Business Management

10 Tips for Service and Parts This Challenging Year

As I write this, news is being released regarding massive job cuts across industry around the world. More specifically for this audience, the automotive industry is going through twists and turns never before seen. Once-secure manufacturers are seeking government assistance, and generational dynasties of franchise holders are locking the doors and walking away. I will leave the “how and why” this happened to the economists and historians. What I offer is “DO”; a few solid thoughts on positive actions you can take in your own business and hometown community.

I am optimistic. Yes, you read that correctly. My reasoning for this viewpoint is rooted in another dark time of US history: World War II.

Prior to United States involvement, my grandfather was an assembly line worker for one of the “big three”, and like every able-bodied male, he attempted military enlistment immediately after Pearl Harbor. Having been determined medically ineligible, he went back to the assembly line and found out new vehicle manufacturing had ceased to produce war material.

My grandfather saw an opportunity; namely, no new vehicles being manufactured meant present vehicles on the street would be kept longer and require more maintenance and repair. Sacrifice, both personal and financial, would also come. He took his savings, opened a repair shop, and was extremely prosperous in his hometown. At it’s peak, he had twelve bays and three “counter people” (they were not called “service advisors” at that time). The shop took in everything (and anything) with some sort of engine needing repairs.

If you couldn’t get it to the shop, he would either come get it, or come to you and work on-site; if he didn’t have the resources, he would find them; if he couldn’t do it (which was rare), he wouldn’t charge you.

He also had a large sign he had created from a rough-cut plank from the center section of a hickory tree which hung above his front counter. The sign’s message faced away from customers, but was readable by staff. Carving wood signs with a router was a popular hobby at the time, and my grandfather cut this inscription:

“If you make their phone ring, yours will ring. If you don’t, yours won’t”.

Sound words of advice which remain unchanged from almost seventy years ago.

The US is now in a similar situation; a country in military conflict not selling new vehicles. The paradigm of Fixed Operations (meaning, Service and Parts) being a necessary evil in order to sell vehicles is rapidly being replaced with the “romantic understanding” these business units keep the lights on and doors open.

To those not involved in Fixed Operations who have finally learned the truth about this concept, I make two simple requests:

1. Don’t forget the friends who stuck with you when times were hard.
2. Give us the resources we need.

For those of you “in the trenches” of Service and Parts, I make these suggestions to do your part for the overall success of your store:

1. Time for a mental overhaul. Being successful in this situation is going to require more sacrifice and dedication than you are used to. This means more everything; more hours at work, more market research, more pricing analysis, more, more, more. Get used to this idea. Put in the time. Remember: right now, you have a job while many do not. The same goes for your staff.
2. Square your house. Parts inventory aging towards 180 days? Fix it, free up the cash, and buy items that sell. Dirty cores? Send them back. Outstanding receivables? Collect them. Uncollectable? Turn over to a collection agency. Outstanding warranty claims? Get them paid or write them to policy. Nothing past 30 days on the schedule. Work in Process? Get it done or close the RO. Once again, nothing past 30 days. Open ROs? Nothing over 5 days. Take the pain and get it over with, then vow never to go there again.
3. Understand your clients. Fast food chains have customers. You have clients. Value them. Remind them of what they need. Remind them of what they choose to decline. Tell them you appreciate their business. Call and follow-up, follow-up, follow-up. Ask yourself: “Why should they do business with us over someone else”? Improve on your strengths and work on your challenges while remembering you need them…not the other way around.
4. Do your homework. Do your market research. Get your pricing right.
5. Enforce controls. No discounting without authorization; similarly, cut expenses wherever and whenever you can.
6. Quit whining, and kill the sacred cows. There is no “entitlement” to any one person or department for profit, time, expenses, or compensation (except where required by law). Remember: part of something is far better than all of nothing.
7. Set goals and communicate them. Learn how much your facility is capable of generating (facility utilization). Determine what you can do with your current resources (clients, people, parts, processes) and maximize your opportunities.
8. Measure, measure, measure everything. Adjust your sails with the wind.
9. Share your successes and challenges. Meet with your staff every day. LISTEN. Praise success and discuss challenges. Blame never fixed a problem; action does.
10. Embrace your inner (phone) voice. See my grandfather’s message above. Build trusted relationships with your clients.

We at ODS live by the creed of “Profit by Action” which may be summed up in one word: DO. What appears above may look like a mountain to climb; feel free to contact us if you would like help reaching the summit.

Rob Palumbo is a Senior Consultant for ODS LCC

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