Does The Parts Manager Matter? | SDR#211

Welcome, everybody, to the big show. We have an exciting announcement for you today, and we're going to talk about does the parts manager matter? I'm Chris Collins. This is Chris Joan.

Hello, everyone.

And our special guest, Cliff. It's a part of the big announcement that and much, much more coming up on this edition of Service Drive Revol.

There's nothing we have done that I've had more inquiries about, especially on Instagram.

Than Facebook.

Than parts hold.

Lots of people talking about it out there.

There are a lot of parts managers that are super talented, good people that feel alone.

They feel like they're an island unto themselves.

Yes. And so we would like to let you in on a secret that isn't really a secret.

Parts hold is coming out.

Very, very soon after you hear this.

This is the launch of part soldiers.

Yep. It's going to be really, really exciting.

It's good stuff.

I think you do an amazing job on it. Also.

Reminded me of a question. What do you call a fish with eight eyes?

F.

I don't get it.

So fish.

We'll come back to it. So what we kind of wanted to do today is as the introduction to parts hold. I know a lot of you listening to this are technicians or service advisors, but you're gonna find yourself over on parts hold listening to that show also just for the, you know, pure fact how important parts is. And. And just the great job you guys are doing with it, that the conversations are relevant to parts, but they transcend that. So we're. We're stronger together. And so maybe we could just start off because we have this kind of inside understanding that you're our internal parts guy. Fair. But when you came on board, you actually were working in service, so you went from parts to service.

So it started out in the. On the parts side of it, 22 parts manager and wanted to grow a business and find my own identity. And so wholesale was that avenue for me early on. A little bit more focused on wholesale. But as a parts manager, wanted to figure out how do I make more money for me individually, for my department, for the store. Figured out there was an avenue with service as well. And so kind of focused on both avenues and ultimately just wanted to grow more. So that's kind of what opened up the door for service. But on the parts side of it, I think as a service person, you come up there and you think it's just as simple as me grabbing a filter off a shelf. And there's much more that goes along with it than just grabbing a set of Brake pads that are just off for the vehicle, off the shelf. So even from tires to the ordering screens for wholesale, to the manufacturer's websites, to the DMS that your store uses, there's multiple layers that they're looking at. It's not just a cut and dry thing. So from a technician standpoint, I think it would be beneficial for them to see how difficult it is to look up something than to just randomly pick it up off the shelf. It's not as simple as that, maybe.

And then from a parts standpoint.

We don't realize the bottleneck that we create from a parts side of it if we don't do the right thing.

Went from parts to parts and service director.

That's right.

So you were still in there meddling.

With parts until I realized that I was stuck and I had to get out. So I gave my office up and stood out in the service department.

That reminds me, before I started working here, I had an interview also. I was. I was out interviewing and the interviewer asked me once, he said, how do you perform under pressure? And I said, I'm okay, but I'm way better at Bohemian Rhapsody.

Whatever that meant.

Okay, so then your first six months on the job as the parts and service director, what were the AHAs that you feel like? Sometimes parts managers don't see the bigger picture.

You know, the depth of what takes place in service was something that was really shocking to me. From the inspections aspect of it, to the presentation aspect of it, to the pricing, to just the customer engagement, to the connection that takes place is just very factual.

It's like you either have it or you don't. You either want it or you don't. You're going to pay. But there aren't a lot of emotions where in service, the thing you're selling is time that is produced by a technician that is a human, not a robot.

But I did find a connection later on. So early on, as just a counter person, one of the things that I wanted to do was make more money. And so how did. How could I do that? Well, I figured if I spent more time in service hanging out with the technicians, they would buy into me. Well, if they believed in me, I would turn more money because I was paid off the hours at the time. So I was paid off the hours that they produced, plus I was paid off a gross profit.

What do you think about that?

I love that kind of plan. I think just the connection that it gives you back to them. I don't know. Looking at it from a service Lens. I don't know that it increases production, but looking at it from a parts lens, I have a vested interest. So that was what it did for me personally. So I think that that's where I would lean on that. That side of it was. I'm more focused on what takes place. Them coming to the counter and hanging out and telling me about the game this weekend and how much they hate their wife and their kids are rotten and all that stuff. It was less about that. And get them away. Give them the part quicker.

Get them.

Get them away from the counter so that I can make more money.

That's interesting. I would guess that the inspections were better from the techs and also the quotes are more thorough from the parts counter people. Like if you have a vested interest in the service results.

So my thing as a counter person, the technician didn't have to come and ask me if we had the part. Like there was a connection and respect that they knew that I would find it.

