When Deere & Co. introduces a long list of new products like it did last August, it’s up to Curt Moeller to ensure that the parts inventory at each of Precision Equipment’s eight locations will be ready to support the new machinery. The latest parts must be ordered and shelved while most farmers are still in the field with the previous models. They’ll expect their parts to be in stock, too.
“When new equipment comes out, we get a list of parts to stock, so our inventory goes up,” says Moeller, corporate parts analyst for Precision Equipment. “We still need to support the farmers who are using the old models, and yet be ready for the new machinery. It can be tough to juggle the entire inventory. Customers expect us to have parts for the two-cylinder John Deere Model A through the newest Tier 4 9RT tractors.”
With more than 25,000 numbers in Precision Equipment’s parts management system, it’s impossible for the dealership to have every part in stock at the very moment a customer needs it. However, Moeller has a strategy that helps each store minimize the chances they’ll miss a sale or, worse yet, send a customer back to the farm angry and empty-handed.
“When a farmer breaks a belt on a brand-new combine,” says Moeller, “he’s going to be very unhappy if we don’t have that belt in stock. We’ll hear, ‘You mean I just spent $300,000 and you don’t have a $20 belt?’”
Corporate Parts Analyst: Curt Moeller
Years with Organization: 25 (started with Kruse Implement in Houghton, Iowa, and stayed at the same location through its acquisition by Elder Implement).
Role: In charge of the parts inventories for all of the Precision Equipment stores. “I monitor zero sales, percent of fill customer satisfaction, and do all of the parts ordering for each location on a daily basis. That’s my day — looking at numbers and working to have the right parts at the right locations when we need them.”
Trusting the System
Moeller’s strategy sounds simple: “If it sells, keep it in stock.” But that plan works only because Moeller trusts the parts management system as well as the counter staff at each location. And, thanks to his previous experience working the counter, he understands the customers and what they’ll likely need as the seasons change.
“We have a rate of fill between 80-84%, so we’ve got a decent number,” he says. “I’d prefer to have a part every time a farmer needs it, but that’s impossible.”
Moeller started at the parts counter at the Houghton, Iowa, dealership 25 years ago, when it was Kruse Implement. The then-independent dealership was acquired by Elder Implement in 2008, and is today Precision Equipment’s southernmost location. While still living and working in Houghton, a town of 125 people, Moeller moved to the corporate parts analyst role last year. The recent merger added three new stores to his “customer” list.
Understanding the regional differences between each store means drawing on his experience while trusting the computer system. “It’s amazing how something will sell at one location but won’t move at another store. There’s quite a difference in the locations.”
Some of the stores have customers who work on 50-year old tractors, so vintage parts sell well. The Muscatine store, for example, sells a lot of decals for old tractors, while other locations don’t. Other differences are more economic in nature: Farmers at one store like to rebuild hydraulic pumps, while at another they’ll choose to replace them.
To keep up with the store-to-store differences, Moeller keeps close tabs on the sales history. If the part’s not moving, the system lets him know.
“Running a daily order report shows what’s selling at each dealership,” he says. “Over time, watching the trends gives me a sense of what will sell at each store.”
Parts that don’t sell after a certain amount of time should be returned, and that’s where Moeller’s stocking strategy is put into play. “The system will tell us to return parts because they’re not selling fast enough,” says Moeller, “but I believe even if we get only two hits on a part number in a year, we should still stock it, especially if it’s just a $25 item.”
Moeller believes if the dealership were to adhere only to the “looks good on paper” goals developed by Deere and corporate, customers will become less satisfied with the in service. Fortunately, the decisionmakers typically side with Moeller. “I’m pro-customer, because they make this business tick. If a customer comes in 10 times and you’ve got the part nine of those times, they remember the one time you didn’t. They’ll understand why you don’t have some of the parts, but if it’s a common one and it isn’t in stock, they’re not going to be happy — and neither will I.”
Thanks to the parts management system, Moeller can look at each location’s inventory and transfer parts between stores when necessary. “We’re going to do more of that, and we’re going to start stocking larger, more expensive components — such as gear — boxes at a central location.”
Moeller works directly with the parts lead at each store. He prefers to say he “works with” rather than “manages.”
He says, “The people we have in place are capable of doing their jobs and don’t need me to tell them what to do. I just watch the numbers. If they start getting out of control, we’ll figure out why and how to fix it.”
Moeller runs a monthly report for each location. “That keeps our incidentals down. If somebody orders a part and the customer doesn’t take it, it can get pushed in a corner and forgotten. Then the part is in our inventory and it may never sell. By doing the monthlies, we’re accounting for all of those parts.”
In the busy times of the year, the store might be moving 80-120 line items per day, but in the slower seasons that number can drop to 40.
Zero sales numbers reflects how long a part is in inventory and will get much of Moeller’s attention. “You want to keep that number low. It’s just good business sense. It’s a balancing act, because you’re trying to keep the customers happy by having parts in stock. You also need to keep corporate happy by providing good numbers. It’s tough to hit that happy medium.”
