Is Your Parts Manager Making THESE Mistakes? (Service Drive Revolution)

The top five mistakes that parts managers make. The top five mistakes parts managers make. Are you ready for this, Jeremy?

I am ready.

This is exciting stuff. It's going to hurt a lot of feelings, but it's all true. It's all very true.

And it's really important because this is the, the crux of getting the car fixed and out the door on time. If you don't have the right parts at the right time, you can't hit your promise time and that could suffer.

And I would say to that point, because you, you, you make a. Maybe we should appreciate parts more.

Yes, we should.

Maybe we should send parts more. Love.

Are you saying we should share our bonuses with them?

Maybe we should share our bonuses. Maybe we should take them out to dinner. Maybe we should invite them to some meetings. Maybe we, you know, parts gets a bad rap that they're not that fun. But I find a lot of parts.

Staff are pretty fun, you know, the most.

When I think back on my career when I made the most amount of money, we had a really good kick ass part parts department, a great parts manager, ran a tight ship, did everything right and it made our lives a lot easier.

Had a strong culture.

Yes, absolutely. Yeah, you're right.

Okay. Number one, the top five mistakes the parts managers make. They don't track lost sales.

Interesting. They don't track lost sales. What do you mean by that?

So there's a, there's a couple things. Sometimes with parts managers, this is like talking about proficiency versus efficiency, which is a bunch of terms that consultants came up with and you know, is mind numbing. But when you ask a parts manager, do you track lost sales? They're always like, yeah. And then you go to their printout of lost sales and there's like three for the month. And you're like, you're not tracking lost sales. And then they want to debate what a lost sale is.

Right.

So what in your opinion would be a lost sale?

Well, anytime you give a quote and it doesn't sell, I could think of somebody calls for a price on heater hoses and they don't sell it. Maybe it's a wholesale account that can be one where they're going aftermarket versus the manufacturer or you're just, you do the quote on the invoice and half of it doesn't sell. You've got to track those things that were quoted but didn't move.

So you're close. But if somebody calls in for a quote and you don't have it in stock. Okay, what we're Trying to do is we're trying to get our fill rate up. Right. Okay. And so if, if three people called in for the same water pump in a month, that would show you that there's a trend starting.

So what you're saying is it's the parts manager's job or the parts department job to get ahead of the trends that the manufacturers give the parts department. So instead of.

But now let me tell you why parts managers don't do it is because in a lot of systems, if you, if you hit something two or three times that it was a lost sale, it's going to order it.

Okay.

And they don't want to have to look at their order, their stock order. They want it to automatically go. So they won't look at it to see the trends.

Okay.

Because, you know, especially with a lot of manufacturers, it's set up that it will just automatically order. So they don't want it to automatically order something that they actually never sold and have it in stock.

Okay.

But I would say that that's the wrong way to look at it. And I probably would stock that part. But. But I at least would want to see it and I would go through my stock order and not be lazy about it. So anything that at the back counter we don't have, anything that somebody calls in for that we don't have, I would be dinging that as a lost sale and then looking at it every month.

That's awesome. That's very insightful. It's a new way to look at it.

The number two mistake that parts managers make is they won't go get the part.

Come on. You. You want them to go get a part for you?

Yeah, I want them to send somebody to go get the part. Today?

Today. Right now?

Right now. If somebody else has the part, go get it.

But that costs extra money.

I don't actually. It could end up costing less because if you got to overnight it.

Correct.

Depending on if it comes on the stock order or not. But most of the time they would rather overnight it than send somebody to go get it.

Okay.

And so in that scenario, like a lot of times, like I can find a courier to get it. If you don't have somebody to go get it, there's, you know, you can find an retired off duty fireman that'll go pick up stuff for you for 10 bucks.

I have one for you. You can actually uber the part to yourself.

Yeah, you can uber it. That's a good one too. But get it today. Yes, that's the second One.

