2014: "The Year In Review"

Each year at ACG "Smart Parts", we dedicate our last issue of the year looking back at the year in review. From my perspective, not only do I enjoy "drilling down" the year in general, it's also kind of a "wake up" call. The year always seems to pass by so quickly and many times, we don't even know what hit us.

The "Year In Review" not only wakes me up, it prepares me for moving forward into the next year. The research helps to put everything into perspective and I would encourage all "Smart Parts" Readers to do the same. 

Before we get into some of the numbers, trends and overall analysis, I want to provide everyone with the sources I used in this research. Keep in mind, other than our own data here at ACG, all this information is readily available to everyone out there on the internet.

For years, N.A.D.A. (National Automotive Dealers Association) and Automotive News have been the standard resource for most dealers and I agree 100%. I will be just scratching the surface with some of this information sharing, but all of it is available online.

Resources:

NADA DATA   Annual Financial Profile 2014  www.nada.org.

Automotive News November 2014 Issue  www.automotivenews.com

Currently, there are 17,665 new car dealers in the United States with California and Texas leading the way with 1,377 and 1,210 dealers respectively. This in itself is a pretty interesting number considering that there used to be well over 20,000 new car dealers in the U.S. not too many years back.

Through November 2014, the "Big 3" are back in line leading the way with GM, Ford and Chrysler. The next 3 include Toyota, Honda and Nissan in that order. That's a pretty big shift over the previous few years as domestics have stepped up to plate to get back into the race. 

Even though there are fewer new car dealers now compared to a decade ago, sales are on the rise! Overall new car sales rose 7.5% from 2012 to 2013 and current, through November, new car sales are up 5.4% over 2013. These numbers are pretty impressive and actually, since 2010, each year has shown increases overall.

As a matter of fact, N.A.D.A. says that their "Optimism versus New Vehicle Sales" Report numbers have been steadily climbing as well since 2010 to support these overall sales increases. Another astonishing fact that shocked me was that New Vehicle Net Profits are also up since 2011, increasing each year after a previous decline of five years.

Why are these statistics important?.....

Quite simply, as more "iron" hits the road, the more opportunities there are for Service and Parts Departments. Fixed Operations have also followed suit with the New Vehicle Sales increases as total Dealer Fixed Operations Sales rose 5% from 2012 to 2013 at a whopping $84.6 Billion Dollars. Many believe that 2014 will surpass this mark as well, currently tracking at a 4.8% increase through November 2014.

Overall, the Fixed Operations may only account for 11.6% of total dealer sales thus far in 2014, but when you consider the gross retention side of the equation, that's whole different ball game. Those percentages are much higher as represented in substantial increases in "Fixed Coverage" and overall "Service Absorption" in many dealers over the past few years. 

In my opinion, the opportunities ahead are as good as I've seen in my 35 years in the business. The opportunities are always good, but it's not that easy when you compare these new opportunities to some in the past. Competition has always played a role, but retention is where it's at. We need to get our customers coming back.

If we don't have the right people following the right processes, all these new opportunities fall by the wayside. I have met, trained and coached Fixed Operation Managers over the years and if there's one thing that I hear most often from the "seasoned" veterans out there is..."Dave, it just doesn't seem as easy as it used to be..."

This is what separates the "good from the great" as the ones who are great take the necessary means to keep up with people, process, accountability and on going training/coaching. It never stops and will always be on going.

As a third party to the dealer, we have definitely seen a rise in the dealers' interest in training and coaching in 2014. In the car business, we all know that there are "waves" that are cyclical in nature and it's upon us again. Training and Coaching is coming back to the fore front.

As I mentioned earlier, there are 17,665 new car dealers in the United States, not counting our friends to the north in Canada. In 2014, ACG's "Active Contact List" of New Car Dealers has risen to 22.6% in just one of our social media venues. These are also key indicators that follow earlier trends mentioned.

For all my "Smart Parts" Readers out there?...

Strap yourself in because 2015 is right around the corner and even though we are wrapping up another great year at ACG "Smart Parts", we are also poised and ready for our "Best Year Ever"!! Numbers don't lie and these statistics represent another great year is upon us!!

Are You Ready?.....

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

Motivation: "Our Inner Driving Force"

So here's the six million dollar question....."What ever possessed us to get into the "car business" in the first place"? Was it our passion for the automobile way back when Henry Ford rolled out that first Model T?....or was it the "need for speed" that drove us into the passion to go faster and faster? just maybe, we liked working on our cars in the back yard on those warm Sunday afternoons.

I think it was a little of all the above, but as a business owner, it was probably one of the easiest businesses to own as it really didn't take much of a business mind to sell cars and parts to turn a profit. 

Wheeling and Dealing became an art form and anyone with a little business savvy and a little capitol was in business. Plus, with cash flow in excess amounts in the millions, who wouldn't want to own a new car dealership?

So, motivation in the early years wasn't hard to determine, but as the years passed...it wasn't so easy any more. Many generations upon generations of owners were folding up and big corporation entered the once known "mom and pop" business. 

So what's the motivation today? Why venture down that road with far more risk than ever before and even more important...why take the risk? 

The automotive industry is still a major part of our economy and there still remains that ultimate desire and passion for the automobile! Actually, this desire seems to be bigger than ever before as banks get larger, homes get bigger, "motivation" lead by this desire. It's also bigger and more competitive than ever before.

People seem to want more and more and the "need to succeed" is in my opinion higher than I've ever seen in my lifetime. So where does all this "motivation" come in?..Same as it always has, from within each one of us.

Ever wonder why we see more and more motivational speakers or books today than ever before? I believe it's because we need to be driven to succeed. I'm not talking just being a little successful, we need to be motivated to be the best we can be. 

