Rock’s Rants: Parts Management

By Ken Rock, Customer Care Manager

Nothing really surprises me anymore. Yet recently, there I was, surprised again. I was visiting a dealership where the parts manager was out for three weeks due to surgery. I asked to speak to whoever was in charge of the parts department, and I ended up speaking to a kid who had literally just turned eighteen. He was initially hired to do oil changes and was still in high school attending classes remotely (while at work, via his cell phone). For some reason this dealer put this kid in charge of the parts department while the parts manager was out.

The kid was ordering parts, handling pricing, handling everything. I asked if he had any inventory management experience. Nope. Yet here he was, in charge of over $200,000 worth of inventory! He told me that occasionally the fixed ops director would come in and help if it got too busy, but other than that, he was all alone.

Honestly, it’s not the first time I’ve seen this. Too frequently I see people in parts departments who aren’t really qualified for the position, and they have no idea how to manage all the ins and outs.

To be clear, knowing how to order a part and sell a part does not make you qualified to run a parts department, even for a little while. When I start asking these “parts managers” about obsolescence, source movement and pack quantities they have no idea what I’m talking about. When was the last time you did a physical inventory and counted every part? In most dealerships today, this happens on a regular basis. But at some dealerships, it rarely happens, which is bad for the bottom line.

Understand I’m not trying to be hard on the kid here, or on others like him. It’s not their fault. But why would a dealer put an untrained, inexperienced person in charge of a major profit center at their dealership?

Dealers and managers, please cross-train employees in every department so they know how to do each other’s jobs, in the event that someone quits or has to take an unexpected leave. Training is easy to obtain. There is training available through NADA, or you can hire an outside consultant to come in and spend time with someone.

When you put someone in a new position, it’s so important to give them guidance. If it’s not possible to hire someone who has experience, you have to figure out how to train the people you have. There is simply too much at stake not to.

You might be wondering, what are the consequences of having an untrained person in charge of your parts department?

You are bleeding profusely. Chances are the factory is managing your inventory for you. If I order special wheels for a customer to jazz up their vehicle, the moment they leave your inventory the factory will automatically re-order more wheels for you. A trained manager will stop that re-order. A trained manager will require pre-payment on special order parts. A trained manager knows how to manage the history of sold parts to make educated decisions on which parts to order going forward. A trained manager knows how many parts to order from the factory, so your dealership stays brand loyal. If you’re not staying brand loyal to the factory it can cost you in many ways; including discounts, warranty claims approvals and parts returns.

Putting an untrained person in charge of parts is like giving a receptionist the job of controller and having that person suddenly be in charge of managing floors plans, payroll and paying off bank loans, without any experience or training. An untrained person is going to mismanage your capital, period. The only question you have to ask yourself is, how much of that capital isn’t important to you?