The main challenges of the automotive aftermarket parts industry are the management of thousands of reference numbers from hundreds of manufacturers and compete in customer service level, quality and price, in the middle of the large number of wholesalers and distributors who market them.
The inventory is for a distributor both the biggest asset on the books and the hardest to manage.
Distributors must define parts inventory ensuring that the right product is in the right place at the right time.
Customer quality of service as well as return of investment depends mainly on how parts inventory is managed.
Slow demand or niche products that distributors don’t sell every day but are still vital for their businesses, represent 35-40% of their assortments. They don’t expect to sell hundreds of them but some. Often expensive, well selected slow demand products can be valuable sales drivers. Poorly selected slow demand products can eat up profits and create obsoletes.
Parts inventory management based only on historical sales data presents the following risks:
Many fast-moving products are not identified
Non-optimal inventory stock levels are defined
Obsolescence levels generated are too high
How can distributors maximize sales and lower their inventory on these slow movers?
Hundreds of thousands of reference numbers associated with products are continuously searched through the multiple aftermarket distribution channels, thus generating demand data.
Systematic analysis of demand data, cleverly grouped, provides a crucial valuable source of information that represents an opportunity for an improvement of efficiency and competitiveness for the parts distributor, specially for the management of the slow demand products.
Companies that analyze and use systematically demand data, presents the following business improvements:
10-25% lost sales reduction
5-15% higher return on investment
5-20% obsolete stock reduction
Market Expert: information and decision system for automotive aftermarket parts distributors.