If I was to ask most of our "Smart Parts' Readers just how many books, articles, blogs or any topic related to or about motivation, I would probably get many responses like..."Haven't we heard enough about motivation already?"....and quite honestly, I would have to agree.

Even though often heard, lectured and spoken by many prominent individuals, motivation can take on many different definitions and terminologies. As a matter of fact, if you were to "google" the word Motivation by Wikipedia, you will actually go insane with the number of definitions!

Here's my point, each one of us has to find that "Inner Driving Force" that makes us tick and drives us to levels beyond our goals and expectations. One of my favorite "motivating" quotes is actually anonymous to my knowledge, unless someone could correct me and it's called......

The Bottom Line

 Face it; nobody owes you a living,

 What you achieve or fail to achieve in your lifetime, is directly related to what you do, or fail to do.

 People don’t choose their parents or childhood, but you can choose your own direction.

Everyone has problems and obstacles to overcome, but that too is relative to each individual.

Nothing is carved in stone; you can change anything in your life; if you want it bad enough.

 Winners have no excuses. Those who take responsibility for their actions are the real winners in life.

Winners meet life’s challenges head on, knowing there are no guarantees, and give it all they got.

And never think it is too early to begin, time plays no favorites and will pass whether you act or not.

Take control of your life. Dare to dream and take risks.

                                              --Anonymous

I believe that each one of us has that "motivational" driving force that can make the difference between success or failure. I also realize that we are not all the same and what motivates one individual doesn't necessarily motivate the next individual. What's most important is what motivates YOU! 

Here's where my challenge comes in for all you "Smart Parts" Readers out there. I'm going to list my "Top 10 Daily Motivational Habits" that I use on a daily basis. Just because these are my own personal ten motivational items, yours could be totally different.

I would even go out on a limb here and challenge all dealers and dealer managers to come up with ten motivational items that can be done consistently each day. Then, after thirty days, measure your results to your prior results before starting the "TOP 10 Daily Motivational Habits" 

Here are my TOP 10 Daily Motivational Habits:

1.) Wake up each day with a positive attitude. It's a choice and I choose to make something positive happen, no matter how big or how small.

2.) Have and live a purpose driven life!...there is a purpose you are here and there are people who are counting on you to make a difference in their lives. Believe in yourself!

3.) Have a Daily Action Plan each day and write it down!

4.) Have a "Road Map" to each Daily Action Plan. How are you going to get there?

5.) Write down your goals in life! Daily, Weekly, Monthly, Annually and Overall Lifetime Goals.

6.) Hold Yourself Accountable...There will be "Bends In The Road", but stay Accountable.

7.) Challenge yourself before challenging others, Judge yourself before judging others.

8.) Surround yourself with "goal-oriented" people and lead by example.

9.) Share what you have learned, our goal as managers is to develop individuals  

10.)  Learning never stops, never be too humble to to learn something new.

Don't go through each day like it's "Ground Hog" Day all over again! Each day is new and and has new opportunities. 2014 is winding down fast and before you know it, you WILL be asked by your owners and dealers...."What's you forecast for next year.....same as the last"?

That's my Top 10!.....What's Yours!

I'll leave you with some of my own personal favorites from one of the best motivational speakers of all time!

“Motivation and bathing are not permanent. That’s why we need both every day”…- Zig Ziglar

“You are designed for accomplishment, engineered for success and endowed with seeds of greatness”- Zig Ziglar

“You can have everything in life you want, if you will just help enough other people get what THEY want”….Zig Ziglar

“Life is tough…but when you are tough on yourself, life will be infinitely easier on you”…..- Zig Ziglar

The Definition of “Average” Is When After All Has Been Said and Done…..There is Usually More Said Than Done… - Dave  Piecuch, ACG

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

The Ultimate Parts Manager: Part Three

As we come down to our final segment of our three part series on "The Ultimate Parts Manager", I really spent some time thinking over just how to conclude the series. When you stop and think about it, this is no "cookie cutter" position and there has to be much more than just three parts to the "make up" of this dealer manager.

In the first two parts of the series, we spent time looking at the background, education and as far as what specific personality traits seem to be common. We also touched on how most Parts Managers seem to "stumble" onto this dealer position in the first place.

In part three, I decided to look for the "intangibles", or, the qualities of "The Ultimate Parts Manager" that don't seem to follow the normal resume, script or path taken by most other Parts Managers. So let's take a look at some of these qualities that I feel, do not ordinarily accompany this position.

One last note before we move on...as you are reading, don't ask yourself if you already fit these qualifications, or perhaps you may feel you already DO these things. Ask yourself how good are you AT these things....

Number One: LEADERSHIP 

With all the "prerequisites" that we talked about in the first two parts of the series, it's pretty obvious to me that to be in the Parts Manager position, the background, education and certain personality traits are a given.

 Most Parts Managers that I have met and including myself, were drawn to that role because we "fit" the position in all those three areas.

In my opinion, true leadership abilities are not trained, passed down or learned. To me, leadership abilities are "born" into some and not all, or perhaps "acquired" by others. Either way, true leaders have a presence about them, never to be mistaken as a follower.

Even though, leadership abilities are necessary in all our dealer management positions, it's not so common in the Parts Manager position. Let me explain a little further with the following scenario...

Picture in your mind a typical dealership, which we will call ABC Motors Dealership in Anytown, USA.

 In the Grand Opening photo, they highlight all the managers with no owners present, just the management staff including the General Sales Manager, Office Manager, Service Manager, Collision Center Manager and Parts Manager.

In that picture, other than physical appearance, which manager would you normally see as a "stand out" or most noticeable? Did you also notice how I laid out the order of managers in the previous statement? How common is it that we see or hear the Parts Manager mentioned last?

My point is that "The Ultimate Parts Manager" MUST be a standout in their overall dealership role and not just a leader inside those Parts Department doors.

