Curious what most parts managers cope with as far as stock order accuracy.
If you say had 100 parts printed how many would you feel is acceptable to edit ?
How many have stockorders that if created and unseen would be comfortable simply forwarding on to the warehouse with no editing .... as it is a trusted ordering system.
What do you think can be done to improve the current methods ?
Thanks
Stock Orders
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Chuck Hartle
Stock Orders
johnny,
This is a great question and one that should draw a lot of varied opinions. We do over 130 stock orders per week and this is what we see.
We adjust roughly 10% of the stock order, even breaking it out as fine as we do. Spikes and unusual sales are usually the parts we have to review. Most of our time is really spend on reviewing phase in parts to make sure sales are valid.
Generally speaking, probably the most needed change for stock order calculations and algorythms are weekly sales instead of monthly sales. There should be 52 sales periods instead of 12 and this, if done properly, would allow a more flexable and trackable history.
While source by movement has be a great help in reducing some depth in our inventories, it is really a bandaid over a cut where stitches are needed. Another thing that would help in more information from the manufacturers, such as model year in and model year out criteria, such as DaimlerChrysler and General Motors. The best way to sum this up is for you to look at the Master Tape information detail for both ADP and ERA on DaimlerChrysler, and then look at the others. You will get the point. The more information you have about a part that the mfg can give you, the better chance you have of making the right stocking decision about a specific part.
I personally believe that the stock order process by both ADP and Reynolds works well, but it takes a lot of time to tweak it to where you feel comfortable enough to where time spent on it in minimal.
Chuck Hartle'
This is a great question and one that should draw a lot of varied opinions. We do over 130 stock orders per week and this is what we see.
We adjust roughly 10% of the stock order, even breaking it out as fine as we do. Spikes and unusual sales are usually the parts we have to review. Most of our time is really spend on reviewing phase in parts to make sure sales are valid.
Generally speaking, probably the most needed change for stock order calculations and algorythms are weekly sales instead of monthly sales. There should be 52 sales periods instead of 12 and this, if done properly, would allow a more flexable and trackable history.
While source by movement has be a great help in reducing some depth in our inventories, it is really a bandaid over a cut where stitches are needed. Another thing that would help in more information from the manufacturers, such as model year in and model year out criteria, such as DaimlerChrysler and General Motors. The best way to sum this up is for you to look at the Master Tape information detail for both ADP and ERA on DaimlerChrysler, and then look at the others. You will get the point. The more information you have about a part that the mfg can give you, the better chance you have of making the right stocking decision about a specific part.
I personally believe that the stock order process by both ADP and Reynolds works well, but it takes a lot of time to tweak it to where you feel comfortable enough to where time spent on it in minimal.
Chuck Hartle'
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george64
Stock Orders
Honda went to a daily stock order about a year ago, and have a logistics nightmare now because a lot of the dealers are still doing weekly stockorders. They cant figure out how to create a stockorder that is clean that can be run 5 minutes before deadline.
Source by movement is the answer. Fast and medium moving parts have sources that are ordered every day.You dont have to look at them. Newly qualified parts have a different source that can be added to a test stock order whenever you want to review. If you agree the part is to be stocked, change the source so it orders every day.
Just like Walmart.
Source by movement is the answer. Fast and medium moving parts have sources that are ordered every day.You dont have to look at them. Newly qualified parts have a different source that can be added to a test stock order whenever you want to review. If you agree the part is to be stocked, change the source so it orders every day.
Just like Walmart.
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johnnyo
Stock Orders
Chuck ..thanks for good comments.
I am curious why (you think) after so many years of this knowledge being known that current vendors do not adopt and revamp methodology. You are among many experts who over the last few years have voiced this as an area of concern. I know that your firm has spent a great deal of time in order assist in this area. It would seem prudent that the OEM manufactures had made sure that the software venders had this in place prior to going on daily ordering systems. Seems to me like they are placing cart before the horse.
Further .... If an accountant had to put up with a month end report that was always ten percent (or more) wrong would that be tolerated month after month?
From my observations ... It would seem that 15 20 30 % editing of a stockorder is so common place and has been this way so long most feel this is a normal part of the ordering process.
I am curious why (you think) after so many years of this knowledge being known that current vendors do not adopt and revamp methodology. You are among many experts who over the last few years have voiced this as an area of concern. I know that your firm has spent a great deal of time in order assist in this area. It would seem prudent that the OEM manufactures had made sure that the software venders had this in place prior to going on daily ordering systems. Seems to me like they are placing cart before the horse.
Further .... If an accountant had to put up with a month end report that was always ten percent (or more) wrong would that be tolerated month after month?
From my observations ... It would seem that 15 20 30 % editing of a stockorder is so common place and has been this way so long most feel this is a normal part of the ordering process.
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Chuck Hartle
Stock Orders
george,
What market are you in? We work with 30 or so Honda/Acura stores and none of them have daily stock orders? They have daily orders, but only one SSO per week... Just curious?
