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I. Introduction

Situations involving special order parts can be very frustrating for both dealership employees and customers.

The words “special order parts” bring to mind a number of things for dealership employees, according to their job and the department they work in.

  • A Service Advisor will have to be the bearer of bad news to the customer.
  • The vehicle will have to be held over.
  • The customer will have to come back.
  • The Technician will lose time.
  • The Parts Department will have to place an order and wonder if the part will really be used.
  • The Service Manager and Dealer think of the customer’s response to a fixed first-visit question on a CSI survey.

The dealership employees aren’t the only ones who have thoughts on special order parts. The customer may roll thoughts over in their mind as well. And sometimes it’s because of what’s happened before.

  • “How long is it going to take this time to get my car back?”
  • “Will they really call me, or will I have to call them and be placed on hold for a long time, just like the last time?”
  • “When in the world am I going to be able to get in and get my car fixed?”

As frustrating as the question is, as frustrating as this is for all of us, are there some ways we can minimize the interdepartmental confusion and serve our customers better?

There are “ways” as opposed to a single “way” to handle special order parts.

Within the pages of this document, there are strategies designed to help you employ tactical ways of handling special order parts. There is not just “a way” to handle special orders. There are “ways.” The “ways” covered have been used by various dealerships. The intent is to help you establish “ways” that will work for you. The types of orders in this document are:

  • Service Department Special Orders
  • Internal Special Orders

We will examine ways to improve communications between parts employees, service advisors, technicians, and customers.

It’s always better to have a strategic way of approaching a complex issue versus shooting from the hip. With that thought in mind, there are various considerations for developing a service department special order parts system.

II. Considerations for Developing Special Order Parts System

A major part of the frustration associated with special order parts for the Service Department stems from multiple priorities and a lack of communication. There are questions to be answered:

  • Is the vehicle drivable?
  • Is the part or parts in question safety or convenience related? For example, is it summer and do we need air conditioner parts, or, is it winter and do we need a heater part? Do we have a brake problem, or is it a carpet that doesn’t fit just right?
  • How badly does the customer need to have the vehicle returned? Take this to heart—do we really know how difficult it is for the customer to give up their vehicle for a day or longer?
  • What kind of commitment has the Service Advisor made to the customer? How must the part need to be ordered to meet the needs of the customer and the commitment made by the Service Advisor?

Parts are sometimes ordered without communication between the Parts Department and Service Advisor. This can cause problems for the Service Advisor and result in losses for the Parts Department in the form of obsolescence credit, stock order allowance/discount, and unnecessary freight charges.

The customer often feels no obligation to return for installation either because the part is a nonessential item or there is no urgency to do so. The need to address this has been a topic of discussion for many years. On customer-pay special orders, consideration should be given to charging the part or a portion of it to the customer at the time of ordering. Parts cannot order without documentation of payment. Warranty special orders have even less urgency to the customer. Many agencies believe that providing a loaner car until installation is completed is the answer. Deposits on warranty parts are also a means of ensuring a return by the customer. Another option is the removal of items not essential to the vehicle’s operation such as trim during the initial service visit.

A system is needed that addresses the needs of the customer, the Service Department, and the Parts Department. Again, there are “ways” versus “the way.” To get the best results, the management staff of the Parts and Service Departments should work together to implement a policy for the employees to follow.

III. Process for Pre-Scheduling Special Order Parts

Customers are sometimes required to make a return visit for a special order part. A way to address this issue is to pre-schedule an appointment for the customer’s return.

Pre-scheduling requires coordination and execution on behalf of both the Parts and Service Departments. A key to success is for the Service Advisor to obtain a commitment from the customer regarding a convenient date and time for them to return for installation. This commitment can be obtained during the call to inform the customer that their vehicle is completed or upon the customer’s arrival, depending on your active delivery system.

Establishing an understanding of all the different types of orders that are available and the days on which they are ordered and received is essential. For example, there may be a stock order, a daily order, and a critical order—the verbiage and time frames may differ depending on the manufacturer. The Parts Manager may wish to educate the service management and advisory staff in an effort to avoid confusion on the details of each order type. The entire pre-scheduling process may be performed manually or through the computer system if the computer is capable of handling this function.

Let us begin first with the manual transition. Upon determination by the technician that a part must be ordered, the technician may hand-carry the appointment card to the advisor for a date to be completed. The advisor enters the completion date on the card and returns it to the Parts Counter for processing of the order. An order is not placed until the advisor informs the Parts Department of the appointment date. Documentation is advisable to eliminate the “he said, she said” syndrome. This date should have already been agreed upon with the customer and advisor.

