Auto parts manufacturer backorders can have huge impacts on productivity and profitability for auto dealerships. Parts managers and service department leadership can become frustrated with backorders that create delays for customers they’re striving to impress. AER discusses some of the reasons for auto parts manufacturer backorders, and provides some insight on what dealer parts departments can do to combat delays.
Lack of Product Support
OEM product support only spans about 10 years at best. When product manufacturing ends to make room for new models, auto manufacturers project the future demand of the product, and run what is called an Lifetime Buy. At Lifetime Buy, additional parts are produced to meet the projected life cycle demand of a product in anticipation of failure, and deterioration. Over time, that surplus of parts produced at Lifetime Buy will naturally diminish, leaving a limited number of viable cores on the market. This is one reason why promoting fast core return times is valuable once the supply of parts wears thin.
Limited Availability of Component Parts
Sometimes, auto parts manufacturer backorders are affected by the availability of important component parts that need to go into the replacement, repair, or remanufacturing of a particular part. When one part of the supply chain is weak, or under-prepared, it can have impacts across the entire industry, from the automaker, to the OEM, to service centers, and even dealers and drivers themselves. The automotive supply chain includes all of these elements, and more, and each point must be strengthened in order to prevent auto parts manufacturer backorders.
Demand at Lifetime Buy is Either Over or Under Projected
Occasionally, the projected demand for a part before an Lifetime Buy is miscalculated, and manufacturing either too few or too many of a part can be catastrophic. In some instances, if there is a great enough demand for a particular part that is no longer supported, some manufacturers will begin making the product again. According to an Automotive News article, GM is one of those few manufacturers that “is constantly evaluating demand for parts for its out-of-production vehicles and if the demand is great enough, GM will produce the component.”
On the opposite end of the spectrum, manufacturers have to be cautious of over production to avoid market saturation, which comes at a premium. Excess inventory takes up valuable warehouse space and eventually becomes scrap. Maintaining a healthy balance of inventory vs. demand is key to cost efficiency.
Lack of Initial Funding
Another cause of auto part backorders at the manufacturer level may be linked to funding. Manufacturing to support product lifetime demand is costly, and a Lifetime Buy on a part may not have been affordable, ultimately limiting product availability pre-maturely.
Atypical Demand Due to Product Failure
Remanufacturing centers keep parts on hand relevant to the part’s expected demand. In some events, such as mass part failures, the demand for a particular component increases immediately and dramatically without time for OEMs and remanufacturing centers to anticipate it. Sometimes, there just aren’t enough parts available in the market to satisfy the atypical demand, which causes backorders.
Technology Advances Can Cause Auto Parts Manufacturer Backorders
Technology only becomes more efficient and more reliable with time. With less anticipated failure rates, the number of parts manufactured at Lifetime Buy may make selection scarce when the product is needed further down the line.
How to Solve Backorders
Finding a reputable remanufacturer is one viable solution for backorders. As the amount of viable parts dwindles down, an auto remanufacturer can assist in maintaining the low amount of parts by repairing back to OEM standards. Essentially, remanufacturing is a win-win for auto manufacturers as they can extend the life of their product while maintaining customer satisfaction.
Another good way to combat auto parts manufacturer backorders is to incorporate 3D printing. A recent article from Forbes suggests 3D printing in the future may have the ability of solving the need for a replacement part, significantly reducing customer downtime.