Number Two: GOAL ORIENTED

Our second "intangible" quality of  "The Ultimate Parts Manager" should not be taken lightly either. I know that many or all of us are going to say that we have goals. My partner Guy and I have our own definition of what a "goal" is and that is ..."it's just a dream with a deadline"!

"The Ultimate Parts Manager" not only has goals, but they are written down. Many studies have proven over and over again that "written goals" are achieved at a high percentage compared to goals not written down.

In the terms of "The Ultimate Parts Manager", these goals are usually tied into meeting, achieving and surpassing all parts guidelines such as first time off shelf fill rates, gross and true turns, stock order performance and parts movement cycles just to name a few. The same is true for meeting or exceeding all sales, gross and net targets consistently.

Lastly, on the topic of goal orientation..."The Ultimate Parts Manager" is not the only one with their goals written down. All the other Parts Department Staff Members do the same with their own goals as "The Ultimate Parts Manager" makes it a requirement. By the way, just another "leadership" quality thrown in here as well.

Number Three: ETHICS 

In my opinion, we don't hear enough about ethics these days. I can still remember many years ago, my Service Manager actually conducting class after hours along with our owner just on the dealer's "code of ethics". The following is an internet definition by "Investopedia" on code of ethics:

"A code of ethics document may outline the mission and values of the business or organization, how professionals are supposed to approach problems, the ethical principles based on the organization's core values and the standards to which the professional will be held."

After I read this definition as well as a few others on "code of ethics", I realized just how this term has seemed to disappear over the past several years. To me, this topic has to be the biggest "gut checks" for all of us and not just "The Ultimate Parts Manager", but it is definitely one of traits of this super manager.

Number Four: SALESMANSHIP

The fourth "intangible" quality of "The Ultimate Parts Manager" that I want to shed light on is Salesmanship. Believe it or not, I'm not just referring to the "ability to sell" parts as I am referring more to "The Ultimate Parts Manager's" ability to "sell themselves". 

"The Ultimate Parts Manager" has the ability to sell themselves to not only their customers, but to other employees as well. That "built in" ability leads others and creates a teamwork atmosphere second to none. Trust is extremely high which leads higher efficiency and overall goal achievement for all involved.

Success is a constant for "The Ultimate Parts Manager" because it is an expectation and a reality. Profitability is actually a "residual" of all the above and of course, our last quality of "The Ultimate Parts Manager" is their ability to manage......

Number Five: PEOPLE & PROCESS

Our last "intangible" quality of "The Ultimate Parts Manager" is their ability to manage People & Process. All the above achievements, success and leadership abilities mean absolutely nothing without the right people following the process.

I believe it cannot go understated that this is an absolute MUST to be "The Ultimate Parts Manager". The people we employ and staff have to trust their leadership to take them down the road to their eventual success and future.

It's the worst possible "trickle down" imaginable if this "intangible" quality is not evident. Lack of the proper people and process can lead to a lack of leadership which leads to a lack of trust.

Once the trust in leadership is gone, so goes the process accompanied with undesirable results. Once all this goes down?...you guessed it!....No more "Ultimate Parts Manager"!

I guess it's not so easy to be "The Ultimate Parts Manager"! Even though we have dissected the make up of this super manager, is it possible that this Parts Manager is out there?

Well?...I believe so, but more importantly, I believe that assessment can only come from within. Are you "The Ultimate Parts Manager"?

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

The Ultimate Parts Manager: Part Two

In part one of our three part series, we found out that in most cases, "The Ultimate Parts Manager" came up through the ranks, working in the Parts Department. In my opinion, nothing can replace "on the job" training and experience.

We also discovered that this Parts Manager has received the proper education along the way to manage the business aspects of the Parts Department. The skills, ability and knowledge attained along with the desire to succeed have set a strong foundation for "The Ultimate Parts Manager".

This strong foundation, combined with the proper "belief system" is now a recipe for success. The only missing ingredient now is finding out what type of person or "personality traits" seem to be common in this individual.

In part two, we will take an in depth look at some of these personality traits and behavior patterns. Keep in mind that even though certain personality traits seem to accompany most Parts Managers, it doesn't necessarily mean that any particular personality trait or behavior pattern is a requirement for success.

In my opinion, "The Ultimate Parts Manager" has to be a critical thinker with more of an inward personality. They tend to be very accurate and have specialized skills, while being diplomatic and consistent. They also tend to be cautious and hold themselves to a high standard.

In comparison, I've always equated or compared this personality type right along with accountants, engineers, airline pilots or even corporate CEO's as attention to detail is a prerequisite to success.

This systematic approach and precise thinking is critical in managing the dealer's parts inventory as well as maintaining a healthy return on investment. Providing customers a high level of service and having the right part the first time is no accident.

Now that we have "dissected" this core personality for the most part and quite honestly, many Parts Managers seem to have many of the above personality traits. Although, I believe that there are a few other personality traits critical to the success of "The Ultimate Parts Manager".

In my opinion, what separates the average Parts Manager from "The Ultimate Parts Manager" is that there are other personality traits not commonly found in most people in the Parts Manager position.

"The Ultimate Parts Manager" also has some "outward" or "extroverted" personality traits which are much more direct. These added personality traits allows "The Ultimate Parts Manager" to interact with others much more efficiently.

These outward and direct behavior patterns include leadership skills, goal setting and a "take charge" ability without fear. They are always looking for new opportunities and are visionary and willing to try new things, never afraid of change and in the end, desired results are always expected.

As you can see, "The Ultimate Parts Manager" is the complete package and is unique in nature. The combination of "direct" and "indirect" personality traits allows the ability to shift the personality when necessary depending on the environment.

Now that we have all the ingredients to success, what happens next with "The Ultimate Parts Manager"? Where does the road lead to and what can we expect? It doesn't end here as we have more next month when we conclude our three part series on "The Ultimate Parts Manager"!