John, in a sentence, the cart is ahead of the horse and out of control. Loved your comment about 25-30% adjustments as normal. I can't tell you how many times I have talked with a parts manager and he told me not to call him on his stock order day!
Thanks,
Chuck Hartle'
What market are you in? We work with 30 or so Honda/Acura stores and none of them have daily stock orders? They have daily orders, but only one SSO per week... Just curious?
John, in a sentence, the cart is ahead of the horse and out of control. Loved your comment about 25-30% adjustments as normal. I can't tell you how many times I have talked with a parts manager and he told me not to call him on his stock order day!
Thanks,
Chuck Hartle'
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Vernon
Stock Orders
The biggest problem I see with stock orders and computer vendors is the fact that many who write the software have no back ground in the actual parts business.
If you have no background in dealership operations and daily task at a dealership,when writing the software that powers this business it is merely data.As the old saying goes "For every action there is a equal or opposite reaction"In writing soloutions through software,many times the reactions aren't studied enough.Coupled together with the facts of philosophy and the variations of methods and the mass amount of parts managers in the dealership industry,the possibility of writing a 100% correct programed stock order becomes almost as impossible as hitting the lottery or at least the odds would probably be higher.
Because many parts sold are so much different region to region really also plays havoc with creating the perfect or close to perfect system.And yes I do think weather of a region creates problems in a all for one system
If you have no background in dealership operations and daily task at a dealership,when writing the software that powers this business it is merely data.As the old saying goes "For every action there is a equal or opposite reaction"In writing soloutions through software,many times the reactions aren't studied enough.Coupled together with the facts of philosophy and the variations of methods and the mass amount of parts managers in the dealership industry,the possibility of writing a 100% correct programed stock order becomes almost as impossible as hitting the lottery or at least the odds would probably be higher.
Because many parts sold are so much different region to region really also plays havoc with creating the perfect or close to perfect system.And yes I do think weather of a region creates problems in a all for one system
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johnnyo
Stock Orders
Dear Vernon
Agree that todays programmers are often somewhat removed from direct contact with the hands on applications. Yet this alone cannot explain why stock orders are producing such poor quality data. With todays data programming tools anything can be written or adapted or corrected very quickly. Rather it would seem that the problem lies more in the FEEDBACK mechanisms that currently are poorly utilized or do not exist.
I tried this .... one day I asked to discuss a software concern with one vendor. I simply requested to speak with one of the developers of the software as I had a reccomendation for them. I was told that no one was allowed to speak to the programmers as that was company policy. I asked the person I was speaking with if she was a programmer , she said she was not. So I asked her how I could discuss details of a programming change .. she said that she would do her best. So it is not the program team that would not have the discussion (or listen to feedback) rather it is company policy that alienates this select group. A quality feedback loop was virtually non-existant.
It would seem that most vendors are solely in the software business. If the mindset would change to one of a partnership and a profit development team concept then changes would occur. For example : If dealer 20 groups met and consistently one specific group or individual was more profitable then all the others and the common denominator was the DMS vendor it would not be long that a switch would be made. Dealerships would flock to a vendor that consistently produced 2 to 3 percent more bottom line profit. If a vendor really set out to create revenue not only for themselves , but also the customer .... The others (DMS) would need to adapt or be out of business.
However, currently switching from any one firm to another due to dissatisfaction is perhaps jumping from pan to fire. You will often still be editing 20 or 30 percent of stockorder. The general company philosophies and weaknesses are basically the same. The programming is based on similar and in some cases incorrect assumptions. All have the same similar lack of feedback and programmers removed from real world hands on dealership experience.
Everyone has favorite vendor ,in many cases PMs find ways to make do or overcome shortfalls ... more comment "if only we could merge the best of these methods ..that would be somethng". Over 2000 posts on this site ..... thats a lot of parts mangers asking for help or asking "WHY" ....
What is needed is a slight shift in DMS philosophy. Each have the people and the tools it simply requires a desire.
Always the hope that preaching reaches other ears then the Choir.
Agree that todays programmers are often somewhat removed from direct contact with the hands on applications. Yet this alone cannot explain why stock orders are producing such poor quality data. With todays data programming tools anything can be written or adapted or corrected very quickly. Rather it would seem that the problem lies more in the FEEDBACK mechanisms that currently are poorly utilized or do not exist.
I tried this .... one day I asked to discuss a software concern with one vendor. I simply requested to speak with one of the developers of the software as I had a reccomendation for them. I was told that no one was allowed to speak to the programmers as that was company policy. I asked the person I was speaking with if she was a programmer , she said she was not. So I asked her how I could discuss details of a programming change .. she said that she would do her best. So it is not the program team that would not have the discussion (or listen to feedback) rather it is company policy that alienates this select group. A quality feedback loop was virtually non-existant.
It would seem that most vendors are solely in the software business. If the mindset would change to one of a partnership and a profit development team concept then changes would occur. For example : If dealer 20 groups met and consistently one specific group or individual was more profitable then all the others and the common denominator was the DMS vendor it would not be long that a switch would be made. Dealerships would flock to a vendor that consistently produced 2 to 3 percent more bottom line profit. If a vendor really set out to create revenue not only for themselves , but also the customer .... The others (DMS) would need to adapt or be out of business.
