Parts Finance

The Parts Department Mindset: Inventory Turnover vs. Fill Rate

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In the majority of dealership environments, industry consultant Brett Coker says that 90 percent of a parts department’s sales come from the service center at its facility. Then, there are the additional parts that are sold to the collision shop.

“In a way, we need to start looking at it that the job of the parts department is to support the service department and allow it to operate at a higher level,” he says. “Both departments benefit greatly from the other's success. So why not make that a focal point?”

It’s not to say that the service-parts dynamic is broken at dealerships, Coker says. It’s just a focus switch.

“Most of the time, the key metric for a parts department is inventory rather than fill rate for the technicians,” he says. “Fill rate should be the most important thing they focus on.”

When a technician comes to the parts department for Widget X, Coker says it should be tracked how often Widget X is placed in his hand on the spot. That’s your fill rate. 

“We want the techs working, not waiting on parts,” he says. “That tech working improves parts-to-labor ratios and makes sure that everyone gets paid.”

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