I am looking for input on the following three scenarios:
1. A customer comes in to have a door trim panel looked at on his out of warranty 1996 Caprice, the mechanic says it needs to be replaced, but we cannot pick the part up. I offer to overnight the part, but the customer does not want to leave the car, the part needs to be special ordered. Does your dealership get a deposit, make him prepay, or order it and hope he comes back?
2. The customer in the above scenario does not return. Since the part was ordered by service are there any direct financial ramifications for the service department when it comes to returning the part to GM? I realize that there is lost gross and such, but I am asking whether service is directly charged any amount?
3. Similar situation to above but the vehicle is in warranty, but still never returns? Does service assist in any return charges?
My last question: Do Ford and Chrysler have a special order return similar to GMs and if so is it limited to mechanical parts and seat-belts, (the parts people are most likely to return to have put installed), or is it more encompassing?
Thank You,
Gerry Laughlin
Special Orders (again)
15 posts
• Page 1 of 2 • 1, 2
Special Orders (again)
by Doug » Wed May 09, 2001 12:12 am
As a service manger I'll add my input, for what it is worth.....
Item #1---- Trim parts (or ANY parts which you are very unlikely to sell) should be paid for in advance. The only exception we make is if it is for a loyal customer who has a good "track record" with us.
Item #2 and #3----- A few weeks ago i wrote the group because our Parts Manager never willingly participated in policy expense when the parts department had clearly made a goof which cost the serive department money. I was wisely reminded to look at both sides of the story ! It was a good reality check ! I realized that the parts manager was taking care of our goofs without quibbling and decided I should do the same and leave well enough alone.
Providing it doesn't happen on a daily basis I would suggest letting such issues go unless you are willing to equally participate in policy expense when a parts mistake means buying a rental car or other expenses.....which service department has to eat.
Just something to think about....
Doug
Item #1---- Trim parts (or ANY parts which you are very unlikely to sell) should be paid for in advance. The only exception we make is if it is for a loyal customer who has a good "track record" with us.
Item #2 and #3----- A few weeks ago i wrote the group because our Parts Manager never willingly participated in policy expense when the parts department had clearly made a goof which cost the serive department money. I was wisely reminded to look at both sides of the story ! It was a good reality check ! I realized that the parts manager was taking care of our goofs without quibbling and decided I should do the same and leave well enough alone.
Providing it doesn't happen on a daily basis I would suggest letting such issues go unless you are willing to equally participate in policy expense when a parts mistake means buying a rental car or other expenses.....which service department has to eat.
Just something to think about....
Doug
- Doug
Special Orders (again)
by Gerry Laughlin » Wed May 09, 2001 6:18 am
Doug,
I do regularly participate in policy expense where the parts guys have made a mistake, and sometimes even when no one has made a mistake, but the **** still hits the fan. When it comes to my relationship with service I am a firm believer in were all in this together. I have been a service manager before, so I do know how lucky I am to be the parts manager. If you have seen my previous posts you will find I have the utmost respect for the Service managers I work with (we have two) as well as the techs.
The problem comes with trying to convince them how much our special orders are costing us. Parts is doing as much as we can, we make the calls, send the 2nd letters and so on, but until service takes an active role in getting these cars back in, the problem will continue. I never have charged service nor do I want to, but the service manager has told me that the special order parts problem is a cost of doing business for parts. Usually we pretty much see eye to eye on most issues, but on this one we are split. All I am trying to do with these questions I have posed is illustrate to him that in some businesses the Service department shares in this cost of doing business, so it is in his best interest to take an active role in getting these cars back in.
Thanks,
Gerry Laughlin
I do regularly participate in policy expense where the parts guys have made a mistake, and sometimes even when no one has made a mistake, but the **** still hits the fan. When it comes to my relationship with service I am a firm believer in were all in this together. I have been a service manager before, so I do know how lucky I am to be the parts manager. If you have seen my previous posts you will find I have the utmost respect for the Service managers I work with (we have two) as well as the techs.