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

The Ultimate Parts Manager: Part One

Over the past three months, we looked at how the Parts Manager's position has evolved with change over the years. Quite honestly, we have all had to adapt to change over the years with advances in technology, increased customer demands and an ever changing market place just to name a few.

In part one of our three part series, we will begin the process of breaking down what it takes to be the "Ultimate Parts Manager" today. Unlike many years ago, in my opinion, today's Parts Manager has to have a different variety of qualifications and skill sets in order to be successful.

So let's begin by building  a "resume" of these qualifications and skill sets that make up the "Ultimate Parts Manager". In addition to our resume, as we are building it, we will put each qualification and skill set into it's proper application.

Here We Go!!....

Education & Background

In our first category, the the right combination of education and experience is required, even though a college degree is not. As I told both my children when they achieved their Master's Degrees and were ready to venture off on their new careers...."Now, you are qualified to learn...."

Even though we gain our education in various ways whether by going on to college or just learning as we go, we all had to start somewhere to develop our skills, abilities and to gain knowledge.

All of these three can be acquired through training, but the only one that can't be trained is desire, an absolute "must" qualification for the "Ultimate Parts Manager" 

I believe the "Ultimate Parts Manager" must first have experience working in the Parts Department to get a "feel" of the parts operation and the role it plays in the automotive dealership.

This role can be any role, beginning from shipper/receiver, inventory clerk, counter person, or even eventually leading up to Assistant Parts Manager.

Along the way up this ladder, knowledge can be obtained through learning on the job as well as attending dealer and manufacturer sponsored training courses. This combination of "on the job" training, (O.J.T.), and dealer and/or manufacturer training courses are initial ingredients for the "Ultimate Parts Manager" resume.

In addition, today's "Ultimate Parts Manager" has to have the proper computer skills which were not required many years ago. "Mastering" the D.M.S., (Dealer Management System), is not the only area of computer expertise required for Parts Managers today.

The "Ultimate Parts Manager" has to be able to navigate the Internet and acquire the skill, ability and knowledge in areas such as Microsoft Office Word, Excel, Power Point and Outlook just to name a few.

Let's also not forget the importance of maintaining the parts portion of the dealers website on a consistent basis. Over time, this combination of ingredients has a chance to develop and master all these new skills gained from the beginning.

The Parts Manager learns through attrition, making mistakes and learning from those mistakes as well as learning from other Parts Managers. I don't know of any successful Parts Managers that I have met over the years that didn't have at least one mentor.

The saddest thing that I often see is that dealers do not "invest" in their Parts Managers enough on these required ingredients.They have a tendency to invest more in their Sales Managers, F & I Managers and Service Managers than they do with their Parts Managers.

Lastly, on this category, I can highly recommend manufacturer sponsored business courses, if available. I was fortunate enough to graduate from G.M.I., General Motors Institute on both Parts and Service. Getting a business education "specifically" designed for our industry is "second to none".

Belief System

This second category in building our resume for the the "Ultimate Parts Manager" is as crucial as our first. Without the proper education, background and "belief system", the Parts Manager will most likely never achieve their ultimate potential.

The "Ultimate Parts Manager" has to have the right "belief system" in managing the Parts Department. In most dealerships, the Parts Manager controls the dealer's second highest asset next to Used Vehicles. The dealer has to entrust the Parts Manager in getting his best return on investment.

With that said, the Parts Manager has to utilize the Dealer Management System, (D.M.S.) to it's fullest extent in order to get the most out of the system.

 I have met so many Parts Managers over the years that do not use proper posting procedures leading to false information on the Parts Monthly Analysis Report. As the old saying goes...."garbage in, garbage out"!

The "Ultimate Parts Manager" believes in the right Set Ups & Controls and has full knowledge on Phase-In/Phase Out Parameters, Days Supply, Source Ranking and Parts Matrix Escalations, etc. More importantly, he or she knows how to manage these Set Ups & Controls properly.

Sadly, too many Parts Managers do not know, or have not been trained in these areas and end up working for their D.M.S. system, instead of the D.M.S. working for them. Without the proper knowledge or training, one can only expect less than desired results in all areas from sales to obsolescence.

If the Parts Manager does not have the right belief system, more damage can be done to a dealer than they could even imagine.

Not reporting Lost Sales, Emergency Purchases, Customer Orders and Stock Orders properly could lead to more obsolescence and Incorrect Off Shelf Fill Rates. Service Productivity, Customer Retention & Satisfaction are also negatively effected by this improper belief system.

Lastly, the Parts Managers attitude, behavior patterns and overall motivation are huge contributors to their overall belief system.

Next month, we will explore:

• What kind of personality does it take to be the "Ultimate Parts Manager?" 
• How does it effect the overall performance of the Parts Department? 
• What "leaderships" skills are in the "Ultimate Parts Manager's" resume?

 We will also look at how this "superstar" handles interdepartmental relationships, negotiations as well as their overall leadership ability.

Stay tuned next month as we continue building the "Ultimate Parts Manager's" resume!...and who knows?...we may just be featuring some of our "Smart Parts" Readers out there!  


 Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

"The Evolution Of The Modern Day Parts Manager" Part Three: Circa 2000 - 2014

When I first became a parts manager back in 1980, it was just about "selling parts" and almost anybody could do it. As a matter of fact, that's how many of us got our first "gig" as parts managers.

Some, like myself, crossing over from the aftermarket, or maybe even a promotion from within the dealership. In my opinion, managing a dealership parts department today has become an art.

Even though we had to and still have to grow with these changes over the years, running a successful and profitable parts department requires the right person with the right skills. It's no longer an "entry level" position within the dealership anymore.

Let me explain why...

