Fixed Ops Journal - August 2017 - 37

The service department at Northstar Ford in Fort McMurray, Alberta,
tracks lost sales to help decide which parts to order and stock.

PARTS

continued from Page 36

in 2015, Schick says, he required parts employees to look up previous
orders and returns and discuss them with the body shop.
"I want my guy to communicate with the estimator and the parts liaison and ask, 'Are you sure you're going to need that? Because the last
two times, you haven't,'" Schick says. "Communicating with the estimator upfront can avoid a return."
For customer-pay repairs and parts counter orders, Schick advocates
prepayment. Service writers need to ensure that warranty customers
return for parts to be installed, he adds, by confirming appointments
before placing warranty parts orders and following up with customers
who miss appointments.
"If it's a warranty, we make the appointment ahead of time," Schick
says. "That seems to help."

Held to account
Schick compiles a daily report on special-order parts and shares it
with the group's service directors and advisers. The reports include details of which special-order parts are lagging on installation or unused
- another reminder to get customers in and work completed.
The parts director also posts a report every month that breaks down
the percentage of unused parts by service technician. That helps motivate techs to be more careful about the parts they order, Schick says.
"If I show all the techs a pie chart, and 75 percent of the returns have
one name on them," he adds, "that's a conversation starter."
Schick keeps unsold special-order parts in distinctive bins. He reviews
the contents of these bins each day with parts and service advisers.
After 60 days, the parts in the bin are considered frozen capital. They
are targeted for return or outside sale at a deep discount.
Driver's Village maintains a parts inventory worth about $2.7 million, Schick says. Unsold "frozen" parts account for roughly 7 percent
of inventory value, he adds.
Consultant Heronime says a well-managed parts inventory consists
of 80 percent regular-demand items, 8 percent special-order items and
the rest in parts that will be automatically phased out as they reach the
end of their life as regular stock.
Maintaining these ratios requires parts managers to monitor inventory data constantly, especially the status of special-order parts, Heronime says.
These tasks are even more crucial, he adds, as some automakers cut
their return margins.
Says Heronime: "You can't keep all this in your head or fly by the seat
of your pants anymore." 

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AUGUST 2017

PAGE 37
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Table of Contents for the Digital Edition of Fixed Ops Journal - August 2017
