I believe that everyone of us has our own unique Management Style, whether a Parts Manager, Service Manager, Collision Manager, Sales Manager or Office Manager. This holds true to ownership as well in the Automotive Dealership.
Even though each dealership department requires a set of skills, ability, knowledge and experience, we all manage in a way that is reflected by our own individual personality. The way we lead, the way we think, the way we prioritize and the way we communicate is determined by our individual personalities.
Even though in some dealership departments we would want a specific "desired" personality, the Parts Department is rather unique. Unique in a way that in my opinion, seems to have one personality type that is similar, or most "predominant" in most Parts Departments today.
In other dealer departments, we may find an array of personality types, or "traits" leading to perhaps different management styles, but Parts Managers seem to have specific personality trait which may be different from other dealer departments with the only exception given to Office Managers and Comptrollers.
This doesn't mean in any way that it is a bad thing, it just simply means that Parts Managers, Office Managers and Comptrollers all seem to have similar Personality Profiles. Quite honestly, I believe it's a good thing when managing the dealers Number Two Asset in Parts and in the Office.
But there are some positives and negatives when the Parts Manager has a more "Cautious" approach to managing the Parts Department, or a more "Aggressive" approach. Especially when it comes down to what parts we may or may not have on our shelves.
In this issue of ACG "Smart Parts", we will explore the differences in personalities and how they may affect many areas of Parts Management. We will bring out the positive and the negative effects of the "Cautious" Parts Manager and the "Aggressive" Parts Manager.
Believe it or not, experience, skill, ability and knowledge do not necessarily determine the overall decisions made by the Parts Manager. In my opinion, no matter what personality profile we have, often times "Common Sense" is left out, or "swayed" due to our personality profile and/or our overall "Belief System"
It's time once again "Smart Parts" Managers to break it all down...
Here We Go!
In my opinion, our biggest enemy that we have as Parts Managers is ourselves. The most common personality trait that most Parts Managers have is that "inner" part of us that tends to doubt, overthink and predict the future. We tend to constantly think to ourselves..."What If this happens, or what if that happens?"...
Getting back to our topic on who we are as Parts Managers, whether more Cautious or more Aggressive, let's start by saying that most Parts Managers lean towards being more Cautious than they are more Aggressive.
It's just our nature to be that way and quite honestly, and as a Dealer, I would definitely want that in my Parts Manager. After all, and as mentioned, the Parts Manager is controlling one of the Dealer's biggest assets.
But as in anything, there is always a "risk and a reward" no matter how we approach our Management Style in the Parts Department. It all starts with our overall Parts Objectives and what matters to us the most.
Even if our dealer lays out their main Parts Department Objectives, it all seems to come down to Inventory Protection, Sales and Gross Profit. Unfortunately, one tends to be prioritized versus all the others, which all are equally important.
This is where we will start things off as we will break down the "Cautious" Parts Manager versus the "Aggressive" Parts Manager with the positives and negatives on both dominant personality profiles.
The "Cautious" Parts Manager Profile
Positive Personality Traits:
As I mentioned earlier, the "Cautious" Parts Manager tends to be more calculating, non-trusting, has to be black and white, over thinking, and the "analysis by paralysis" Parts Manager that will always tend to protect the dealer's asset by keeping obsolescence to a minimum, first and foremost.
They will also hold the line on Gross Profit Percentages, Expense Control, Asset Security, with a "Predictable" Performance Overall. This "Cautious" Personality Trait will also tend to be protective on rules and guidelines no matter what the situation may be, not wavering and not giving in.
These personality traits are comforting for the dealer especially with Parts Reconciliation between the Ledger Balance Inventory and the Controlled DMS Inventory. The "Cautious" Parts Manager is always a hero when these balances are met with some uplift each year.
The "Cautious" Parts Manager is also very "expense minded" and may even be "over critical" on purchases and always trying to "save a buck" and not buying or spending were unnecessary. Again, making the dealer feel much more comfortable with the Parts Department.
Negative Personality Traits:
Even though all the above is great when we think about protecting the dealer's asset, there are some adverse effects if you are a "Cautious" Parts Manager. If you are living life on the Service side of things, the "Cautious" Parts Manager may potentially build walls between the two departments.
Keep in mind, I'm not saying if you tend to be more of a "Cautious" Parts Manager, that you don't have a great relationship with the Service Department. It just simply means that the "Cautious" Parts Manager will definitely weigh the "pros and cons" before making their decisions.
In Service, no two days are the same as customer issues happen constantly where time is of the essence as time is a "perishable inventory". Parts Supply Chain Issues, Backorders, VIN Specific Parts and Stock Out Situations are just a few that can all tie vehicles up in the Shop.
If we are a "Cautious" Parts Manager, we may still hold the line no matter what the cost even though we are not facing the "Front Line" with our customers personally. The Service Manager and the Advisors are the ones facing the conflict, not the Parts Manager.
Another negative to the "Cautious" Parts Manager is that they tend to be more concerned about Obsolescence Protection than they are "First Time Fill Rates". In other words, and even if sales demands dictate that we should have more of the right parts, the "Cautious" Parts Manager chooses not to stock these parts for various reasons.
Maybe the part is too expensive, maybe it will become obsolete, maybe it won't sell, and we will be stuck with it. After all, we can always get these parts on an "as needed basis" if they need it and the vehicle is here.
What the overly "Cautious" Parts Manager does not realize, (or care about) is that they are tying up a lift for hours waiting or chasing parts that we could have had and increased shop productivity on the "first visit" to the Parts Counter.
