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Parts Department Optimization
Jan 18, 2026
2 min read

The Gear Behind the Grind: Streamlining Your Parts Inventory for Peak Performance

Optimized Parts Department
In the fast-paced world of automotive service departments, parts management is the lifeline that keeps everything running smoothly. Yet, many dealerships find themselves grappling with inventory challenges and missed upsell opportunities, often resulting in frustrated technicians and unsatisfied customers. Did you know that franchised dealers wrote 270 million repair orders in 2024, generating a staggering $156 billion in service and parts sales, according to NADA Data? Despite these impressive figures, an alarming 12% of repairs weren't fixed on the first visit in 2025, with parts unavailability cited as a major factor. This translates to lost revenue, diminished customer satisfaction, and increased competition from independent shops that have already captured 12% of service visits since 2018. The stakes couldn’t be higher for parts departments that are the backbone of fixed operations profitability. But there's hope. By leveraging intelligent recommendations and inventory insights, your dealership can transform its parts department into a powerhouse of efficiency and profitability. In this guide, we'll explore cutting-edge strategies for optimizing your parts department, focusing on setting realistic first-time fill rate targets, integrating aftermarket and OEM parts sourcing, and harnessing the power of autonomous parts-running robots. We'll also delve into best practices for connecting scheduling to parts availability, ensuring that your service advisors are never booking blind repair orders again. Whether you're dealing with inventory obsolescence, struggling to meet fixed absorption goals, or simply looking to improve your parts department's contribution to overall dealership success, this guide will provide you with the tools and insights you need to stay ahead of the curve.

Understanding the Challenge

Service Manager Checking Inventory

Parts departments are often viewed as the heart of a service department, but they can also be the source of significant bottlenecks. One of the core challenges lies in managing inventory effectively, ensuring that the right parts are available at the right time without carrying excessive stock that ties up capital. The balance is delicate, and missteps can lead to financial strain and frustrated customers.

A common hurdle is achieving a high first-time fill rate, which directly impacts technician efficiency and customer satisfaction. When parts aren't available for a repair, it not only delays the job but also risks customer loyalty. According to J.D. Power's 2025 CSI Study, 28% of repairs not completed on the first visit were due to unavailable parts.

Another significant issue is the tendency to rely heavily on OEM parts, often resulting in backorders and extended wait times. Dealerships must navigate the complex decision-making process of when to source aftermarket parts without compromising on quality or affecting customer satisfaction indices (CSI) negatively.

Moreover, the rise of electric vehicles (EVs) adds another layer of complexity. EV service readiness requires a different set of parts and expertise, and parts departments must adapt quickly to meet these demands. Without proper planning and inventory insights, dealerships risk falling behind in this rapidly evolving market.

Related Topics

increase parts department salesdealership parts inventory managementautomotive parts department profitabilityfirst-time fill ratefixed absorption

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