Is Your Parts Manager Costing you Retention and Profit?
- December 18, 2016
- Posted by: DebD1
- Category: AUTOMOTIVE FIXED OPERATIONS, News
Is Your Parts Manager Costing you Retention and Profit?
By Greg Criss
In the last 10 years, we’ve been looking at ways to keep our guests here, and happy. We’ve installed drive-thru walk-around processes, incorporated electronic tablets, begun ways of reviewing the quality of each multipoint inspection, and performed more training with everyone in the areas of customer satisfaction.
One of the areas that can be a detriment to all of this training and dedication can be an un-evolved parts manager. And, really, there hasn’t been much training to work with this position to bring them to the next levels.
To make this quick and to-the-point, I am going to outline some warning signs.
1. Your technician productivity doesn’t reflect your technician’s abilities. You are moderately busy, but the flat-rate times don’t reflect your technicians’ true abilities. You may have the wrong mix of parts (check your month end summary), or you may have an attitude (“You’ll get the part, when you get the part.”)
2. Your Gross Profit Retention in Parts is down. We’re still doing the same or better in sales but the retention is down. We’ve learned that when we have parts purchasing options for the guest we rarely have to discount the part. With everyone connected with Smart Phones, a guest can find an average price of a part for their vehicle in minutes.
3. We’re not offering parts pricing options. The average age of a vehicle on the road according to R.L. Polk is now 11.3 years old. I keep seeing the mileages climbing for averages in service departments. But as the vehicle gets older, our competition at the Big Box Retailers, independent mechanics, etc. kicks in. We’ve got to be competitive. If we lose a job, sometimes I hear in the parts department, “They will be back once they hang that aftermarket junk on there.” The truth is they won’t be back. We didn’t lose the job; we have probably lost a customer forever. And if the guest feels that we weren’t working on the best of their behalf on the repair solution, will they be back to give us a chance to buy a new vehicle?
4. We are not capturing that Job today. With all of the manufacturer’s supporting overnight delivery in most cases, we have been accustomed to having the guest bring the vehicle back while we order the part. It’s just our way of life. When we don’t capture the job today, the technician is inefficient. I agree that we can’t have all parts in stock; however, there may be a dealer in the area that does, or have we sought out other parts? While we may retain $10 more on that part in gross profit, the technician just lost .2 in racking the vehicle, & parking and re-parking the vehicle. If math serves me correctly, and our effective rate is $80 per hour, then that’s $16 of lost revenue (unbillable time) for the technician and the company. Your parts department should be exhausting any means to get that part here today. (Note: In that calculation the driver and time are not considered. Also the inconvenience of the guest is not considered when we have to order the part, or the cost of a loaner or rental to keep the vehicle here.) Bottom line: It’s expensive to not repair a vehicle today. If it’s avoidable, is your staff and manager trained to seek out all methods to make the repair happen?
5. Inefficient Stock-In Procedures. Most dedicated deliveries are during the hours of night. Many times I will see technicians starting at the same time the parts department personnel are starting. The first job up is a special order part, and the technician has to wait while the order is picked through to find the part. Are your techs standing around waiting for the part, or is the dispatching on “hold” until they can find the part? Why not start someone earlier so the parts are ready for the technicians when they arrive?
6. Horrible Attitudes? Does your parts counter interact well with your technicians? If the technicians hate going to the counter and interacting with the parts personnel, then you will lose potential sales. Your parts department has a supportive sales role, and that must be the focus. With the introduction of parts programs such as RIM and Parts-Eye, managers have had some duties taken from their plates. Being nice to people might be a requirement for some dealerships. Imagine if a salesperson was not nice to a guest or an advisor wasn’t nice to a guest. Why would we tolerate any different behavior from our parts department?
7. Technician Turn-Around. Technicians are extremely difficult to find that are in-tune with our objectives and are competent. The best way to increase staffing is to keep the staffing you have and add; otherwise, you’ll never be staffed correctly. We have to ensure a positive work environment for everyone with support that is felt. We can’t afford for a technician to feel as if they are not supported in every aspect. Let’s assure that we are not overlooking the treatment by the parts department, and the willingness to assist the technicians in being the most productive.
8. Knowledge. While these programs, such as RIM, Parts-Eye, etc., are good programs for smaller dealerships, there comes with that responsibility for us to be COMPLIANT. We have to retain a certain percentage of purchases through the manufacturer. It’s true. However, that’s not an excuse for losing guests, and doing business in an antiquated way. Many dealerships are able to provide option pricing AND be COMPLIANT. Your manager may not want to change, and it’s easier to give this reasoning than to figure it out.
9. Accountability in Leadership. Your parts department manager may be all on board with all that we’ve spoken, but cannot get cooperation from his/her team members. Dealership leadership must make it known how the picture is going to look. Dealership leadership must be unrelenting and consistent in it’s approach and hold team members accountable for actions that are less than acceptable. Start training your staff in leadership if management already does a great job but the concept doesn’t translate to the team members.
The take-home here is that you might want to check your parts department. Many times the manager is a manager of few words, so we think that everything is going well, but if the manager doesn’t have the right mentality and processes, it can be a killer for all of your accomplishments. The New Year is a great time to start some new improvement plans that may include changing some of the ways you do business in your parts departments. If you have any questions please feel free to reach out to me at (724) 971-6372 or visit us at www.crissconsulting.net