However, currently switching from any one firm to another due to dissatisfaction is perhaps jumping from pan to fire. You will often still be editing 20 or 30 percent of stockorder. The general company philosophies and weaknesses are basically the same. The programming is based on similar and in some cases incorrect assumptions. All have the same similar lack of feedback and programmers removed from real world hands on dealership experience.
Everyone has favorite vendor ,in many cases PMs find ways to make do or overcome shortfalls ... more comment "if only we could merge the best of these methods ..that would be somethng". Over 2000 posts on this site ..... thats a lot of parts mangers asking for help or asking "WHY" ....
What is needed is a slight shift in DMS philosophy. Each have the people and the tools it simply requires a desire.
Always the hope that preaching reaches other ears then the Choir.
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petepuma01
Stock Orders
I would be interested in seeing the suggestions for improving the existing stock order formulas the DMS' provide.
What would you change? What works well? What needs to be improved?
Regardless of the suggestions, I would hope that even if they were implemented, parts managers would still manage their inventory and review the suggested order. Even with a perfect formula, review is still necessary to address temporary spikes, emerging trends, etc.
What would you change? What works well? What needs to be improved?
Regardless of the suggestions, I would hope that even if they were implemented, parts managers would still manage their inventory and review the suggested order. Even with a perfect formula, review is still necessary to address temporary spikes, emerging trends, etc.
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johnnyo
Stock Orders
Pete
Good thoughts computers are great, but it is people that make things happen.
I know of several parts managers that edit more than 60 percent of the stockorder.( and I do not think they are alone).
In order to improve a stockorder it may be suggested that a base line of what is acceptable first needs to be developed. One must have a target that should be an attainable and a standard in the industry. All kinds of base lines for TURNS and GROSS PROFIT and many other measures are in place for measuring how well the parts department is doing. Where is and what is the BASE LINE for an acceptable stockorder (error rate or edit rate) ?
Chuck already mentioned that his firm supports 130 or more clients in doing stockorders. Why, because his company has proven time and again that accurate orders produce real profit, and reduce obsolescence. If the average edit (error rate) is 30 percent and as he mentioned he has less than a 10 percent remaining edit rate, well, that is a 20 percent improvement. Thats a substantial gain, many parts managers would appreciate even a one or two percent gain in inventory efficiency. The thing is that to improve and even reduce the 10 % rate to 5 percent is attainable, but requires a rethinking of how main vendors algorithms and daily sale calculations are completed. As well as several other areas that as you mention involve spikes and unique OUTLIERS sales that occur.
Let me suggest to you that an acceptable base line and attainable is FIVE % edit rate, Or no less then 95 percent accuracy each and every time the stockorder is produced. As well, of that 5 percent no less then 2 percent is edited not because the parts are not required, but rather as simply a reflection of how the parts manager likes to manage their department. That leaves a stockorder that should be about 97 percent accurate first printing.
First rule-of-thumb to improving stockorder accuracy..
VERY SMALL CHANGES ... OVER TIME . LEAD TO LARGE RESULTS.
Good thoughts computers are great, but it is people that make things happen.
I know of several parts managers that edit more than 60 percent of the stockorder.( and I do not think they are alone).
In order to improve a stockorder it may be suggested that a base line of what is acceptable first needs to be developed. One must have a target that should be an attainable and a standard in the industry. All kinds of base lines for TURNS and GROSS PROFIT and many other measures are in place for measuring how well the parts department is doing. Where is and what is the BASE LINE for an acceptable stockorder (error rate or edit rate) ?
Chuck already mentioned that his firm supports 130 or more clients in doing stockorders. Why, because his company has proven time and again that accurate orders produce real profit, and reduce obsolescence. If the average edit (error rate) is 30 percent and as he mentioned he has less than a 10 percent remaining edit rate, well, that is a 20 percent improvement. Thats a substantial gain, many parts managers would appreciate even a one or two percent gain in inventory efficiency. The thing is that to improve and even reduce the 10 % rate to 5 percent is attainable, but requires a rethinking of how main vendors algorithms and daily sale calculations are completed. As well as several other areas that as you mention involve spikes and unique OUTLIERS sales that occur.
Let me suggest to you that an acceptable base line and attainable is FIVE % edit rate, Or no less then 95 percent accuracy each and every time the stockorder is produced. As well, of that 5 percent no less then 2 percent is edited not because the parts are not required, but rather as simply a reflection of how the parts manager likes to manage their department. That leaves a stockorder that should be about 97 percent accurate first printing.
First rule-of-thumb to improving stockorder accuracy..
VERY SMALL CHANGES ... OVER TIME . LEAD TO LARGE RESULTS.
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scotstrong
Stock Orders
We know that Reynolds and ADP both have people that monitor this forum. Now let's see if any of them take some of this back up their appropriate lines of communication and initiate some two-way dialog with the ultimate goal of effecting needed changes. Your move, DMS providers!!