"The main thing is to provide a more efficient supply chain," Ortlepp said.  "We wanted to decrease depth of dealer inventory and increase breadth to achieve a higher fill rate."  In doing so, he said the aim was to create a 93 percent facing fill rate to dealers, and a total system fill rate of 98 percent.

More than 96 percent of the 1,028 Honda and Acura dealerships coast-to-coast who order parts before established cutoff times -- usually 4 p.m.--can receive parts the next day in most cases before 8 a.m., Ortlepp said.  The orders are filled by nine Parts Centers (PCs), including locations in Portland, Ore., French Camp, Calif., Torrance, Calif., and Davenport, Iowa.  "The goal is to get the dealers to take advantage of daily delivery by enacting a 'sell one, buy one' mindset," he said.  "This allows them to reduce the on-hand quantity or depth of high demand parts, providing the capital and space to stock additional part numbers to increase breadth."

"We do know that the dealers feel they can be more competitive now," he said, referring to wholesale collision and mechanical orders.  "Having the part on the shelf is very beneficial in gaining incremental business.

"Collision sales have grown faster than the prior year," Ortlepp said, adding that DSO has allowed Honda to get more aggressive in pursuing the business of collision repair facilities.

"Being able to get the parts the next day versus the next week is the biggest advantage," said John Golojuch, parts manager of Burt Kuni Honda in Centennial, Colo.  Both dealership service departments, as well as independent repair facilities are benefiting, he said.

"It has also allowed smaller dealerships to get into wholesale because they don't have to stock it," Golojuch said.  Sales at the retail parts counter have seen a spike because customers are likely to come back the next day for an accessory or part rather than wait for a week.

To fill orders quickly, American Honda invested $100 million in a new parts redistribution center and $25 million in a warehouse management system that is linked to the inventory via a bar-code and scanner system, Ortlepp said.

"Most warehouses pick, pack, and stage a truck in 30 minutes," he said.  "Scanning is critical to get all orders out in a reasonable time."  The system is connected to the dealers via a Dealer Management System that handles all aspects of operating the dealership from ROs to new-car sales on the front end, he added.