So how, how does that make the service department run better? So you're talking about bay efficiency, rack efficiency, tech efficiency. Because if the car's racked and it's there, we save time. If I can get that part installed today and the car's done, the job is done. We don't have to unrack it, re rack it, put it back into workflow. So you're talking about running a tighter, more streamlined dealership that's thinking outside of the shop.

Well, I don't, I don't care if it's a dealership, truck, car, independent, whatever it is. At the end of the day, what you're doing here is improving the customer experience. So let's say you have a dealership with loan cars, the loan cars are going to come back quicker. Let's say you don't have loan cars in your, in independent shop. The customer experience is going to be drastically improved. Because if they're paying for a rental car, they don't have their car. We could get it for them today or back to them tomorrow morning instead of it being another day. But if you want to order it and wait for it to come and it's in town somewhere, you're you cost us at least another day. But which the customer perceives as it took longer because it did. Right. So at the end of the day it's more about the customer experience. But it also is just that mindset of being aggressive. If you're aggressive that way you go pick it up, you better things happen.

Just wait till the big A delivers it. Same day for you.

The big A Amazon. Oh yeah, right, right.

Absolutely.

It's coming.

It is coming. Yes, sir. So I agree. Go get it. Go get those parts and get the cars moved out of your shop.

Number three is you don't have a real system of how you handle the shop.

Okay.

And so a lot of parts managers have done this thing where they have runners, they don't have runners and they don't understand kind of what you got to, you got to pick away. So you're either going to have a bunch of high paid parts guys, right. Or you're going to have one high paid parts guy and a bunch of runners. But the idea of runners was that you could have less of the high paid parts guys. You could have one sitting in a computer pulling the parts, ordering all that, but the runners are running it out to the shop.

Right.

And if you, if you're running a hybrid and you don't commit one way or the other, your expenses end up being too high, and you end up not. Not getting a result.

Right.

So the idea with the runners is that you can have one parts guy, they pull a ticket, the runners know to go find it where it is and run it to this tech in that stall. And so you could have those kids that are, you know, $15 an hour or whatever, minimum wages in your. In your area. But I find that a lot of parts departments are running this hybrid and they're not really being efficient one way or the other.

So really what you're talking about is creating a system within the system. So you've got the repair facility that. That we look at lean processes and how to, you know, make our technicians more efficient and all that. And then just looking at the parts department, how they operate as a more efficient unit by creating a system that gives that.

Result is what you're looking for there.

Yeah. And I think a lot of parts managers are okay with there being a line of text at the back counter, where. When I see a line of text at the back counter, I'm just watching production.

You know, Chris, it makes me want to drink when I see that.

Drink moonshine. Really, really strong moonshine with.

Well, you got to realize when a technician is standing around, that's $300 an hour just being wasted. We need to produce. We need to get those texts back.

That's strong.

That's crazy. Yeah, we need to produce.

Got it. We have to produce. We got to get the technicians moving. The. The most. The biggest expense we probably have is when a technician is standing there not doing anything. I think we're going to talk about that in one of the other episodes coming up soon in March. So get that system together. Make it work.

Number four mistakes that parts managers make is they don't get out of their office. They don't wander around, they don't go in the shop. They don't, you know, touch everybody. They're just sitting in their office running reports, checking emails in a cave somewhere.

Absolutely.

They're not up and about. Your role as a leader is to be up and about, to be seen, to have your presence felt, to be checking, knowing what everybody's doing, maybe, I don't know, spend more than half of your time out of your office.

Interesting. But they're the manager.

Well, we know where they are.

You do? Absolutely.

We know exactly where they are.

You know, it's interesting about that is you can learn so much by going through the shop. And I think also you have to let go of old ideas and old ways. Before you bring in new stuff. So I think we're really at this point in our industry and with the business that profitability is going to come from a new idea. So this is great. Go out, spend half your time seeing people get out in the shop, see what you can do differently and be open to new ideas. Because a lot of things. Well, we've never done it that way. We're not going to do it that way. That's not winner thinking.

