GM Delealer Develoment Parts

PARTS EXCELLENCE
DEALER
DEVELOPMENT
General Motors Dealer Development Systems
PA RTS EXC E L L E N C E
Reference Library
This reference library is to be used in conjunction with and is complementary to

the Service and parts Excellence Standards Manual. Essentially this library is a
collection of Dealership management and operating ideas gathered world-wide.
If, after reviewing a specific standard you have areas in your Dealership
organisation that fall into the needs improvement category, then there will be
ideas in this library that may help you solve your problems.
While the reference libraries contain hundreds of good ideas, it should never be
assumed that the ideas and examples presented are the only or desired means of
solving your problem. You may have some better ideas to achieve a desired
operating standard. This reference library provides How to make it happen
guidance.
The contents of this reference library contain the Parts Excellence area of:
DEALER DEVELOPMENT
2001 General Motors Middle East Operations

This publication is copyright. Other than for the purposes and subject to the
conditions prescribed under the Copyright Act no part of it may be
reproduced by any means without prior written permission. Enquiries should
be addressed to General Motors Middle East.
General Motors Dealer Development Systems
DEALER DEV E LO P M E N T
Preface
PARTS EXCELLENCE
A LONG-TERM APPROACH TO TOTAL
CUSTOMER SATISFACTION
Parts Excellence, a Dealer development system, is designed to organise your Parts
Department into seven functional areas that are discussed as separate Parts
Excellence modules. The seven modules of Parts Excellence are:
Dealer Development
Parts and Document Flow
Inventory Analysis
Purchase Planning
Personnel Development
Facilities Development
Market Development
Each module includes:
A 4-page Certification Report
Evaluators
A Dealer Action Guide (the main text)
Dealer Decision Grids
THE CERTIFICATION REPORT

The Certification Report is the way a Dealerships progress on the Module can
be reviewed. The Report is also the way a Dealership is certified as meeting the
required performance level for a Module.
The Certification Report includes:
(page 1) Dealer name and address, review and/or certification status,
plant representative and Dealer representative. A copy of the completed
document whether for review or certification must be forwarded to
local management as well as Detroit management. This information can
also assist in communicating those areas requiring additional focus in order
to achieve total customer satisfaction
(page 2) A summary of Evaluators, in graph form, by each standard area of
performance on which a Dealership will be measured. The document, if
kept up to date, can provide a quick and accurate summary of where the
Dealership is positioned, at any time, with regard to certification
(pages 3 and 4) The means for reviewing Dealership performance in the
standard areas to be measured
the principal areas that will be measured are shown under the column
titled Section
Preface
Each principal area is comprised of specific standards that must be

maintained by the Dealership. These are indicated under the column of
Qualifiers
Each specific standard, or qualifier is comprised of the evaluators used to
measure Dealership performance for that specific standard. Since the
evaluators require action by the Dealer, they are listed under the
notation Dealer Action
Please note that each evaluator is assigned a point value in order to avoid
arbitrary measurement. A Dealer must achieve a minimum of 80% of
the Modules total point value in order to achieve certification
To make the Certification Review form most useful, several columns
have been included to the right of the point value so that the Review can
be used as a check sheet for determining areas that require attention
Certification in a Module requires achieving 80% of the Modules total
possible points (page 4) as well as 80% of each sections possible point value
(page 2)
THE EVALUATORS
A page of Evaluators will be found at the beginning of each section in the
Module. These are duplicated on pages 3 through 4 of the Certification
document and indicate both the Qualifier and the Dealer Action to be
measured.
THE DEALER ACTION GUIDE (Main Text)

The Dealer Action Guide serves as reference for developing Dealer action plans
that fulfil the measurement criteria of each Module. The ideas, approaches and
techniques provided in the Guide are suggestions to help augment your thinking
regarding improvements to be made.
Carefully read the Qualifiers and Dealer Actions (evaluators) as well as the text
information in the Guide to clearly understand the intent of the standard areas.
ii
Preface
You can then decide if it feasible and practical to use the suggestions in the
Dealer Action Guide to bring your Dealership up to Parts Excellence standards.
You should find that many of the Guides suggestions offer practical application
in your Dealership. If you choose an alternate approach for improving the
situation it must be approved and documented by the Parts Excellence
representative.
Do not think you have to limit your use of this Module to the Evaluators
marked Qualify By or Will Not Qualify. There is always room for
improvement even in the best organisation. Review how you now run your parts
operation and compare it to the way the material in the Module relates to these
methods. You may find some new suggestions or you may be able to modify
some of the suggestions to improve your already successful business.
DEALER DECISION GRIDS

