Developing Your Best Special-Order Parts Process – Part 3

This is Part 3 in a three-part article. View Part 1 | View Part 2

A means to emphasize the importance of insuring the quick turnaround of special-order parts would be to incorporate various incentives or penalties within the pay plans of service advisors and fixed operation managers. The considerations can take many different forms. Service advisor compensation additions for positive performance can include but are not limited to the following considerations. Motivational spiffs can be developed to reward the advisor by measuring the percentage of times that special-order parts are installed within a given time frame and paying a dollar amount for levels (example: 100% = $$$ / 90% = $$$). A specific dollar amount can be added to advisor pay for each transaction that is completed within a set time frame (example: 5 days = $$$ / 10 days = $$$). A more permanent method would be to incorporate advisor performance on special-order parts turnaround into various components of their pay plan by adding or decreasing compensation levels on production or CSI. Excellent performance would dictate an increase in the amount paid per flat rate hour, the amount paid as a percent of labor dollars written by the advisor, or in the CSI bonus level. To be effective only measurable data on special-order performance should be used. Other consideration could be given to charging the service advisor all or a portion of the price of the part after a predetermined number of days. The cost of the part could be charged to him or the full retail amount. Incorporating poor performance into the pay plan would dictate a decrease in the amount paid per flat rate hour, the amount paid as a percent of labor dollars written by the advisor, or in the CSI bonus level. Another approach would be to link both the Service Manager’s and Parts Manager’s pay plans to the combined performance of both departments. One way would be to add a component for each manager that is dependent on the performance of both departments. Pay plans could be considered that would reflect the total combined performance of both departments. Another policy that would affect both managers’ compensation would be to sell all the parts over 30 days old to the service department. It would then become the responsibility of the service department to have the parts installed. The increased expense incurred by the service department would negatively affect the manager’s compensation.

A critical area of special-order parts that does not come to mind quickly in discussion is the supporting role the parts department provides for the body shop. Many times, a month can be made or lost in the parts department based on sheet metal sales to the body shop. A much higher percentage of parts is special ordered for the body shop strictly because of facility limitations. The body shop may very well dictate a process totally of itself, which may even be different if your body shop is on site or off site. In many cases it is the basic arrangements between the two departments that play a major factor in its success factor. There would appear to be more accountability and responsibility if one person within the parts operation is dedicated to service the body shop account. This way a relationship and bonding can be developed which is beneficial to both departments. At least one daily visit, if not two, are advisable. This way new orders can be accepted from the individual writing the estimate and an update can be given on pending orders. A specific time frame normally works well; then it is a predictable time that within reason can be counted on by all parties. As an example, maybe there is a visit at 9:00 AM and 3:00PM.

Naturally, the estimator is anxious to hear about the arrival of new orders in an effort to schedule and load the shop. Parts that are owed either for a vehicle that has departed or one currently in the shop is another area of conversation to take place during these visits. The body shop needs to be prepared to discuss these issues during the daily visits.

The parts department assigning one party to the body shop can reduce the amount of traffic and phone calls to the parts department from the body shop. Think about the amount of time that could possibly be saved by reducing the number of trips and calls to the parts department. Of course, both departments share the time saving. The parts person has the responsibility to upgrade the status of pending parts, receive new orders and place orders depending upon circumstances. The proposed arrival dates can change dependent upon the availability in stock and the availability in local warehouse, so communications are essential.

A brief visit to each technician by the parts person affords the sense of unity and communication on a first-hand basis. Should there be an incorrect part or an unusual part required the parts representative is right there on the spot.

On occasion, a part may not be available based on the appointment date. If this is the beginning of the repair process, one part missing may not be an issue and repairs can still proceed. However, if this is a return situation for a special-order part, communication at least a day prior is essential.

Many body shops will have a designated area for parts to be checked in, stored, and accounted for. The parts person should have the accepting party sign for all the parts delivered in an effort to reduce any future misunderstandings. If this were to be the technician assigned the job, the correct part received can be verified at this early stage.

