E.O. is an abbreviation for Emergency Order. E.O. sales occur when a vehicle is being repaired in the workshop and the parts that are required to repair it are not currently held within your parts stock.
In this instance, the required parts are ordered from your franchise manufacturer on an emergency basis and the parts are usually delivered the next day.
This KPI measures the percentage of your parts purchases that have been ordered on an emergency basis.
Example:
A) Purchases on E.O. = R17,977 B) Total parts purchases = R79,894 C) E.O. % = 22.5% (A ÷ B X 100)
Discussion:
In most cases, parts that are ordered on E.O carry a financial penalty, which reduces your overall Buying Margin. therefore it is your interest to maintain a balance between your True Stock Turn and E.O.%