NEWS AND PRESS RELEASES Click Here to Find Out About a Career with PartsEye

Taunton, MA - May 25,2019

The achievements of an organization are the results of the combined efforts of every individual!  Thank you to all of our customers for being a part of our success now and in the future!

PartsEye’s 1st Customer Advisory Board Meeting - Recap

Ponte Vedra Beach, Florida - Apr 23,2019

PartsEye hosted their first PartsEye Customer Advisory Board Meeting over 2 days earlier this month at the Ponte Vedra Inn & Club in Ponte Vedra Beach, Florida.  The main purposes of this inaugural meeting were to identify ways to improve the current PartsEye product, recognize other areas of Parts Managers’ day-to-day tasks that we can help automate and also try and find new products for development.

In attendance for the 2-day meeting were representatives from our manufacturer customers including Hino, Isuzu, Kia, Mazda, Mitsubishi, Nissan and Subaru.  Also, in attendance were Parts Managers from dealerships from each of the manufacturers and the Executives of SmartCo Services.  Those in attendance represented PartsEye users from across the United States and Canada.

The agenda consisted of a welcome dinner on the day of arrival, breakfast prior to the presentation given during the following day as well as dinner that evening with a farewell breakfast on the day of departure.

During the meeting held on the main day, Bryan Klugh (Chairman & CEO) presented background information on SmartCo Services and PartsEye while Jere Ingargiola (Chief Information Officer) discussed our technology efforts.  Scott Jones (President) then provided an overview of the latest features we’ve developed for PartsEye such as cross-balancing, D2D program, unusual demand and adjustments in stock orders as well as many other features.  These new features were demonstrated to ensure all brands are aware of their benefits and are putting them to good use.  During all presentations, attendees were encouraged to interrupt at any time with questions and comments.  This resulted in very lively conversations on many topics.

Part of this important meeting included 2 breakout sessions – one which included the OEM representatives and a separate one which was made up of the Parts Managers.  Each of the groups were asked how PartsEye can be improved at either the dealership or the OEM levels and which tasks could be automated to improve their efficiencies.

Thank you to the attendees that joined us and made our first PartsEye Customer Advisory Board Meeting a success.  We hope to host similar meetings in the future giving additional representatives the opportunity to meet and have their voices heard!

4000th dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Apr 02,2019

Smartco Services LLC announced that at 10:02 AM today, MHC Hino - Springfield of Springfield, MO submitted their first PartsEye suggested stock order, making them the 4000th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US, Canada and Mexico. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

Mazda North American Operations Selects PartsEye as Preferred Inventory Management System

Taunton, MA - Apr 01,2019

After a successful pilot program which began in April 2018, Mazda North American Operations selects PartsEye as a Mazda approved parts inventory management system.

Taunton, MA - Feb 01,2019

After a successful pilot program which began in February 2018, Hino Motor Sales USA selects PartsEye as a Hino approved parts inventory management system.

3750th dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Aug 02,2018

Smartco Services LLC announced that at 9:34 AM today, York Mitsubishi of York, PA, submitted their first PartsEye suggested stock order, making them the 3750th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US, Canada and Mexico. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

Taunton, MA - Jun 01,2018

After a successful pilot program which began in November 2017, Mitsubishi Motors selects PartsEye as a Mitsubishi approved parts inventory management system.

3500th dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Jan 17,2018

Smartco Services LLC announced that at 2:47 PM today, Kia On Hunt Club of Ottawa, ON, submitted their first PartsEye suggested stock order, making them the 3500th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US, Canada and Mexico. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

Taunton, MA - Nov 01,2017

After a successful pilot program which began in July 2016, Nissan Canada selects PartsEye as a Nissan approved parts inventory management system.

3250th dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Jan 13,2017

Smartco Services LLC announced that at 3:34 PM today, Go Kia South of Edmonton, Alberta, submitted their first PartsEye suggested stock order, making them the 3250th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US, Canada and Mexico. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

Taunton, MA - Sep 01,2016

After a successful pilot program which began in December 2015, Kia Canada selects PartsEye as Kia preferred inventory management system.

3000th dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Mar 24,2016

Smartco Services LLC announced that at 4:21 PM today, Taylor's Automax Nissan of Great Falls, MT, submitted their first PartsEye suggested stock order, making them the 3000th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US, Canada and Mexico. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

Taunton, MA - Feb 01,2016

PartsEye selected as preferred inventory management system by Kia Motors Mexico.

