Happy New Year "Smart Parts" Managers and I want to welcome in the New Year with my first question to all past, present and future "Smart Parts" Managers out there...
"So!...what made you want to become a Parts Manager, or perhaps become a Parts Manager?"
You don't have to answer right away because I've often asked myself that same question. For most of us "back in the day", we most likely fell into the role by happenstance. Maybe we didn't go onto college, or military service and we were just looking for a job. Then perhaps, we stumbled onto a parts counter position and then down the road...Voila!...we became the Parts Manager.
Believe it or not, many of us "old timers" did wind up as Parts Managers just as mentioned above and we learned from the previous Parts Manager. We also learned just the way they taught us and may have or may not have been a good thing. We never asked why, and we just did it the way they did and when asked why we do it that way, we simply said..."That's the way we've always done it!"
Problem with that statement is, we never knew if what we were doing was right or wrong, as long as we got the parts. Some of us were fortunate enough to get the proper training and knowledge as I was able to receive and attain.
For many Parts Managers though, they just did it the same way every year. To the point that many Parts Managers would have perhaps 30 years of Parts Manager experience, which was actually one year, thirty times, never actually knowing what it took to be a successful Parts Manager.
This leads me to my second bold question of the New Year...
"What's so different today and perhaps coming in the future versus many years ago and what does it take to be a successful Parts Manager today and going forward?"
Let's begin our journey to the past, present and future...
Parts Managers in the Past:
I guess I fall into this category all the way to the present, but as I mentioned earlier, the qualifications on being a Parts Manager in the past was completely different than today, and perhaps in the future. Primary qualifications included being a trustworthy employee, maybe some tenure in the Parts Department before becoming the Parts Manager with a basic education background.
We weren't required to have a Financial or Accounting background as we were basically paid an hourly wage, or salary and we would never see a Dealer's Financial. As years went on, we may have received a "paste and cut" version of the Parts Sales & Gross Page as we may have achieved a bonus on total sales and gross.
We never saw an Expense or Net Profit number to actually see how we ended up from a profit or loss standpoint. This was considered privileged information that we were not allowed to see or focus on as Parts Managers.
We learned basic duties on how to look up parts in a catalogue and micro fiche well before computers came of age. We learned how to keep track of those parts we sold by writing them down as they sold and walking the aisles to see what we needed.
We checked our inventory to see what we stocked on a "counter pad", or we just walked to the bin to see if it was there. We usually had it as many parts fit many applications for many years and we just remembered the part numbers and where they were on the shelf, (pretty weird huh?)
We then learned how to order parts for restocking the shelves and customers by "mailing in" our parts orders, or perhaps via phone, or teletype machine, until eventually, on very primitive computers. We often picked those parts up ourselves at our local Parts Distribution Center, (PDC), or waited for them to come via mail, or UPS.
As we transitioned into the role of Parts Manager over the years, we were fortunate enough to witness change along with new innovations and new computers. We watched vehicle parts transitioning to vehicle components and computer chips becoming the brain of the automobile. Today, most vehicles have anywhere from 30 to 50 or more microchips controlling nearly every vehicle function.
Overhauling transmissions, engines, alternators, starters, rear ends, wheel cylinders, etc. have become a thing of the past as component replacements has become the new normal. Overhauling and actually "repairing" a component was how it was done "back in the day".
Lastly, and before we move on, electronics, computer software and fiber optics started controlling many moving parts that used to be driven via hydraulic pressure, vacuum assist, pumps, manual levers, air and even gravity.
Parts Managers in the Present:
First and foremost, and as a Parts Manager from the above category, the most dynamic and "welcome" change from past to present is more and more women are becoming Parts Managers. Not only are they becoming Parts Managers, but they are also great Parts Managers!
I've had and still have the privilege to train and work with many women Parts Managers and their personality types and behavior patterns are well suited for the position. Not only that, but it also seems that all the women Parts Managers that I have worked with have or have had a more extensive educational background as opposed most of my Parts Manager gents out there.
Overall, today's Parts Manager, whether a guy or a gal, has to have a more extensive educational background than we did in the past. Today's Parts Manager should have an educational background that incudes Basic Standard Accounting, especially Automotive Standard Accounting.
