Thanks again for the input,
Can I add some more fuel to the fire?
Had a situation today where a vehicle came back, a week later, after being sold. All of our Used Cars, ACTULLY DO, get a pretty thorough inspection. A few minor problems had arisen since delivery. Tire wobble at 50mph, loose adhesive molding, radio display lights inop, etc. Nothing too major.
Anyway, to get out of a fix, Service Dept. requests that we acquire a used radio to remedy the display problem, vs. a new radio. Parts locates a radio for a cost of $125.00 and quotes a price of $200.00. The service manager then states to said parts consultant, Whats your markup? Parts consultant replies, Im not sure what the percentage is. As to which, the Service Manager replies, Its gonna be at 10 over cost, and Ill make sure of that! And, Ill make sure, so-and-so Service Advisor, checks cost, and that is at 10 over. Now, what?
As I earlier stated, Selling cars is the main objective of our Dealer Principal, and the earlier sale of a vehicle has now been affected. DONE DEAL!
So, Sales finished their end of the deal, money made. Service Dept. missed something during used car inspection. Vehicle comes back, needs more money to make right, Service must cover their butt, so Parts Dept. takes hit.
Having seen similar events before, Parts getting wrong end of the deal, someone, i.e. Parts Consultant, must find a way to help his own Dept. (Parts) make money, while also preparing himself for the inevitable comeback, and aggravation.
Alas, parts consultant never divulging actual cost, can manipulate cost to reflect a cost of $150.00, and 687ing the other $25.00, in an effort to at least make something. Radio sold at 10 over, $165.00. To appease Service Dept.
Is Our Dept. wrong in this matter? We have to remedy it when it fails!
Dont get me wrong, Please, I can appreciate anyone, Sales, Service, Parts, etc. making money, but how many car deals have been based on cost? Some, Im sure, but, in most cases, not many. Service cost fluctuates, in accordance with friendship, in my neighborhood.
Cant believe that noone else hasnt experienced this in their neighborhood. Dream World!
What if the owner sees that we have robbed a salesman of part of his deal?
Whos at fault?
Not that it matters.
Cost manipulation by the parts dept. has to come in to play in order to stop making our dept. less profitable! The other depts. at least at our shop, and Im sure many others, seem to think that we are less important.
I can think of many ways to 687 items, (manipulate cost), but, I would rather not. How can I convince Sales & Service to stick to pricing and forget about cost? Im not just looking to make gross for one month, but, trying to make sure that we all make money, and stay in business.
Why is it that I feel that I must deceive the Service Dept., based on cost of a part, to make them understand that LABOR isnt the only end of the dealership, as well as Sales?
Sorry, so long, but, actually short.
Thanks, Pete
Tweaking Cost
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Doug
Tweaking Cost
Actually, Pete, cars usually ARE sold "from cost up"....
And if the car was sold only a week ago, the repairs would probably get charged back to the car deal, and then commissions change, etc.....so it may not have been a "done deal" for sales dept.
Anyhow, I certainly understand where you are coming from. No fair always being asked to take a hit, especially if you're the only one taking it on the cuff. Ask the Service Mgr how much labor he "ate" on tha repair. If he got full pop and you took it in the pants, I'd be angry, too.
Parts Dept is certainly NOT less important than any other.
However, as a general rule, it's sales and service departments that have to deal with most write-offs, customer disputes, rental expense, making concessions to customers,etc etc. If the other managers perceieve that pars departs simply sits back collecting retail money on everything while they (other dept's) bear the burden of making customers happy and fixing problems, then you're probably gonna have some resentment.
My impression, and I could be wrong, is that you've got some problems with "departmental walls" in your store and everyone is on a different page.
Why not sit down with the SM and strike up a deal that you can both live with, perhaps cost-plus-25 on any parts that the shop is gonna have to eat. And, they must be on an internal RO so you keep the profit----not split the profit as you would on a customer pay RO.
I'm not saying you're wrong at all for feeling the way you feel.
And, for what's it's worth, I don't see any problem with your 687 account idea. It's a little different, and your business office will probably scream
but if it works for you.........
Good luck
Doug Dwyer
And if the car was sold only a week ago, the repairs would probably get charged back to the car deal, and then commissions change, etc.....so it may not have been a "done deal" for sales dept.
Anyhow, I certainly understand where you are coming from. No fair always being asked to take a hit, especially if you're the only one taking it on the cuff. Ask the Service Mgr how much labor he "ate" on tha repair. If he got full pop and you took it in the pants, I'd be angry, too.
Parts Dept is certainly NOT less important than any other.
However, as a general rule, it's sales and service departments that have to deal with most write-offs, customer disputes, rental expense, making concessions to customers,etc etc. If the other managers perceieve that pars departs simply sits back collecting retail money on everything while they (other dept's) bear the burden of making customers happy and fixing problems, then you're probably gonna have some resentment.
