Last week I challenged you to pull your parts inventory to understand the emotional difference between old parts and old trucks. One of the challenges I laid before you was to think about how much different the world is today compared to 6 months ago. What opportunities are closed today that were open 6 months ago? What avenues are available today that did not exist in January?

If I had told you in January that drivers and fleets would pay for sanitization and electrostatic cleaning would you have believed me? How about customers looking to buy higher quality air filters, N95 masks, respirators, or hand sanitizer? While Covid-19 has been with us for a long 6 months, it has only been 6 months. The world continues to spin on its axis, but that axis has tilted. The nature of the world that we occupy has been fundamentally altered.

Now pull up that parts obsolescence report again. How many parts are on the shelf that haven’t been sold in 6 months? How many of those parts that you purchased in February would you buy again today? How many would you buy in the same quantity? How many of the hard decisions you made in the last 6 months since you committed that dollar to the shelf (or block of ice, if you prefer to be more dramatic) that may have been made differently if your cash position was stronger?

1.      Don’t treat managing the asset that is your parts inventory as a uniquely “rear-view mirror” exercise. This is the time for a proactive approach with in-house ordering and your vendor managed inventory. Put the brakes on the old way of ordering, and make sure you’re not getting overloaded with newly slow-moving inventory that’s on auto-order based on a VMI program. See our Parts Inventory Health Check for right-sizing your inventory.

2.      Challenge your fixed ops leadership and front-line employees to bring new ideas to the table to deploy the potential cash freed up by the exercise. Areas where you may be willing to sacrifice margin to take share from a struggling competitor. Opportunities presented by the challenges faced by your customers and your slower competitors. The point of freeing up this cash is not just to feather the nest. It’s time to get aggressive, grow your business and take share!

Want to go deeper on diagnosing and developing your parts department? KEA Advisors Parts Discoveries help you baseline your current situation, identify performance gaps, and highlight the opportunity in your parts department processes. Reach out to me to get started: Bennett@keaadvisors.com