As the decade began in the year 2000, we started to see a new evolution begin in the way we do business and the way we have to "manufacture" our gross profit. In a way, our parts business was getting more like the new and used vehicle sales departments.

The manufacturer's began to take more of an "active role" in the dealer parts departments by offering more volume discounts as well as discounts for maintaining compliance levels on the manufacturer's stock replenishment programs.

All of a sudden, just like in the sales department, selling at cost is profitable! Once those parts discounts, allowances and return reserves come through on the parts statements, another major profit center is born. The only bad news from this though is, just like in sales, the "little guy" is now being cut off.

Managing the parts inventory by itself became a "juggling act" as purchasing parts and managing obsolescence has now become, in itself, an art form. Taking full advantage of every discount, allowance and return reserve without over stocking and/or building obsolescence is not as easy as one would think.

Along with "moving" and "juggling" the parts inventory, the parts manager still has to provide a high level of service by having the "right parts, the first time". Meeting high levels of "first time" off shelf fill rates plays a crucial part in meeting productivity levels in the dealer's fixed operations.

Now the game begins as we see why this "evolution" requires the right person with the proper skills and knowledge to manage a successful, profitable parts department. The parts manager now has to be a "mover of inventory" in order to "manufacture" gross profit along with providing high levels of service.

Even though all the other parts gross areas are extremely important, it seems in many dealerships, it's these added discounts, allowances and return reserves that actually put the bottom line in the black.

"Moving" inventory, in many cases has replaced "selling" inventory as parts are now sold in higher volumes. Many are also sold at cost or even below in some cases in order to take advantage of the "back end" gross from the manufacturer.

The wholesale parts market has also changed drastically in recent years. More and more each year, wholesale collision parts grosses are being controlled by insurance companies working directly with the manufacturer or only specific dealers.

Thus the reason that many dealer parts managers are choosing to get out of the wholesale collision parts business altogether as profit margins get smaller and acquisition/holding costs get higher. In my opinion, we are not far away from seeing satellite collision parts distribution centers operated by insurance companies. 

Another area of wholesale that has drastically changed is "mechanical" wholesale parts sales. Some aftermarket parts vendors are now purchasing manufacturer parts from dealers at cost or below in massive volumes and in some cases, repackaged with different labeling for resale.

Dealers are then rewarded for their increased manufacturer parts purchases with higher discounts and return reserve allowances. It's a whole new ball game out there now and the list goes on!

New market areas have also increased since the beginning of the millennium with social media and the internet becoming of age. Dealer parts managers are now selling and acquiring parts world wide through search engines and websites such as ECommerce, Ebay and Partsvoice, just to name a few.

We are now seeing "partnerships" between aftermarket parts vendors and the manufacturer. Dealer Management Systems, (D.M.S.) are being integrated to accommodate aftermarket inventories.

No need to call "downtown" anymore to see if the local aftermarket parts store has the part or not. Parts counter staff can check parts availability just like any other manufacturer's part in house. 

Things have certainly changed over the last thirty plus years since the day I unlocked the part department door for the first time.

To me, it's amazing to see how much change we have endured over this period of time. I guess once we put it all in perspective, it has been a "gradual" change, but if you look back at where we were and where we are now, the parts manager position has definitely become more valuable.

Over the next two months we will be looking at just what it takes to be the "Ultimate Parts Manager". I believe that this series on "The Evolution Of The Modern Day Parts Manager" proves that being a parts manager "ain't what it used to be"!

What kind of special person does it take to manage a successful and profitable parts department today?

We will find the answer to that question and more over the next couple months with part one of "The Ultimate Parts Manager" beginning in August!....Don't Miss It!

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

"The Evolution Of The Modern Day Parts Manager" Part Two: Circa 1990 - 2000

In my opinion, the 1990's was a "breakout" decade for technology and many new innovations that are still being expanded on today. Many of these technological break through's impacted the "Evolution Of The Modern Day Parts Manager" heavily and most in a very positive way.

Dealer Management Systems, (D.M.S.) were now common and a necessary integral part of a dealers' operation. Being able to manage the dealer's second highest asset, the parts inventory became much easier and measuring sales and gross numbers more obtainable.

With the dealers' new addition of the Dealer Management System, (D.M.S.), the connection between the dealer and the manufacturer became instantaneous through the Dealer Communication System, (D.C.S.). Submitting and receiving parts orders was now easier and more efficient than ever before.

As the D.C.S. expanded in the 90's, manufacturers were now able to provide dealers and parts managers more options for ordering and receiving parts with shorter lead times and dedicated service.

Overnight deliveries for most areas throughout the U.S. and Canada was standard as the dealer was now able to offer customers a better level of service.

The "re-emphasis" on service seem to be rejuvenated in the late 80's and really came alive in the early 90's. Dealers' knew they had to regain the service customers they lost over the past few decades by becoming more competitive on their pricing as well as offering minor services without an appointment.

Who would have thought back then that dealers' and parts managers would be in the tire business?

Manufacturers' and dealers' also realized that survival in the 90's meant having a solid and profitable fixed operations. A once familiar term was "re-born" as "Service Absorption" was alive again and became part of the vocabulary as well as a big part of the dealers' overall bottom line.

The 90's were also a "big boom" era for cell phones, (or should I say "car phones?) and the internet. These two explosive advances in technology really "took off" in the decade of the 90's.

Being able to access either was not for everyone as the first "car phones" were quite expensive to purchase and use and the internet was very slow with limited accessibility.

By the mid to late 90's, the internet and cell phone technology expanded through satellite communications and micro-chip technology.

Competition grew as cell phones got smaller and more affordable and the internet goes wireless as "social media" is born. "Websites" are now the new crave as advertising takes  a new look as we approach the new "Millennium."

So how did all this new technology and innovation effect the "Evolution Of The Modern Day Parts Manager?"   

