ArticlesOptimizing All-Time Buys: Balancing Risk and Efficiency in Service Parts Management

Optimizing All-Time Buys: Balancing Risk and Efficiency in Service Parts Management

Managing All-Time Buys

Authored By: Eric Francucci

All-Time Buys (ATBs) are one of the most complex and emotionally charged challenges faced by service parts organizations. Committing to a large, long-term purchase--often worth millions--comes with significant risk. Order too little, and customer service suffers; order too much, and capital is unnecessarily tied up in slow-moving inventory. The decision-making process is further complicated by evolving technology landscapes, such as the shift from internal combustion engines (ICE) to electric vehicles (EV), which is driving an increase in ATB requests from suppliers. With ATBs often comprising 10-15% of total inventory for domestic OEMs, the stakes are high, and strategic planning is crucial.

While there is no universal solution to eliminate ATBs, OEMs can take proactive steps to minimize their impact. Implementing a structured cross-functional review process, leveraging supply chain leverage to push back on unnecessary ATB requests, and investing in advanced forecasting models are key strategies for managing these high-risk purchases. By integrating financial considerations with long-term demand planning and supplier negotiations, organizations can optimize their ATB approach--freeing up capital, reducing storage constraints, and ensuring a more agile supply chain.

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