The problem comes with trying to convince them how much our special orders are costing us. Parts is doing as much as we can, we make the calls, send the 2nd letters and so on, but until service takes an active role in getting these cars back in, the problem will continue. I never have charged service nor do I want to, but the service manager has told me that the special order parts problem is a cost of doing business for parts. Usually we pretty much see eye to eye on most issues, but on this one we are split. All I am trying to do with these questions I have posed is illustrate to him that in some businesses the Service department shares in this cost of doing business, so it is in his best interest to take an active role in getting these cars back in.
Thanks,
Gerry Laughlin
- Gerry Laughlin
Special Orders (again)
by Doug » Wed May 09, 2001 9:28 am
We have our service advosirs call customers when parts are in....it works well because they can make an appointment at the same time. This helped our S.O. parts situation quite a bit.
Every few weeks the PM gives service a list of "old" S.O. parts and we call everyone again. Still, though, there will always be a few customers that either can't be reached or just never come back.
If service department is leaving your parts guys with the entire burdon of getting these customers back in maybe it would be appropriate to have them eat some of the return charges. Maybe in would instill some team effort.
If both the service and the parts guys have made a genuine attempt at getting the customer back in to no avail, then you have a "well, that's just the cost of doing business" situation.
Cheers,
Doug
Every few weeks the PM gives service a list of "old" S.O. parts and we call everyone again. Still, though, there will always be a few customers that either can't be reached or just never come back.
If service department is leaving your parts guys with the entire burdon of getting these customers back in maybe it would be appropriate to have them eat some of the return charges. Maybe in would instill some team effort.
If both the service and the parts guys have made a genuine attempt at getting the customer back in to no avail, then you have a "well, that's just the cost of doing business" situation.
Cheers,
Doug
- Doug
Special Orders (again)
by tjsmith » Wed May 09, 2001 1:57 pm
I tell you, the service dept here, were not calling customers when the parts came in, and the customers would call and of course ask for the parts manger and would want to know WHY?? no one has called. After a shop meeting and there was no change...I started calling and setting up apointments without the help of the service dept, it did not take long for the service to start calling customers and setting up appointments. Now our Service Director does all of the calling and really does a GREAT job at getting customers in the shop. The service director and I see just about eye to eye on all issues, and have developed a great game plan in the last year and it really shows.
- tjsmith
Special Orders (again)
by UncleMark » Wed May 09, 2001 9:56 pm
I am a Honda Parts Manager, therefore I have the ability to APPLY to return anything within 28 days of invoicing. After the application is approved, I have an additional two weeks or so to ship parts back. Therefore, all SOP's are at my store for approximately six weeks. The customer is notified by postcard (by Parts Dept) when the parts arrive, telling them they have two weeks to pick them up. The shop is given a copy of the order form, and are expected to make phone calls as well. At the 18 day mark, they are sent a FINAL NOTICE postcard, telling them they have 5 business days. In actuality, I hold them for another 2-3 weeks. Then they go back. And I'm ruthless about it. There are absolutely NO exceptions. Honda does not penalize you in any way for returns under this program, so I'm out nothing.
One thing about my operation is unique: I don't do prepay of any kind. It's a hassel, an accounting nightmare, insults a lot of customers, and doesn't address the worst offenders -- the nit-picky warranty customer that doesn't return after their kid has spilled their first ice cream cone and the car doesn't smell new anymore. Nevertheless, as a result of Honda's return policy, good follow-up by our Service Dept., and a take-no-prisoners approach to strictly enforceing my no-exceptions policy, my inventory is still very clean and obsolecense is at a minimum.
Therefore, in your scenario, nobody is "charged" for anything. The parts go back. Period. Granted, I am not dealing with GM, and can't say whether our approach would work in a situation like yours. I will say one thing, however: I think both Parts AND Service managers spend WAY too much time trying to nickle and dime each other over penny-ante stuff like this. It's the nature of the business, on both sides. You should be operating in such a manner that minor, unavoidable expenses as might occur every so often don't really matter that much in the big scheme of things.