Both departments lose on these situations where the "Cautious" Parts Manager "chooses" Obsolescence Protection over obvious demands that are not filled on a potential first time basis.
Even though parts demands are met, the choice is made to either not stock the part, or lower the Stocking Levels, which lead to "stock out" situations and more down time chasing or ordering parts we should have had in the first place.
The "Aggressive" Parts Manager Profile
Positive Personality Traits:
First and foremost, the "Aggressive" Parts Manager always works hand-in-hand with the Service Department. No matter what the situation, no matter what the need, the "Aggressive" Parts Manager wants in on the action.
Although, I am not saying that the "Cautious" Parts Manager doesn't work well with the Service Department as I mentioned. It just simply means that the "Cautious" Parts Manager tends to hesitate on their decisions more than the "Aggressive" Parts Manager.
Meaning that the "Aggressive" Parts Manager will do whatever it takes to have or find the parts they need to fill the customer demand, no matter what the cost. They will also be more aggressive on their Stock Order Recommendations, if of course the math is set up correctly on the DMS.
They are not usually concerned about the cost of the part or having the proper Stocking Levels even higher than recommended. The "Aggressive" Parts Manager also seems to report Lost Sales at very high levels to increase demand and First Time Fill Rates.
They may also be more aggressive on pricing strategies to achieve the desired sales and gross profit levels, not as concerned about customer perception, especially with wholesale clients.
Lastly, on the positive side, the "Aggressive" Parts Manager tends to share more information, or "train" their Parts Staff more effectively. They don't hold back challenging their team to reach higher levels in their careers, delegating and trusting more than the "Cautious" Parts Manager.
Negative Personality Traits:
First and foremost, the "Aggressive" Parts Manager tends to have more Parts Obsolescence than the "Cautious" Parts Manager. The "Cautious" Parts Manager tends to put Obsolescence Protection as their main priority, which is a good thing for the dealer.
Another negative with the "Aggressive" Parts Manager is Parts Department Organization as their Parts Departments tend to look "sloppier". Parts on the floor, less security, Parts Reconciliation Variances with Accounting, lack of proper bookkeeping and so on.
The "Aggressive" Parts Manager may also lack accountability as far as price overrides and are less consistent on Pricing Policies, even though they may be sales and profit minded. Parts employees may also be allowed to make decisions that they should not be making.
Another negative for the more "Aggressive" Parts Manager is the lack of bin counts periodically to insure a more accurate inventory count throughout the month and year. Meaning that there may be less focus on the details that the "Cautious" Parts Manager may have.
Lastly, and due to fact that they tend to get the part at whatever the cost, they may tend to have higher Semi-Fixed Expenses on shipping costs, buying at a higher price and even higher Personnel Expense. The "Aggressive" Parts Manager seems to want to be on the front line and spend less time in their office drilling down the numbers.
The Bottom Line:
In my opinion, we need a Parts Manager with both Personality Traits in various areas. If we are a "Cautious" Parts Manager, our main priorities may include Obsolescence Protection, even though it may highly impact First Time Fill Rates.
In other words, if we are more focused on protecting from obsolescence, we would rather order the part instead of having the part on the shelf. Even if the part meets all Phase-In Criteria, we will rather order the part when needed, thus lowering Service Cycle Times.
Whether it be due to the cost of the part, or we may feel that we don't want to be stuck with the parts and adding to obsolescence. The "Cautious" Parts Manager will always protect the inventory first and worry about getting the part later if needed.
On the other hand, the "Aggressive" Parts Manager needs to learn to be more organized and pay attention to the details. Even though they may tend to be more willing to cooperate, there are added costs with expenses and accruing more obsolescence in the long run.
On an added note, there are many companies out there that specialize in controlling obsolescence or "Idle Inventory", but at the expense of lowering First Time Fill Rates. In my opinion, anyone can protect against obsolescence if we only stock the fast-moving parts and order everything else when needed.
It never fails, whenever I see a Parts Manager that is primarily "Obsolescence Protection Minded", the First Time Fill Rates tend to be lower. They are afraid to take a chance on adding to that obsolescence and the Service Department and ultimately the customer suffers.
More importantly, the dealer suffers as Service Productivity is lower and the worse part of it is, they will never see these Missed Opportunities on any Financial Statement. What could have been will not show as we will just break down the Financial on what is seen and not the unseen effects.
Vehicles could be tied up more in the Shop and resulting in Productivity going down, just to protect from obsolescence. Both have to be a priorities, Obsolescence Protection and First Time Fill Rates, they go hand in hand.
Although, and if we tend to be more of an "Aggressive" Parts Manager, the lack of attention to detail could cost the dealer highly in the Inventory Asset Department. After all, Parts Reconciliation is never a problem until it becomes a problem.
Much like OSHA, they are never a problem until they show up and we are in violation of many Safety Standards, and the fines are then levied out. The "Aggressive" Parts Manager has to learn their "total" Duties & Responsibilities of running the Parts Department.
Finally, don't be predominantly one or the other as far as being a "Cautious" Parts Manager or an "Aggressive" Parts Manager. We have to come out of our "Comfort Zones" and be the "Total Parts Manager".
If you want to learn more about ACG Smart Parts "Eight Habits of Highly Successful Parts Managers", visit our website @ www.smartpartstraining.com, or...just pick up the phone and call me at :
(786) 521 - 1720...After all, not knowing is not worth not "fixing" it...
No comments:
Post a Comment