I love coffee. Seriously, I probably drink six or more cups a day, and over the past few years, my husband and I have become what some would call bougie coffee enthusiasts.
Or, to put it simply, you can say we are coffee snobs.
We have the pour-over, the French press, and we grind our coffee beans every morning, because how bougie would you be if you did it any other way?
A few years ago, I was speaking at a dealer event in Europe and had some time to go to Paris. Luckily for me, I spent four years in high school learning French. Unfortunately for me, the only words I could remember were curse words.
So, on my first morning in Paris, I realized I had a major conundrum. I needed coffee, but the people in the coffee shop were not going to appreciate that the only thing I could do was curse at them.
I realized we both needed something from this interaction. I wanted—well, needed, but not like an addiction—coffee and the coffee shop owner wanted my money. I mustered up all my French knowledge, walked into the coffee shop, and said, “Bonjour, Je parle un peu francais,” which means, “Hello, I only speak a little French.” I omitted that the only French I could speak would make their mama blush.
Similarly, inside most dealerships, the tension between parts and service is not because the parts department aims to ruin the service department’s life, or vice versa. The opposite is actually happening. Both departments are often trying to achieve the same goal; they just have separate ways of doing it and speak different languages.
Here are four things to remember when dealing with parts and service tension.
- You are trying to do the same thing. When you consider what is happening inside the service and parts departments, at the core, both are trying to do the same thing. Both want to take care of their customers, make money for the dealership and maximize the inventory they have in stock.
Neither department has customers who are happy to see them because the customer needs something replaced or repaired. Often, the only thing getting in the way of repairs is either the parts or service department. If that doesn’t give off warm and fuzzy vibes, what does?
The trick is when service techs request a part, they need it now because their process is broken or they will have a bay being wasted while waiting on a part; price does not matter at this point. The language they are speaking is urgency and often intensity. If you do not speak intensity, you may be put off.
The parts department, however, needs time and money. The language it is speaking is strategy and process. Just as in service, if you don’t speak the language, it can be off-putting.
- The service department is typically the parts department’s biggest customer. When thinking of customers, we typically focus only on external customers, those who are waltzing in the front door, instead of internal customers, who you know and might even eat lunch with daily. At the core, both customer groups are important, but the internal customers are often your biggest customers, regardless of the dealership department.
For the parts department, the service department is typically the largest customer but is rarely treated as such. With this relationship, you need to keep a few points in mind.
The service department is charged more.
Yes, you read that right. The parts department has the right, and in fact the responsibility, to charge its largest customer more. The biggest customers are charged more because of the extra work and parts required to occupy space on the shelf. We typically encourage parts departments to add an extra 5% on all the parts it sells through the service department, up to the “ouch” point, which is the average transaction value at the parts department. Doing so helps hold the parts department’s margin when the service department asks you to order a part it thinks it might need but then returns the part. Depending on your dealership’s size, you might hire someone to help with inventory management and parts flow to the service department.
The service department must communicate as soon as service techs know they need a part.
Service department, we need to talk. It’s not the parts department, it’s you.
Now, I know that can feel a little harsh, but let me explain. If you do not tell the parts department that you need a part well before you need it, they likely will not have that part.
The basis of the service process is the triage procedure. Once a day, you stop the work in your shop and clock on to a new work order for the units that arrived. You do an initial diagnostic overview of the items or a quick triage to determine the problem.
Doing so enables you to minimize those pesky calls to the service department from customers “just checking on their unit” and gives the parts department a few days to order the parts before you bring them into the bay.
Service techs can ask the parts department to keep a part on hand even if that item will not turn fast. If the service department knows a particular part will be hard to get and service techs might need it within the next year, the department has the right to ask the parts department to keep the part in stock. The parts department can charge a premium for the part because it is “renting” the space on their shelves. When the service department requests the part to repair a unit, the part is ready to go.
- The parts department’s No. 1 job is to guard and grow inventory profits. Cyclical inventory counts are key. When the phrase “cyclical inventory count” leaves my mouth, people often look at me like I have a foot growing out of my forehead. The idea of inventory itself seems far-fetched, much less cyclical inventory, which simply makes no logical sense.
First, the best thing the parts department can do for the parts/service relationship is to know its parts inventory and where it is.
Here is how to tell how well you are doing at inventory management. If a customer called and asked if you have a part, and your business management system said you had two of them, would you tell the customer to come in without putting your hand on the part? If your answer is no, then you think your inventory is 50% incorrect.
To fix this, every single day you need to conduct an inventory on a small number of parts. You can pull this report from your software. By year’s end, you will have inventoried every part at least once and your fastest-moving parts more than once.
Doing this is beneficial because conducting a yearly parts inventory is about as fun as a root canal, but pick your poison.
- Technicians are the biggest parts inventory disrupter. Now, before you take this article and highlight the last sentence and duct tape it to the service department’s entrance, let me explain.
The No. 1 reason parts inventory falls off track is because technicians simply grab the part they need to finish the job in their bay. They do not want to screw up the parts department’s inventory and watch you seethe with anger—at least most of the time.
Often, this can happen when a stocking order arrives. The technician knows the part they need is in the big brown box, delivered at the most inopportune time of the day.
As a result, the technician simply grabs the part, intending to either tell the parts department they grabbed it or add the part to the work order. Instead, the service tech just forgets. They get into the job, and the part vanishes into thin air (or onto a customer’s RV), resulting in parts inventory and margins being off.
At the core, you are both trying to do the same thing—generate money for the dealership and take care of customers.
To make this work, you must designate someone to do two things. First, they have to ensure techs are getting their required parts. The designated person will set the parts out for techs the night before they need them (remember the triage process, in which service techs tell parts staff what they need before they need it.) The designated person will then make sure everything is put away and inventoried quickly when the stocking order arrives. Doing so will eliminate the “part just disappeared” trick out of the magician’s lineup. If you have fewer than seven technicians, this task can typically be a part-time role. If you have more than seven, you will need a full-time person to handle the job.
Collaborating with people can be tricky, and working with people who you think are out there trying to ruin your life is even trickier. Coming to terms with the fact that both departments have the same goal in mind, but are going about it differently, can become as enjoyable as a good cup of coffee. You simply need to know how to communicate in a way that gets you what you need.
Sara Hey’s new book, “The Dealership Equation: How People, Processes & Profits Can Make or Break Your Business,” was released at the end of August.