Oh, even if you didn't have it in stock?

We didn't have it in stock. So they rarely asked, you know, do we have that in stock? They knew that I was going to find it instantly if I had to go in the. In, you know, the greater area that we were at. If I had to go to the aftermarket source, I was going to find the part. Now, if it was a carpet for a 76 Cordoba, probably not. But if it was a set of brake rotors. Yeah, but if it was a set of brake rotors, they knew that I was going to take the time to find it. And that connection allowed me to make more money because they were more productive. I made more money off the parts sale, so I saw the value in that side of it. Plus, when you really get the breakdown of starting to look at a financial. From a parts manager standpoint, you know, where your bread is buttered.

Sounds like a punchline to a Christian joke.

And yet it wasn't.

And why does. What do you call a fish with eight faces or whatever?

Eight eyes. Eight eyes specifically.

Oh, you could use that. Maybe tie that into that punchline.

Makes more sense than fish or whatever.

I almost want to explain it, but I'm not going to.

Yeah. And the chances of me waking up in the middle of the night going, oh, I got it. Are very low.

Slim. Pretty slim right now.

Okay, now, when we talk about parts hold, what. What is it that we want to do for parts managers? How are we going to serve them beyond just the fact that it's a lonely place and so we want to give them.

A community. But what else is it we want to do? We want to have conversations. So one of the things that we're focusing on with parts hold is having parts managers come on and interviewing them and talking to other parts managers in the sense that it's a community and we, you know, we want to involve them in the conversation. What else is it we want to do?

I think connecting the owner and the GM to the parts department because most of the times the owners don't go back there, they don't want to be involved. It's just a necessary evil for the dealership. But I think that there's value in them finding out that there's actually a business that you can run out of that. I also think that it's going to be really good for service managers, service directors to get another perspective of parts. And maybe there's something that we're missing from the service aspect that we can connect those missing pieces. It's almost as if we have a puzzle and we're missing a couple pieces. I just think them pulling them in and connecting it is a bigger section.

Yeah, I think that there's a couple of things to it. The first is, I think that what we've done with the first kind of runs of these things is I think we've definitely allowed a parts manager a couple of really, really good best practice strategies, everything like that. And I do think that that's been one of your focuses is. Is really pulling. Because I think that the reason that GMs and owners don't go back to the parts department is because they don't understand it completely. Right?

Yes.

But I think that we're trying to make it and put it into words and kind of explaining how the parts department works in a way that everybody can understand it. And you would not be able to do that as well as you do without having your service experience and knowing what it was like to be on both sides of the coin. So I think that really kind of pulling out and explaining the business in a way that everybody can understand.

It's unpopular opinion. And I'm simply going to state this and there'll be people, hopefully there's plenty of people that are parts people that are listening.

But it's really, really difficult to be a parts manager in some ways that I don't think a service guy can appreciate.

And so I think if they understand that there's more depth than just an oil filter. 5281090 oil filter there's told you he remembers those.

It's been superseded.

It's crazy.

Has been to a B.A. now, I think is actually what it is.

No, but yeah, I think also too though, I think that's true with a lot of.

A lot of things in the sense that like, you know, just take for example, people consuming this show, right? So people are going to consume Parts Hold.

They.

They're interested in their day. They want it to provide them entertainment, value, community, whatever it is, but they don't a lot, they don't have a lot of patience for it if it doesn't. And they have no idea how much work goes into it. They have no idea that I don't know how many of the ones that we recorded are we throwing away. 3. So they have no idea what it takes to. To make and nor do they care. And so I think that that's true with service managers and parts managers is at the end of the day, parts managers are fighting their battle and they. It's just human nature to tend to believe that you have it worse than somebody else in that sense. And maybe as we all get older and grow, one of the things that we learn because we've done different positions, right? Like you've worked in parts, you worked in service. You start to understand that in any position to perform at a high level and provide value is hard. And there's a level of sacrifice to be a good porter. There's a level of sacrifice, right? So if you're talking about any sort of leadership position to be a good leader, it's not about you anymore. It's about.

The team and the outcome and all that. And so it's, you know, I think Parts doesn't get the appreciation because it is thought to be more of a simple, you know, commodity transaction, but having the right mix. And also just how hard it is now to hire people in parts because.

You know, like when you came up or when I came up as an advisor, we were like, oh, wow, here's a career that the harder I work, the more I make and the more I can succeed. And me succeeding really just comes down to me, which is like a cool thing right there. There aren't a lot of politics or games to be played at that level of a dealership. Now if you're in a group and you get up to management, maybe there's more politics, but just at that basic, you know, this industry has provided all of us with. With a lifestyle and opportunities that. That were based on our efforts. Right. More than anything else. And so.