Here We Grow Again!

Taunton, MA - Dec 11,2015

SmartCo Services LLC is pleased to announce the relocation of its Massachusetts office to meet the needs of the fast growth of the company as well as to improve our working conditions. The expansion is attributed to our domestic and international growth as well as the continued support of our many OEM / dealer clients and of course our valued employees.

The Massachusetts office is the heart of our customer support and Information and Technology departments.  This move will help us to further develop the PartsEye, CrossHairs, and Insight services we currently offer while allowing us to expand in new areas enhancing our ability to serve our growing list of clients both nationally and around the world.

The new office allows SmartCo Services to expand in both office space and production capacity while continuing to provide innovative solutions and service excellence to our customers. We strive to maintain our position as the best inventory planning and management systems for dealers around the world.

We look forward to your continued support!

New Address Effective 12/15/2015

200 Myles Standish Blvd,

Taunton, MA 02780

Please Note: Our Financial Mailing Address for our Florida office remains unchanged.

2750th dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Sep 29,2015

Smartco Services LLC announced that at 4:15 PM today, Kia of Columbia of Columbia, MO, submitted their first PartsEye suggested stock order, making them the 2750th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US, Canada and Mexico. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

SmartCo celebrates its 10th anniversary

Taunton, MA - May 26,2015

Ten years ago, SmartCo first released PartsEye and since then a lot has changed. PartsEye has evolved throughout the years and become the great service it is today. We thank our executive management team, clients and staff who have helped shape PartsEye through feature suggestions throughout the years. The SmartCo team has grown extensively throughout the years which results in our quick and accurate support.

SmartCo Services LLC moves its Florida office

Palm Beach Gardens - Feb 11,2015

SmartCo Services LLC is pleased to announce the relocation of its Florida office, to better serve its clients and employees, to a newly built facility at 7108 Fairway Drive, Palm Beach Gardens, Florida.

To find out more about PartsEye™ and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

2500th dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Dec 22,2014

Smartco Services LLC announced that at 12:33 PM today, JC Billion Nissan of Bozeman, MT, submitted their first PartsEye suggested stock order, making them the 2500th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US, Canada and Mexico. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

2250th dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Oct 15,2014

Smartco Services LLC announced that at 1:02 PM today, Demaagd Nissan of Battle Creek, MI, submitted their first PartsEye suggested stock order, making them the 2250th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US, Canada and Mexico. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

2000th dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Jul 31,2014

Smartco Services LLC announced that at 4:45 PM today, Orangeburg Nissan of Orangeburg, SC, submitted their first PartsEye suggested stock order, making them the 2000th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US, Canada and Mexico. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

Taunton, MA - Apr 01,2014

After a successful pilot program which began in July 2013, Subaru Canada selects PartsEye as a Subaru approved parts inventory management system.

1750th US dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Jun 02,2013

Smartco Services LLC announced that at 2:00 PM today, Kia of Silver Spring of Silver Spring,MD, submitted their first PartsEye suggested stock order, making them the 1750th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US and Canada. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

Taunton, MA - Feb 01,2013

After a successful pilot program which began in October 2011, Isuzu Commercial Truck of America, Inc. (ICTA) selects PartsEye as an Isuzu approved parts inventory management system.

1500th US dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Nov 27,2012

Smartco Services LLC announced that at 4:00 PM today, Mid City Nissan of Chicago, IL, submitted their first PartsEye suggested stock order, making them the 1500th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

Isuzu Commercial Truck of America, Inc. (ICTA) enters into a Pilot Program with PartsEye™ for their parts inventory management system

Taunton, MA - Oct 06,2011

SmartCo, LLC is pleased to announce Isuzu Commercial Truck of America, Inc. (ICTA) has begun a Pilot Program, as the first trucking company using PartsEye™ for their parts inventory management system and have selected 10 dealers to participate from different areas around the country.

Weekly follow up calls to their corporate offices indicate their staff is pleased with the program thus far and plans are in the works for a more in-depth implementation of our services throughout their network of dealers.

This opportunity has allowed PartsEye to successfully connect with even more DMS systems not previously used such as KARMAK.

To find out more about SmartCo Services LLC or PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose option 3.