Along with watching the numbers, regular conversations with the parts lead at each location is crucial. “By working the counters, they get a good feel for what customers need and what’s moving.
In the Customer’s Mind, Bigger Should be Better
As the Houghton, Iowa, location of Precision Equipment moves beyond its days as a single-store operation to one in a family of eight, customers will expect more from their neighborhood equipment dealership.
“At one time, customers knew the owners of the ‘mom and pop’ store that used to sit in Houghton and were a little more forgiving if a small part wasn’t in stock,” says Curt Moeller, corporate parts analyst. “But now, if we’re seen as a big corporation, customers will expect us to have even the higher ticket items in stock.”
The dealerships will have them, he promises. Whenever possible, Precision Equipment sends in corporate orders to support the locations. “While we don’t want to stock a high-dollar component at every location, we better have a couple of them close by.”
Using the sales history for each location helps Moeller determine what to order for each store as well as to share among the corporation. “I can’t look at a machine and guess about what part’s most likely to break. When it does and you tell a farmer, ‘we don’t carry it because I don’t remember it ever breaking,’ he’s going to say, ‘I’ve heard that one before.’”
“I’ve been doing this 25 years, and you’ll never have everything in stock that customers need. But if the guys at the counter are good about posting lost sales in the system, we’re able to keep track of the trend in parts sales and get them back in inventory. If you have good employees putting good numbers into the computer every day, you learn to trust the system. If it’s saying, ‘we need a part’, we’d better order it, because it’s selling.”
While Moeller is watching the numbers at each location, so is his boss. “My performance is measured on several things. Customer satisfaction is big, as well as zero sales, percent of fill and turn rate. Both Deere and corporate have set out the numbers and it’s up to me to hit them.”
Still, Moeller says the dealership’s executive team doesn’t dictate what parts he brings in. “They watch the numbers and if something starts getting out of control, they’ll ask what we’re doing to get straightened out.”
Bugs in the Transition
With so much riding on the parts management system, computer issues top the list of what makes a day at work really bad. The three new dealerships that were brought into the fold in November were being moved to the corporate parts management system during the week Farm Equipment visited.
When we caught up with Moeller at the Fairfield, Iowa, location (formerly Jefferson County Equipment) there were significant bugs gumming up the transition. Orders had been lost. But the pain had to be endured for each location’s inventory to be visible so Moeller could keep inventory in check. The new system would also permit parts to be transferred between locations. Moeller was confident that when he left Fairfield, the staff at the dealership would be up and running.
“I’ve been doing this 25 years and you’ll never have everything in stock that customers need. But if the guys at the counter are good about posting lost sales in the system, we’re able to keep track of trends in parts sales and put them back in inventory…” – Curt Moeller, Corporate Parts Analyst
Computer problems aside, training is a big part of getting staffers on the same page with a new system. “Many of the people at the dealerships have worked the counters a long time, so you get used to the tools you work with,” says Moeller. “Nobody likes change, but we can bring in a new parts counter person who’s never worked with any business system and in 3 days they’ll have it mastered. But it can be difficult for us old dogs. The guys in Fairfield are doing well with it. It just takes time.”
To incorporate the parts ordering and inventory processes for the three new stores into Moeller’s system, he’ll first study the numbers and talk to the staff to get a handle on what they had been doing. He already knows some things will change at Fairfield. “When it comes to certain parts, they’ll tell me, ‘It’s not the season, I don’t need it.’”
That’s where trusting the parts system and knowing the sales history comes into play. “I said, ‘Look at your history. You sold these lawn mower parts in the middle of winter, so you need them in stock. I don’t think we should second-guess the customer. Somebody bought these parts. We need to have them in inventory.’
“As a farm equipment dealership in general, our thinking about seasonal parts sales has changed over the years. At one time there was more seasonal stuff — lawn mowers were summer, combines strictly fall. It’s not that way anymore. Shops are working on combines all year-round, and they’re working on planters through the winter. You’ve got to stock those parts. You want the money when the farmer is standing at the counter. If you send him away empty-handed, he may not come back. That’s something we all need to understand. The seasonal aspect of this business is gone.”
Need to Listen
Moeller has made the transition from parts counter to parts analyst. For others looking to make such a career change, he recommends keeping an open mind. “You’ve got to listen to people’s ideas and not be afraid to implement new ones,” he says. “Some work and some don’t, but you’ve got to be open-minded because there are a lot of good ideas out there. Listen to everyone — store managers, technicians, parts counter people. You don’t need to use all the ideas, but you need to listen.
“I still work the parts counter when I can. I stood at the counter for 24 years so I got to know people,” he says. “I miss working directly with the customer, but I like what I’m doing these days. It’s a challenge to get the numbers where Deere and Precision Equipment’s leaders want them and keep customer satisfaction high at the same time.”