With the number of SKUs expanding and more and more companies moving to an omnichannel model for parts sales, inventory planning and demand forecasting in the aftermarket has become increasingly complex. Companies are turning to advanced analytics tools to help make more accurate and faster inventory decisions.
IndustryARC predicts that automotive data analytics market will reach $3.81 billion by 2023, with a compound annual growth rate of 15.4 percent. That growth will be fueled, in part, by the increasing amount of data available from autonomous and connected vehicles or telematics systems.
Traditionally, the aftermarket has relied on past sales, seasonal trends, vehicles in operation data, and other data points to create sales forecasts. The tools used to create those forecasts have become even more accurate.
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A number of analytics tools have emerged both from traditional technology vendors like Epicor and from the wholesale distributors themselves. They are able to incorporate additional data and other information to create more granular forecasts.
Another option was released in April from Aftermarket Analytics, which launched its Inventory Analyst (IA) web-based software for inventory planning.
Company CEO Justin Holman says that excess inventory has eroded industry profits, and that there is a need for better sales forecasting and inventory planning. The IA tool claims to have improved demand analysis information at both the county and ZIP code level, and comes pre-loaded with vehicle sin operation (VIO) data. Users can develop customized replacement rate modeling forecasts by year, make and model.
The software is available on a monthly subscription basis that can be canceled at any time.
Initially, IA has been targeted at suppliers. “We’ve been working in the aftermarket doing consulting and analytics work, and we decided to achieve the kind of growth we wanted, we would have to come up with a product,” Holman says. “We like what we see in the aftermarket on the supplier side. These are companies that are creating American jobs and fulfilling an important economic function, but in many ways they are outmatched by retailers. We want to level that playing field, and inventory problems are highly significant.”
IA includes the ability to upload part catalogs and part-to-vehicle files, as well as integrated VIO data. “What we’ve done for ease of use is made it as easy as it can be to generate a demand estimate for a particular part,” Holman says. “Catalog data is often messy and incompatible. We’ve had to wrangle with VIO data form third parties, and come up with replacement rates using third-party data. We’ve gone to great lengths to make all that come together easily in a software package you can access from a browser.”
Holman says the solution can reduce the cost of accessing VIO data, while providing greater flexibility in creating replacement rate models.