1250th US dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Mar 31,2011

Smartco Services LLC announced that at 12:33 PM today, Viva KIA of El Paso, TX submitted their first PartsEye suggested stock order, making them the 1250th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

SmartCo Services LLC forms SmartCo Consulting and Training LLC (SCT)

Taunton, MA - Mar 01,2011

SmartCo, LLC is pleased to announce the merger of SmartCo Services LLC with DSI Consulting, forming SmartCo Consulting and Training LLC, servicing the United States and Canada, designed to enhanced our offerings for those dealers who need more assistance in their daily operations. We offer a full complement of parts operations solutions, such as in-dealership custom training, workshops, performance reporting and planned inventory control.

To find out more about SmartCo Consulting and Training LLC or PartsEye™ and how it can work for your dealership business and parts department call 877 880 0816 and choose option 3.

1000th US dealer starts using PartsEye as their parts inventory management system

Taunton, MA - Jun 18,2010

Smartco Services LLC announced that at 7:51 AM this morning, Gurley Leep Kia of Mishawaka, Indiana, submitted their first PartsEye suggested stock order, making them the 1000th dealer activated in the PartsEye™ System.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and choose option 3.

SmartCo Services LLC expands to Florida!

Taunton, MA - Apr 01,2010

SmartCo Services LLC announced today the opening of a new location in Palm Beach Gardens, Florida.

Managing Partner and CFO, Phil Lustbader, stated “the new location offers increased support staff and allows us to capitalize on a larger pool of subject matter experts.”

To find out more about PartsEye™ and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

SmartCo Services LLC moves its corporate offices

Taunton, MA - Nov 01,2009

SmartCo Services LLC is pleased to announce the relocation of its corporate offices, to better serve its clients, to a 6800 square foot facility at 135 Washington Street, Suite 201, Taunton, Massachusetts.

To find out more about PartsEye™ and how it can work for your dealership business and parts department call 877 880 0816 and choose Option 3.

Survey of parts managers gives PartsEye, the innovative web based parts management system, great reviews!

Taunton, MA - Jun 19,2009

PartsEye users recently responded to a questionnaire covering their experience with the innovative web based parts Inventory & availability management system. The survey covered topics from initial reaction, concerns, support, training and ease of integration to improvements, tangible results and overall benefits. It was done in cooperation with one of PartsEye’s dealer network customers.

The results were overwhelmingly positive. "Everyone should use it", "It keeps inventory current and wide","It's a win-win for the dealership and the customers".

A few respondents were skeptical at first, "How can someone outside the store control inventory?" or "More factory involvement!". These concerns were overcome as parts managers quickly started seeing positive results. "Off shelf fill has risen 20%", "Partseye increased parts availability resulting in increased profits and customer satisfaction", "Obsolescence has been reduced to 2%". "We have seen sales increase from having more parts on hand"!

PartsEye works with the parts manager, assisting them in their work, "PartsEye does not reduce your authority as a parts manager - you retain total control of your inventory", "You are .... gaining a new tool to manage your inventory". Instead of spending precious time deciding what to order and entering this into order entry systems, PartsEye generates a stock order that the parts manager reviews and changes based on their experiences and parts activity. But as many respondents stated, the PartsEye recommended stock-orders are accurate and become more accurate over time as PartsEye learns from the daily monitoring of each dealers daily stock levels. "Trust PartsEye and let it do its work over time" was a comment heard from many respondents.

And PartsEye delivers results. "All aspects of the parts department have improved", "Our same day fill rate is 97%, a 5% improvement", "23% increase in wholesale", "Sales increase due to having more parts on hand","Reduced obsolesence and higher shelf fill rate", "Sales have increased", "CSI is improved".

PartsEye is supported by expert Parts Planners, available on the phone during business hours. "Training for the program was easy. Support has been great", "The planners are easy to get a hold of, extremely knowledgeable and their ordering system adapts to my needs", "Excellent".

PartsEye is easy to install and use, "The initial set up took literally minutes", "It took 20 minutes to have the system explained." And it is "Easy to use, great system", "No problems".

PartEye is delivering great results to dealers across the US. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and ask for Phil Lustbader. As a respondent put it - "PartsEye WORKS"

750th US dealer starts using PartsEye as inventory management system!

Taunton, MA - Jun 03,2009

SmartCo, today announced that Casey KIA of Newport News, VA, became the 750th US automobile dealer to start using PartsEye, the innovative web based parts inventory management systems, in its parts department.

PartsEye provides optimized parts inventory levels based on a dealers individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye continues to deliver great results to dealers across the US. In the last six months the number of PartsEye users have grown 50% as more dealers see the advantages of using it to deliver better customer service and improve their overall business. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and ask for Phil Lustbader.