My impression, and I could be wrong, is that you've got some problems with "departmental walls" in your store and everyone is on a different page.
Why not sit down with the SM and strike up a deal that you can both live with, perhaps cost-plus-25 on any parts that the shop is gonna have to eat. And, they must be on an internal RO so you keep the profit----not split the profit as you would on a customer pay RO.
I'm not saying you're wrong at all for feeling the way you feel.
And, for what's it's worth, I don't see any problem with your 687 account idea. It's a little different, and your business office will probably scream
but if it works for you.........Good luck
Doug Dwyer
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Chuck Hartle
Tweaking Cost
Doug,
Again, the best answer is from Scott Allen. These situations are why dealers have created a service and parts director position in the dealership. This is supposed to be someone who understands both sides of the coin and acts fairly in these kinds of matters.
Going from a parts manager to a fixed operations director myself, I have got to tell you that it was an eye opening experience to see how critical one department is to another. As I saw this critical element and had to take off my "parts hat" and become impartial, after a year and a half of being a "Fire Chief" and "Judge", I developed a pay plan that paid our fixed operations managers (Service, Parts, and Body Shop) off of the bottom line of the entire fixed operation. I went from "Fire Chief" to "Facilitator" in a very short period. Customer satisfaction began to climb rapidly as did profits. I can't tell you what a change it made in the manager's perspectives on these kind of issues. I wasn't sure it was going to work at first, but by dumb luck it was the best thing I ever did and even the managers appreciated it and the "Walls" dropped completely.
We all chase our paycheck, and defend our turf, and as long as their is separation and anamosity between departments along with separate paychecks, you will experience these conflicts. What was more important when I came to this realization, is in too many cases the customer ending up being the "bologna" in the middle of the conflict: and they knew it! You break down the walls, you work toward a common goal, and your customers will see this and have a better experience in servicing their vehicle.
Chuck Hartle'
Again, the best answer is from Scott Allen. These situations are why dealers have created a service and parts director position in the dealership. This is supposed to be someone who understands both sides of the coin and acts fairly in these kinds of matters.
Going from a parts manager to a fixed operations director myself, I have got to tell you that it was an eye opening experience to see how critical one department is to another. As I saw this critical element and had to take off my "parts hat" and become impartial, after a year and a half of being a "Fire Chief" and "Judge", I developed a pay plan that paid our fixed operations managers (Service, Parts, and Body Shop) off of the bottom line of the entire fixed operation. I went from "Fire Chief" to "Facilitator" in a very short period. Customer satisfaction began to climb rapidly as did profits. I can't tell you what a change it made in the manager's perspectives on these kind of issues. I wasn't sure it was going to work at first, but by dumb luck it was the best thing I ever did and even the managers appreciated it and the "Walls" dropped completely.
We all chase our paycheck, and defend our turf, and as long as their is separation and anamosity between departments along with separate paychecks, you will experience these conflicts. What was more important when I came to this realization, is in too many cases the customer ending up being the "bologna" in the middle of the conflict: and they knew it! You break down the walls, you work toward a common goal, and your customers will see this and have a better experience in servicing their vehicle.
Chuck Hartle'
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Doug
Tweaking Cost
Good postings on this subject.
As the SPD at our store (and long-ago parts manager at two others, as well as service mgt background) I do try to see all sides.
I try to get everyone to stop thinking about what's good for their department and, instead, think about what is good for the store as a whole.
It's not always easy but we're getting there and it's amazing how quickly disputes get handled when we know that everyone is gonna be pitching in (monetarily and otherwise) instead of trying to lay blame or make one department carry all the burden.
In some cases I'll expense policy work to all departments equally. If were making a long-term, repeat sales-service-parts-b/shop customer happy, why not ? ALL departments benefit in the long run.
Year-by-year things get better. It's not an overnight thing, beleive me. It's a gradual change in overall philosophy.
Good luck to all
Doug
As the SPD at our store (and long-ago parts manager at two others, as well as service mgt background) I do try to see all sides.
I try to get everyone to stop thinking about what's good for their department and, instead, think about what is good for the store as a whole.
It's not always easy but we're getting there and it's amazing how quickly disputes get handled when we know that everyone is gonna be pitching in (monetarily and otherwise) instead of trying to lay blame or make one department carry all the burden.
In some cases I'll expense policy work to all departments equally. If were making a long-term, repeat sales-service-parts-b/shop customer happy, why not ? ALL departments benefit in the long run.
Year-by-year things get better. It's not an overnight thing, beleive me. It's a gradual change in overall philosophy.
Good luck to all
Doug