On the Subject of Special Order Parts

Chuck-WenzlerWouldn’t it be nice if all the parts that are needed to repair and maintain vehicles were at our fingertips on a daily basis? The technicians wouldn’t complain about the parts department not having parts, customers would not have to return to have a part installed, and there would never be a need for a special order parts location in the parts department. But we don’t live in a perfect world. Even the parts distribution centers don’t have all the parts on any given day.

 Special order parts represent a few different things, depending on how you look at it. To the parts department, they represent additional income. Non-stocked parts are ordered and then sold to the customer, generating income and gross profit. But they also can represent an expense when they are not installed and just sit on the shelf. Parts that are special ordered and never installed represent one of the largest contributors to parts obsolescence.

 To the service department, each part on the special order shelf represents labor that is not being charged to install that part. When special order parts are not getting installed, the technicians are not generating flat rate hours installing those parts.  Ultimately, the service department is then missing out on labor sales and gross profit.

 Studies have shown that if a part has not sold in 6 months, it has a 25% chance of selling in 12 months. If it hasn’t sold in 9 months, it has a 15% chance of selling in 12 months, and if a part doesn’t sell in 12 months, it has less than a 2% chance of ever being sold. Because many special order parts are generally non-stocked specialty items, it’s easy to imagine that they can quickly turn into obsolescence and an expense if not handled quickly and properly.

 There are many different processes that can be used to minimize the chances of special order parts becoming obsolescence. None that I have experienced are 100% effective, but they can and do work. But not every process is for everyone. Every facility has its own unique needs, personnel, and philosophies. The key is finding one that best works for you in order to get the customer to come back in to have the part installed.

 All successful special order parts processes begin with communication. There must be a sound communication process in place that informs the parts advisors and service advisors as to the status of special ordered parts, either manually or electronically. Many DMS systems have the ability for the service advisor to track the status of special order parts. Some dealerships still utilize manual tracking methods. Without a proven special order parts tracking tool, there is no way of properly communicating to the customer when to come in for the installation of the part. I have witnessed too many scenarios where a part has sat on the special order parts shelf and NO ONE has contacted the customer to return for installation because NO ONE was informed that it was there. Imagine the impact that can have on customer satisfaction.

 One method is to send customers a post card that their part has arrived. Personally, I have not seen that process used in many years, but it may still exist in some dealerships. The postcard would say the special order part has arrived and the customer needs to come in to have the part installed. If they didn’t in a certain amount of time, the part would be sent back. Problem with this process is there generally is no follow-up with the customer, post cards would be treated as junk mail and amazingly enough, sometimes the customer never even knew that parts had been ordered for their vehicle. Then the service department would get the call from the customer to either schedule the appointment or explain to the customer what part was ordered and why.

 The parts department can take an active role in getting the customer into the dealership for the installation of the part. There are some dealerships who have the parts counter people contact the customer by the customer’s preferred contact method –phone, e-mail, or text–to have them come in to have the part installed. Again, sometimes the service advisor does a good job of informing the customer that a part is needed to be special ordered so the repair can be completed. Sometimes the service advisor does a very poor job of informing the customer of the need to special order a part and the customer leaves not knowing the repair is incomplete. Either way, the call generally has to be transferred to service for an explanation and to schedule an appointment. Sometimes the customer gets through to the service advisor, sometimes not, either being put on hold or having to leave a message, which begins the game of phone tag.

 Another method is to have the parts department inform the service department that the special ordered part has arrived and the service advisor is tasked with contacting the customer to arrange a time to come in and have the part installed. This is not an easy task for the service advisor as their days are full with all the other tasks they face on a day-to-day basis, and quite often this process is not followed as well as it was designed.

 If a dealership has a service Business Development Center (BDC), they could be tasked with contacting and scheduling a time with the customer for the installation of the part. The parts and service departments must communicate closely with the BDC as to what the part is and the amount of time necessary to install the part. Even with good communication with the BDC from parts and service, this may still require the BDC to transfer the call to the service department for further explanation.

 Personally, my preferred method is to schedule the appointment for the installation of the Special Order Part prior to the customer leaving the dealership. This accomplishes a couple of things. First, the customer is made aware of the need of a non-stocked part. No surprises. Secondly, it simplifies the communication process between the dealership and the customer. Let me use the following as an example:

 I believe it would be safe to state that in most cases, 80% or better of all special order parts arrive to the dealership in 3 to 5 working days or less. At the time of the Active Delivery, the customer is informed of the need to special order a part to complete the repairs. During the Active Delivery, or in a conversation with the customer prior to the Active Delivery, an appointment is scheduled for the customer to return. If a service advisor has 2 customers per day that require a return trip to have a special order part installed, and they work a 5-day week, that would be 10 customers that would need to return for the installation of the part. The service advisor would then schedule an appointment for the customer to return in 5-7 days for the installation of the part. The dealership would need to have a solid process in place to inform the service advisors as to the status of the special order parts. Since the appointment is already made, the customer would only need a reminder of their appointment for the installation, which would be 80% of the time. This can be done by phone, e-mail, or text. For the customers whose parts do not arrive in the 5-7 day window, a call would need to be made to inform the customer as to the delay, and either reschedule the appointment or leave a message that they will be contacted upon its arrival. So I ask which is easier, to make a minimum 10 phone calls per week to arrange appointments for the installation of a special order part? And I say minimum, because more often than not, a game of phone tag ends up being played. Or to make 2 phone calls per week to inform the customer of the delay and to reschedule the appointment?

 Many service advisors will balk at this process, stating that they are never certain as to the status of the part, and don’t want to commit to the timeframe of the parts arrival. That is why a solid process is in place for the communication of the status of the special order parts. I’ve asked hundreds of service advisors if they believe that generally speaking 80% or better of their special order parts arrive in 5-7 working days, and overwhelmingly, the answer is yes. Now, there are exceptions, but that is usually well communicated in the dealership and that would be for backordered parts, generally associated with service bulletins, product enhancements, field notices, and recalls.

 Obviously, the best way to be certain that special order parts get installed is to keep the vehicle until the part arrives. This can cause an inconvenience to the customer unless they can be provided with alternate transportation, either a rental vehicle that is provided by the dealership or manufacturer or a loaner car. Having the ability to provide this to the customer can greatly influence customer satisfaction and Fixed First Visit scores. It also helps to keep parts from stacking up in the special order bins.

 Then there are the instances where the customer has changed his or her mind regarding having the special order part installed. Maybe the customer no longer owns the vehicle, or the customer has moved away. These situations happen, and unfortunately, not much can be done other than try to find another outlet for the part.

 Then there are the mysteriously ordered parts. These are the parts that the service advisors order when they are diagnosing vehicles on the service drive, which they should not do. Or the parts technicians order when taking a guess at what it might take to fix a vehicle. Both of these scenarios can create issues as they more than likely will cause the customer to make an unnecessary third trip in to have the vehicle repaired, because the diagnosis that took place and the part that was ordered generally doesn’t correct the condition. This can end up resulting in poor CSI, and in a customer pay situation, unnecessary cost to the customer. If the part doesn’t get installed, it may end up back on the shelf and eventually turn into obsolescence, creating an additional expense to the parts department.

 These methods, and others, can be very beneficial in keeping special order parts from going from profit generator to an expense. But the key to successfully handling special order parts lies in having a rock solid communication process, both internally and externally. It is critical to the success of the process to keep the customer and the service team informed as to the status of special order parts.

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