500th US dealer starts using PartsEye as their parts inventory management system.

Taunton, MA - Dec 16,2008

SmartCo today announced that Hadwin-White Subaru of Conwin, SC, is the 500th dealer to start using PartsEye, the innovative web based inventory management systems, in its parts department.

PartsEye provides optimized parts inventory levels based on a dealer's individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

PartsEye is delivering great results to dealers across the US. To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and ask for Phil Lustbader.

250th US dealer starts using PartsEye as inventory management system!

Taunton, MA - Oct 15,2007

SmartCo, provider of PartsEye, the innovative web based inventory planning and management system, today announced that Shasta Subaru of Redding, CA, became the 250th US automobile dealership that started using PartsEye to manage its' parts inventory.

PartsEye provides optimized parts inventory levels based on a dealers individual criteria. By providing suggested stock orders based on sales history, demand analysis and the SmartCast forecasting tool, PartsEye quickly optimizes the parts inventory to maximize order fill at the lowest possible cost.

To find out more about PartsEye and how it can work for your dealership business and parts department call 877 880 0816 and ask for Phil Lustbader.

Subaru Defies the Directed Parts Industry Status Quo

Taunton, MA - Sep 01,2005 Bryan S. Klugh, SMARTCO Services
(To read from ASCET Click Here)

At Subaru of New England, collaborative inventory management partnerships yield impressive inventory efficiency gains and suggest a new industry standard for automotive manufacturers.

Retail inventory management is what many automotive manufacturers call their attempt at vendor-managed inventory. As with all inventory-dependent industries, wrestling with inventories and balances is a huge battle with every original equipment manufacturer building and supporting multiple vehicle models, each with thousands of individual parts. Many automotive manufacturers have tried to control their dealers’ replacement parts stock. While some have had limited success, we think Subaru of New England has built the better mousetrap. This cutting-edge business model for controlling dealer parts inventories has reinvented the way new-car dealers look at inventory and their supply chain.

Subaru of New England is an independent distributor solely responsible for supplying dealers in the six New England states with vehicles, accessories, replacement parts, sales and marketing support and training. There are 62 franchised dealers accounting for just over 10 percent of the total Subaru dealer body in the United States. Subaru operates a parts distribution center of about 60,000 square feet in Norwood, Mass.

After 30 years in business, Subaru’s outdated methods of inventory planning were creating tremendous problems. Inventory was growing at an uncomfortable pace to overcome a huge order fill problem. Inventory turns were at an all-time low of less than two times annually, and same-day order fill was less than 70 percent. The results of these poor service levels were felt both inside the company and out.

Subaru’s ownership and executive management replaced underperforming middle-level managers in an attempt to improve the situation. Retail dealers were unhappy and starting to look to other sources for service parts. Retail customers were upset over parts delays.

The primary cause of the inventory situation was initially determined to be the planning processes. Inventory planning was speculative at best, based on information provided to planners on nationwide purchases from Subaru of America. There was no visibility down the distribution chain, and actual sales demand was never offset by return history.

Subaru’s upper management decided to investigate better planning processes and found an emerging industry with several software solutions available for planning replacement parts inventory. After reviewing many solutions such as Xelus, Baxter, Manugistics and others, Subaru partnered with Servigistics in 1999. Servigistics was a relatively new company whose flexibility and efforts to grow fit well with Subaru of New England.

Subaru also chose to upgrade its business software to more modern versions, first utilizing Solomon, then upgrading to Navision (now Great Plains/Microsoft). The upgrade to new software solutions allowed Subaru and its parts staff to implement changes in forecasting and ordering practices that yielded improvements in not only stock levels, but also in warehouse process improvements and efficiency.

The process changes and subsequent results were notable; however, there proved to be a deeper problem. Central inventory levels still did not meet expectations and order fill was better, but not a benchmark. After some research, the root causes blocking further gains were identified.

Many of the dealer inventory levels were a disaster. The average dealer had too many fast-moving parts because they feared running out. They also shied away from stocking slower movers for fear of building excess inventory obsolescence due to limited return policies. Subaru, like most of their peers in the industry, allowed only a small portion of purchases to be returned (4 percent).

Dealers also had a huge problem with respect to special orders or expedited parts. Since they did not stock the slow movers, they had to special order those parts, sometimes incurring extra cost and freight. This action added additional handling costs in ordering process, customer tracking and repeat visits by the service customer. In some cases parts obsolescence increased when special-ordered parts were either not needed or never installed.

