Parts departments are stepping into a bigger role in dealership profitability — and the dealerships that recognize that shift early will have a major advantage.
At the Fixed Ops Roundtable, Angie, Ted, Kaylee from PartsEdge, and Mike Weldon of Center for Performance Improvement dug into the challenges facing parts managers today, the opportunities hiding in inventory, and how technology and AI could reshape the parts counter.
The conversation made one thing clear: parts can no longer operate in the background. It needs a bigger seat at the table.
Featuring Kaylee from PartsEdge & Mike Weldon of Center for Performance Improvement
For years, many dealerships have relied on experienced parts managers who built their departments through decades of knowledge and hands-on experience. But as those long-term managers retire, dealerships are facing a new challenge: how do you transfer that knowledge and give the next generation the support they need to succeed?
Mike shared how PartsEdge helped his dealerships address inventory obsolescence and improve overall department control. By combining technology with structure, his team was able to develop stronger parts managers who were able to stop simply working in the business and start working on the business.
That support is becoming even more important as a new generation enters parts. Many new managers inherit processes that were built decades ago, without the same institutional knowledge that came with the previous generation.
The goal isn’t simply to give parts managers another tool. It’s to give them the confidence, visibility, and support to actually grow the department.
One of the biggest challenges Kaylee is hearing from parts managers is simple: they’re overwhelmed.
Manufacturer programs, technology, DMS conversions, and lost conversions are creating more complexity while parts managers are still expected to keep the department running efficiently.
Mike also emphasized that parts success doesn’t happen in isolation. Service and parts have to work together. When service isn’t ordering the right components or parts isn’t stocking what the shop needs, the entire dealership suffers.
The opportunity is to build stronger collaboration between departments and operate as one fixed ops team.
Parts has often been overlooked simply because it has historically worked well without much attention. Experienced managers stayed in their positions for decades, departments remained profitable, and leadership didn’t always see a reason to intervene.
But parts is fundamental to service profitability. As Kaylee pointed out, you can’t sell those labor hours without the parts.
The next generation of parts managers deserves a bigger voice — and a bigger seat at the table.
One of the biggest opportunities dealerships are missing is visibility into the true health of their inventory.
It’s not enough to look at total inventory or wait until a DMS tells you what has already become obsolete. By then, the opportunity may already be gone.
The focus needs to shift toward productive inventory — the parts that are actually generating business — while identifying aging and idle inventory that could be converted into something more productive.
In one PartsEdge case study, shifting idle inventory into productive inventory represented an estimated $30,000–$40,000 in additional opportunity.
The takeaway is simple: there can be real money sitting on the shelf.
The strongest prediction from the conversation was that parts will become increasingly central to dealership profitability.
Fixed operations is already gaining more attention as dealerships recognize the importance of fixed absorption and the profitability coming from parts and service.
Mike pointed to the opportunity to win back more of the business dealerships are currently losing outside the dealership. Even a modest increase in customer retention could create a significant boost across the dealership network.
And Kaylee took that prediction one step further: the parts department is becoming the “front of the house.”
As convenience reshapes other industries, dealerships are beginning to recognize that parts plays a much larger role in delivering the products and services customers need. OEM facility designs are already reflecting that shift, with larger parts departments becoming increasingly important.
“The parts department now becomes the front of the house.” — Ted Ings