F EAT U RE OBSOLETE PARTS INVENTORY MANAGEMENT By Eliminating The Problem In Advance D ealers should be using their return allowances make immediate inventory changes. Generally, imple- on their oldest parts because they have the mentation comes in the form of playing with phase-in least probability to sell. Simple enough. But criteria. In doing so, they start to make it harder for actively selling parts to qualify for inventory. The result where do those obsolete parts originate? is that they choke off their active inventory and pos- OBSOLETE PARTS ORIGINATION sibly negatively affect your fill-rate, your customers, Your obsolete parts typically originate from unsold and returned special order parts. Dealers do not focus on these parts because they accumulate one or two at a time. This happens amongst all your parts workers across each day and over many months. You do not even notice you have a problem until it stacks up and you are dealing with it on the backside - 12 months later. Suddenly, you are left with a ton of obsolete parts that were once special-order parts. Unfortunately, these parts were never installed on the customers' vehicles. To counter a 12 plus month old obsolete parts inventory aging program, many Parts Managers will become concerned and look for a way to 32 and your bottom line. But it is an easy way to reduce inventory fast and give the appearance that the adjustments are effective. But in fact, that action starves your inventory that is actually productive and making money. The problem has never been your active inventory. And for the most part, it is unlikely that it was the Parts Manager's phase-in criteria. The obsolete parts problem is your unsold and re- The obsolete parts turned special order parts. Your pro- problem is your unsold avoiding this problem. It takes dili- and returned special find and maintain the right process- order parts. cesses for these parts are critical in gent review and a commitment to es for you to see your obsolescence issues disappear.