In addition to these problems, the average Subaru dealer is like any other auto dealer: they employ parts managers who usually have no formal education or training because very little training exists.

In addition to under trained personnel and poor process at the dealer level, Subaru contributed to the problem due to its own corporate culture and sales programs. The automotive industry is a business driven by production. The mentality is “if we build it, it will sell.” And if it doesn’t, we’ll promote it and rebate it until it does. If we get the dealer to carry more cars, they will have to sell more cars. Similarly, if we get the dealer to carry more parts, they will have to sell more parts. This philosophy carries over into all departments, and sales programs, incentives, pay plans and bonuses are generally aimed at the manufacturer selling more to the dealer.

Dealers are often ranked not by their retail sales of parts, but rather by their purchases from the manufacturer. This process inspired programs that rewarded dealer parts managers for buying more parts. Rebates, discounts, prizes and awards all enticed the parts manager to buy extra inventory, even when it was not needed. Yet, once a dealer bought extra parts to hit its objective and earn its reward, excess inventory levels would cause the dealer to reduce purchases in subsequent months.

The problem escalated because when dealer principals reviewed their month-end financial statements and observed the parts inventory, they would tell their parts managers to cut down purchases, so slower-moving parts would end up in a stock-out situation. And as time went by, the shut-down time would come sooner and sooner each month because Subaru field staff and management were doing such a good job in creating and promoting programs that enticed dealers’ parts managers to make poor purchasing decisions. These many problems were compounded by the fact that Subaru had parts competition from two sources. One source was gray-market importing of genuine Subaru parts by non-Subaru distribution companies. The other source was aftermarket parts availability by independent warehouse distributors and jobbers like NAPA, CARQUEST, AutoZone and others.

Other excess inventory problems at the dealer level came from what I termed the evil three: speculation, greed and emotion. The first evil, speculation, is when a parts manager sells two or three of a part number in a short time span and falsely assumes that part is now very popular, so he orders 10 or more. The trouble is, often the spike is incidental and the dealer may never sell all of the excess purchased. The second evil, greed, is when a parts manager sees what he feels is a quick opportunity. Sometimes a large demand can be predicted such as when a recall is announced. A specified number of units are required but are in limited availability. A parts manager may find out about this and order all the available supply, effectively hoarding the inventory, assuming that other dealers will then be forced to buy from this dealer at a premium. Problems for the hoarding dealer arise when the manufacturer is able to replenish its parts production before the dealer sells out or when the other dealers elect not to buy from the greedy dealer and instead wait for availability to increase. The third evil, emotion, arises due to internal dealer personnel conflicts. A service manager may demand the parts manager stock a particular part to save the service department from either lost sales or deferred repair jobs because the parts aren’t in. Even if actual demand is less than perceived by the service department, to avoid the conflict, the parts manager may carry excess inventory and then get stuck with the extra as obsolescence approaches.

The best way to overcome these obstacles is to help control the dealers’ inventory by use of some type of collaborative vendor-managed inventory program. This would require adapting parts-planning technology, as it was not originally intended, to plan for dissimilar locations. A major obstacle to this approach would be in getting dealers to accept the concept since most dealers have, at best, a tenuous level of trust with the manufacturer and many planned original equipment manufacturer inventories have been attempted unsuccessfully. There were several major roadblocks to be addressed:

• Design a system to integrate daily demand data from disparate dealer management systems in many different locations
• Treat dealer inventory in a manner that both the dealer and Subaru could agree upon
• Ensure data integrity: are the dealer personnel keeping up with inventory sales, ordering and receipt posting
• Parts managers’ trepidation and feelings of intrusion into what they considered to be their domain and the primary reason for their job security
• Design pay plans and incentives that would motivate both the dealers’ and Subaru’s staff to work toward the same goals

Subaru implemented a collaborative effort, which included decision makers on both ends, not a traditional vendor-managed inventory system. Data was exchanged, and sales and promotions were geared toward efficient inventories and increasing retail sales. Moreover, central location jobs were changed or eliminated and consultants were hired to work with the dealers to better educate the managers on selling parts to the retail customer. Subaru staff pay plans were designed to promote partnership, and a system was implemented to work with the dealers to keep inventories broad and lean, providing maximum parts number coverage with the least dollar investment.

