In part one of this series on Retail Inventory Management (RIM) planning, we covered the importance of having an effective strategy and considerations for implementing a robust technology solution. Now let’s dig a little deeper and look at what steps you can take to successfully plan, implement, and roll out a strategic RIM program. While this may seem like a daunting task, breaking it down into bite-size pieces will help you tackle common obstacles.
These steps are based on years of proven practice, so you can move forward confidently.
RIM Customer Results
Typical outcomes of a successful Retail Inventory Management implementation:
- 20-30% dealer network inventory reduction
- 20% increase in parts availability (from 70% to 90%)
- 15-40% emergency order reduction
- 10-30% write-off reduction
- Variation order request (VOR) reduced to 10-15%
Getting dealers on board
The biggest challenge to successfully rolling out a good RIM program often is dealer adoption. While this may seem obvious, it can become a serious roadblock—no matter what system you’re using, it’s important to get them onboarded and using the system quickly and consistently.
Dealers are independent companies with their own parts and, in many cases, their own inventory systems. You can’t force them to do anything, so you need to show them how your system can benefit them. It comes down to change management. Offering favorable terms and conditions can help incentivize dealers and build trust. Just be sure to carefully review and modify any existing incentive programs at the same time to make sure they’re not working against what RIM is trying to achieve—for example, sales team incentives.
Integration with data management systems (DMS) is also crucial. On the OEM side, there’s probably just one system to integrate with, usually an Enterprise Resource Planning (ERP) system. But in a dealer network, the landscape can be scattered because each dealer might be using their own software. Ensuring the integration maintains data quality and accuracy is critical. If the data is wrong, the dealers won’t trust the system—and they won’t use it.
Start with a pilot program
Dealer networks often span a large geographical area, whether in a specific region or around the globe, which means the RIM system also has to be quite large. To test the scope and get a feel for how receptive your dealers are, start with a carefully thought-out and well-executed pilot program.
Be sure to include dealers on your main DMS systems so you can test that integration, as well as dealers that represent the functionality you want to evaluate. Make sure you have good testers, too, who will really get involved—because only the dealers can see what actually ends up in their DMS. Choosing dealers that will be good ambassadors, helping to spread the word and spark interest in the wider network, will also help with the main roll out and that all-important adoption. Don’t underestimate the power of a good review.
Roll out in waves
Once you’ve thoroughly and thoughtfully tested the system and made sure everything works, you have to figure out the most efficient way to roll out to the rest of your network. Build what’s called a rollout factory, which means you design your approach, build your templates, and decide how the system should be configured. Then build a factory to roll it out quickly, in waves—onboarding dealers together that use the same DMS system or are in the same region and speak the same language, for example. Start with the big dealers and management systems, and then work your way through until you’ve reached your total business volume target. To get it done as quickly as possible, you can roll out many waves in parallel.
Just as important as getting dealers on board is planning for change management on the OEM side. If you’re launching a RIM program, you need a dedicated RIM department or group that can actively make sure that it’s working, that your dealers are compliant, and so on, providing help wherever it’s needed. Approach this as a strategic initiative. Trying to implement a program without taking this view, without making a lot of changes, usually results in failure.
It’s also important to think about the short-term financial impact. In the long-term, RIM will increase efficiency, satisfaction, and sales. But in the immediate future you may need to change some of your dealer terms and conditions, which could have financial implications.
Think you already have a RIM program?
It’s worth noting that some companies have created their own in-house or homegrown RIM system and may be looking to improve or add to it. But these systems typically have no collaboration with the dealer. In fact, they’re more like a back-end engine or calculator—the dealer sends a file and receives a recommended order in return. These systems are usually quite basic and lack key features such as redistribution, future planning, buybacks, and so on. In reality, it’s very far from actual RIM.
Can a RIM solution be implemented remotely?
Absolutely. While there are some advantages to gathering everyone together during the design phase, most RIM solutions are cloud based so there’s nothing to physically hand off. With many companies already working remotely over the last year or so, providers are well-versed in remote implementation and may have even improved their tools and technologies in the process. If possible, do the pilot dealer training sessions in person so you can iron out any wrinkles together. But when you’re ready to roll out to your wider dealer network, you’ll want to train dealers virtually anyway because doing it in person is cumbersome and expensive.
Has the pandemic impacted RIM program operations in any other way?
Most OEMs did not escape the economic impact COVID-19, with many seeing a sudden 80-90% drop in dealer orders for new equipment. OEMs that already had a RIM program in place were able to see this change as well as what was happening at the dealer level. This put them in a position to collaborate closely with their dealers and figure out ways to cope, such as promoting specific parts. On the other hand, OEMs without a RIM system had no visibility into what was happening or why.
The aftermarket tends to gain importance following any kind of economic uncertainty, as it’s one area where OEMs can continue to generate revenue. Many end customers stop buying new equipment, so they need to keep their old equipment up and running. This means parts availability is critical—maybe even more so than during a growth economy. Just one more reason to get your RIM program up and running sooner than later.
Find out how Syncron can help your organization successfully design, test, and implement a RIM program across your dealer network. Visit the Syncron Retail Inventory page or contact us to speak with a representative.
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