Standardizing these processes can go a long way to preventing a buildup of obsolete SOPs. Remember to identify when relationships with that customer may be strained and analyze how much that will impact your business.
Evaluate the Life Cycle of SOPs
Once you’ve identified the source of high SOP obsolescence, the next step is to determine the life cycle of those parts. In short, how long do those parts sit on the shelves at the parts department? The percentage of obsolete parts that are acceptable to have sitting on the shelves is different for every dealership.
For the average dealership, the ideal obsolescence rate is below 5%.
The average obsolete part sits on the shelf for anywhere between 7 and 12 months, depending on your dealership’s specific definition. If your parts department has an accumulation of special order parts that are 12 months old or older, that percentage could easily rise.
In fact, the average parts department reports that up to 30% of their total parts inventory is made up of obsolete parts.
What can you do to lower that percentage? Identify how much of your obsolete inventory comes from special order parts. Determine how long those parts have been sitting on the shelves and develop processes to keep special order parts on the shelves for a limited time period (i.e., six months). If you can return a special order part, be sure you note the amount of time you have and return the part to the OEM.