LOST SALES OBSOLETE

[RONALD GRAVES]

I believe that it is time to change the lost sale process. Its time has passed in its present format. I want to know why a sale was lost! With the enhanced process I propose many of the questions about what a lost sale is would be resolved.
The first change would be for the in-house computer system to record all parts inquires with a 0 on-hand count. This could be printed out at the end of each day by counter person. By doing this management could work with those who are weak at posting lost sales.
The next change would be to catagorize lost sales. We have all lost sales due to excessive price be it internal or factory. These could be posted as LP (lost price). Since most of the factories have access to the information in our in-house systems this could become a very powerful tool to determine prices for them. LB (lost factory backorder), the counter person knows it's B.O. so why post a lost sale. It still should be recorded! Again the factory has access, so maybe they will do something. LO (lost obsolete) Factory has discontinued this item but maybe there is still a demand. LN (lost not on shelf), your old fashion lost sale.
There are a couple of others I would like to also see but I will leave those to you to devise.
The end of day report could also split out the these lost sales by catagory giving you a better picture of your market.
Remember; Information equals power; power equals money!

Thanks
Ron Graves

[AL HAGER]

I BELIEVE THAT YOU HAVE HIT A GREAT SHORTFALL OF OUR COMPUTER SYSTEMS. IF WE HAVE A CUSTOMER ASK FOR A PART,WE HAVE THE PART BUT STILL DON'T MAKE A SALE, IS THIS A LOST SALE?? SHOULD BE BUT THERE IS NO WAY TO TRACK IT. THE WAY R&R IS SET UP RECORDING A LOST SALE FOR THOSE "OTHER" REASON WOULD JUST INCREASE STOCKING LEVELS,MY COUNTER PEOPLE RARELY WILL TAKE TIME TO WRITE A NOTE ABOUT A LOST SALE OF THIS TYPE BUT I WOULD'NT HAVE ANY TROUBLE TO DO AN EXTRA KEY STROKE TO TRACK DIFFERENT REASONS OF A LOST SALE. I WOULD BE INTRESTED IN HERE FROM THE R&R PEOPLE ON POSSIBLE CHANGE TO THEIR LOST SALES. THANKS

[Chuck Hartle]

Excellent Ron! You have certainly hit a cord with me. I love the idea. Tracking true demand is a serious shortfall with our
DMS systems.

As for the parts advisor posting the lost sale correctly, it would be even sweeter if
you "turned" on a prompt that would bring up the table whenever a part is being added or at zero on hand with the selections and the parts advisor cursored to the proper lost sale selection and hit "enter".

I love the idea! I will run with it with the ADP and ERA folks that I deal with. What other codes did you have in mind?

Chuck Hartle'

[CHRIS BAUMANN]

Some good ideas and good feed back...But
you have to remember a "lost sale" was and continues to be an extremely important tool to improve your inventory coverage as well as all the other measures of inventory performance.
A lost sale because you do not have the part is the only lost sale that matters for
inventory control purposes. If you order it from GM, Ford, Etc , or buy it from another dealer it is not a lost sale. If I have a pf47 oil filter at 5.50 and Pep Boys/Auto Zone has it at 3.95 I dont consider that a lost sale. I consider it being undermined by GM SPO and Bill Lovejoy. One of my functions is to check out excessive and/or unusual lost sales and correct them if need be, in 2101
on ERA. No, lost sale posting is definitely
not obsolete. Although a measure of which sales were not made and why, would definitely provide important information, which the MFGs could use to improve their marketing of the correct parts.
cb+-

[cwalden]

I think tracking lost sales is a very important tool in our tool boxes. But it is
only one tool. Ive heard so many diffrent
opinions of what a true lost sale is, you
either have it in inventory to sell at the
time of (inquiry) or you dont, is my opinion.
We have the final say so on what is brought into inventory.
I run a bogus stock order using my SPORD source to bring in most of my new parts, it
has all the info needed and like I said, any
part (no matter what) that I dont have at the time of (inquiry) is recorded as a lost sale. Please post all opinions and shoot holes in mine.

[This message has been edited by cwalden (edited 09-12-99).]

[Chuck Hartle]

This is good feedback. Chris, you are right when it comes to opinions on tracking lost sales, there are so many. It is my experience that a "BIG" problem with many of the dealerships is a lack of awareness education with the parts advisors.

A parts manager should formulate his "lost sale" philosopy and educate the rest of the department on the proper posting and tracking of demand. All too often I see where the manager has a good explaination of tracking true demand but the reports show a different result.

Chris, you spend time checking out excessive lost sales and correct them in 2101. Why are you getting that many? Are your parts advisors posting "frustration" lost sales or do you have a large customer making one time large purchases that should be sold as "unusual" sales?

The two extremes I experience are too much posting of lost sales by parts advisors to try and increase the inventory depth or too little posting of lost sales because in some cases the option isn't even turned on for the parts advisors to post them.

If you want another opinion of tracking true demand, see my article dated May 1999 in the parts manager. You can call (800) 321-5312 to get a copy of it.

I offer a free analysis of parts inventories and we look at the percentage of "NS" test parts in your inventory to see how well your people are tracking true demand. You can get more information by going to www.partsedge.com if you are interested.

Keep up the exchange of information. This is good stuff!

Chuck Hartle'