Understanding Your Manufacturer Replenishment Program

Our friends at PartsEdge.com have recently released a Parts Manager educational video on your Manufacturer’s Replenishment Programs.  We couldn’t agree more with the expertise shared on this topic. In the series, you’ll hear from Chuck Hartle, PartsEdge’s resident parts expert. In this particular video, we think you’ll find lots of value. Chuck discusses how knowing …

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What they’re saying about NADPE – Randy Buyers, Parts Manager


NADPE has changed the game when it comes to idle parts inventory. We’ve helped Parts Managers, like yourself, get rid of idle and obsolete parts and free frozen working capital. Our program is easy to use and will help you exchange your idle and obsolete parts inventory at full dealer cost – without losing a single penny. But don’t just take our word for it, here’s what our customers are saying.

“We’ve moved $142,000 Canadian of parts. The effect for me now is that I’m about a month away from being to what my goal was, no parts in the building older than six months-no-sale. That’s a very, very clean inventory, and it’s maximizing the dealer’s investment.” – Randy Buyers, Parts Manager

How Did You Know This Was A Problem Worth Solving?

Well, any parts manager, you’re looking at your turn rate of inventory, your investment costs, your investment trending. And with slower moving parts, the manufacturer, and my particular case, Chrysler Mopar parts, they allow a return allowance, and it’s based on and built up with purchase accrual. So in the years, in the last five to eight years, not only Chrysler, Ford as well, and GM is, they’ve come up with inventory management procedures. They’ve got automatic replenishment order procedures for you. And I’m at longer-heads against that with the manufacturer.

At one point, we used to work well. Our return allowance used to be 6.5%, so for every hundred dollars and parts I bought, I’d be allowed to return $6.50 worth of slower moving inventory. So it built your return, your turn rate of your inventory, and you kept your investment fresh. Over the last eight years, there’s been a marked move from all of the manufacturers. They’re not interested in obsolete parts.

There was a time five years ago when there wasn’t a part in my building that was over six months-no-sale. And with the drop in the return accruals, I was having parts that were having a birthday on the shelf, and I was utilizing my maximum allowance to return parts to Mopar, but I was falling farther and farther behind.

Do You Think This Is An Industry Wide Problem?

Yes, absolutely. And not just specific to Chrysler, i.e. Mopar parts. It’s in Ford. It’s in General Motors. It’s prevalent.

You Have Been Using NADPE For 15 Months Now. What Results Have You Seen?

We’ve moved $142,000 Canadian of parts. The effect for me now is that I’m about a month away from being to what my goal was, no parts in the building older than six months-no-sale. That’s a very, very clean inventory, and it’s maximizing the dealer’s investment.

What Kept You From Joining A Service Like NADPE Sooner?

I didn’t know that there was any in existence. Again, as I said, I found it by accident on Facebook, and when I read it, I went, what? Parts, are you worried about parts obsolescence, on something like social media like Facebook, and so I went back and looked at it, and I went, yeah, I’m very interested in that. You hit a nerve.

If You Were To Recommend NADPE To Another Dealer, What Would You Say?

Well, as we touched on earlier, this is an industry wide problem, and it’s not just here in Toronto. It’s North American wide. The manufacturers have moved away from the larger return accrual rates. And so if you’re a larger dealer, and you’re involved in the wholesale providing wholesale customers outside the dealership, automotive needs, your parts obsolescence problem will definitely be there. Whether you’re aware of it or not, that’s up to the parts manager.

Why Do You Recommend NADPE To Other Dealerships?

I have recommended NADPE to a lot of the dealers that I deal with. It’s an essential tool now-a-days. With the manufacturers moving away from allowing the dealers to return parts the way we used to, it’s [NADPE] a necessary tool now to keep their inventory clean.

Can Draw Parallels Between Used Car Inventory Control And Parts Inventory Control?

In your parts department, you have X amount of dollars that are slow moving. So most dealers, okay, that’s great. It’s a wonderful story. But if you say to them, you have two cars that haven’t moved on your used car lot in six months. You have a $40,000 Jeep Grand Cherokee, and you have a $20,000 Jeep Cherokee. You’ve got 60 grand that hasn’t moved in six months. Every dealer would be all over the used car manager. Move this! Let’s put some dollars towards moving these. Are they priced too high? Do we need to offer a rebate? Do we need to reduce? Let’s sell it at a loss just to move that piece, so I don’t carry what’s called flooring. I don’t have the flooring expense to keep those old vehicles, but yet, they’re not aware that they have five valued vehicles of parts inventory sitting here.

Do You Find The Online Exchange Platform Easy To Use?

The platform is very, very simple to use. It tells you that there’s a potential trade. And you click on, and it opens up by the part numbers that you’re familiar with, what they’re suggesting could come to you from the other dealer, and then they’re suggesting on a second page what could go to the other dealer from your inventory. So it’s easy. You click on it, and you go, okay, yes, I would certainly like to sell those. And again, as I say, in a lot of the manufacturers, auto replenishment orders, you don’t have a say. They tell you, this is coming in tomorrow and good luck.

Do You Think Your NADPE Trades Are Fair And Cost Effective?

Yeah, 100%. Yeah. And don’t tell NADPE this, but honestly, it’s relatively nothing.

Are you ready to have an inventory like Randy’s? Sign up today.

Like All New Things, It Takes Time

Developing relationships with your customers is vital to your success. Understanding their standpoint, helps you better understand how you can help them. At NADPE, we believe that by developing these relationships, we become what we call “human”. Not just a voice at the other end of the telephone, an email thumbprint or signature, we are …

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Why Your Parts Manager Is A Money Manager

From the outside looking in, a parts manager’s job is viewed by some simply as an inventory clerk and a supervisor of people. This is a misconception by those who don’t understand the complexities of controlling parts inventory and making capital perform. Parts managers play a key role in converting capital the dealer principal puts …

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Getting Over The Fear of Trying Something “New”

In a recent conversation with Jeremy Baratto, the Parts Manager of Team Chrysler, we had the opportunity to get some invaluable feedback about our parts exchange program. It was interesting to find out what provoked him to sign up, his perspective on the benefits of using our program and hear his side of the story. …

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The #1 Resource Guide For Parts Managers

How to become the Top 5 percent in Parts Management It can feel like you’re the lone person on an island, being a Parts Manager.  Many times, you get the feeling as though you’ve been stuck for 10 years, repeating year 1, without access or knowledge of outside consulting, training, or help. It can be …

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Top 6 Ways Dealers Can Reduce Idle & Obsolete Parts Inventory

On average, every dealer in North America has 30% of their parts inventory classified as idle parts. This represents $88,000 for the average dealer with a $291,000 inventory. This includes both parts that are considered non-stocking, better known as unsold or returned special order parts, and phased-out parts- parts which once sold well but no …

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11 Ways To Get Rid Of Idle Parts Inventory & Obsolete Parts Inventory

You may be asking, how can I get rid of my Idle Parts Inventory, or even your Obsolete Parts Inventory. Here is a list of ways to get rid of slow-moving parts inventory in alphabetical order in bullet point form: Auction:  Easy solution to clear parts in bulk.. After all expense are paid, usually, 10-15% …

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