I want my business to continue to grow and prosper. I know I need to develop effective written processes for the operation of my dealership, but how do I go about designing the structure for these processes?
Last time we addressed the written processes from the sales department’s perspective, this time we take a look at the parts and accessories side of things. Regardless of the department, written processes are about managing people. You really can’t hold your people accountable for their actions unless there are specific written guidelines for them to follow, regardless of the department they work in.
This time around we consulted with Best Operators Club members/dealer principals like Kurt Finley (Colorado Powersports, Boulder, Colorado), Don Owens (Dothan Powersports, Dothan, Alabama), Jim Maslyn (Motoprimo, Lakeville, Minnesota) and Mike McBroom (Neosho Powersports, Neosho, Missouri).
Although most of these BOC dealers already had written processes in place, they were not necessarily totally satisfied with the results. They all agreed that they would benefit from sharing ideas on the structure for these processes. This month, we address their findings on the processes for the proper operation of the P&A department.
Where do you start when you want to develop a written structure for the operation of a given
department in
a dealership?
The Best Operators Club members decided that they first needed to determine the nonnegotiable practices for the parts and accessories department.
What are “nonnegotiable practices” for the P&A personnel?
These are the practices that are absolutely essential to the operation of a successful parts and accessories department. While a long list of these practices was developed, we have distilled them into the top ten nonnegotiable practices for the P&A department:
1: Staff Must Be Ready For Work Each Day, Dressed In Uniform And On Time
These highly-visible employees represent your entire dealership to your customers. They often provide the customer’s first impression, and you know what they say about first impressions. The frontline staff must act and look professional at all times in order to present your dealership in the best possible manner.
2: All Special Orders Are 100% Pre-Paid
Large numbers of special orders are never picked up, despite follow-up calls and mailings. Many items are not saleable to other customers. There are costs involved with ordering and storing special order items as well as customer follow-up. Recover at least the value of the parts and freight.
3: All Lost Sales Must Be Recorded
To determine if items should be added to your inventory, measure the potential demand for these items. All non-stocked items requested by customers must be recorded as lost sales.
4: Stock Only Fast-Moving Items
Parts and accessories must have a minimum of four turns per year in order to be stocked. These can be actual sales or lost sales. Parts that drop below four turns should not be restocked.
5: A 20% Restocking Fee Is Applied To Returned Items
There are costs. Returns must be credited to the customer, received back into inventory and physically restocked. The restocking fee helps recover these costs. It also discourages customers from “borrowing” parts to see if they will work in applications that are not indicated.
6: Displays Must Be Kept Clean And Neat — Change And Rotate Every Month
The cleanliness and quality of your displays has a tremendous impact on the sales of the displayed items. You invested in fixtures and lighting, so P&A staff should be tasked with daily cleaning of all display items and store fixtures. Damaged display fixtures must be repaired or replaced before the doors open. Displays must also be changed and rotated on a regular basis to provide a new look to your customers. Items that don’t sell in one location may sell in another.
7: All Incoming Calls Must Be Returned By The End Of The Business Day
Follow-through is essential to customer satisfaction that stimulates growth. P&A staff should log all calls in their day planners. They must follow-up on every call by the end of the day.
8: Utilize Valuation Reports
Have a set dollar level for your inventory. Break the budget down into realistic categories (clothing, accessories, hard parts, etc.). If
you need to add more accessories, you must reduce somewhere else to maintain the budget, etc. The valuation reports will help to track this.
9: Utilize Monthly Inventory Aging Reports
The aging reports identify non-movers so you can take action. Number of inventory turns has a direct impact on the profitability of your P&A department. Remove the slow movers and reinvest this money in fast-moving inventory.
10: Cycle Counting
Bins should be sized to be counted in one day. Count one bin daily, with the goal of counting your entire inventory several times a year. Cycle counting is an important management tool that helps you identify issues such as inaccuracies or shrinkage in a timely manner.