I just think that's probably underappreciated when it comes to the parts thing.

So I would say two things on that. I think that's why I think one of the benefits that could come out of this is that service guys would ask questions of parts guys that they would come away with from the Parts hold podcast and they would ask questions. And the same could be true for parts guys to ask the service service guys questions to understand the business and understand each other's business. Maybe there's something that a service guy picks up off the podcast that a parts guy just skims over because it's something that they naturally do. So I think that there's a value in that and on the control aspect of it. I think that's. There's some avenues that we're approaching on the podcast and talking about specific areas that maybe parts managers haven't thought about in growing the business. Business.

Yeah. And I would say that we've seen this evolve in the sense that our relationship with International Truck. One of the things that I think it was probably Jeremy there, who's a really big advocate for the dealers and really smart and.

Wanted parts and service to work together more. So we created a, you know, a training, training course that was about service understanding parts and parts understanding service, starting with the financials. But the managers had to do it together. And the outcome of that was when they did it, the results were incredible. And so we were trying to now incorporate that in our coaching on the car side in the sense that we've. We've created a measurable called S pop, which is service and parts operating profit. And when you talk about fixed absorption, a lot of businesses don't have a body shop. And so it's kind of like a hit or miss thing. But the one thing we do have and everyone is S pop, which is service and parts operating profit. And so that percentage of gross is a. Is a powerful number. And so including parts in that. And it's incredible just in the short amount of time that we've done it, how just shining a light on it has made it improve.

Absolutely.

Like anything you give energy and focus improves. And so, but it's just so fun to look at the dashboards and see like, so if you're looking at a service dashboard and you see like, okay, the net to gross is 30, but the S pop is 40, then that means the parts department's probably 50% net to gross or it goes the other way. But I'm always like, you can tell who's the higher performer of the two by looking at the S pop and then that, that department and you know, just, just shining a light on it makes it improve. It's just, it's magic how that.

Finding some identity in that.

Yeah. And so that's a big evolution. The other thing too, before we get to our list of.

Does the, the parts manager matter and kind of the subject today, another thing that we've seen happen is in our coaching group we have levels. So when you come in, you're, you're at level one and then you move up and then eventually you can get to elite status, which is hard to do. It's really hard to do. And there's three things that you have to do as a service manager to do that. And we should develop this for parts. We should be thinking about this. Right? But you, you have to have a really high net to gross. You have to have customer satisfaction numbers above your, you know, your, your market or your region by a certain amount. And then the third one is you have to win. Our manager advisor comp. Or your advisors are benchmark against other advisors as a, as a group. Right. That's the hardest one to do, is to win that. And if you're not in our coaching group, you might not understand, but it's, it is really hard to come into coaching and win that because there's so much talent, there's so many groups of advisors, just hitters row that, you know, managers that have been in our program for a while that just have an incredible team of advisors and to beat them is, you know, can seem impossible. And so one of the things that you have to do as a coach is you have to.

You have to convince them that it's mental. Would you agree with that or how.

Agree with that 100%.

How do you help a manager get past the fact that like you're in like, let's say you're in the Honda group and there's all these managers that, you know are just killing it and you're, you see yourself at the middle of the pack all the time. How do you, how. What is your strategy to flip them?

I think it's a mindset. It's gotta be a mindset. One of the fun things that I've done recently is, and it started with the story in particular that he asked for it, he wanted a picture of the manager of his group and he wanted a picture of the lead advisor and he was creating a dartboard and was gonna put him up. And so I got him that and I said, hey man, just so you.

Know, like, do the people know that you got it?

Yeah. I called the manager up and was like, hey, I need to get a picture of you and your advisor.

That's not awkward at all to ask.

Do they want to throw darts at it?

Yeah. And he was game. He's he.

Because, because he gets it.

Because he understands that to be the hunter, you're now the hunted and he's got to remain a hunter. So I thought that was an interesting spin on it. But even doing the thing of, hey, he's really not better looking than you, the advisor is probably better looking than most of your advisors, but the manager is not better looking than you are. And that manager, a fresh outlook on it and a fresh passion. And I do think that there's a thing of looking at it. Some of these managers aren't even looking at it and they're just seeing their name at the bottom of it. And you keep asking why? Why are you on the bottom? Don't you deserve to be that higher? So I think there is a thing there too. And just prodding them and understanding how to, how to, how to move the needle and what the parameters are. I think that's a big key to that.

