"Moving You Up And To The Right"
Changes Our Clients Have Seen!
Frozen Capital
Frozen Capital are those parts that are not profitable for the dealership. They are a combination of Non-Stock (NS) coded parts and Auto Phase Out (AP) coded parts and should represent less than 5% of the dealership's total investment in parts inventory. Causes of high Frozen Capital include:
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Poor Return Processes to the Manufacturer
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Uncontrolled returns from Wholesale Accounts
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Unmonitored returns from the Shop
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Poor Special Order Controls
Fill Rate to the Shop
A technician's ability to "spin a wrench" is directly related to the Parts Department's ability to provide IMMEDIATE off the shelf availability of parts. Fill Rate measures that. Fill Rate to the shop should reach at least 90% As off the shelf availability of parts goes up:
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Technician Productivity and Efficiency Go Up
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Profitability Goes Up
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Loaner Car Days Go Down
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Special Orders Decrease
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Fixed Right, First Time Increases
Selling Days of Supply
Days of Supply has been a measure of Parts Inventory performance for many years. However, this calculation contains parts that are not actually selling or are not longer in inventory:
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Obsolescence
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Unsold, Uninstalled Special Orders
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Work In Process
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Returns to the Manufacturer
Selling Days of Supply represents the value of inventory on the shelf that is actually selling. It is a more realistic measure of Parts Inventory performance.