In order to succeed, today's "Modern Day Parts Manager" is no longer the guy or gal the dealer sticks in the Parts Department and simply tells them that they are now a "parts manager".

They are also not the guy or gal that is there to "fetch" parts for the techs or answer the buzzer at the retail counter once in a while.

Managing a profitable parts department requires a skill set that utilizes all the aforementioned innovations to develop and maintain marketing strategies, customer retention and overall department profitability.

Providing the "right parts the first time" is also a key factor in service productivity and profitability, another attribute necessary to the "Modern Day Parts Manager".

In my opinion, the 90's actually brought out the "Evolution" part of the "Modern Day Parts Manager". The parts manager now had to know what a financial statement or "D.O.C.", (Daily Operating Control) was and understand it.

They now need to read and know a Parts Monthly Analysis Report which measures results such as True & Gross Turns, First Time Off Shelf Fill Rates, Stock Order Performance, Level of Service, Sales Activity and Gross Profit Margins just to name a few.

There were a few parts managers' dating back to the 70's and 80's that were very profitable and instrumental to the dealers' overall bottom line, but the 90's seem to be the decade where the parts manager evolved into a key management position.

The success and "Evolution Of The Modern Day Parts Manager" continues toward the "Millennium" and believe it or not, it gets even more competitive, requiring more skill sets.

The 90's really opened our eyes to seeing what it takes to be a successful parts manager, but believe it or not, it will take even more when we continue with part three next month!

Don't miss next month's issue of "Smart Parts" where we will explore....

"The Evolution Of The Modern Day Parts Manager"

Part Three: Circa 2000 - 2014

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

The Evolution Of The Modern Day Parts Manager Part One: Circa 1980 - 1990

Our May edition of "Smart Parts" will take us back over thirty years to see what it was like to be a Parts Manager "back in the day", starting with the 80's and eventually leading up to where Parts Managers are today.

Our journey back in time begins in an era before computers were even used in the Parts and Service Departments. Believe it or not, repair orders and parts counter tickets were hand written in most dealerships until well into 1980's.

Parts and labor were billed manually with pen or pencil, using a calculator to add up labor fees and parts totals. The 3 C's, (complaint, cause & correction) were actually spelled out by the advisor and the parts counter person would have to detail each part number, quantity and price...line by line.

So!...How did we record parts sales on each service repair order? The parts counter person would slide a piece of carbon copy paper, (some called an "onion skin") under the first sheet of the three part repair order to create a copy for the Parts Manager for posting.

Many technicians who worked on vehicles back in the late 70's and early 80's would say that the vehicles manufactured back then were much easier to work on even though "on board" computers were making their debut. In my opinion, the 80's were the launching pad for many automotive technological advances.

It was also an era of "trial and error" as many new vehicle models were introduced, bringing on a new meaning to the word "recall". New vehicle warranties changed drastically from the standard 12 month/12,000 mile warranty to three times the amount in time and mileage or even higher.

Parts Managers in the early 80's were also on the leading edge of the technological evolution. Prior to computers, the parts inventory was managed in several different ways. Inventory cards, stock out sheets and manual parts order pads were common ways to keep up with and maintaining proper inventory levels.

Checking parts availability was also quite interesting as many of us used counter inventory pads, inventory card "tub" systems, (how about that one!) and for many of us...just remembering part numbers or where the part is by bin location or group.

If the part wasn't there?...we either tagged the bin location for re-order, or we located the part at another dealer.

Daily stock orders and overnight dedicated delivery were non-existent as weekly, bi-monthly or even monthly stock orders were the standard.

Parts orders were often mailed into the P.D.C., (Parts Distribution Center), or maybe sent via "teletype" for delivery or "will call" pick up at the local P.D.C. If you don't know what a teletype is...send me an email and I will explain further.

In many cases, it was not uncommon to run out of parts with reorder lead times anywhere from seven to over thirty days! Guidelines for parameters such as days supply, phase in, phase out and source ranking were very different to today's guidelines.

One of the benefits of being a Parts Manager back in the 80's was lower number of parts applications. For example, a set of brake pads could fit the same and multiple applications for several years where as today, it could be the exact opposite. One application could have several part numbers to chose from in the same model year!

Looking up parts has also come a long way from big, thick catalogs lining the parts counter, leading to microfiche and eventually computer cataloging. Remembering part numbers and bin locations were a common practice "back in the day".

Also..."back in the day"...parts discounts from the manufacturer were much better. Accruing return reserve, stock order discounts of 8%, supplemental order discounts of 4%, promotional and truckload discounts in the double digits were very common, unlike today.

Alas!...as we moved further into the 80's, computers replaced the pen and pencil and we were on our way! Even though many early versions were quite primitive and had their issues, it was definitely a big step forward.

In my opinion, the biggest issue was people....people accepting this major change to our lives and accepting that it was here to stay.

As we approached the end of the 80's, computers were pretty much a normal part in the every day operations of most dealerships. The difference in the computers back then and now is...No Windows, Apple or Internet!

The only purpose and design for these computers were to support the D.M.S. (Dealer Management System) with no other function.  

Lastly, as I look back on Circa 1980 - 1990...one of the biggest recollections that I have is that this is when we lost a lot of our service and parts business to the aftermarket. As dealers, we took our customers for granted as more choices became available.

As we venture on into the next two segments of "The Evolution Of The Modern Day Parts Manager"...keep one thing in mind. Technology will never stop advancing, but providing Extraordinary Customer Service will always remain the number one success ingredient for all times....

Stay tuned as we explore "The Evolution Of The Modern Day Parts Manager Part Two: Circa 1990 - 2000 in our June issue of "Smart Parts"!!!

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

"Are You Hiding From Your Customers"?

The evolution of providing customer service in our dealerships today has been an interesting ride over the past several years. Some of us have actually been around before D.M.S. (Dealer Management Systems) when we "hand wrote" repair orders and parts tickets.

