Fixed Ops Journal - August 2016 - (Page 48)

FIXED OPS JOURNAL Two parts policies by Toyota, on returns and same-day delivery, challenge traditional industry practices as they aim to improve service at dealerships. How are they working? Here's a look. GIVE (BACK) AND TAKE ■ Near-unlimited returns program allows dealers to 'stock whatever they need' ■ Same-day service aims to give Toyota, Lexus stores competitive edge JIM HENRY foj@autonews.com A utomakers typically impose strict quotas on parts that dealership service departments can return for refunds. But Toyota now offers its dealerships nearly unlimited parts returns. "We want our policies to enable dealers to stock whatever they need, without fear of not being able to return it," Neil Swartz, vice president of service, parts and accessories for Toyota Motor Sales U.S.A., said in an interview. Parts and service managers at Toyota and Lexus dealerships say the new program, which began in January, helps them use their parts inventories more efficiently and makes returns easier. Toyota, like other automakers, previously limited returns to a percentage of the dollar value of parts a dealership ordered. Toyota dealerships had a 7 percent return allowance, based on monthly parts purchases, and Lexus stores "Even if I think I can't had a 6 percent allowance. That policy aimed to minimize return something, I the expense of shipping, processing and restocking returns. Across still ask. They're the U.S. auto industry, returns acusually pretty count for about 6 percent of the understanding." value of parts ordered, said Harry Hollenberg, a founding partner of JESSE MORENO, the automotive consulting firm parts manager of Larry Carlisle & Co. H. Miller Toyota Corona The traditional return policy has encouraged dealerships to decide what parts to send back largely in an effort to meet the quota and get the biggest cash refund, Hollenberg said. Michael Stefansson, manager of customer first and quality for Toyota Motor Sales, said the automaker's new system, called Unlimited Returns, uses dealership returns and parts orders to determine more accurately which parts are selling slowly and which ones are in demand. Under the old policy, Stefansson said, "all the thinking was around dollars, not managing your inventory to have the right " " SEE RETURNS, NEXT PAGE Swartz: Dealers need not fear parts returns. PAGE 48 AUGUST 2016 JIM HENRY foj@autonews.com A mazon, FedEx and UPS offer same-day delivery for retail purchases. But most automakers, for reasons of cost and complexity, don't deliver parts to their dealerships any sooner than the next day. Bucking that trend, Toyota and Lexus offer same-day parts availability to their dealerships. And parts managers at dealerships that sell these brands contend the policy confers big advantages: quicker service, less need for loaner cars, more efficient use of service bays and higher customer satisfaction. "That is the best thing Lexus ever did for us - the fact that we can get a transmission and a vehicle in and out in one day," instead of keeping the car or truck overnight because of a lack of parts, said Luciano Restrepo, parts manager of Keyes Lexus in the Los Angeles suburb of Van Nuys, Calif. "I utilize the service every single day," he said. Larry Rodgers, parts manager at Lexus of Westminster, also in suburban Los Angeles, said having to keep fewer cars overnight means more business for the dealership. Otherwise, he said, cusSEE SAME DAY, PAGE 50

Table of Contents for the Digital Edition of Fixed Ops Journal - August 2016

Fixed Ops Journal - August 2016
Contents
Editor’s Letter
Service Counter
Legal Lane
Treading confidently
'Tis the season
Profit Builder
Valet service
Richard Truett
OEConnection
Changing oil:
Photo story
Trade-off
Toyota way
Feedback
Lone star
Airbag recall
Forging links
Top 50
5 Minutes With
Shop Talk
Fixed in Time

Fixed Ops Journal - August 2016