The appointment needs to stand out on the appointment log, perhaps with a yellow highlight. One consideration at this point is the creation of a repair order for the purpose of charging the special-order part. This technique is most applicable to the pre-scheduling process because a time and date have already been determined for installation. As well, there is a repair order already generated prior to customer arrival which would expedite installation. A minimum grace period of at least one day should be considered in case an unexpected delay is encountered. If all appointments were scheduled on the computer, then perhaps highlighting this appointment on the computer would be a way. Every day the advisor should look at the next day’s appointments to ensure that all parts have been secured. In the unlikely event that there is one that no notification was received from the parts department, the advisor should contact the parts department for clarification. It is possible that one could fall through the cracks; however, if there is a check and balance in both the parts and service departments, embarrassment should be minimal.

Naturally, from a communication standpoint, the Parts Department has its responsibilities as well. Once the order form with the appointment date has been received, the order should be placed to match the appointment date. If you use the color-keyed special-order form, reserve one copy for the alphabetical file and one copy for the appointment date file. As the parts are received, the copy pulled from the appointment date box may be given to the advisor for receipt verification. The alphabetical copy can remain until the part is secured for installation. Each day the assigned party in the parts department should check the next day’s appointment box to ensure all copies are gone, which would indicate that all parts have arrived for that day’s appointments. If a part was unable to be obtained, the advisor should contact the customer to select another workable date. Should the part be involved in a back-order situation, a commitment will need to be made to follow up with the customer, by phone, email, or whatever method of communication is selected.

Another good practice, even though an appointment was pre-scheduled, is to contact the customer one day prior to the appointment. Naturally, the purpose is to reconfirm. In the event of a no-show appointment, every effort should be made to contact the customer by phone, email, pager, or whatever means was agreed upon. This minor step can have a heavy impact on the special-order parts in the bins not picked up. A meeting with all parties involved from both departments is critical for success prior to the technique being implemented.

In many cases, the special-order parts orders are set up in the computer by themselves. In this case, when the part is receipted, the status is updated from “ordered” to “received.” Now a service advisor or parts person can inspect the status at any given time with little obstacles in their way.

As with any technique or concept, there can be assets and liabilities. From an asset standpoint, here are some of the reasons for setting an appointment at this time:

  • Setting an expectation level for the customer
  • To avoid the process of receiving the part and then contacting the customer
  • Less time between the order and the installation
  • An improved chance of getting the customer back in for the installation

There could be resistance to installing this process due to these possible liabilities:

  • The fear of a breakdown in communication.
  • The parts department’s failure to notify the service department of referrals and backorders.
  • The part didn’t show up for one of the above reasons and the customer showed up because nobody called them.

An effective game plan with all party’s commitments is essential. As the saying goes, if we do what we have always done, we will continue to receive the same results.

IV. Service Advisor Contacts the Customer for Installation When the Part Arrives

One of the more traditional ways to handle the special-order part process is with an advisor contact upon part arrival. After the order is placed, the advisor normally contacts the customer to inform them of a part being placed on order. This notification normally takes place at the same time a call upon job completion would be made and or at the time of pickup. With this technique, it would be advisable to have a stamp that indicates that a part has been ordered. Of course, the stamp or sticker would be placed on the customer’s copy.

From the parts department perspective, a party within this department is responsible to notify the service advisor that is responsible for the order when the part arrives. One way that this can be done is using the standard 4 or 5-part special order. One of the copies goes to the advisor for notification. Another way could be using computerized forms if the special-order part system is utilized with the computer system. This screen is accessible to most individuals and the advisor can print a copy at their will.

This all leads up to the customer notification upon part arrival. The preferred method by many customers is a personal phone call to a daytime phone number for the customer. However, depending upon the individual, a pager number or email address may be considered. Just as reassurance, a postcard may be mailed by the parts department. As is the case in most instances, the process only works as well as it is followed and inspected. A similar focus on special order parts on the shelf is advisable as many dealerships focus on open repair orders. It is not abnormal for an open repair order list to be given to an advisor daily and an update expected at the end of each day, if not daily then weekly. Why could one not expect the same from the special-order parts bin?

V. Parts Department Contacts Customer for Installation

Another of the more traditional methods to handle the special-order parts process is to have a Parts Department employee contact the customer. The initial ordering process is very similar to the Service Advisor contact technique. After the order is placed, the service advisor contacts the customer to notify them that a part is being placed on order. As in the prior technique, this notification takes place when the service advisor contacts the customer upon job completion and again at the time of pick-up. It is still suggested that the customer copy be stamped or a sticker affixed to indicate to the customer that a part has been ordered.

As with the previous technique, the parts department notifies the service advisor responsible for the order when the part arrives. Again, the standard 4 to 5-part special order form may be utilized. A copy would go directly to the service advisor. The computerized form may also be utilized in this method if the computer is being used as part of the special-order part system. A printout of the screen using a slave printer or the generation of a report by an advisor can be used. Access must be given to this special-order parts screen to the service advisors.