The body shop will require one person to communicate with the parts person, at a minimum. If only one person is used, this party may be the estimator, the person scheduling work or the manager. Each body shop’s case will be different from the next since no two body shops are exactly the same. This individual should be prepared to turn over new orders that have a proposed start date, supplement orders, or owed orders on a daily basis. No matter what kind of order, share the proposed appointment date. Naturally it is not a perfect world; some days, verbal communication at the time of the visit may not be possible. In this case consider having bins or areas set up for new estimates to be picked up, new supplement orders that are required, and an area for updates on current orders. Every day the next day’s schedule should be checked in an effort to ensure that all necessary parts have been secured. In the unlikely event they have not, the parts person should be contacted during the next visit for clarification. If a vehicle is going to be released with an owed part, the body shop should communicate this to the parts department in an effort to have all parts billed out and accounted for.

Computerized special-order part communications are another way management of today’s fixed-operations uses to communicate and expedite special-order parts. With several vendors offering integration of special-order parts procedures on computer systems, dealerships are offered the ability to check status on the computer.  These types of procedures can be installed into any of the previous processes discussed in this document. In most cases, the parts status is updated in the special-order field upon the part being receipted in the computer system. This allows an advisor/manager/clerk to check status at any time. This process may or may not eliminate the need for all prior processes to be performed.

With today’s customer being more computer savvy than ever before, consideration could be given to utilizing a website to aid in the notification and appointment process for special-order parts. Creation of a page for customer access to check the status of their special order would enhance customer communication with the dealership. The page could contain the listing of all customer special-order parts for access by either name, repair order number, or a designated order number issued to the customer. It would be possible to also include an estimate of the time necessary for installation of the part so the customer can arrange for installation based on his schedule. The customer should have the ability to schedule installation through the website. This could be done by creating a link to the service department schedule with possible available times. After selecting an appointment time, the service department would verify the time by either email or phone. Each day either by printing a list of appointments or accessing the page, the service department would have access to the appointments scheduled.

Two important topics associated with special-order parts are the Customer Satisfaction Index (CSI) and Special-Order Economics. Customer satisfaction scores are affected by special-order parts. A vehicle returned to a customer to await the arrival of the special-order part will have to make a second trip to the service department to complete the installation if mobile installation isn’t a part of the dealership’s services. The way some CSI surveys are worded, and the way customers interpret the question asked, undoubtedly ensures that in many instances returned CSI scores will probably indicate the vehicle wasn’t repaired on the first visit to the service department. When dealership policies are not effective and/or not followed, communications breakdowns can cause a less than satisfying experience when parts are not expedited in a manner to meet the expectation set.

On the economics side, according to the manufacturer, it may be advantageous for the parts department to order the part or parts needed on a regular stock order, or something other than an overnight order. Many parts managers are astute wizards of expense control. If parts management is exercising policies to contain freight costs, handling costs, maximize obsolescence credits and buy parts the most cost-effective way, conflict can be created when the service department wants parts not in stock ordered the most expeditious way. According to the cooperation offered by the service department in getting parts installed, the parts department may be hesitant to cooperate in ordering parts the fastest way.

From the other side of the parts counter, the service department may be concerned with loaner or rental car expense, as well as rental or loaner availability to the customer. In some cases, considering the time it takes to get the vehicle into the shop, diagnose it and order necessary parts, the maximum days for manufacturer reimbursement for loaner or rental expense may expire.

So, it’s in everyone’s best interest to consider all the facts and develop a partnership to minimize the frustration every dealership faces with special-order parts.

In closing, the processes and procedures employed can be a major factor in your success or frustration. Every dealership is different. What works for one dealership may not work well for the next dealership. Choosing the right process, one that works for you, will be a factor on your customer satisfaction, customer retention, parts obsolescence, obsolescence returns and special-order parts return programs.

Written by David Dietrich

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