As we approach the midway point of 2026, this month's issue of ACG "Smart Parts" will once again focus on the basics. That being said, it's pretty interesting that some of these "basics" we focus on each month are very relevant.
It is not our intent to bring up something new each month, even though we have introduced many new ideas, concepts and approaches in our ACG "Smart Parts" Blogs over the last 14+ years.
More importantly than all that, one of our most common phrases, not only in our ACG "Smart Parts" Training Program, but also in our ACG "Smart Service" Training Program as well is...
"Don't Ask Yourself if You Know It, Instead Ask Yourself How Good You Are at It!"
In other words, we may already know what the process is and have known for years, but how good are we at that process? Especially when it comes down to managing Special Ordered Parts and preventing Parts Obsolescence as a whole.
If You Don't Already Know It, Here's a News Flash!...
"One of the Biggest Contributors to the Dealers Obsolescence is Special Ordered Parts that Never Get Sold!"
In many dealerships today, it shouldn't be a question of "do we have a process?", it should be more of a question of "do we have the right process?" None can be truer with our "Special Order Parts Process".
Special Order Parts can be one of our biggest contributors to Parts Obsolescence and if we don't have the right process, we could be purchasing obsolescence right from the start. Even though we may have a process, in many cases there are few restrictions and most important, there is usually a lack of accountability.
In this issue of ACG "Smart Parts", we will detail our Special Order Parts Process that will help minimize obsolescence while increasing overall parts sales. Keep in mind that these Special Order Parts should be considered as "pre-sold work, or "pre-sold parts sales".
Let's Begin...
As we mentioned, having a process in many of our daily routines is not uncommon. It's more of having the right process that leads to expected results and determines the success of any process.
As we go through and detail our Special Order Parts Process, you may notice that it may contain some process items that are already being followed in most dealerships today. It's more of what we aren't doing in our current process that we should be focusing on.
Number One: Special Order Parts Authorization
Much like most problems that lead to undesired results in any process, it all starts in the beginning, and initiating a Parts Special Order Process is no different. We should be first looking at just who is authorized to order these Special Order Parts in the first place.
In many dealerships today, just about anyone can Special Order a part without any accountability or incur any consequences. In all actuality, whoever authorizes the initial Special Order should be held accountable for the sale of that part.
Authorized personnel should only include Parts Personnel, Department Managers, Service Advisors and of course, the customer. Technicians do not order parts as they are not usually held accountable. They can tell us what a vehicle requires, but they are not authorized to order Special Order Part(s).
All Special Order Parts need to be authorized and signed for to start the accountability trail. If these parts are not eventually installed, or sold, then the authorized person or department generating the Special Order should be held accountable to any return fees.
The authorizing party should also be signing off on when they are notified when the Special Order Part(s) have arrived as well. Often times, the Parts Department just lays a Special Order Part receipt on their desk and goes unnoticed and lost in a paper shuffle.
This is crucial because in my opinion, if the Special Order Part does not get installed or sold, then it should be returned after 30 days, no matter the cost. Otherwise, it will just be added to the inventory and future parts obsolescence.
Number Two: Parts Pre-Payments, Restrictions
This part of the process is usually common in most dealerships today when applicable. Problem with this one is that we can't ask for a deposit or pre-payment on Warranty Parts or Internals. These are also the parts that we are stuck with if not installed or sold, once again adding to Parts Obsolescence.
Of course, acquiring deposits and pre-payments is extremely important and involves the Accounting Department in processing these payments up front. It also requires the proper billing procedures in order to relieve these payments on RO's and Counter Tickets.
Special Order Parts "restrictions" on the other hand are not often followed enough in many dealerships. Proper signage and wording on Repair Orders and Counter Tickets have to include these restrictions, exclusions or added fees.
Restrictions and conditions should include; No Returns on Electrical Items, No Special Order Parts Returns after (30) Days, Packaging Restrictions, and Return Fees May Apply just to name a few.
Keep in mind that these Return Fees should also apply to other departments, even if these fees are charged internally to the authorized department as an expense. Even though there are really no "monies" realized, the expense should be applied, and the part should be returned to the manufacturer or scrapped.
Back when I was a Parts Manager, and when Special Order Parts reached (30) Days without being sold, the authorizing person or department was given final notification. I would then give them a two week "grace period" to get those parts sold.
Once the (45) days have elapsed, these Special Order Parts were either sent back to the manufacturer or scrapped. The return fees or scrapping fees would then be charged to the authorizing department as there has to be accountability with consequences.
I have learned over the years that if we followed these guidelines and stuck to them; the problem seemed to go away. Most importantly, the dealer had to support this part of the process with no exceptions.