In my upcoming series titled: "The Evolution of the Modern Day Parts Manager", I will expand more on some of these changes over the years.

In this article, however, I want to focus on one topic, for the most part, that really HAS NOT changed over the years.

Let me start off by asking a question..."When was the last time you saw a parts department employee or manager talking to customers on the service drive?"

Hmmmm....strange question isn't it? Why would anyone that works in the parts department WANT to get involved with any service customer in the first place?

Most parts employees wouldn't even dare to go out there, unless they have to! Maybe they "have to" go out there to verify a piece of trim on a customer's vehicle, or maybe even a tire size.

The point I'm making is that, generally, you don't see any parts employees engaging customers unless it's at the retail part counter, or if they are called upon to go where most parts employees fear and that's the service drive. Believe it or not, there is a logical reason why most of these parts employees fear customer interaction.

It all begins with the behavior tendencies that are usually associated with employees that work in the parts department. The "detail oriented" nature of whats required to work in the parts department attracts and needs personality types that are more "Indirect". 

As I have mention in previous articles, there are more transactions in the Parts Department in a single day than there are in the whole dealership in a single month! This is why we need people with these "Indirect" behavior tendencies in the Parts Department.

"Indirect" meaning their behavior skills need to be more listening, doing, observing and thinking as opposed to the behavior tendencies of the "Direct" personality types which are more competitive, dealing, talkative and more interactive with people. 

This is why, in many dealerships we tend to see more "Direct" personality types in Sales and on the Service Drive while more "Indirect" personality types in the Parts Department, Main Office or in the shop as Service Technicians. 

So what does this all have to do with my original question of hiding from our customers?.....

I believe there is a TON of opportunity to increase overall sales, from vehicle sales to service and parts sales by having what I call, the "missing link" in providing overall customer service.

It is not uncommon to see sales people in the drive talking with customers along with service advisors, but how often do we see parts people on the drive?

Opportunities such accessory sales could be increased just by having a someone from parts promoting them when customers drive in for service. I also believe that there would be more competitive pricing on parts as the parts department would be more interactive with customers.

Especially when the customer wants to know why they are paying $10.00 for an oil filter, or $25.00 for wiper blades. 

I don't think we would have half the parts pricing issues on competitive parts if a representative from the Parts Department had to answer to the customer as opposed to service advisors and managers.

The parts gross profit percentage needs to be lower on competitive parts, (25%-30%) and higher on "captive" parts, which is usually 40% or higher, pending on the cost range.

Normally, when we are "hiding" in the Parts Department, we don't experience any of these customer responses, perceptions or reactions that highly impact our customer retention. Parts employees have a lot of knowledge that should be shared with customers if we could just "think outside the box" and come out of our shells.

Many new dealerships today are actually being designed and built to have the Parts Retail Counter adjacent to the Service Reception Area. Better yet...I've seen some dealerships have all three...Sales, Service and Parts designed in an "open air" atmosphere to tie all these departments together. 

Logistics play a big role in just how "involved" the Parts Department can be in order to better interact with customers. Many dealerships don't even have a service drive, or may not have the parts department staffing available to have a parts person dedicated to the service write up area  in the busy morning hours.

I believe that having the Parts Department more involved with interacting with customers is the one area that most dealerships fail to take advantage of to bring the whole customer experience "full circle". I also believe there is a lot of hidden knowledge and talent in the Parts Department that's going to waste. 

Who knows?...there could be someone in your Parts Department right now that would love to have the opportunity to share their knowledge with customers concerning accessories, "do-it-yourself" vehicle projects, overall vehicle care and even "pride of ownership".

It's time for the Parts Department to be "seen and heard" by being a part of the sales process and not just a "provider of parts". It's time to stop hiding and be a part of the customer retention process as well.

Final Question:

"Do any of your service customers know any of your Parts Staff Member names?"

Interesting thought....if they do?...Congratulations!...If not?...why not?

     

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

"Who's YOUR Performance Coach?"

If I were to think of one common thread that I believe runs through the veins of most Parts Managers, or any other dealership manager for that matter is the fact that they all have to "wear many hats".

Think about your day for example...replay all the different duties and responsibilities throughout any given day and ask yourself if "training" was on that list. I know when I was a dealer manager, in most cases I didn't have time to train or teach my staff.

Some of my Parts Manager duties, responsibilities and actions were spent on items such as managing inventory, parts ordering & receiving, pricing policies, wholesale accounts, staff issues, profitability, customer issues, etc.

If we do find time to train/coach our staff or even ourselves, it usually is short lived and is hardly ever consistent. Often times, we only tend to train when we are required to by the manufacturer through certifications or attending a seminar from time to time.

So why is training usually the least important job responsibility for dealer principle and managers? Two most common reasons are training expense and the time needed for training.

Many dealers feel that their training expense is already too high due to "required" training by the manufacturer resulting in fewer "coaching" opportunities.

If we all look back in our careers, most of us have had the training required to be where we are today, but the most important part of training comes after....and that's called coaching.

If you really think about it, teaching and training an individual just means that they are now qualified to learn. It's the on going coaching that makes us the best we can be. 

In all of professional sports, I can't think of one athlete that does not have at least one coach. The coach focuses on fundamentals as well as how a particular performer applies his/her training and teachings. They didn't just receive their training and put into a position...they are "coached" to maximum performance.

I read an interesting definition recently on Wikipedia about coaching in general and it goes like this....

"Coaching is a training or development process via which an individual is supported while achieving a specific personal or professional competence result or goal. Occasionally, the term "coaching" may be applied to an informal relationship between two individuals where one has greater experience and expertise than the other and offers advice and guidance as the other goes through a specific learning process."

Wikipedia definition goes on further....