Yeah. And so a couple things, if you're new to us, to understand the reason why we created the elite group was what would happen is managers would come to our in person meetings over and over again and they would get tired about talking about how do I hire techs or how do I get my elr, whatever it was, because they'd mastered that. So once you're in our program for a while, all those things that you perceive to be hard when you come in aren't hard anymore. And you kind of, you know, you're willing to help other managers to some degree, but you, that isn't. You don't want to fly to Dallas for a two day meeting and just talk about how do we hire techs. And so we realized that we needed to have.

You know, a different group that was elite that had a different type of experience in that sense. And I remember when that happened, it was a long time ago was there was a manager who's kind of infamous that started yelling at another manager, I don't want to talk about cones. Like he freaked out on him.

And I realized at that moment, I can't really. You can't have a bunch of newbies with a bunch of wily veterans in our thing. Also, sometimes there is a little bit more ego with the higher they have a swagger Too. Yeah, there's swagger. So. So what happens in the Elite meeting is we're going into other businesses, we're looking at other things besides, you know, automotive. So we might go look at a restaurant chain or, you know, when we did our meeting in Dallas, we broke down a business that was a touring company that does tours in France and New York. And one of the tours they do is the JFK assassination site. And they opened up their books and taught us how they market, you know, the percentage they pay to websites that refer their average per customer, how much they pay their guides, how they train their guides. Like, and it's. It's incredible. You know, kind of like we were talking about the different managers not knowing what other departments are up against, going to other industries and understanding, like, well, what's it like to try to order for a restaurant? Or what's it like when you're like, one of them? We looked at, they. They're a brewery, so they're brewing the beer and selling it and providing their other restaurants that they own with the beer. How do you. How do you, you know, as a parts manager, how do you order that, like, when you're making it and fulfilling it, you know, and so there's a lot there. And how do you price it? And one another thing that we don't deal with that those businesses deal with is there's an expiration date to that food or to that, you know, beer or whatever. So, you know, we have obsolescence, but it doesn't. Doesn't. It's not perishable.

And that I do think that there's some, Some items that managers probably aren't even aware that they have expiration dates on them. I mean, I'm thinking silicone is one of those items.

Oh, yeah.

Put some out there.

It's got expiration dates on it.

The.

I'll bet. Parts manager.

Let's try to keep this in, you know, PG13 and not talk about.

Yeah.

You have no idea how many of his jokes we have to cut out.

Or we just don't. We don't. We don't. Okay. So that. That being said, and we've put a huge focus on the Elite thing as far as the coaches are vested in how many managers make it to Elite, which has helped tremendously. But last month, we. In the last couple of months, right, we've had seven people come into the Elite group, which is incredible, and an incredible batch of talent.

The.

The other thing I would say about this, and this might be the most important part of It. And I know we've, we've talked about it, but.

Is last year, two of the members of the elite group became general managers. And I believe that our role in the industry is to take parts in service managers, directors and make them into leaders that are so effective that the transition to general manager is easy. And I would say that the two that made it.

I know for sure one, because we talked about it a lot.

We'Re like, wow, this is easier. In a sense, because of their leadership skills, the general manager position was perceived as easier.

And I don't have I ever told you this, years ago in two coaching meetings. So we had a coaching meeting in the Midwest, and then just, you know, a day later we had it in LA and there were like, let's say there's 40 or 35 people in each one. And I stood at the front of the room and I said, how many of you want to be general managers? Nobody in either one raised their hand. Nobody. And I was like, we're failing because the best general managers and the best future owners are from fixed stops.

How many times do we sit with somebody and they're like, why don't I, you know, I'm the general manager. I don't know anything about service.

But you never see a service person go in and not learn about sales. Right? Like, it's funny how lazy it is the other way, but you never. Like, our industry is much better served if there's a mix of general managers that come from fixed, then just a mix. I'm not saying, you know, but having, having that mix is better for the customers. It's better for. For the dealerships and all of that. So our role is like, let's see how many we can graduate to general managers from the elite group. And I would say if you looked at our elite group, they're more than half of them could be general managers tomorrow. Tomorrow.

That's something. I heard you ask a manager the other day that I thought was interesting. Like, hey, is this all you want to do? And he's like, well, no, I have a desire to be a general manager.

And he's young, he's 29, so he's not even 30 yet. So I totally love that kid.

Well, I think too, like, how hard it is to get to elite. The average is like a year or something. And that might have come down recently because, you know, the coaches have been doing such a good job. But.

You know, the, the mental transformation that happens when you stop making the excuses. You face kind of un. You know, Perceived as unwinnable challenges. And then you win. You, you've, you're pretty much better at leadership and business than, than most out there. Like it's no joke to be elite.

