Identify Areas for Improvement in Parts Operations

In today's rapidly evolving automotive industry, the role of a parts manager in a dealership is more critical than ever. It's a continual journey to find the perfect balance between growth and operational efficiency, especially in the face of shifting markets, strikes, labor shortages, and the emergence of new parts managers. To strengthen your dealership's operation, it's time to explore strategies that identify areas that are in need of improvement and innovation within your parts operations.

Training: In a recent poll, 92% of respondents revealed they lacked a defined training process for new parts managers. While hands-on experience is invaluable, a systematic onboarding process is essential to ensure that crucial concepts are not overlooked. Outsourcing training or consulting can provide new parts managers with the tools and knowledge needed to approach their role proactively. Remember, training isn't a one-week task but an ongoing process, and we've observed the most success when it's accompanied by continuous support and optimized inventory management strategies.

Vision: Simply maintaining the status quo won't cut it. Parts managers need a clear vision and access to big-picture reporting on their inventory. Understanding department dynamics and areas in need of improvement is crucial. The goals shouldn't be solely profit-driven; success markers include employee retention, department communication, and efficient inventory maintenance.

Time: Parts managers consistently struggle to find enough time to do everything they would like to do to be more efficient. Between employee management, inventory control, service coordination, and unforeseen challenges, they're often stretched thin. Acknowledging the need for time to excel is vital. This might involve outsourcing, expanding teams, providing more tools and support, and dedicating regular time blocks for review and brainstorming.

Teammates: Collaborative teams outshine hostile or dysfunctional work environments. A top-down approach that emphasizes mutual support, education, and respect is essential for new parts managers' success. Fostering a culture of collaboration helps improve delegation, morale, service quality, efficiency, and customer service.

Tools: The role of a parts manager has evolved significantly, with complex Dealer Management Systems, expanding inventories, thinning margins, and increasing obsolescence. Tools and technology are crucial in navigating these challenges. Parts managers need to easily see the right data to manage the DMS intricacies, oversee inventory effectively, and thrive in their evolving role. They are in a perpetual juggling act, attempting to grow business while keeping operations operating like a well-oiled machine.

In addition to the human elements, dealerships must recognize that parts operations can't be static. Operating with unchanging settings over time can lead to a range of issues that adversely affect parts operations:

Low Fill Rates: Sticking with unchanging settings may lead to consistently low fill rates, affecting the ability to fulfill customer orders promptly and efficiently.

Low Gross Profit: Unadjusted settings can result in low gross profit margins, eroding the overall profitability of the parts operation.

Inventory Turn Issues: Inflexible settings can contribute to poor inventory turnover rates, tying up capital in stagnant stock.

Over/Under-Stocking due to Manufacturer ASR Programs/Guideline Management: Failure to adapt to changing manufacturer ASR programs and guideline management can result in overstocking or understocking issues.

High Obsolescence that Keeps Coming Back: The lack of adjustment can lead to persistently high obsolescence rates, costing the dealership financially.

Special Order Issues or Running Out of Fast-Moving Parts: Without proper settings, parts managers may struggle with special orders or even experience shortages of fast-moving parts.

Source Accounting Issues: Static settings may lead to challenges in accounting for variances and identifying sources of discrepancies within the parts inventory.

Lack of Parts Pricing and Matrix or One That Needs Updating: Failure to update pricing and parts matrices can result in inaccuracies and lost revenue opportunities.

Over-Complicated Management Reports: Inflexible settings can lead to overly complex and convoluted management reports, hindering efficient decision-making.

The success of parts managers relies on a combination of training, vision, time management, collaborative teamwork, and access to the right tools. Dealerships should prioritize supporting their parts managers, recognizing their pivotal role in the overall health of the dealership. By doing so, they can ensure operational efficiency and profitability in an industry that's continually evolving and presenting new challenges.