You know what your fill rate percentage should be. You also know what your manufacturers believe it should be. However, are either of these the correct percentage for your dealership?
Several factors will weigh in on what your fill rate percentage should be. First, look at the difference in inventories between the different manufacturers you carry. It makes sense that the fill rate for your mainline manufacturer will be higher than those for supplemental vendors. However, should the fill rate for supplemental vendors be based on the turn of parts from your mainline manufacturer?
I feel the answer is no. We should not base our supplemental vendors fill rate off of our mainline turn. For example, let’s say your mainline manufacturer (A) has a turn of four times a year. That number would stand on its own.
Your supplemental vendors, however, might have turns of 1.8, 2.4 and 2.8 respectively, and still be considered healthy. The chances of having the part on the shelf for your mainline supplier is naturally going to be higher than with your supplemental vendors.
Some supplemental vendors offer specialized units that have peak use seasons. As long as the vendor doesn’t frequently or significantly change the design or model of its equipment, if you stock the known high failure rate parts you could have a nice fill rate percentage even with a low turn.
Also look at how you are calculating your fill percentage. Let’s say your customer needs five parts and you have four on the shelf—would your fill rate be 80 percent or 0 percent? First you need to understand how your mainline supplier is calculating fill rate. One manufacturer may say that four out of five is an 80 percent fill. Another manufacturer, however, might say that four out of five is a 0 percent fill rate because you were not able to fill the entire order. In my way of thinking, if the job requires five parts and you only have four, you fell short, and it counts as a 0 percent fill rate.
