According to Hedinger, Stens has worked with several dealers who have implemented parts storage solutions such as Vidmar cabinets. "Dealers tell us that the cabinets reduce the amount of space used to store inventory, allowing them to keep a more accurate, lower inventory level," Hedinger says. "The cabinets also make finding parts a lot easier."
Harris adds, "Parts stay a lot cleaner tucked away in cabinets. This kind of organization also makes parts returns a lot easier. We've seen a lot of larger dealers going to bin location systems and parts drawers."
5. Assign responsibility
Controlling inventory and maintaining organization is tough to do without those responsibilities landing on someone's desk. Whether that desk is a dedicated parts manager's, yours or someone elses, at least one pair of eyes must keep a constant watch on your parts operation.
A dedicated parts manager is the best way to go, but not realistic for many dealerships. Harris says that until you get to that million-dollar level, where you have five to seven employees and can really start managing your dealership department by department, it's hard to justify a full-time, dedicated parts manager. For smaller dealers, just having a "part-time" parts manager who's in charge of ordering, organization and cleaning out obsolete inventory will be a big help.
What makes a good parts manager these days? "Computer skills are absolutely on the rise," Harris points out. "This is really important for larger dealers who are relying more on business systems and online ordering. Also for larger dealers, having a parts manager who's a little more business-savvy could be more important than having technical skills, though there's still an advantage to knowing the equipment from a service standpoint."
You've worked hard to clean up your inventory and improve organization. Now it's time to start marketing your parts department more aggressively to give sales a kick in the pants.
"Our most successful dealers have worked really hard to spiff up their showrooms," Harris says. "There's no rule that says you have to stock your entire parts inventory in the back room. Keep in mind that packaging is a lot better today. Take down some of your traditional signage and displays that you've had around forever. Work with your suppliers to get updated materials and showcase as many of these fast-moving parts as you can."
7. Ask for the sale
If customers don't see these parts on display, chances are, your parts sales will extend little beyond the everyday repair order. "Your parts and service departments should work together to not only perform basic repairs, but also preventive maintenance," Harris says. "More dealers are using the Internet today. Get your customers' e-mail addresses and promote accessory sales and spring tune-ups."
Jim Yount says you should track the ratio of parts sales to service labor dollars. While it's difficult to say what a good ratio is, because there is so much variation from one piece of equipment to the next, this will help you monitor progress. For instance, if you're averaging $1 in parts to every $5 in labor, implement some strategies to help close that gap. If in a month you're now averaging $2 in parts to every $5 in labor, you're making some serious progress. Keep it up.
"When a customer brings a piece of equipment in for service," Yount says, "take two minutes and complete an inspection while the customer watches. Discuss what you see—worn tires, wobbling wheels, cables, lights, switches, filters, seats, blades, saw chain, guide bars, chain brakes, sprockets, hydraulics, leaking fluids, etc. Ask the customer about replacing or repairing each item. Give him or her a guarantee. If you don't have a checklist, develop one. Then, when your business grows sufficiently and you can afford one, hire a service writer."
Aside from the customers coming into your dealership for service, you can also reach out to customers in an effort to boost parts sales. Harris says many of the better dealers he sees have developed parts catalogs for their commercial customers. Those dealers are also seeing an increasing number of parts orders coming through their websites.