Parts to Service manager

Parts to Service manager

Postby LOWAIRD1964 » Fri May 19, 2017 5:42 pm

I am currently a parts manager (who runs a profitable dept.) and was offered the service managers job. The service dept has been only profitable 3 or 4 months in the last 3 years. What am I getting myself into? Any comments, suggestions, or how fast I should run
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Re: Parts to Service manager

Postby Fixed Ops Mgr » Fri May 19, 2017 11:32 pm

Having held both positions in my dealership, I personally like being parts manager better however I am a relatively new parts manager. I still have to oversee service because our
service manager is relatively young and cannot run service properly by herself so I help advise and I am technically a fixed ops manager. Neither position is easy and service just has
a different set of headaches and problems. I will say that it is easier to make money and be profitable in the service dept. if it is structured properly with pay plans, expenses, etc.
Things you will run into with service is a lot of techs have bad attitudes. They complain when they are not busy, they complain when they have to do warranty repair work, they complain
when they don't have parts to complete the job, they complain when the tech in the next stall has a better paying gravy job than him. The first rule in service is always blame parts for whatever
goes wrong. There is a lot of complaining and negativity in service, at least at my store there is. Technician turnover and hiring new techs can also be a big problem. Good techs are hard to find.
You will probably see a lot more customers day to day in service than in parts so if you are a people person you would like that. Like I said, service is just a different set of problems.

In my location which is rural there is not a lot of competition in service repairs so it makes it easy to be profitable in the service dept and our parts dept is at breakeven or profitable
every month also. I just have found there is a lot of resources to find and buy parts from with today's online/ecommerce age. My parts dept struggles with online competition and a lot of
parts stores in my area but we do good with the service dept. needed parts for customer vehicles, warranty repairs, internal vehicles so our shop is our biggest customer. We do some
wholesale business but not a lot because for us it is to competitive. Can't complete with the big boys. I just feel it is much harder to be profitable in parts because of more competition and
slimmer parts margins then labor sales and labor margins. Accessory sales suffer in this day of LPO's. Discounts and purchase allowances, return reserve all are harder to come by these days. Parts
is just a new set of headaches and challenges for me, I find it all to be a numbers game.

This is just what I have run into in my area however your store may be completely different. All I can say is I have 26 years being a service manager and 6 months being a parts manager, I like
parts better maybe because it is a new challenge for to conquer for me.
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Re: Parts to Service manager

Postby LOWAIRD1964 » Thu May 25, 2017 1:56 am

Thanks for the reply fixed ops. I have been in the business for 20 years starting out of high school working the parts counter and now parts manager for past 5 years. We are a one line dealership that has 5 techs, 2 service advisors. We are steady but not busy. The service department has not made a profit in 2 years. 3 months out of those 2 years service was out of the negative because of the parts transfer other then that in the hole for sometimes 10's of thousands of dollars. I just don't understand? Now the service manager is part of the problem. He is lazy, never looks or cares to look at monthly statement to see what can be done to right the ship. Is this common for a service dept to always constantly lose money month after month? Being a parts manager I am used to turning a profit, not much in these days in time but something. I just don't know if I want to get involved with a dept like this.
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Re: Parts to Service manager

Postby Fixed Ops Mgr » Thu May 25, 2017 11:48 am

Interesting that we are in different roles. I ran the service dept for 25 years at my store and built a very successful highly profitable dept that always makes money, usually nets about 20,000 per month. I had to take a 20 month leave of absence due to a health reason and I recently came back to work in 01/2017 as the fixed operations manager/parts manager. The dealer wanted me back thinking I could turn a failing parts dept losing money every month around and I am really struggling so far. I have found it is much harder to make money in parts meanwhile I watch a young service manager who does not want to work tearing the service dept apart making a lot of mistakes in running the dept. Being at work is really hard these days.

I am convinced that a service dept that is structured properly can make a lot of money. I would bet that if you become service manager that you will have to make many changes that many of your
employees will not like and you will not be popular for a while. I don't know the dynamics of your store so I can't say why service is losing so much money but I would guess it has to do with technician
pay plans and to many expenses may be getting charged to service? Advisors may not be upselling any work and simple be order takers? Is there lack of traffic and appointments everyday? My struggle right now in the parts dept is the dealer charges to much expense to the parts dept such as rent, utilities, advertising, etc..

Only you can decide what is right for you and if you have full control to make any changes needed then you should definitely be able to make money in service over time. Running a service dept is much
easier than running a parts dept however you will have more employees to manage. I am taking everyday in parts and as new challenge and I learn something new everyday.
I enjoy parts and I know that I can get my dept profitable in time. I just need to open some eyes at my store to what has been going on in parts and what is now going on in service. Your challenge would probably be the same.

Cheers.
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Re: Parts to Service manager

Postby mightytitan9 » Wed Aug 02, 2017 1:51 am

Our parts department is doing approximately 35% more in total sales than our service department. Gross is about 40% more than service.

Anybody have any numbers to compare? Our Service Department has been extremely slow the past year, but it seems like our Parts Department is still humming right along. I'd like to verify this if possible.
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Re: Parts to Service manager

Postby Fixed Ops Mgr » Sun Aug 13, 2017 12:55 pm

Business has been tough here in the upper midwest this year so far. Service dept is very slow - I have not seen it this bad for a long time and somehow service monthly sales is up 2% over 2016. Parts dept
has been slow also and our monthly sales are down by 6% over 2016. Service dept gross profit is up by 1% and parts gross profit is up 11% ( We did some part pricing matrix changes early this year on low priced items)
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Re: Parts to Service manager

Postby Richard » Fri Sep 01, 2017 10:28 pm

LOWAIRD1964 wrote:I am currently a parts manager (who runs a profitable dept.) and was offered the service managers job. The service dept has been only profitable 3 or 4 months in the last 3 years. What am I getting myself into? Any comments, suggestions, or how fast I should run


What did you decide?
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Re: Parts to Service manager

Postby LOWAIRD1964 » Wed Sep 27, 2017 1:17 am

I went over to the dark side Richard....
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