Visibility: the Core Element of Dealer Inventory Management

William Barkawi 24 Jul 2024 5 mins read
Dealer Inventory Management

OEM Dealer Inventory Management is a critical component of any heavy equipment OEM’s business, especially when it comes to spare parts components which typically have to be available at any given moment.

However, this is easier said than done. Having the right parts at the right time in the right place to ensure high fill-rates and limited downtime requires a lot of connectivity and visibility.
Furthermore, spare part operations extend far beyond your own network of central and regional warehouses as OEM—it involves independent dealers, distributors, service facilities, and other distribution channels. OEMs typically lack visibility over this network—making it very tough to manage inventory, predict future demand, and keep customers satisfied.

Therefore, this is exactly why the industry and OEMs need a change; a shift from traditional dealer inventory optimization software to a solution that covers the big picture.

What is a Dealer Inventory Management Software?

Dealer inventory management software helps OEMs and dealerships manage inventory, technicians, and machinery to improve their efficiency, reduce costs, and ensure that they are able to meet customer demand.

By providing real-time data on inventory levels and production processes, the software can help OEMs to make better decisions and stay competitive in a fast-paced and constantly evolving industry.

Typically, it’s a multi-layered approach:

  • Forecasting: estimating future demand for a product or service based on historical data, market trends, and other relevant factors to ensure the right parts are available at the right time.
  • Inventory optimization: managing inventory levels to ensure they’re sufficient to meet customer demand while minimizing the cost of carrying excess inventory.
  • Replenishment: placing orders with suppliers and managing delivery schedules to ensure that inventory is available to meet customer needs.

Although these functionalities are standard for inventory management software, they’re nothing without clear and precise data. That’s the challenge OEMs need to solve—capturing the right data for efficient parts management.

What Are the Benefits of Optimizing OEM Dealer Inventory Management?

There are clear reasons for an inventory management tool that covers the OEM’s own supply chain, from the central warehouse to the country units, regional warehouses, and local parts distribution centers.

  • Cost reduction: better predictions about what is going to be needed at what point in time in what quantity also tells you what is not needed.
  • Improved cash flow: improved inventory management enables you to optimize working capital levels for efficient cash management.
  • Increased efficiency: technicians can be utilized to their full capacity when parts are readily available, minimizing the customer wait time.
  • Higher availability = better customer service = higher sales: customers do not expect machines to be flawless but expect their vendors to provide seamless customer service—part availability yields a competitive advantage and results in higher sales.

Accessing these benefits, however, can be tricky with disconnected dealership inventory management solutions. OEMs can’t talk to customers directly. Oftentimes there is another complex supply chain of independent dealers, distributors, and service facilities between OEMs and customers separating them.

OEMs typically use a combination of solutions to manage the downstream supply chain—but this doesn’t provide the connectivity needed to get full visibility. Thus, it becomes difficult to ensure customers have the right part at the right time and place.

So, how can OEMs optimize dealer inventory management?

Visibility and Connectivity: the Key to Optimized OEM Dealer Inventory Management 

In today’s fast-paced business environment, connectivity and visibility are the keys to success. They go hand-in-hand: connectivity provides visibility by ensuring that you receive accurate, real-time data across the supply chain. This allows businesses to identify bottlenecks and inefficiencies and take corrective action in real time.

End-users and their IoT machines are directly connected to the dealers/distributors, whose Dealer Management Software/ERP systems are connected to the OEMs—providing a connected, informed, automated, and optimized spare parts management system.

Therefore, the data collected through this connectivity is super important because it provides valuable insights into sales performance, inventory management, customer behavior, market trends, and competitor activity. By leveraging this data, OEMs can make better business decisions and improve their operational efficiency, customer satisfaction, and revenue growth.

Your chosen solution should act as a data integration hub, connecting and activating the players across the service network.

Connecting your Network for Optimal Visibility

Gone are the days of using different solutions to manage the downstream supply chain—a strong solution connects them effortlessly into one system without needing to replace the current infrastructure in an expensive way. Don’t be fooled by the bells and whistles of shiny features and functionalities—what you’re looking for from your dealer inventory management solution are connectivity and visibility.

Connecting the multi-stakeholder supply chain optimizes the inventory management system for everyone. It enables OEMs and dealers to get a more realistic picture of customer satisfaction, streamline operations and increase efficiency, drive greater revenue, and reduce stockpiling costs.

Data is king—and creating a connected network that gathers, analyzes, and provides insights into your operational data is crucial for supply chain optimization. Without a connected network, dealers and OEMs are relying on poor data for effective parts management—a recipe for disaster.


Dealer inventory management software enhances decision-making by providing real-time data on inventory levels, production processes, and forecasting, thereby improving competitiveness in a dynamic industry.

Lack of visibility across dealer networks poses challenges for OEMs, affecting inventory management, demand prediction, and customer satisfaction due to disconnected solutions and complex supply chains.

Optimizing dealer inventory management yields benefits like cost reduction, improved cash flow, enhanced technician efficiency, and increased sales through better customer service and part availability.

Prioritizing connectivity and visibility features in management solutions is crucial for OEMs, facilitating real-time data integration, insights into sales performance, and streamlined operations.

Effective utilization of collected data requires creating a connected network that gathers, analyzes, and provides insights into operational data, enabling informed decision-making, operational efficiency, and revenue growth.

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