1989: VIN-tory
VEHICLE-MARKET SPECIFIC AUTOMOTIVE INVENTORY MANAGEMENT (AIM) SYSTEM
The selling of automotive auto parts is much more complex than selling clothing, food or appliance. The major factor complicating the sale of auto parts is the fact that they are year and vehicle specific and must be catalogued to reflect this information. In addition, vehicles sales from one town, region province or state and county can differ significantly. As a result, unless an auto parts seller (jobber or retailer) is not an a representative of an automotive vehicle manufacturer, the inventory required to meet the needs of a specific market was to some degree dependent on intuition combined with a supplier’s general market data which at the time was best method to creating a state or provincial level inventory model. The investment required for inventory was sizable and carried a certain level of risk (availability or overstock).
The automotive retailing company operated more than 450 automotive parts selling and servicing location across the country. The inventory stocked in each location was determined by the local operator and the management team. Staff turnover and growing global entry of foreign vehicles into the North American market made the task of developing and maintaining the representative required inventory for any specific market much more difficult to determine and manage. Each and every year extensive resources were allocated at both the store and corporate level to adjust individual store parts inventories to better reflect the higher demand products in each of the store markets.
In 1989 a major project that I initiated was the development of a program referred to as Automotive Inventory Management (AIM). I prefer to refer to the program as VIN-tory because a vehicle serial or identification number (VIN) is at the core to identifying and recommending the type and quantity of inventory required in any market. The program’s objective was to provide easy to use and understand analytical tools to identify the size and type of vehicle population and any market and use this information to develop a representative inventory stocking and management system. The methodology used to deliver this information management system was based on coordinating two key unrelated existing programs: the auto parts manufacturer’s vehicle description application auto parts catalogues and the government collected Vehicle Identification Numbers (VIN’s). The automobile manufacturers follow a standardized VIN structure allowing for the key necessary application data to be deciphered and catalogued matching the auto parts manufacturer’s application catalogues. Although not perfect at the outset the first generation yielded the auto parts retailing company was able to deliver within its first year a program to its dealers that enabled it to rely known available vehicle population results to adjust parts inventory to each of the localized markets.
The deliverable outcomes from this project were a reduction in the risk associated with the stocking of unwanted and unnecessary parts (reduced financial risk) to both the corporation and each of the independent dealers and the delivery of above average sales and profit growth because parts inventories were on hand when required.