Parts Managers today also have to be verse in both parts inventories, the Controlled Balance Inventory that we manage on the DMS side, and the Accounting Ledger Balance Inventory listed on page one of the Financial. These inventory variances were never a concern years ago that could be devastating to a dealer if not managed properly today.
Other educational skills include computer software training to include Excel, Word, and other Microsoft Office Applications. Even more important is Financial and Personnel Management Training as managing the Parts Department has become "managing a business". Each dealership department has to stand on its own and be profitable, especially in these times.
We are now required to not only "manage the business", but also be a "profitable" business where we have to manage sales, gross and expenses to a desired net profit amount. We have to know, achieve and maintain industry guidelines on all sales, gross, expense and net profit categories.
Lastly, and not to be left out of today's Parts Manager's educational background is Inventory Management Skills Training as the parts inventory is one of, if not the most important dealer asset. It's much more difficult today to manage the parts inventory compared to years ago.
Managing proper inventory Stocking Levels today requires that certain skill of "balancing" between what the manufacturer wants us to stock versus what we should stock based on our own customer demand in order to maintain proper First Time Off Shelf Fill Rates.
Parts "life cycles" are much shorter as manufacturers increase their inventory breadth with more parts and more applications than years ago. A parts life cycle years ago would often see one part number fitting many applications for many years.
Today, it's quite the opposite as many parts will only fit one application depending on vehicle options and for a shorter time span of year and model usage. Stocking the right part at the right time, along with eliminating obsolescence before it happens has become a high priority in protecting the dealer's investment.
In addition, today's Parts Manager has to "multi-task" and "juggle" through this ever-changing supply chain and back-order issues just to provide the service our customers' demands in this high pace world we live in. I can honestly say that we never had to deal with these issues in the past that we are experiencing today.
Today, we also have to be "network savvy" as E-Commerce purchases and sales continue to rise. Our parts purchases and sales are coming from a much more diverse network of online sales and purchases websites and warehouses. We continually have to use all our available resources to find parts and get rid of parts at a marketable price.
I have spoken to many Parts Managers that have been out there as long as I have, or even longer and they are spending many more hours a day managing these issues than ever before. We also joke about how so much has changed over the years and how much fun it used to be years ago.
Parts Managers in the Future:
Even though the future Parts Manager will experience all the above mentioned in the present, I believe it's going to get even more intense for the Parts Manager of the future. More and more electric vehicles will be hitting the market which means even more technology and "knowledge" that the future Parts Manager must have.
Mandatory training and education will be, in my opinion, a big player into managing the parts inventory in the future with algorithms taking over stocking levels, seasonal parts sales along and with even more "manufacturer control" on parts inventories in general.
I also believe that supply chain issues will be somewhat of a new normal as component replacements such as auxiliary batteries, control units, DC converters, motor drives, on board chargers, etc. become more in demand. These types of parts don't sound cheap to me and will most likely have limited supplies, manufacturers, vendors and warehouses all over the world.
Managing the parts inventory, in my opinion, is going to change drastically in the future as we spend less time "managing" parts inventory and more time "processing" parts inventory. Even though we will always need those maintenance and "wear and tear" parts, most other component parts will not be stocked and have to come from outside sources.
That being said, this is why I believe that these supply chain issues will only increase in the future as most dealers will not want to invest in a more expensive parts inventory with less movement at higher acquisition and holding costs. Who knows...we may be more of a Parts "Acquisition" Department in the future.
Online parts purchases and sales will also continue to grow as we will do what we have to in order to provide the service our customers demand. As mentioned in previous issues, E-Commerce sales and purchases are expected to continue rising and supply chain issues grow.
Even though we will always have to stock the right parts at the right time by any means, we will have to see what those parts are. In my opinion, only parts demand will dictate what we have on the shelf, which means, we should never go back on our basic Parts Manager instincts and processes which starts with the continued process of posting Lost Sales.
What lies in the future is definitely a mystery, but what we do know now is that we are seeing signs of what's to come. We have to constantly train ourselves and our staff in order to keep up with change and evolution. It all starts with our willingness to learn as we go, accepting and growing with the environment in order to achieve our goals.
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...