Yeah, that's good. Number five is that the parts department becomes a silo. And what I mean by a silo is that you think of parts as just parts. You don't think of parts as a customer experience. And so from the customer's point of view, they are just getting a repair, they're getting back on the road, they're, they're solving a problem. They don't care that there's a bunch of different departments. It doesn't matter to them. And one way that I see that parts managers, when they really get this, they start selling a lot more accessories because they start going to the sales meetings, they start going to the advisor meetings, they're out in the service department talking to customers and they stop thinking about parts as their island that they have to protect with a moat around it. When they start thinking of it as a bigger part of the revenue of the entire shop, of the dealership and going out and seeing how they can affect other departments and then you start selling more accessories.

Right. You know, and I think about it what you just said from a service advisor standpoint, I'm guilty of not supporting the parts department too. It's. We take it for granted.

Yeah. So it's saying we need to invite them in too. It's on us as much.

Yeah, absolutely. And then it's very interesting that, and I wrote down this when you were talking. Parts procurement is a customer experience touchpoint and it's part of it. And if you don't have the right part at the right time, that can take away from that five star experience that we're trying to deliver to the customer.

Yeah, that fill rate, that's why I think the lost sales helps with that. That fill rate. When, whenever there's a manager that wants to debate the lost sales thing because they don't want to look at their stock order, most of the time their fill rate is pretty low. So the fill rate is driven by being aggressive, being open, maybe stocking a couple things that you wouldn't normally do. But in the long run, you're, you're gonna be, you're gonna be ahead of it.

Well, absolutely too. And depending on where you're at, like you know, here in la we have most of the major distribution centers here on the west coast, right here in Southern California. So it's easy to get most everything next day. So a lot of parts departments will fall back on that. Well, if you order by 4:30, we'll have it tomorrow. Well, what if we had it today? So if you're in an outlying area, that can be a huge competitive advantage. If you grow your inventory and they are able to fly, fill those orders right away and get those cars back on the road faster.

Yeah, I see too on the, on the fifth one, on the silos. I see when parts managers start going to sales meetings and they start talking to the sales department, they start talking about accessories. Maybe they spiff and gamify accessories. They're selling LEDs on trucks, they're selling bed liners, you know, they're selling luggage racks, all that stuff.

The opportunities there. I remember when I had my shop in Flagstaff, this is about 15 years ago, I was going after fleet business and I had a guarantee that if your truck had a breakdown, I would do any repair within 48 hours, whether it was an engine, transmission or whatever. Because I knew that I could drive to LA and pick up any part. Well, I had a guy take me up on it and he needed a transmission and guess where the transmission was? Was here in la. So we drove from Flagstaff here, picked up the transmission, got it back in within 12 hours, had the car back on the road within 22 hours, hit our deadline and my guarantee was if we didn't meet the 48 hour deadline, your repair was free.

Oh wow.

But it was a nine thousand dollar job and the guy didn't question my price.

No. Yeah. You could have charged more, right?

Yeah, absolutely. So it's a competitive advantage when you have the inventory there and you can deliver same day. That's awesome.

Yeah, the, the thing about that last point and kind of to wrap all this up is I think a lot of times parts managers see themselves more as an accounting type role instead of a retail role.

Okay.

But the best managers are, are the ones that see that they're in the retail business, not in the number crunching business. I know parts is a lot of numbers and it can get out of hand and you have to be able to manage that part of it very well. But at the end of the day, going forward, you gotta think of yourself more as being in the retail business than an accountant.

Absolutely.

That's the biggest one. Cool. Thank you so much for watching this clip of Service Drive Revolution. Now you can catch the full episode on on YouTube, iTunes, or Spotify or wherever you consume your podcast. If you have any questions, go ahead and post them in the comments below. Make sure you subscribe and hit the bell icon so you're notified when we post new episodes. I'm Chris Collins, and you can find me on Facebook and Instagram at chrisbulldogcollins and I'll see you again on the next episode.