ridge]

David,
I think I'm following you, but I just want to make sure. Suppose you have a customer call and inquire about a master cylinder for an 88 Lincoln Mark VII. You price the part for $2100.00, (don't laugh, this is actual list price) Of course he says thanks but no thanks. Now, do you post this as a lost sale?
Technically I lost the sale, but it wasn't because I did not have the part. It was because the price was outrageous.

Thanks,
Lee

[David S]

Ridge:

After all these years in this business I didnt think anything could surprise me. Well, you caught me off guard with this one! $2,100 is nuts!

The key to answering you in your scenario is whether or not you had the part on hand.

The purpose of the Lost Sale function is not to tell you that you are overpriced or whether your Parts Advisors are doing a good job of selling. The purpose of the Lost Sale posting function is to provide a method to collect data regarding potential sales on parts that are not currently stocked. All we are looking for is demand data for Phase In criteria. So for the example you have provided, I would post a lost sale if the part is not currently in inventory. If the part is currently a stocking status part you can potentially cause yourself harm by posting a Lost Sale.

If this part was not currently stocked and was to reach Phase In criteria. Even though the part is wildly expensive, enough demands on that part may suggest that it is a part you may want to consider stocking. In reality being an experienced Lincoln Parts Manager you may recognize this part as a risky investment. Whatever the case, with consistent posting of Lost Sales you would know that: A) Your Parts Advisors are doing their job. B) You will always have the opportunity to Phase In parts that your customers are requesting. C) You will have all the information needed to make financially sound decisions on what to stock. D) You are going to make more money!

Remember in the end, the Parts Manager is the final filter.

Maybe what this industry needs to do is change the term Lost Sale, Any ideas?

David S.

[Mike Davis]

Hi all:

Just a thought to Davids last point. I have long thought that it would be wonderful for the DMS to have "reason" codes for lost sales, not available, backorder, price, etc. Then the lost sales could be used a little bit better for managing inventory, pricing, etc. If you consistently lost sales due to pricing you may want to review pricing policies. Similarly if you were always out of stock on parts and losing sales this would indicate a different problem. While a lost sale posted helps that part number a trend is time consuming to determine not to mention difficult and contributes to people not managing lost sales. Perhaps "Lost opportunities" would be a better indicator and with more information could really help the parts manager in all areas.

Just thoughts,

Mike

[Rex]

Chuck said in a previous post: "if you all of the sudden sell a part (or have a demand for the first time) that was on "NS" status, the system will put it to "AP" status and if you don't review these parts they will drop off of the system at the end of the month".

I ran this English Statement to check it out: LIST PART-NO. WITH SS "AP" "DEL" AND WITH YRSL GT "0" AND WITH SENTRY AFTER "01MAY99" {less than a year ago}. Sure enough, many parts listed. I wrote a special program to keep the test parts for the full 12 months, and ran it in our job stack every Saturday.

David then got me looking at it again, and now the English Statement brings up nothing but parts I have manually changed to delete status! I took the special program out of the stack for the 1st of April, and still no parts listed.

Did I miss something?? Did anything change at your stores Chuck? Is there something you're not telling us Mike?



------------------
www.powerprograms.com

[Chuck Hartle]

Hi Rex,

I am going to assume two things by your English Statement:

"LIST PART-NO. WITH SS "AP" "DEL" AND WITH YRSL GT "0" AND WITH SENTRY AFTER "01MAY99" {less than a year ago}>

You need to run another statement weekly and you need to change this first statement just a bit.

First, the existing statement needs to be altered to SENTRY LE (less than or equal) to whatever you have used as a NS Testing period. For example if you answered "12" to the MNS Testing Period in your OMN Option 3
(Phase-In/Phase-Out) then you would need to make the Entry Date 13 months or older. If you are running this weekly, you should get a whole list at the beginning of each month. The status will only change based on 3 conditions:

1) Your parts have been in stock with an entry date of 13 months or greater.

2) Your on hand is at zero

3) Your on order is at zero

What you would want to run in a weekly job stack would be the following statement:

LIST PART-NO. WITH SS EQ "AP" AND WITH O.H. EQ "0" AND WITH O.O. EQ "0" AND WITH P-U

This statement would get you all potential parts that would go to "DEL" (delete status) at month end, regardless of your entry date.
I would recommend that you check this list over carefully for parts that are potentially starting their life and not ending it and either remove the AP status to order on your next stock order or if it has history in the YRSL and you don't want to stock it to change it to NS.

What Mr. Nichols is talking about is the following scenario;

-If you have a SENTRY date of 01MAY97
-The part met your phase in 8 months later
-You stocked the part for two years with a blank status
-It suddenly quit selling and met your phase-out criteria
-You sell the part to zero today 07APR00
-You change the part back to NS status after reviewing your report on 08APR00
-On 01MAY00 after running your MNE this part will show up on your report "PARTS TO BE DELETED NEXT MONTH FOR REVIEW" in your MGR report.

Why? Because your NS testing period is based on the SENTRY date and your SENTRY date is 3 years old (or 36 months) so the system will automatically change the status flag to "AP" status every month now unless you alter the SENTRY date. Thus, you have two choices, alter the SENTRY date or change the status back to NS.

Sorry for the long winded version, but maybe this will clear it up for you.

Chuck Hartle'

Give these a try and run them accordingly and you will see what I am talking about.

[This message has been edited by Chuck Hartle (edited 04-07-2000).]

[Rex]

Chuck,

2 scenarios:

1. A part has been through it's life cycle, longer than 12 months, and has met phase-out criteria. You want to keep it around as a test part until there is a full 12 months of no sales. That is what Mr. Nichols spoke of as I understand it.

2. A part has been in the system less than 12 months, and on it's first hit, it changes to AP, as you said in your post: "(or have a demand for the first time) that was on "NS" status, the system will put it to "AP" status".

#2 is what I was looking for in my English Statement, which, as I said, WAS listing numbers.

Have I lost my mind? Is #1 the only bug?

Rex


------------------
www.powerprograms.com

[Chuck Hartle]

Rex,

I probably just made the subject confusing. #1 is the only bug that I am aware of.

However, under you scenario in #2 you may have a lost sale or regular sale on a part you have put back to NS status, and, at the end of the month (because it still did not qualify for phase-in) it will change to "AP" status because it did not meet the phase in criteria and the SENTRY date is greater than the MNS setting in OMN 3.

So, in short, you can have demand on these parts during the month and have them go to AP status at MNE for that reason.

Chuck Hartle'

[bclark]

David S

I have been readind this dicussion for some time and must reply. Your definition of a lost sale has been stated many times and I still question the application of this method.

My experience in over 20 years has all been with smaller dealerships. It is not unusual for a customer to request a part not in stock and leave to check somewhere else. LOST SALE? The same customer will very likley return one or two days later and order the part. SALE = LOST SALE = TWO DEMANDS.

The system we were on before R&R calculated demand as "sales + lost sales - emergency purchases. I could enter all special orders as emergency purchases and post all request as lost sales without having false demand.

My question is, at what point does a request become a lost sale.

B Clark