I think they get addicted to it.

Oh, to the quest.

Well, to the win. Like if they start seeing if they're negative, net the gross and they get to zero, all of a sudden they're, they're wanting to get to the next level and they're going to get to the next level. And that's going back to, you know, what's the difference? Those elite guys are always talking about how do I get to the next level? 25% in and up, 30% in and out. 40% isn't enough. They're constantly looking for the next thing. So I think that's a big portion of that too is they're constantly talking about how do I get to the next place?

And not to toot his own horn because he won't do it. But out of the seven, how many of those clients do you think Cliff coached?

Well, I should know. This is it two? Three.

Three.

Think the three out of seven. Good job.

Yeah, great job.

Yeah, that's awesome. Thank you.

So, yeah, that's an exciting thing and a responsibility I think for us as a team is to graduate.

Middle managers to leaders and then from leaders to general managers. But that's really what happens there, right?

Yes.

Is they're no longer functioning like middle managers. They're. They're starting to think bigger. And I think we should do the same thing with parts. I think we, we need to include parts in our coaching and we need to create a system for them to become elite and then for them also to either be parts and service directors or general managers. But there's a lot of talented parts managers out there that are only thinking small because they don't have examples of success to reference.

I would agree with that.

But now we have examples on the service side of, you know.

Going from broken to general manager. And it's relatable because you, you know, kind of like I always say is like they're just thinking different. They're not any better looking or any more talented.

Right.

They just decided to do it and you're sitting around blaming the market or whatever it is. So.

We gotta do everything we can to include parts and help them to feel a part of the community and then be inspired to a higher thing because, you know, we're better as an industry at fixed stops, has a seat at the table. And we're not just an afterthought. You know, it's the future more than anything. The manufacturers can go direct with the car sale, but they can't. They can't delegate the service.

Yeah.

Yep. It's great stuff. Okay, let's go to our list, which I think this is a. This is a great list. So does the parts manager matter? And then we have seven on here. So there's seven.

And Cliff, how long were you a parts manager for that?

A gray joke?

A little bit. Yeah. That's okay. But you're 15, 20 years. So I'm going to guess that after 15, 20 years of being a parts manager, you're probably going to say that the parts manager doesn't matter.

Doesn't matter.

Yes.

Oh, no. So the first one here, and he came up with this one. Service needs parts. Parts doesn't need service. Explain that.

So as a parts manager, I ran my business as multiple businesses. I had an internal business, I had a shop business, and I had a wholesale business. And each one was managed different and each one was. Ran differently. They were independent of each other.

But if the service department closed down, you still had it.

I still had two other avenues.

Yeah.

And now, I mean, because looking back, ebay was just becoming a thing when I was a parts manager. And we tried and did some stuff off that, but even looking at now online could be even another avenue. So I could have online internal wholesale service. I could have it across the board. And if one fell off, I've got the other to fall back on.

Yeah. And so then the next one is parts out of several businesses within a business.

Yes, that's exactly what we're talking about.

Number three, we have parts. Availability directly affects the service experience for a few reasons. One is most ROs don't go out without a part.

Right.

So we need parts to do an oil change, basically, with the exception of an alignment or some sort of wiring repair or whatever program or whatever. For the most part, you know, 90, I would say 95% of an RO has a part, maybe higher accurate, and then the availability of the part. So the parts manager being good at their job and having a high fill rate, the availability.

Has a tremendous effect on the production or the productivity in the shop. So the technician's efficiency, that then leads to the customer's satisfaction.

In the sense that we can turn it around and the customer has their vehicle back. Also.

If we don't have the part, then maybe a customer's in a rental car for a long time.

But if a parts manager is really good and we have the part in stock or we can get the part same day. The perception that the customer has that this was easy and the technicians are going to be more efficient because they're not pulling them in and out.

So as a parts manager, the best thing I could hear at the back counter is, wow, I didn't think you would have that.

Oh, yeah, that's awesome.

That's a great thing. But think about it from a sense of a parts manager not paying attention to his oil, and they run out of oil and then service drains the oil. And now I've got to figure out how to tell the customer that you're going to have to wait for an extended period of time because I have to get oil from a local place because we ran out of oil.

Oil. It's fun to hear say oil, isn't it?

The next one is the parts department's profitability is a huge part of fixed absorption.

100% huge part.

The next one is a relationship with manufacturers, runs through the parts department. So a lot of people listening to this have never made this connection because you've never sat in. Well, sat on the side of the manufacturer. But the manual.