Monday, November 7, 2011

Dave's Eight Habits to a Successful Parts Operation

                       Smart PartsTM
            "Eight Habits Program"

  1. Fundamental Beliefs: The “core” of the Smart Parts “Eight Habits” Program. It all starts with an honest DMS reporting system. Proper data entry into the DMS System will provide essential information for the highly successful Parts Manager. Learn how to make your DMS system work for you and better manage this vital information.

  1. Parts Definition of Terms: Proper reporting in the DMS System can’t happen without a proper Definition of Terms. What is a Lost Sale? Does my staff have the same definition? Am I posting Emergency Purchases correctly? Am I receipting Customer Orders as Stock Orders? These and many other important questions are defined in this important “Habit”.

  1. Goals & Guidelines:  Every successful Parts Department has clearly defined, written goals in order to be successful. In this segment, we will review the latest NADA and Industry Guidelines in order to set attainable and “crystal clear” goals.

  1. Proper Set Ups & Controls: When was the last time you reviewed your Phase-In/Phase-Out Controls? How about your Days Supply Set Ups? Do you have the proper “Source” Set Ups? Are they current to your manufacturers Stock Order Programs? These modifications are crucial to the success AND liquidity of the Parts Inventory. This “Habit” will open the door to being “Obsolescence Free”!

  1. Return on Investment: In most automotive dealerships, the parts inventory is the second highest asset. In this segment, we concentrate on your parts inventory “True Turns”, not just the “Gross Turns”. How is your dealers’ parts inventory working for them? Is YOUR inventory turning at least FIVE times a year? If not, here’s where you can!

  1. Controlled Obsolescence: Many Parts Managers fight this “Monkey on the Back” with little success. Manufacturers’ accrual amounts never seem to be enough to overcome this obsolescence burden. In “Habit #6”, we will not only develop a plan to ELIMINATE this burden, we will also implement a plan to stop this burden from ever coming back!

  1. Parts Profitability: Latest industry guidelines indicate that the overall Parts Gross Profit Percentage should be approximately 35% - 37% combined AND a Customer Pay Gross Profit Percentage of at least 42% - 45%. What’s YOUR number? In this segment, we will learn how to properly implement a pricing structure that is not only competitive; it will “target” captive items as well to give us an overall profit percentage within current guidelines.

  1. Service Shop “Parts” Productivity: The average automotive dealership LOSES approximately 8%-10% of their Service Shop Productivity by NOT having the “Right Part the FIRST Time”. In our last segment, we will reduce that “Lost Time” by increasing your “First Time Off Shelf Fill Rate”. Technicians end up having to order the parts and push the vehicle out of their bays, only to bring it back in at a later time to complete the repairs. How much time do YOUR techs spend moving vehicles in and out of the shop because they didn’t have the parts? Remember…TIME is a perishable inventory and latest industry guidelines dictate that we should be providing the parts on “first visit” at least 75% of the time. This is measured by “Stock Order Performance” or “Sales From Stock Ratio” and NOT “Level of Service” or “Off Shelf Fill Rate”! What’s your number?
Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM.  Dave can be reached at Cell 786-521-1720 or E-mail at Vist our Website at   

Wednesday, November 2, 2011

Parts Marketing Strategies 2011 - Part Four

  Marketing our products and services with today's "social media" couldn't be any easier AND at a much lower cost. If our "foundations" have been set with the right people, process and pricing structures, we can now prepare a marketing strategy that will give managers more exposure as well as keeping more customers coming back to your dealership.

  Most, if not all dealerships have their own website that advertises their products and services, but once the website is set up, it really just becomes a newer, more modern form of the "yellow pages"! People only go there when they have a specific need or to find out some basic information. Some customers may use the website to schedule an appointment for  service, but other than that? successful is the website? 

Better are we measuring the success of that website as a marketing tool? I'm sure the website looks great, lots of nice pictures of the dealership and staff, pictures of vehicles, directions to the dealership, etc., but effective is the website in YOUR overall marketing strategy.

  In order to be successful in today's market, your "strategy" must begin with your customers email addresses. In most dealerships today, customer email addresses add up to less than 25% of the total customer base contact information.

 Even though this may not be a surprise to most, but email is one of the most desired method of contact and provides one of the best forms of advertising at a very low cost. There are also many internet based companies that charge very reasonable monthly fees to market your products and services. 

These social media websites allow dealers and managers to design their very own E-Newsletter to their customers on a regular basis, just as you are reading now in this "Smart Parts" E-Newsletter! 

  By designing your own marketing E-Newsletter, you are able to keep in touch with your customers on Service and Parts Specials, market accessories, dealership and community events, etc. Another direct benefit to the Parts Manager is it's another outlet to maintain active wholesale accounts as well as marketing obsolete inventory. 

Most dealers today spend more time and money on gaining new customers instead of keeping the ones they have. The average dealer customer base is over 10,000 customer names, but only 20% - 30% remain "active" in a twelve month period.

  With the combination of other social media outlets such as FaceBook and Twitter for example, along with designing your own "active" E-Newsletter, keeping in touch with your customers has never been so easy and affordable.

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM.  Dave can be reached at Cell 786-521-1720 or E-mail at Vist our Website at