One thing about my operation is unique: I don't do prepay of any kind. It's a hassel, an accounting nightmare, insults a lot of customers, and doesn't address the worst offenders -- the nit-picky warranty customer that doesn't return after their kid has spilled their first ice cream cone and the car doesn't smell new anymore. Nevertheless, as a result of Honda's return policy, good follow-up by our Service Dept., and a take-no-prisoners approach to strictly enforceing my no-exceptions policy, my inventory is still very clean and obsolecense is at a minimum.
Therefore, in your scenario, nobody is "charged" for anything. The parts go back. Period. Granted, I am not dealing with GM, and can't say whether our approach would work in a situation like yours. I will say one thing, however: I think both Parts AND Service managers spend WAY too much time trying to nickle and dime each other over penny-ante stuff like this. It's the nature of the business, on both sides. You should be operating in such a manner that minor, unavoidable expenses as might occur every so often don't really matter that much in the big scheme of things.
- UncleMark
Special Orders (again)
by kpratt » Wed May 09, 2001 9:59 pm
Gentlemen,
Service is responsible for prompt pick up of parts ordered for our customers. If your having problems with the Service Manager and his "cost of business" attitude, do what I did. Keep a log for a month. Keep precise record of parts not picked up or return and why...Don't fudge. If parts made a mistake then list it....Now figure out how much extra you paid to get the parts, how much will it cost to return the parts. Figure in the lost gross to parts and then determine how many hours were lost in the service department...Add all the expenses and lost gross together and take it to the general manager or the dealer and ask them if they think that the figure is a "cost of doing business".
Service is responsible for prompt pick up of parts ordered for our customers. If your having problems with the Service Manager and his "cost of business" attitude, do what I did. Keep a log for a month. Keep precise record of parts not picked up or return and why...Don't fudge. If parts made a mistake then list it....Now figure out how much extra you paid to get the parts, how much will it cost to return the parts. Figure in the lost gross to parts and then determine how many hours were lost in the service department...Add all the expenses and lost gross together and take it to the general manager or the dealer and ask them if they think that the figure is a "cost of doing business".
- kpratt
Special Orders (again)
by joe r » Thu May 10, 2001 12:58 pm
We use a four bin system like many dealers. The special order system is tied to the appointment log in report generator. The service advisor must make an appointment before the part is ordered but that is not a problem. Then when the cashier is calling customers the day before their appointment, if she sees a part involved she checks in 2028 to insure the part has arrived. If it hasn't, she resets the appointment one week in the future.
Each week the service advisors are given a list of special order parts that are in their third week. Each advisor rarely has more than three or four.
If parts are returned, I absorb the handling charges. It's just part of doing business. There are times service has to pay for a rental when one of my guys makes a mistake. Beats arguing about it.
Joe R
Each week the service advisors are given a list of special order parts that are in their third week. Each advisor rarely has more than three or four.
If parts are returned, I absorb the handling charges. It's just part of doing business. There are times service has to pay for a rental when one of my guys makes a mistake. Beats arguing about it.
Joe R
- joe r
Special Orders (again)
by Chuck Hartle » Fri May 11, 2001 5:51 pm
Gerry,
To answer your first question. Ford and Chrysler have a return program pretty much the same, as of May. Ford allows 30 day returns on parts except Sheet Metal and Hazardous Materials.
Chrysler use to have a 30 day return on everything except hazardous materials, but now have extended it to 60 days but taken away the sheet metal.
This issue we are dealing with here is "forced" stock from service customers. All of you have done a good job here is giving some ways that you are trying to control this or put up with it.
What I would like to hear is how you are controlling the other part of it that hurts a lot more and it the larger share of the problem. This is technician speculation. The tech trouble shoots the problem down to 2 or 3 parts that are causing the problem. Under warranty policies and an "open checkbook" feeling by techs and writers when it comes to warranty repairs, why not order all three parts. Customer satisfaction is solved, only one part is used, and the parts department is left holding the bag with the two that weren't needed.
I would bet a dime to donuts that there is not a parts manager in a car dealership who hasn't had the technicians and writers complain that you never have the right parts. I don't care how big you are and how much you have in inventory, this will always happen.