The customer notification process differs from the others previously reviewed. Upon part arrival, someone from the parts department will be charged with the task of notifying the customer. Again, the preferred method is a personal phone call to a daytime phone number for the customer. A pager number or email address may also be used. If an answering machine is reached during a daytime phone call, a postcard should be mailed as a backup. It would be wise to send a postcard whether someone has been contacted or not.

The parts department has the part or parts in their inventory and will try to get the customer back to the dealership to get them off the shelf. If cooperation between parts and service is strained, the parts manager will ensure that customer notification is done. The parts department will get contact made to avert sending the parts back within 30 days if the manufacturer offers a return program, adds to idle inventory, or uses earned obsolescence credit to return the part. The liability of using this process includes a shortcoming in customer communications. If a customer is contacted by phone, the first request to follow is for an appointment time. This will usually result in the parts department transferring a call to the service department; another transfer may be necessary to the appropriate service advisor, the service advisor may be assisting others or not be available, or the phone may not be picked up at the appropriate time. If the parts department is bearing the responsibility of customer notification, there is the probability the service advisors aren’t doing an adequate job of letting them know the parts on order. The service advisor originated the transaction with a repair order, and it is only logical to assume that’s where it should end. There can be a lower standard of customer satisfaction.

VI. Special Order Part Installation at Customer’s Home or Office

There is also a non-traditional process being adopted for completing the specially ordered parts cycle, and part installation at the customer’s home or office. This is a growing trend throughout the country. Instead of having the customer come to the dealership for installation, the service department goes to them. This technique can result in higher levels of customer satisfaction and at the same time help to reduce return visits to the service department by customers requiring additional parts installation.

One of two appointment process options requires the service department to schedule mobile installation after receiving the part. Upon receipt of the specially ordered part or parts, it will be necessary for the service advisor to contact the customer and secure specific information from the customer. The date and time of the appointment must be set with a number of factors in mind. The location of the car at the time of the appointment is obviously of prime importance as well as the location of the keys for use by the mobile technician. We must also verify the phone numbers for both the day prior to the appointment and the day of the appointment for effective communication with the customer. The appointment is scheduled on the mobile service scheduling system. Prior to the visit, the part is inspected to ensure the accuracy of ordering and quality. The customer is then contacted the day prior to the appointment to confirm all arrangements for installation. On the day of the appointment, the customer is contacted before departure from the dealership. Communication is essential to avoid unnecessary delay or even cancellation after the mobile unit arrives at the agreed-upon location. Policy and procedure guidelines for warranty replacement parts must be adhered to as outlined by appropriate documents or manuals. After completion of the installation, the mobile technician must acquire the customer’s signature on the repair order and return it along with the defective part. Warranty repairs require no reimbursement by the customer; however, any customer-paid transactions should be prepaid before installation of the part. This may be done either by having the customer pay for the entire repair before leaving the dealership upon ordering or by acquiring a credit card number and billing the repair upon return from installation.

The other appointment option is the pre-scheduling of the installation before the customer’s departure from the initial vehicle pick-up. All of the steps above such as the acquiring of all necessary information, communication steps preceding the actual installation, and the following of all applicable policies and procedures should be followed. The obvious variation is that the appointment is set before the departure of the customer when the order is generated so that no call is necessary upon receipt of the parts. The parts department is responsible to schedule the mobile service vehicle on the day of installation based on the information concerning the appointment indicated on the special-order form. Contacting the customer, the day before and the day of the appointment can become the responsibility of the service advisor that initiated the transaction or a designated parts employee responsible for coordinating the mobile vehicle service.

As with any of our previously discussed processes, there are specific assets and liabilities to be considered before developing mobile service and special-order parts installation. The current capacity issues in many dealerships have given credibility to alternative means to reduce traffic without diminishing revenue. Installing parts through the use of mobile service will reduce the number of vehicles returning to the service department thereby freeing up appointment time. It is feasible that this approach may also increase sales of maintenance and light repair items by performing them on location. From the perception of the customer, this represents an increased level of service provided by the dealership which could result in improved customer satisfaction scores. Careful consideration of this form of service must also include a review of the potential pitfalls. The most obvious of these is the additional communication required to ensure consistent performance. Contacts with the customer are increased by having to verify the location of the vehicle and the specific times it will be there. This is in addition to the required contacts for notification and appointment setting. In order to perform mobile installation, a vehicle with the proper equipment and tools is an obvious necessity. The expense associated with this as well as the manpower requirements should be calculated and weighed against the anticipated return. If the installation of warranty components is done, a higher skill level may be required, thereby increasing the personnel expense incurred.

