Wednesday, June 6, 2018

June 2018: Issue 100: "The Best Of The Best"

For over eight years and counting, ACG "Smart Parts" is and has been a monthly blog post dedicated and devoted to today's "Smart Parts" Manager. Our mission in the beginning and still today is to provide the latest information, ideas, insight and training tips for the Automotive Dealer Parts Manager.

We have also provided many Parts Managers our FREE "TakeAways" over the years. These "TakeAways" consisted of what I call "tools of the trade", Excel Report Calculators designed to help Parts Managers sharpen their skills in many various areas of inventory, financial and personnel management.

As we hit this month's 100th issue of ACG "Smart Parts", we wanted to take a look back at some of our most popular, or as they say in the blogger world, most "clicked on" blog articles by our "Smart Parts" Managers. We will briefly revisit these blog posts in descending order from the most recent, all the way back to the beginning.

Each of our monthly blogs dating all the way back to the beginning are still readily available today, just in case you may have missed them, or perhaps you just starting following us at;

Many Parts Managers today still tell me that they will often times go back over the years to revisit previous issues that provided them vital information and training from Dealer Management Systems, (D.M.S.) issues, Definition of Terms, Parts Goals and Guidelines, Industry Updates, Leadership and Management Training, etc.

So, "Smart Parts" Readers, let's take a look back to some of our most popular "Smart Parts" blogs and let's see if any may be some of your favorites! You never know....we may rediscover some information that may be useful today as we take a "descending" look back over the years!

March 2018: The Top 5 "Unseen Costs" Of Managing The Parts Inventory

This popular blog illustrated some of the costs of managing the parts inventory that most, or at least many Parts Managers never even considered because for the most part...they go "unseen". We answered questions such as;

  • How much does  "overstocked" inventory really cost?
  • What are "false profits" in the area of Discounts and Allowances?
  • What are, and how do I calculate Inventory Acquisition & Holding Costs?
  • How much do low "First Time Off Shelf Fill Rates" cost in Lost Service Productivity?
  • What is the actual cost of Obsolescence versus Active Parts with Higher Turn Rates?
For most of us, we never review these "unseen costs" because they don't stick out on any reports, other than maybe obsolescence, but we hardly ever think about what it REALLY costs if we carry too much obsolescence.

February 2018: Vendor Managed Inventories: "Compliance Or Obedience?"

This "Smart Parts" blog realy drew some attention as we looked at various manufacturers Vendor Managed Inventory Programs, (V.M.I.). We looked at how many Parts Managers today are TOTALLY relying on the manufacturer to replenish their stocking inventory and the dangers that may lie within when relying solely on the manufacturer.

My first question to Parts Managers who rely solely on the manufacturer has always been;

"What did you do before there was a V.M.I. Program offered by the manufacturer and how did you replenish your stocking inventory?"

It just seems that more and more Parts Managers today are being more "obedient" to the manufacturer, but calling it "compliance". Whatever happened to creating your OWN stock order on your OWN D.M.S.?

The end result in most of these situations is that the manufacturer is happy, but the individual dealers' "First Time Off Shelf Fill Rate" suffers. Have you ever asked yourself one or both of these questions;
  • "Why is the manufacturer telling me that I should stock this part when I've only sold one in the last year and a half?"
  • "Why isn't this part number qualified on my V.M.I. Program?....I sell a ton of them!"
Inventory Protection and Automated Stock Orders are the two top "selling points" by these manufacturers, along with more earned discounts, allowances and return accruals following right behind. Even though these are great benefits, we need to use the V.M.I in addition to our own D.M.S.

As a Parts Manager, my goal in buying parts was to "sell them", not "hold and protect them" over a period of time. At least, that's what we did "back in the day" well before these V.M.I. Programs were introduced.

October 2017: "It's Time To Do The Math Ourselves!"

Another popular issue really addressed a simple topic, but one that also seems to go unnoticed today. When was, or have you ever calculated your individual store's Gross or True Turn Rate? Believe it or not, there are still many Parts Managers that don't even know how to calculate Gross Retention Percentage.

With the on-going advancements in Dealer Management Systems, (D.M.S.), Computers and Software in general, it seems that we have gotten away from the basics. Knowing and doing the math is less popular today because we don't have to!

The problem is with all these calculations and math being done for us is that we end up not even knowing if the numbers, percentages and results are even accurate in the first place because no one knows how to recheck them for accuracy. This month's issue is definitely a "reread", unless you missed it!

June 2017: An ACG "Smart Parts" Perspective: "The Future Of Parts Profits"

This article was also very popular because it touched on a topic that many Parts Managers are concerned about today. With the quality of new vehicles getting better and better each year, where is our parts profits going to come from?

Back in the day, maintenance intervals were every three months and/or 3,000 miles and today, we are lucky to see our customers coming back into our dealerships at least twice a year as maintenance intervals get longer and longer.