"Some coaches use a style in which they ask questions and offer opportunities that will challenge the person being coached to find answers from within themselves. This facilitates the "learner" to discover answers and new ways based on their values, preferences and unique perspective"

So how does "coaching" come into play for Parts Managers? Just take a moment to answer the following questions and you just might think about getting a coach.

• Are you achieving your target sales and gross numbers?
• Are you carrying more obsolescence year after year?
• Are your True and Gross Turns at or better than Guide?
• Are your parts staffing requirements within Guide?
• Is your Parts Department's "Fixed Coverage" or "Service Absorption" at Guide or better?
• Is your Special Order Parts Aging over (30) days?
• Are your employees trained and coached to optimum performance?

If you answered "no" to any of these questions, you are not alone. As I mentioned earlier, most managers find it difficult to "coach" along with their many other duties and responsibilities. Most of us have all had proper training...it's the "coaching" we lack with our staff and with ourselves.

The above Wikipedia definition really hit home for me, especially the second part of this definition as it is our "coaching model" in all of our ACG "Smart Parts" and "Smart Service" Programs.

So!...."Who's YOUR Performance Coach?"

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

"Get Tuned In and Get Tuned Up"!

As mentioned in our introduction of our February 2014 edition of "Smart Parts", we will be exploring into present and future marketing strategies. In order to accomplish this task and be successful, there are many factors we have to examine. 

Not only do we have to have a marketing plan or "strategy", we also have to have a strong foundation. Thus, our two part segment titled: "Get Tuned In and Get Tuned Up!"

Let's get started!

"Get Tuned In!"....

It is obviously no surprise to anyone of us how social media has impacted our lives and means of communication over the past few years. It is getting stronger and more powerful as each day passes in terms of how we conduct our business and more importantly, our marketing strategies.

Social media has become one of, if not the most preferred means of marketing products and services. Websites such as Facebook, Twitter and many others have become the new "information highway" by reaching millions of people, especially when it comes to staying in touch and retaining your customer base.

With all this said, we first have to determine who our target base is, or audience. What are we really trying to sell? Are we just getting our brand name out there and hoping for success?

What products, services or customers will we target? How will we measure our success and most important...Return on Investment?

In my opinion, there are only a few "bases" from a Parts Department stand point in taking advantage of our social media outlets. Let me explain further....

First, one of the most popular reasons to utilize social media in the Parts Department is expand the customer base to eliminate obsolete or idle inventory. Social media is also a great outlet to increase accessory sales for both the Sales, Service & Parts Departments.

Secondly, high volume parts dealers can also take advantage as parts sales are beginning to replicate new vehicle sales. Many sacrifice lower "up front" profits in order to gain higher volume purchase discounts and incentives.

Maybe even all of the above...reduced obsolescence, higher volume discounts and profits!

Overall market share can also be impacted by the right plan of attack. Increased effort and investment on individual dealer websites, shared networks, web search engines, space and priority can further the overall impact.

The third one is, in my opinion the most important....customer retention. Both of the above scenarios, or reasons for utilizing social media is extremely important in maximizing profits and reducing "frozen assets".

Keeping in close contact with your customers and retaining the base has to be the number one reason to utilize social media as a primary resource.

Along with social media, there are many companies that network individual dealer inventories to maximize exposure, reduce obsolete/idle inventory as well as increasing potential market share.

Companies such as Ebay & Parts Voice, eCommerce, Dealermine, Amazon and D2D Link are all reputable resources. 

"Getting Tuned In" requires the right approach, action plan and most important...the right target base and audience.

"Getting Tuned Up!"

Even though we need to "Get Tuned In" with social media and the right action plan, we have to ask ourselves..."Is my house in order?" Or even better...Am I ready to "Get Tuned In?"

Many dealers' seek assistance from outside sources and social media to get rid of obsolescence or idle inventory. If this is your particular situation, you have to ask yourself how you got in this position in the first place.

Before even developing an action plan that involves social media or an outside resource, you need to "stop the bleeding" first!

One of my most popular questions that I like to ask Parts Managers is..."When was the last time you looked at your D.M.S. (Dealer Management System) Set Ups & Controls?" Over 90% of the time I get a response like..."I don't remember!..."

Phase-In/Phase-Out Criteria, Days Supply, Source Ranking by Piece Sales and Matrix Pricing are just a few of the basic Set Ups & Controls that need to be reviewed at least two or three times a year.

On the subject of Matrix Pricing for example, if I would ask any Parts Manager out there..."What price cost range does at least 80% of your sales come from?"...What would I get for an answer? If you want the answer to that one, just send me an email!...

Maximizing parts profit on "captive parts" is one of our biggest opportunities where the only competition is like branded franchises, excluding aftermarket vendors.

"Tuning Up" our Part Matrix and Source Ranking by Piece Sales allows maximized profits while remaining competitive.

One other Set Up that is extremely important is having the proper Days Supply in each individual parts source. It is sad to say, but there are many Parts Managers out there that do not even know how to calculate Days Supply properly.

If Obsolescence or Idle Inventory is a situation in your store, I would highly recommend reviewing the Phase-In/Phase-Out Parameters in each source.

One word of caution....many manufacturers "out source" vendors to change these parameters in order to satisfy manufacturer sponsored stock replenishment programs. 

Even though inventory protection may be offered, subsequent costs may be in sued by the dealer as we discussed in last month's issue of "Smart Parts". (O.E.M. Stock Replenishment Programs: "The Good, The Bad and The Ugly")

Looking ahead, it is quite obvious that we have entered into a new era of marketing, networking and competition.

Our business is not getting any easier and, in my opinion, the strong will survive as long as the house is in order and the targets are in sight!

Need to "Get Tuned Up?"...check out previous issues of "Smart Parts" online @ www.smartpartstraining.com, or request a FREE Parts Department Evaluation!

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com