VII. Internal Special Orders, New & Used Car Departments

Another process that requires examination and is a source of frustration for all departments within the dealership is the special-order parts process for new and used cars. Without good procedures and communication, this aspect of special-order parts can create numerous internal problems for all departments. Parts can get ordered without stock numbers. The salesperson asks to have it put under his name and to see “him” when it comes in, then gets lost in the shuffle. Parts often get ordered without repair order numbers, resulting in a billing problem. Many times, the unit may be sold and delivered prior to the part being received, and the order is not updated to reflect that ownership has been taken. The part will be received and not charged to the unit, causing the charges to not be reflected in the deal. When the part is received and the customer hasn’t complained of a problem, the sales department probably won’t notify them to avert a negative CSI response. As a result, the parts department may be asked to return the part and have to incur handling fees or use obsolescence credit.

A way to consider the needs of the sales department, parts department, and the purchaser would be to charge the part to the unit at the time it is ordered. The part should be charged on a repair order or counter invoice, whichever is applicable. If the part is charged to a repair order, it should then be closed. According to the dealership’s preference, the labor may be charged in advance, ensuring that all pending charges are levied against the unit. Consideration should be to never order a part without a stock number, the person’s name requesting the part, and a repair order or counter invoice. When drafting your own policy, it should be made clear how internal parts orders must be authorized before placing the order.

Any policy should be specific in outlining the responsibilities of each department in the processes adopted. Sales department responsibilities should include all authorizations relating to the sale transaction and billing considerations. As well, the sales department should provide a report of sold units requiring special-order parts, including the stock number with the new owner’s name and address. This would apply to all vehicles delivered prior to receipt of the part/parts as well. This report should be provided on no less than a weekly, if not daily, basis. Communications and special-order procedures would work better if a daily report were generated. The parts department is now responsible for converting the special-order information from the stock number to the new owner’s information. Depending on the notification process being utilized in the store, the customer is contacted upon receipt of the parts. This can be done within the parameters established for special-order parts, whether the service advisor notifies the customer, a specified parts employee, or an arrangement for mobile installation. The service department must also be supplied with the necessary information upon the part’s arrival. Depending on the process, the service department must contact the customer to set an appointment for installation. If notification is to be made by a parts employee, an appointment must be established with a service advisor. Mobile part installation would require the service department to contact the customer according to the mobile installation process previously outlined.

There are benefits associated with the utilization of this process as well as some potential liabilities. This process eliminates, or at least minimizes, the need for involvement by the sales staff in the notification and appointment processes. Due to the lack of a defined role for the salesperson in handling specially ordered parts on new and used cars in many dealerships, confusion often follows. By turning the process over to the service and parts departments that already have a defined method for handling special order parts, we can eliminate that step. This should also help to minimize turnaround time from order to installation. Another advantage is to begin communication between the advisor and the new customer, which will begin relationship building. Much like the often-attempted practice of introducing new and used car customers to service, this will serve to relax their apprehensions about future transactions. Levels of customer satisfaction would be enhanced through effective customer handling. The issues of internal documentation and billing concerns are also addressed by billing parts to the repair order when the special order is generated. In some instances, it may also be appropriate to bill labor charges that will be incurred at installation. This will allow the office to close deals completely in an expedient manner to properly address sales commissions. The liabilities remain much the same as with many of our previously discussed processes. Communication breakdowns can occur. Improper transfer of stock numbers to customer names and addresses may make it difficult to determine who the part was ordered for and increase parts on the shelf. The turnaround time from order to installation may be extended due to a number of reasons. There may be a perception of a lower priority because the origin of the order was internally driven. The advisor may not have been involved with the order and be unfamiliar with the need for the customer’s concern. The advisor may also delay contacting the customer until his schedule is less busy, assuming that the expectations of the customer are less urgent because he accepted delivery without the part.

VIII. Compensation Considerations

To emphasize the importance of ensuring the quick turnaround of special-order parts, incorporating various incentives or penalties within the pay plans of service advisors and fixed operation managers can be a viable approach. These 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 the CSI bonus level. To be effective, only measurable data on special order performance should be used.
  • Other considerations 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 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.

X. Computerized Special Order Part Communications

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 the status of the computer. These types of procedures can be installed into any of the previous processes discussed in this document. In most cases, the status of the parts is updated in the special-order field upon the part being received in the computer system. This allows an advisor/manager/clerk to check the status at any time. This process may or may not eliminate the need for all prior processes to be performed.

With today’s customers 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. The 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 the 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 E-Mail 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.

XI. CSI and Special-Order Economics

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, communication 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 in the most cost-effective way, conflict can be created when the service department wants parts not in stock ordered in 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 expenses, 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 a loaner or rental expenses 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.

XII. Conclusion

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 have a factor on your customer satisfaction, customer retention, parts obsolescence, obsolescence returns, and special-order parts return programs.

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