On the other hand, in this article, we provided lots of research and information on the "Recall Boom" in the country with air bags leading the charge to our newly expanded parts profit area. Recall parts sales and profits were hitting an all time high and in many dealerships, the number one single parts profit area.

This one was back in June of 2017....Where will our future of parts profits take us in 2018 and beyond?...keep reading and we will address that one in the future!

April 2016: "Is Wholesale Really Worth It?"

In this article back in April of 2016, we touched on this age old question that still haunts many Parts Managers today. The only thing different with this article was that we actually provided a "FREE TakeAway" which was an Excel Calculator that would answer this question for each individual automotive dealership today.

This Excel Calculator brought in all the indicators, factors, costs and benefits to all the areas that affect the overall net, net profit of the parts wholesale business. In many cases, there are a LOT of dealers out there that are actually losing money in wholesale after everything is factored into the equation and they don't even know it.

Even though many Parts Managers and Dealers like the benefits of all the discounts, allowances, return accruals and "cash flow that is generated by the extreme volume, many "unseen" costs go far beyond the benefits that are "seen".

August 2014 - October 2014: A Three Part Series: "The Ultimate Parts Manager" 

This three part series on what I referred to as "The Ultimate Parts Manager" covered all the ingredients of what it takes to be the "Best Of The Best". We took a detailed look at each individual ingredient listed as follows;

  • Education and Personal Background
  • The Right "Belief System"
  • The Right Personality and Personality Profile
  • Leadership Skills
  • Goal Orientation
  • Having The Proper Business "Ethics"
  • Salesmanship
  • Having The Right People
  • Having The Right Process
Having the right ingredients is the key to being "The Ultimate Parts Manager"

April 2014: "Are You Hiding From Your Customers?"

Now, this one caused a little stir back in April of 2014 for sure! For many years, the Parts Manager is pretty much in the background, especially when it comes down to customer service in the Service Department.

I've witnessed and seen many disputes over the years between Service Advisors, Service Managers with the Parts Department in general, with the Parts Manager when there are issues over pricing, parts not in stock, or special order parts that didn't arrive in time for a scheduled customer appointment.

The communication between the Parts and Service Departments is crucial in my opinion and the Parts Manager should be a key player in customer satisfaction. Many Parts Managers that I have met over the years do not even engage the Service Customer.

In my opinion, it's time that Parts Managers take an active role, right along side of the Service Manager when it comes down to pricing policies, CSI, and selling skills, much like the Service Advisors and should be trained to be a "partner" in all Fixed Operation capacities.

It's time for Parts Managers to "get out of the closet" and experience what the customer experiences, along with helping the Service Department work on it's number one goal and that is Customer Retention.

After all, in most dealerships today, 65% - 70% of the Parts Department Gross Profit is generated in the Service Department. Another great "reread" and reality check for sure!

February 2013 - December 2014: "The Parts Department's Top 10 Indicators"

This ten part series, in my opinion, really boosted ACG "Smart Parts" back in 2013 as we devoted almost a whole year in training new Parts Managers and perhaps, re-educating Parts Managers on Parts Manager basics, which I call "Parts 101"...

Each month, we focused on one top ten indicator which we counted down from number ten, all the way to number one. In order, we took, in my opinion,, the most important indicators, or "topics" that a Parts Manager really needs to be educated on and know the terms, definitions and most importantly, how to manage these top ten indicators.

Without taking anything for granted, we defined and detailed each indicator without exception and to educate and inform Parts Managers the importance in understanding each indicator. Believe it or not, we had a lot of positive comments from Parts Managers out there, with the top comment being;

"I never knew this stuff before...I've been a Parts Manager for years, but no one has ever explained any of this stuff to me before now....Thanks!"

Here are the top ten indicators from number ten down to number one in my opinion;

10.) Parts Department Net Profit
  9.) Parts Gross Profit & Parts Gros To Sales
  8.) Expense Management
  7.) Inventory Gross & True Turns
  6.) Sales Activity 0 - 3 Months
  5.) Controlling Obsolescence & Managing Special Order Parts
  4.) Lost Sales & Emergency Purchases Reporting
  3.) Sales & Gross Per Employee
  2.) Level Of Service, (Overall Off Shelf Fill Rates)
  1.) "First Time Off Shelf Fill Rates"

Number One is number one for a reason because it covers all aspects of the other nine "Top Ten Indicators." If we are selling parts, "The First Time" at a rate that is 80% or higher, we are then maximizing our sales and profits, maximizing the dealers' investment and providing the best customer service that keeps the customer coming back.

These are just a few of the "Best Of The Best" as we had many more that date back to the beginning in April of 2010. We are just getting started here at ACG "Smart Parts" with many more months of information, insight, opinion and training tips as we move on to the next 100 issues!

As mentioned earlier, all of our monthly ACG "Smart Parts" blogs are readily available and this "library" of parts blogs are timeless and may come in handy as your reference source for many years to come!

As my Service Partner, Guy Salkeld always says;

"Training is the Key to Knowledge and Skill, but Desire is the Key to Success!" 

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 Vist our Website at