Chuck Hartle is the founder and president of PartsEdge, a powertool for New Car Dealerships Parts Operations, helping to increase DMS utilization, improves efficiency, accuracy, and profitability with solid and consistent plans for eliminating all types of idle inventory in a Parts Operations. With over 40 years in the auto industry Chuck has the know-how and love for the industry that has enabled PartsEdge to identify the biggest needs of dealerships.

Mastering Parts Management: Avoiding Common Pitfalls

Enhancing Efficiency and Effectiveness in Inventory Control

In this episode of the Parts Management Podcast, Kaylee Felio and guest Chuck Hartle delve into common pitfalls for parts managers. They uncover the frequent mistakes and discuss how to avoid them. From lack of training to mismanaged special orders, they provide valuable insights. Let's break down their conversation and provide actionable tips for parts managers.

The Training Gap: A Root Cause

The Challenge of On-the-Job Learning

Most parts managers ascend to their roles through experience, not formal education. Often, they excelled as parts advisors but received little training as managers. This lack of structured education can lead to inefficiencies and mistakes. Therefore, dealerships must invest in proper training and development opportunities for their parts managers.

Leveraging Learning Resources

Chuck Hartle highlights that podcasts, webinars, and educational links can be valuable resources. These tools offer practical knowledge in areas like inventory control and price matrixing. Engaging in continuous learning is vital for parts managers to stay updated and effective in their roles.

The Special Order Process: A Common Mishap

Missteps in Receiving and Selling Out Parts

One of the main issues in parts management is the special order process. The challenge lies in properly receiving and selling out parts. This process often involves various departments, creating complexity and potential for errors.

The Importance of Customer Follow-Up

Getting customers back in for special orders is a frequent problem. The responsibility for this task can be unclear. Sometimes it's the service writers' job, while at other times, it's part of the parts department's duties. This confusion can lead to missed opportunities and unsold inventory.

A Solution: Clear Responsibilities and Incentives

Hartle suggests assigning this task to a dedicated team, such as warranty clerks or a Business Development Center (BDC). Providing them with clear responsibilities and incentives ensures better follow-up with customers. This method improves inventory control and customer satisfaction.

Stock Replenishment and the Danger of One Hit Wonders

Relying on Automated Stock Replenishment (ASR)

Dealerships often depend on stock replenishment programs like RIM and ARRO. These programs automatically reorder sold parts. However, parts managers should still run daily stock orders for non-guaranteed parts. This proactive approach prevents stockouts and ensures a well-managed inventory.

Managing One Hit Wonders

One-hit wonders are parts that are rarely sold but take up inventory space. These parts often result from lost sales postings. Over-relying on automated systems can exacerbate this issue. Parts managers should closely monitor these parts to maintain a lean inventory.

The Controversy of Lost Sales Postings

To Post or Not to Post

Lost sales postings can create inflated demand and lead to unnecessary inventory. Some consultants advocate for posting every lost sale, but Hartle advises caution. Posting a lost sale for every missed opportunity can exaggerate true demand.

Simplifying Lost Sales Management

Hartle simplifies the approach to lost sales. Only post a lost sale if the customer or technician does not fulfill the demand. If a special order or emergency purchase is made, do not post a lost sale. By adopting this method, parts managers can control inventory more accurately.

Final Thoughts: Continuous Improvement

The Path to Excellence

In summary, improving parts management involves continuous learning, clear processes, and careful demand management. Dealerships should invest in training and utilize available resources. They should also define responsibilities and incentivize customer follow-up. Additionally, parts managers must proactively manage stock and avoid unnecessary lost sales postings.

Building a Stronger Parts Department

By following these strategies, parts managers can enhance efficiency and effectiveness. Implementing these tips helps them avoid common pitfalls and manage their inventories better. Ultimately, this leads to higher customer satisfaction and a more successful dealership.

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Sponsors:

This show is powered by PartsEdge: Your go-to solution for transforming dealership parts inventory into a powerhouse of profitability. Their strategies are proven to amp up parts sales by a whopping 20%, all while cutting down on idle inventory. If you’re looking to optimize your parts management, visit 🔗 www.partsedge.com.

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Takeaways

1. Keep managers learning through ongoing education.
2. Build focused team for customer orders.
3. Record lost sales accurately and carefully.

Quote

“Good special order process goes a long way in starting to help inventory control and mismanaged inventories.” -Chuck Hartle

Connect

Chuck Hartle
LinkedIn: www.linkedin.com/in/chuck-hartle-1923ab14

Website: www.partsedge.com

Kaylee Felio

LinkedIn: www.linkedin.com/in/gotopartsgirl

Website: www.partsedge.