Subaru introduced an advanced inventory management program as a pilot in October 2001. Working first with just a few dealers, the system was built to extract data from dealers’ individual management systems every day and to calculate and forecast ultimate stock levels at each separate location based on each individual dealership’s actual sales demand and lost sales history. Once stocking levels are established, the system will determine needed replenishment orders on a daily basis, dealer by dealer. Those orders are posted for the individual dealership’s parts manager to review on a daily basis, at which time the suggested order can be edited, deleted or have parts added before submission.

Instant message and email systems are utilized to allow real-time communication between the Subaru planner and the dealer parts manager. Adjustments are made on a daily basis based on dealer personnel input. The system is provided at no charge to the dealer in return for parts-purchase loyalty, meaning Subaru is the dealer’s sole source for Subaru service parts.

What is most significant is that to improve dealer comfort level, any parts that are suggested by Subaru and accepted by the dealer are guaranteed to sell within six months. If accepted parts reach seven months without sales activity, a return list is generated by the system and the dealer need only pull the parts and set them out for the dedicated delivery service to return to Subaru, at which time the dealer is issued full return credit; no handling charges, no freight costs and no penalties to the dealer. In addition, there is no percent or dollar value limiting what may be returned; this is 100 percent protection.

As more dealers have been added to the system, other benefits have been realized. One example is a dealer-to-dealer part locator in which participating advanced inventory management dealers could locate emergency parts needs at other area dealers. Another example is when central-inventory-critical shortages are filled from dealer excess inventories.

After a successful pilot period, the program was rolled out and recommended for all dealers on a voluntary basis in 2003. No dealers were required to participate, but the response was so successful that to date over 95 percent of the region’s dealers are active on the system. The results on the dealer inventory levels were phenomenal. Average months’ supply dropped by over 60 percent from three months to 1.1 months with many dealers operating at less than a one-month supply of parts. Even with inventory turns approaching 12 times annually, most dealers are still able to provide the requested part out of their own stock for an average first pass order fill in the mid-90 percent range at the dealer level.

Since the inception of the program, dealer retail parts sales levels have increased at rates greater than their units-in-operation counts have grown. As a result, dealers are experiencing higher levels of satisfaction both from retail customers and from dealer personnel.

In addition to the gains in sales, return on investment and productivity at the dealer level, Subaru was able to realize some amazing improvements. At the central location, same-day first-pass order fill rose to an industry-high benchmark of 97 percent. Due to increased efficiencies at dealer level and global visibility into total demand, inventory levels at the central location were fine-tuned and are now at all-time-low dollar investment to sales figures, resulting in a record 4.5 turns annually at the regional distribution center.

One surprising effect is that even though Subaru stopped incentivizing dealers to purchase parts, region sales to dealers have grown almost 70 percent since 2000, primarily because even though dealers have reduced their total inventory investment, they now have more of the right parts for their dealership in stock. What an interesting concept: stop promoting the sale of wholesale parts to sell more retail parts.

Subaru of New England, which has just over 10 percent of the national dealer body, is now doing over 17.5 percent of the national Subaru replacement parts business. Relationships between regional staff and dealer personnel have improved because all incentive and reward programs are based on the same realistic goals, namely retail sales at the dealer level, as well as on other performance factors.

Through this experiment, Subaru has learned that collaborative efforts to control inventories have yielded far more than inventory efficiencies. The relationship environment has changed, making a successful region into a benchmark in the industry. Eventually, all dealers are going to want this type of partnership with their suppliers. Subaru of New England is proud to be at the forefront of this evolution in service parts process.

SmartCo Services begins sales efforts with PartsEye

Taunton, MA - May 26,2005

SmartCo Services announces the beginning of its sales effort. The company's founder Bryan S Klugh, announced today that SmartCo will be working to promote PartsEye to Automotive Manufacturers, Distributors, and retail dealers.

PartsEye is a unique blend of today's Service Parts Planning technologies with real time communication between retail parts managers and PartsEye inventory planners. The service works to have an optimal mix of replacement parts available when needed at the right retail locations while reducing inventory costs, eliminating excessive returns, and promoting positive growth throughout the parts distribution channels.

PartsEye helps protect a retail dealers capital investment in inventory while assuring a high ROI. These improvements at the dealer level are also reflected in improvements reflected at the Manufacturers Parts Distribution Centers.

SmartCo Services LLC, a Massachusetts based limited liability company based in Taunton, MA, was founded on the principal of promoting collaborative efforts between manufacturers and their dealers. SmartCo is an acronym for Services Management And Retail Techniques COmpany.