oil change employee - parts or service?

[Chuck Hartle]

Roytunno,

If you charge a portion of the service advisor's pay to the parts department, wouldn't it only make sense to charge the service department for the parts advisor that does nothing but sell parts to the technicians? How about parts charging a monthly fee to service for boxing up all those warranty parts that were replaced by the service department. Oh yea, the front parts advisor wants a commission on labor for referring a customer to the service department for installing an accessory.

The list could probably go on and on and on. Gary said it well, as long as the dealer wants it done a certain way it will be done that way. The pletoria of expense programs and practices make it so hard to ever really compare apples to apples when it comes time to go to the twenty-group meetings. Usually most dealers have some very common practices that allow a fair comparison. Then, there are others who will make changes just to stand out in their twenty group numbers.

I have seen and been through enough twenty-group composites to truly understand why it has, in some cases, been referred to as 'liar's poker'.

Anyone else got some feedback on this? I am sure we could keep this thread going for a long time on all the unusual practices, expense structuring, and pay plans that exist in the dealership environment today.

Chuck Hartle'

[roytunno]

Chuck,
Not exactly, I think that the parts department is masking the true cost when it comes to who sells the parts. If a retail counterman sells parts there is a cost involved. If a wholesale counterman sells a part the also is a cost. That is why I think that a portion of the service advisor's pay plan should be shared with the parts department. Overall the back parts counter only survives with the service department and charging the those employees as is a cost to the parts department only makes sense. Dont most parts department have the highest gross profit at the back counter? There is some logic to what I am saying but I'm not trying to make a big issue of this. I just think that this makes sense. One question to ponder...If a Service Advisors pay plan is one based on Parts and Service sales, why does the service department get charged for something that they make no profit on? This question is why I think the parts department should participate in the commissions for the service advisors. As for warranty parts return that is an obligation of selling parts as is a core return or a parts delivery. The mfgr pays for warranty parts don't they and the parts department makes a profit on them...right?

[This message has been edited by roytunno (edited 08-18-2000).]

[joe r]

Generally when the shift of personnel expenses starts to occur all you have to do is follow the money trail. Who's paycheck will benefit from this.
Chuck is right. Pay plans should be based on total fixed ops. Every one is then on the same team instead of nit-picking and
trying to charge the other guy. Mistakes and
expenses affect everyone.

Joe R


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[chucks]

Let's not forget the modern model of dealership cost structure. That is where each department is a stand-alone "profit center". More like every department is a seperate business entity, in head-to-head competition with the other departments. Few dealerships operate as a single business anymore. Co-operation between departments is simply so much lip service, it doesn't show up where it really matters, in the employee compensation plans. Is this good, or bad ? You decide. As far as the original question, I have yet to work at a dealership where any part of a lube tech's pay is charged anywhere except the service department. But, as has been pointed out, the dealer can shuffle the numbers pretty much as suits his/her fancy.

[ladihawke]

I don't agree with the fact that service dept. sells my parts and that is why I should pay them...but that is my opinion. Maybe I could see paying for a lube guy for that reason if it wasn't for the fact that I already split my profit 50/50 with the service dept. So I give them half my profit, pay for a tech or two, and take care of organizing and returning all their waranty parts. WHERE DOES IT END? And to beat all I still make a profit every month....service can't say that...So what would they do without US??????

[gman]

ladihawke, I don't think you should pay for the lube tech, particularly if you have no say so over who is hired. That being said, as a fixed ops guy I see both sides of the equation. From the service side, by the time I price at a competative level, take depreciation for dispensing equipment, take care of the responsibility of disposing of waste oil and filters, and process the RO, we are seriously hoping that we have been able to discover some additional needed work to keep from losing our rear. The parts department makes the same profit on each oil change regardless.(I still don't think the lube tech is your responsibility)

What has surprised me in this string is the obvious belief that parts should share no expense in the processing of warranty claims.
I feel this expense should be calculated using a ratio of gross profit generated from warranty sales labor/parts. (don't worry no one has listened to me yet)

Should service pay for returning/scrapping warranty parts? I'll answer with a question. Should parts pay a portion of the shop foreman's wage? (as it pertains to warranty repairs) Or maybe the porter or final inspector who puts in endless miles trying to duplicate today's intermittant concerns? Of course not! The point being made is that both sides of this equation incur ridiculous, unrecoverable expense simply to perform and process warranty. (ladihawke, you refer to having to deal with "their" warranty parts. In your dealership who keeps the profit from these parts?)

