You are just seeing the way MBAs want a company to be run. It shows a BIG profit on paper. The real problem is there is no column to account for lost business or sales if you never had the part to start with. A part in inventory shows stocking cost. One that they order over and over an never stock, shows a higher profit margin. Plus they get to charge the customer for special shipping and ordering cost. Plus the extra service calls.
The parts person in many businesses is supposed to put in a lost sale note about the non-stock part. Then after you have a history of that part being a lost sale then you start to stock the part. The trouble is most parts guys don't ever do a lost sale report. They may not have the time or they may not even know why they need to do one.
The one that really PO me off is when a company like JD has a stocking level for certain parts nation wide. If your parts manager does not set the dealer's computer to keep his stocking quantities, the computer system defaults to the nation wide minimums.
So in a livestock area where just about every farm has a JD 4020 or JD 3020 the minimums are set by the grain guys that don't have any tractors over five years old in the shed. One of the local dealers got so bad we just told everyone he just had a telephone and an order pad.
Here a few years ago I had to go to three different dealers just to get the parts to change a clutch on a JD 4020. Non of them had all of the parts: clutch, pressure plate, throw out bearing and pilot bearing. When I was in a dealer's shop full time, twenty years ago, we always had complete set on hand.
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Today's Featured Article - Good As New - by Bill Goodwin. In the summer of 1995, my father, Russ Goodwin, and I acquired the 1945 Farmall B that my grandfather used as an overseer on a farm in Waynesboro, Georgia. After my grandfather’s death in 1955, J.P. Rollins, son of the landowner, used the tractor. In the winter 1985, while in his possession the engine block cracked and was unrepairable. He had told my father
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