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<\/figure>\n\n\n\nWhat \u201c12-Month Obsolete\u201d Really Means<\/strong><\/h2>\n\n\n\nA part with no demand for 12 months deserves immediate review, but age alone does not determine what should happen next.<\/p>\n\n\n\n
A thorough automotive parts inventory audit<\/a> should consider:<\/p>\n\n\n\n- ~ Date of most recent sales, last stock, and last activity<\/li>
- ~ Current quantity on hand<\/li>
- ~ Monthly sales history and quarterly lost sales<\/li>
- ~ Reorder level, maximum stocking level, quantity on order, and quantity on back order<\/li>
- ~ Stock status, including whether the part is normally stocked, a special-order part, changed, or recently returned<\/li>
- ~ Return status<\/li>
- ~ Superseding and superseded part numbers<\/li>
- ~ Model-year fitment range<\/li>
- ~ Bin, shelf, and drawer location<\/li><\/ul>\n\n\n\n
The difference between months no-sale<\/em> and months no-receipt<\/em> is especially important. Months no-sale shows how long it has been since customer demand occurred. Months no-receipt shows how long it has been since another unit entered inventory.<\/p>\n\n\n\nLooking at both can reveal a damaging pattern: a part may not be selling, yet an automatic replenishment setting, a manual order, or an incorrect stocking level continues to bring additional units into the department.<\/p>\n\n\n\n
Not every 12-month no-sale part should be liquidated automatically. Legitimate exceptions may include required OEM stock, newly introduced models, safety or campaign components, low-frequency but operationally critical parts, and inventory reserved for an active repair.<\/p>\n\n\n\n
The audit helps determine which parts still support current or future demand. <\/p>\n\n\n\n
Obsolete Inventory Freezes Working Capital<\/strong><\/h3>\n\n\n\nConsider a dealership carrying $600,000 in parts inventory. If 10% of that stock has had no demand for more than 12 months, approximately $60,000 is tied up in inventory that may no longer support current operations.<\/p>\n\n\n\n
That money cannot easily be used to stock faster-moving parts, upgrade equipment, train employees, expand wholesale operations, improve customer transportation, or market the service department.<\/p>\n\n\n\n
Obsolete inventory also weakens dealership inventory turns. It increases the average inventory investment without a proportional increase in sales, leaving the dealership\u2019s cash sitting on the shelf longer.<\/p>\n\n\n\n
- ~ Date of most recent sales, last stock, and last activity<\/li>
- ~ Current quantity on hand<\/li>
- ~ Monthly sales history and quarterly lost sales<\/li>
- ~ Reorder level, maximum stocking level, quantity on order, and quantity on back order<\/li>
- ~ Stock status, including whether the part is normally stocked, a special-order part, changed, or recently returned<\/li>
- ~ Return status<\/li>
- ~ Superseding and superseded part numbers<\/li>
- ~ Model-year fitment range<\/li>
- ~ Bin, shelf, and drawer location<\/li><\/ul>\n\n\n\n
The difference between months no-sale<\/em> and months no-receipt<\/em> is especially important. Months no-sale shows how long it has been since customer demand occurred. Months no-receipt shows how long it has been since another unit entered inventory.<\/p>\n\n\n\n
Looking at both can reveal a damaging pattern: a part may not be selling, yet an automatic replenishment setting, a manual order, or an incorrect stocking level continues to bring additional units into the department.<\/p>\n\n\n\n
Not every 12-month no-sale part should be liquidated automatically. Legitimate exceptions may include required OEM stock, newly introduced models, safety or campaign components, low-frequency but operationally critical parts, and inventory reserved for an active repair.<\/p>\n\n\n\n
The audit helps determine which parts still support current or future demand. <\/p>\n\n\n\n
Obsolete Inventory Freezes Working Capital<\/strong><\/h3>\n\n\n\n
Consider a dealership carrying $600,000 in parts inventory. If 10% of that stock has had no demand for more than 12 months, approximately $60,000 is tied up in inventory that may no longer support current operations.<\/p>\n\n\n\n
That money cannot easily be used to stock faster-moving parts, upgrade equipment, train employees, expand wholesale operations, improve customer transportation, or market the service department.<\/p>\n\n\n\n
Obsolete inventory also weakens dealership inventory turns. It increases the average inventory investment without a proportional increase in sales, leaving the dealership\u2019s cash sitting on the shelf longer.<\/p>\n\n\n\n