Tuesday, March 3, 2015

Parts Call Centers: "The Next Wave In Parts"

Keeping up with our ever changing industry can be quite tasking at times and I have often overlooked some of the most obvious changes going on right in front of my eyes.

 The topic for this month's issue of "Smart Parts" came to me during a casual conversation with a very good friend of mine who works for a dealership "Parts Call Center".

I would also like to add that Rick is one of the best at his craft and is always at the top in sales and gross numbers each and every month in this dealership's "Parts Call Center". Overall parts knowledge and years of experience is irreplaceable.

As he was updating me with his success stories and sales achievements, it dawned on me that I did see this coming a few years back when I developed our ACG Parts "Call Distribution Center", (C.D.C.) Program.

I also remembered how extensive and detailed the program had to be in order to be successful in any market in the U.S. and Canada.

In my opinion, implementing a "Parts Call Center" requires so much more in the way of logistics than your typical Sales or Service Business Development Centers, (B.D.C.) in many automotive dealerships today.

One of the biggest differences is the "skill sets" that are required in "Parts Call Center". They involve more than just phone skills, script training and a list of customers to stay in contact with.

Having the right parts personnel with the right parts "know how" in providing the right parts is crucial. In some cases, there is no substitute for experience and this is one of those cases.

So...what are the guidelines to implementing a successful "Parts Call Center?"

First of all, before we get to the guidelines and implementation part...let's look at some of the benefits to having a "Parts Call Center" in the first place. I believe there are a few HUGE benefits right out of the gate. Even though there are many to follow as we will review, here are the big three...

When I was developing our ACG "Smart Parts" Call Distribution Center Program, (C.D.C.) the math revealed that the parts staffing metrics in the "Smart Parts" C.D.C. Program resulted in a minimum personnel cost reduction of 25%.

Most parts sales are realized from incoming phone calls and the centralized location lessons the need for increased parts staff versus individual dealer parts locations.

In the dealership, technicians also benefit as their "back counter" parts staff is dedicated to them 100% and not answering phone calls. In dealership overall staffing is reduced because the only needs left in the store are front and back counter staff. 

Second, overall parts sales and gross numbers rose as well due to the higher call efficiency from experienced parts personnel with fewer chances of "looking up the wrong parts". Less time on the phone results in higher efficiency, higher customer satisfaction and you guessed it....increased parts sales and gross! 

The third huge benefit is the stocking or "warehousing" of the parts shipped from the "Parts Call Center". Wholesale and retail parts are shipped to individual dealer locations from the call and distribution center as orders are placed.

Much like national aftermarket parts vendors do now to replenish their individual satellite location inventories.

As for the Parts Manager, all duties and responsibilities are shifted to the "Parts Call Center" including all Inventory Management Systems, (I.M.S.) functions such as;
  • Parts Ordering
  • Parts Receipting Updates From Individual Locations
  • Parts Pricing
  • Source Ranking
  • Phase-In/Phase-Out Parameters
  • Days Supply
  • General Shipping & Receiving
  • Account Management
Implementing a "Parts Call Center" does require a set of guidelines in order to be successful. These basic guidelines cannot be overlooked in the initial implementation and depending on individual logistics, more guidelines may need to be added. Here are some of the guidelines;
  • All "Parts Call Center" expenses are shared with all participating stores based on a percentage of overall annual parts sales averages. Percentage of shared expenses are updated annually and adjusted as required.
  • All parts incoming calls are directed to the "Parts Call Center". All orders placed will be distributed through the shared dealer warehouse or individual dealership for delivery. 
  • All "in-dealership" repair order parts and over the counter retail sales will resume as usual with less parts staff. Individual store parts inventory replenishment will be facilitated from the "Parts Call Center" if central warehouse is used.
  • All dealer groups' parts inventories will be linked in the group's computerized "shared network" for optimum "off shelf fill rates".
  • Obsolete inventories will be tracked by individual store and shared with all stores within the network. Inventory re-distribution on obsolete items to other stores in the network is encouraged if sales of obsolete inventory may become active again in another location.   

These are just a few guidelines that need to be considered or implemented when considering a "Parts Call Center" implementation. There are definitely many "positives" for dealer groups to contemplate a "Parts Call Center".

 Multiple stores and locations, individual dealers logistics, franchises and proximity all have to be taken into account for proper planning and implementation.

I believe that we will be seeing more and more "Parts Call Centers" as many dealers expand their operations and franchises. In addition to that, I believe Collision Centers, Insurance Companies and Manufacturers will continue to partner up and drive the need for centralized or "satellite" parts warehouses.

The future is already here as more and more of these "Parts Call Centers" are popping up right before our eyes! Even single line or "stand alone" dealers can benefit from implementing a "Parts Call Center". Adding a "Parts Call Center" to an existing dealership B.D.C. is not a bad idea!

Just watch, listen and count the number of phone calls coming into your parts department. Watch and see how long your technicians are standing and waiting to get their parts. Two or three technicians waiting for a parts person for 10-15 minutes can add up to a lots of "Lost Productivity"!

Time is a perishable inventory that we can never get back! It's time to get "out of the box" instead of just "thinking outside the box"......and we can help! 

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTMThe 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