Parts proliferation is a term first popularized in the aftermarket in the late 1970s to describe the awful fate that had befallen distributors of vehicle parts. We would all-manufacturer and parts house alike-be buried in an avalanche of SKUs necessary to service the quickly expanding vehicle fleet.
The end was near indeed. But thank God for Bill Gates and his ilk. The tubs of Cardex inventory records were replaced by various flavors of computerized inventory control systems. Triad, Karmak Legend, Profit 21, Mylee, MacDonald and Autologue appeared just in time (pardon the inventory pun).
The inventory “beast” finally is at bay. Or is it? The number of vehicles on the road have grown from 156 million in 1980 to 250 million in 2005. NAPA classified 71,000 parts in 1975 and 225,000 in 2005. Nine hundred ten vehicle nameplates morphed into 1590 during the last 10 years.
However, during the same 10 years, inventory as a percentage of sales in the vehicle aftermarket actually dropped by 15%, according to the Feds. We have begun to tame the inventory “beast.”
Let’s look at a strategy that can make this beast our pet. Viewed positively, heavy-duty component proliferation serves as the biggest barrier to entry for industry newcomers. However, it is only a matter of time before places like Home Depot or other “big boxes” start to aim their computers at us.
Four leading causes of further complication must be mastered by today’s successful distributor.
Consider the economics: More warranty, dual inventory, reduced margin dollars, no training support. Handling the same unit demand for fewer dollars, chasing a market segment with limited future-great plan!
