Parts Department Charges

[bam]

Scenario: Our parts department buys a a non-OEM part, for a specific job, from a store in town. The technician ends up not needing it but has soiled the packaging. The store won't take it back because it's dirty. The parts department charges the service department for the part. Eventually, we may use the part on a different job and the part will be billed out on the ticket and thus, the parts department gets paid twice. Of course, I could keep the part and after awhile, the service department would have a mini parts department. That probably isn't a good idea.

I'm looking for ideas on how to handle this. There are numerous scenarios that happen over time that ends up with the same bottom line, the parts department bill service for a part that for one reason or another, doesn't get used.

Thoughts?

[robc]

The easiest answer would be to tell parts to start buying from a new vendor. Would your dealership not take a box back because it was soiled? I guess it depends on how soiled. I just think that returns are just part of doing business if you are going to sell to shops ... every vendor you buy from should understand that and have a reasonable return policy.

But let's assume that you're stuck with the process you have. Then it is something to be worked out at the dealer level. Clearly this is a policy that does not foster good productivity in the shop. The only choice would be to only order parts as needed - causing delays that costs way more than usually the part. I totally understand that parts can't eat the item and force it into inventory, but it makes no sense for service to become a repository of forced stock as well. Otherwise (if it were me as service manager) I'd just start writing my own POs and keeping the mark-up on these parts and go into the parts business in service drive. Nobody wants that.



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** Rob, Editor Dealersedge/WD&S **
Help is only a message post away!
robc@dealersedge.com

[Toyotaguy]

I am sure that there is more to the story then just one part. I bet if you ask your PM to call the jobber to explain why they won't take the part back you will find that all the parts returned are "soiled" and can't be sold. I have charged my service department a thing or two for that reason. The reason I do it cause if I didn't my service department would order what ever they want and use only what they want. I find it that most techs like to plug and play. They don't diagnose the vehicle. They guess cause its easier. The tech doesn't care about the box or the bag the part came in. They come back with it and say it didn't work take it off the RO. I have ordered 1500 computers that were returned cause the fuse blew.

If my service manager stopped the usual return cause of laziness I wouldn't charge him a thing. As for the store not accepting returns. Don't pay the bill till they take it back. Once they see you mean business they will understand.

Just a PMs opion.

[Gerry Laughlin]

Over the years we have had similar situations, when this happens we put a card on the part signed by the sm that says it is ok to charge it to service after 12 months. Parts tries to sell it during that time if they can, if it doesn't sell after that then it gets eaten.
Gerry

[pietro686]

I hear both sides of the story,and agree with all replies...Myself being a PM (20 y) and promoted this year to do both PM and SM.
However, it sounds like you might have a few "out-of-control-part-hangers" like I do.
Take some time and have a shop meeting about this very thing,and what its costs the service department every month or year. Then tell them how that cost trickles down to effect everything that goes with running the department.
Then do as Rob & Toyotaguy said and get with the vendor, but ask politely . If you put it to them as just cost of doing business,I think you will find they will just argue more often.( I know I do, hahaha )
We can all talk big , but till we see an example, how often / how dirty / etc ..you just never know.....
Might I also ask ? How do you and the parts manager get along ? We used to have those kinds of problems weekly when our old service manager (2 prior ago)worked here.
Most of you know what I am talking about..
One (PM or SM )trying to get the other in trouble or fired all the time.

Good luck BAM !
Snide

[scotstrong]

A similar wrinkle:

Technician is having trouble diagnosing a problem vehicle (prob a comeback at this point). Tech calls technical assistance hotline and hotline says "replace such and such part." Parts orders in said part, often with additional overnight expense or sacrificed benefits, tech installs said part, car still not fixed, tech returns part and says "take it off the repair order". In most cases, this is a now-nonreturnable part because it shows obvious sings of installation; and often a bastard part that you don't really want in the parts inventory. Parts manager goes to service manager and asks "If tech assist said to replace it, why do we not leave it on the vehicle and take the part and labor sales associated with that repair attempt?" Service manager's reply is that "Our warranty expense is too high, have to watch closely or we may get audited." What does the parts dept. do with the non-returnable parts in instances such as these?

Scot Strong

[This message has been edited by scotstrong (edited 12-15-2004).]

[MR GOODWRENCH]

One thing we've tried is to have the counterman carefully open and remove selected parts (like computers, modules, etc) from the package first, then pass the part to the technician. Like cores, the box stays safely in the parts dept until such time as the part is installed or returned. "New" parts get carefully re-packed, and cores always get a follow-through if needed. This doesn't cure the problem entirely, but it has helped.

[Old Irish]

Ok, just to play devil's advocate for a moment .....

Mistakes happen. And diagnosis isn't always as easy as some may think---especially if testing yields just borderline results on a part.

When one of the parts guys makes a goof that costs the service department money, how often do you say "put the customer in a rental and bill parts department" ??

Or "Sorry about getting the wrong window regulator. We'll pay the labor to reassemble the car so the customer can have it back until we get the right part." ???

Or, if the customer has been back 4 times and we keep getting the wrong part, does the parts manager come out to help deal with the furious customer, or does he just leave it to the service advisor??

I'm not trying to cause any arguments, and having spent many years as a PM, SM, and S/P Director, I have seen both side of the coin for many years. Frankly, there's a tendency to maximize service department problems and minimize parts department goofs.

But, getting back to the original scenario....

Such stuff should be handled case-by-case. If it was a flagrant mistake on the techs part, or it is a chronic issue with the same tech, or the part is non-returnable, I have no problem "eating" the part on my service dept policy account. In return, the PM has "no problem" taking back the more ordinary type parts. In other words, I handle the nasty goofs, he handles the smaller ones.

I like the idea of tagging a part and charging it to service after 12 months. I think 6-8 months is a better guideline, but I like the concept.

Cheers
Doug

[partking]

My policy is that if the part is likely to be used in the near future by another tech in the service department, I just put it back into stock. But if that is unlikely, I bill it to a service policy account. This relieves the on-hand. The part goes on the shelf clearly marked as property of the scv dept and not to be counted in inventory. A user note is placed in the parts master for that number to remind advisors that the part is present. If we get another opportunity to use the part, a credit memo is made to service policy (putting the on hand qty back in the system) and it is then billed out to the new RO.

This promotes accountability, keeps on-hand counts correct and makes it possible to recover the expense when appropriate.

The service manager actually appreciates knowing if any of his folks are not doing a proper job of diagnosis.

[Parts Guru]

The Part King is right on track on that one. We do something simular.