Turn the tide and use education awareness to work on controlling the problem. If you take a look at all the parts that are forced into the average inventory, this is about 20% for an average dealer. Unknown to the service department, they are causing the problem and blaming the parts department for their own "cost of doing business." In a small to mid-size store, this is a killer. The service department is forcing parts to stock all this unfulfilled demand (junk) and then complaining that you don't carry the right parts!
I had a meeting with our techs (4 years ago when I was the fixed operations director) and showed them the amount of forced stock and what it was costing the store in lost parts profit and labor profit. I also showed them how all the untested parts were "joking" our ability to carry the right stuff. They got the picture loud and clear, and with a couple of simple implementations that have been mentioned, we dropped our forced stock percentage by 70%.
You will never totally eliminate forced stock based on warranty issues and our ability to fix the vehicle, but when you consider that we see a parts operation with 35% in forced stock inventory, this means that the parts manager can only control 65% of what he/she is stocking. The rest is out of their control???
Feedback?????
Chuck Hartle'
To answer your first question. Ford and Chrysler have a return program pretty much the same, as of May. Ford allows 30 day returns on parts except Sheet Metal and Hazardous Materials.
Chrysler use to have a 30 day return on everything except hazardous materials, but now have extended it to 60 days but taken away the sheet metal.
This issue we are dealing with here is "forced" stock from service customers. All of you have done a good job here is giving some ways that you are trying to control this or put up with it.
What I would like to hear is how you are controlling the other part of it that hurts a lot more and it the larger share of the problem. This is technician speculation. The tech trouble shoots the problem down to 2 or 3 parts that are causing the problem. Under warranty policies and an "open checkbook" feeling by techs and writers when it comes to warranty repairs, why not order all three parts. Customer satisfaction is solved, only one part is used, and the parts department is left holding the bag with the two that weren't needed.
I would bet a dime to donuts that there is not a parts manager in a car dealership who hasn't had the technicians and writers complain that you never have the right parts. I don't care how big you are and how much you have in inventory, this will always happen.
Turn the tide and use education awareness to work on controlling the problem. If you take a look at all the parts that are forced into the average inventory, this is about 20% for an average dealer. Unknown to the service department, they are causing the problem and blaming the parts department for their own "cost of doing business." In a small to mid-size store, this is a killer. The service department is forcing parts to stock all this unfulfilled demand (junk) and then complaining that you don't carry the right parts!
I had a meeting with our techs (4 years ago when I was the fixed operations director) and showed them the amount of forced stock and what it was costing the store in lost parts profit and labor profit. I also showed them how all the untested parts were "joking" our ability to carry the right stuff. They got the picture loud and clear, and with a couple of simple implementations that have been mentioned, we dropped our forced stock percentage by 70%.
You will never totally eliminate forced stock based on warranty issues and our ability to fix the vehicle, but when you consider that we see a parts operation with 35% in forced stock inventory, this means that the parts manager can only control 65% of what he/she is stocking. The rest is out of their control???
Feedback?????
Chuck Hartle'
- Chuck Hartle
Special Orders (again)
by fburrows » Sat May 12, 2001 2:48 pm
Chuck:
I agree completely. Our best dealership customer is a GM dealership with an 8 million dollar inventory. Their CSI numbers for having the right parts available are at zone average and their technicians still complain about not having parts.
Overall the technicians are definitely a big part of the solution when they order a part simply because they dont know what else to do and ordering a part is the easiest way to make the problem temporarily go away. I think this is where a good shop foreman that can help the technician with a difficult problem really pays off.
------------------
Frank Burrows
Automotive Business Solutions
frank@autobusiness.org
I agree completely. Our best dealership customer is a GM dealership with an 8 million dollar inventory. Their CSI numbers for having the right parts available are at zone average and their technicians still complain about not having parts.
Overall the technicians are definitely a big part of the solution when they order a part simply because they dont know what else to do and ordering a part is the easiest way to make the problem temporarily go away. I think this is where a good shop foreman that can help the technician with a difficult problem really pays off.
------------------
Frank Burrows
Automotive Business Solutions
frank@autobusiness.org
- fburrows
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