Number Three: Pre-Billed Special Order Parts
In my opinion and in the past, I would never Special Order a part for Service unless I had one of two things, which would be an RO or a Future Appointment set for the customer. In most Dealer Management Systems, a future appointment can be created, attaching the Special Order Part to a customer.
Prebilling a Special Order part to an RO or a Future Appointment is essentially the same thing and "allocates" the Special Order Part to either the RO or the Future Appointment with a Lead Time of at least 3-5 days. If a Special Ordered Part is Back Ordered, Service is notified and the Future Appointment is "modified", not deleted to an alternate Future Appointment Date.
Billing a Special Ordered Part to a Future Appointment would also allow the Service Department to remove parts from an RO, which we all hate in Parts. If a part is removed from an RO for any reason, the Special Order Part should then be billed to a Future Appointment.
It's also much easier for the Service Advisors to "pre-schedule" these appointments as opposed to waiting for parts to arrive and fit these customers into their schedules. Communication is key though as we don't want customers coming in for their appointments and the part hasn't arrived for whatever reason.
The Parts & Service Departments also have to do their prework before the customer arrives to ensure the right parts were ordered and received. This "prework" should be in place no matter if the customer had a Future Appointment or not and should apply to all Special Order Parts.
Believe it or not, this happens often as Special Order Parts are ordered wrong for whatever reason or person. Another "Purchased Obsolescence" Scenario happens when the Tech Special Orders additional parts "just in case" they may need it, or the diagnosis is not clear on the needed parts.
Number Four: Special Order Parts Notification
If there was one area where the ball gets dropped in this whole process is this one as everyone seems to point the finger at someone else. Every DMS out there has a "Universal Special Order Communication System". There should not be calls going back and forth between Parts and Service to see if Special Order Parts have arrived.
Maybe the Counter Person just dropped the slip on the Service Advisors desk without personally notifying the advisor, or the Service Advisor was notified and didn't call the customer. Whatever the "excuse", this one seems to always lead to "Process Failure".
First of all, if we had set a Future Appointment in the first place and the Parts Department made sure the part was there for that Future Appointment and we verified we had the right part beforehand, things would flow smoothly.
I realize that if all that happens correctly, then things would flow smoothly, but unfortunately, when the process fails just one time, it gets dropped completely. Instead of finding out where the slipup was and fixing it, we tend drop this "good practice" process completely.
Number Five: Special Order Parts Bin Sequence
Lastly, one of the areas that most often gets overlooked is where we "bin" these Special Order Parts in the first place. In many, if not most dealerships, Special Order Parts are kept out back near the shipping & receiving area mostly for convenience. Out of sight and out of mind when they should be prioritized for obvious reasons.
In my opinion, Special Order Parts should be closer to the front counter in order to stay on top of them and reduce the chances of being stuck with them. After all, we already know that these parts could eventually be added to our obsolescence.
In addition, we should also "bin" them differently as most Special Order Bins are set up in alphabetical order sequence by the first letter of the customers' last name. This has been pretty much how we have binned Special Order Parts for years.
Quite a few years ago I happened to visit a dealer that literally had no issues with Special Order Parts Aged over (30) Days, which is the industry guideline. When I asked to see his Special Order Bins, I was confused as I didn't see these Special Order Bins labelled with the letters A - Z for the first letter of the customers last name.
Instead, what I observed were Special Order Bins with the Service Advisor's Names at the top and four shelves below. Each shelf had fluorescent tape to the left starting with green on the first shelf, yellow for the second, blue for the third and the fourth shelf labeled with red fluorescent tape.
Each shelf indicating how long that the Special Ordered Part(s) had been received and on the shelf waiting to be installed and sold. This "visual" was amazing to me as it really made it easy to manage these Special Ordered Parts.
Each day, one of the Parts Staff would update and move these Special Ordered Parts to the appropriate shelf based on the receipt date. The Service Manager also insisted that his Service Advisors walk these shelfs to make sure they did not end up on the bottom shelf, which was week four.
This "visual" Special Order Management idea was so simple to me and so practical in order to keep these Special Order Parts cycled through every (30) days. Other than the exceptions of back ordered parts, restricted parts and rescheduling customers became much easier to manage.
Everyone involved has to have a sense of urgency and accountability to this whole process. Those days of just saying..."The customer never showed up so just put it back in inventory and we will sell it to someone else"...are long gone.
Bottom line is that Special Ordered Parts that do not get installed or sold are just adding to the dealer's obsolescence and acquisition and holding costs. Most importantly, Special Ordered Parts could be referred to as "presold work" and we should consider them as such.
We all work very hard to increase Parts & Service Sales each and every day and these parts are just sitting there waiting to be installed and sold. Keep in mind that simply ordering Special Order Parts doesn't complete the task as it's just beginning.
f 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...
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