All of this makes it even more important to work together as a team. Customer Service needs to be one department not two!!

[RICHLOWE]

I CAN'T BELIEVE ALL THE US, THEM, OURS, THEIRS, MINE, MINE, MINE I'M HEARING IN SO MANY OF THE STRINGS!!!!

BELIEVE IT OR NOT, THE DEALERSHIP IS ONE BUSINESS--NOT THREE. THE WALLS BETWEEN DEPARTMENTS ARE THICK AND HAVE BEEN THERE FOR MANY YEARS.

BUT THEY CAN ONLY STAY THERE AS LONG AS DEALERS AND GENERAL MANAGERS CONTINUE TO PUT DEPARTMENT HEADS AGAINST EACH OTHER INSTEAD OF PAYING THEM ALL OFF THE SAME NUMBERS.

MY OLD FOOTBALL COACH, MY OLD MILITARY TRAINING INSTRUCTOR, MY OLD SOCCER COACH, AND NOW I ALWAYS REPEAT THE OLD WELL WORN PHRASE, "THERE IS NO I IN THE WORD TEAM."

"I HAVE TO PROCESS 'THEIR' WARRANTY PARTS!"
"I HAVE TO PAY FOR 'THEIR' TECH!"
"I HAVE TO SELL 'THEIR' PARTS!"
"MY DEPARTMENT ONLY GETS..."
"THEY SHOULD HAVE TO DO IT, NOT US!"
"IT'S NOT MY JOB TO..."

PEOPLE IN THIS INDUSTRY NEED TO LISTEN TO THEIR OWN ARGUEMENTS. THEN WE CAN SEE HOW SILLY WE ACTUALLY SOUND AND HOW UNPRODUCTIVE IT MAKES US ALL--AND HOW CUSTOMERS ARE SICK OF HEARING IT.

[ladihawke]

rich..I totally believe we should work together, but until the day comes when we have a cooperative service manager i must do what i have to do to keep my department going. I have none of these problems with my bodyshop manager, but in that department we have cooperation between not only myself and the manager, but also with all of the employees.

I have no problem handling the warranty parts because yes i do get paid for them but my point was there are alot of things my department does that are taken granted for. I don't know about your dealership but around here if it needs to be done right and no one wants to do it it becomes the parts departments job...(including such jobs as taking all the cardboard out for everyone in the dealership in stead of them walking to the dumpster). Usually I do this with no problem because i like to see things run smoothly, but we can do only so much on a staff of three.

[gman]

ladihawke, I think you have hit the nail. There is a lot that is taken for granted at every dealership. If we get new sales displays, furniture, etc. fixed ops is the first to know because all of the trash is piled in either our shop or service dept. I came from the service side of the business and thought I knew it all about parts...until I actually went to work in that department! There were so many small but important things I was not aware of. I would be willing to say that most people's perspectives wpould be changed if they went to work in another department for 30 days. For most of us with sales oriented dealers it is especially tough to communicate on certain levels because they just don't understand what it takes to get the job done. I think this may be a contributing factor as to why there are so many performance based pay plans that virtually turn each department into competing businesses. Wow, even GM has figured out how counterproductive internal competition is!

[johnny o]

hi ladihawke ... many years ago a mechanic friend of mine asked if i would consider coming to work at their dealership as the parts mgr had just given his notice. He also let me know that management at that dealership was "HARD ON THE EMPLOYEES" ...he also made a comment that stuck with me for many years ...he said "dont worry about the management or problems; rather use this opportunity and dealership as a training ground and perhaps it will be a spring board to better things." That saying' is and has been a life saver as that dealership proved to be a very difficult place to work.Now many years later i am manager at a great dealership (winning prestige club 1999).
Please look at your situation as training for better opportunities and that will help you plan for bigger and better things. While it does not solve the current problem it may at least help take the edge off. :>

Second MNI has on site training .. mabe an outside voice independent of the dealership may assist you. You should talk to Mike about the cost and other values his firm has. Some times we need an outside moderator to handle our blind spots in management. Mind you,theres no guarntee that even with experts advise that management will change. It takes people who wish to work together.

ps saw ladihawke .. was a great movie