In addition to general text material there are also Decision Grids which provide
specific suggestions to help organise and enhance a Dealerships approach to
solving problems and making changes.
APPROACH
It is suggested that you approach the materials in all Modules in an orderly
manner which consists of:
1
READ
Module
Contents
Justification
2
REVIEW
Forms
Operating
Assessment
3
ANALYSE
Evaluators
Standards
Potential
4
CHOOSE
Alternatives
Grid
Decide
5
IMPLEMENT
Suggestions
Specifics
Monitor
Outcome
This module has been developed by Mike Nicholas, Inc., Gresham, Oregon, in
cooperation with Asian Parts & Accessories Operations, GMC.
R. J. Kager
L. J. Sorchevich
Detroit
iii
Module One - Table of Contents

TITLE
PAGE
Preface
Table of Contents
i-iii
i iii-iv
CERTIFICATION
Retailer Certification Review Module No.1
1-4
DEALER DEVELOPMENT MODULE
Introduction
Programme Launch
Decision Grid
5
7
8
BASIC PERCEPTIONS
Evaluators
The Dealership
Parts Manager
Key Requirements
Decision Grid
10
10
12
17
18
THE PARTS DEPARTMENT
Evaluators
Dealer Role
Business Perspective
Operating Methods
Decision Grid
19
20
24
30
37
THE PARTS TRANSACTION
Evaluators
Demand
Control Forms
Decision Grid
Analysis Forms
Decision Grid
Planning
Decision Grid
41
42
49
61
62
66
69
73
DEPARTMENT MANAGEMENT
Evaluators
Facilities
Facility Checklist
Employees
Job Descriptions
75
76
79
84
86
CUSTOMER SATISFACTION
Evaluators
Approach
Requirements
Decision Grid
93
94
96
101
iv
Module One - Table of Contents

TITLE
PAGE
PROFIT CENTRE BASICS
Evaluators
General Characteristics
Advantages Benefits
Increasing Profitability
Decision Grid
105
106
111
114
122
WORKING TOGETHER
Evaluators
Conflicts
Interdepartmental Cooperation
Decision Grid
Interdependence
Retailer Involvement
Decision Grid
127
128
131
140
143
146
150
iv
Dealer Development Module

- Introduction
This module provides both the rationale and method for leading the Parts
Department from the Dealers perspective. It cannot and should not attempt to
remake the retailer into a parts management expert. Rather it establishes what
the retailer can do to accurately understand and assess Parts Department
operations so that the performance is optimal. It establishes a level of
commitment to the Parts Operation which is essential to complete Modules 2
through 7.
APPROACH TO CONTENTS
The Retailer should approach the Parts Department (through the material
supplied in this Module) in five steps:
1 READ
MODULE
2 REVIEW
FORMS
3 ANALYSE
EVALUATORS
4 CHOOSE
ALTERNATIVES
5 IMPLEMENT
SUGGESTIONS
Contents
Justification
Operating
Assessment
Standards
Potential
Grid
Decide
Specifics
Monitor Outcome
These five steps comprise Retailer Development in a system for achieving Parts
Excellence. The contents of this Module lead the Retailer through a logical
realisation of what the Parts Department is, how it operates and how its
achievements can be assessed and improved.
MODULE ORGANISATION
Since numerous individuals, each having a specific interest, may utilise this
module for their own requirements, the five steps discussed above are not
structured in the the text from one to five. The structure and intent of each is as
follows:
IMPLEMENT: A dealership Certification Review for the Module is

found immediately following the Table of Contents. It is followed by a
Certification Review Form. These forms are a measure of the Dealerships
implementation of actions suggested in the Module and, properly updated,
serve as a quick review of each dealerships progress toward certification in
the Module

- Introduction
ANALYSE: Evaluators for the Module's individual content provide a
quick review of the material to be covered. They also set the performance
standards by which the Parts Department will be measured for module
certification. For these reasons, they are placed at the beginning of each
section. In setting the performance standards, they describe a logical,
complete approach toward departmental efficiency. This focuses the
dealerships efforts
READ: Background information is the bulk of the text in this Module. It

explains various Parts Department areas or operations and justifies why such
knowledge is important. It increases the retailers understanding
REVIEW: Key operating and assessment forms are briefly described and
given as examples. Operating forms are those documents used in the
Departments daily activities to make operations orderly and accountable. In
addition, analysis forms are also provided. These are periodic documents
which collect data and provide management tools for assessing or
monitoring the results of Parts Department activities. This improves the
retailers control
CHOOSE: Decision Grids provide specific suggestions to help organise

the retailers approach to solving problems and making changes

- Programme Launch
To emphasise the introduction of Parts Excellence as a Dealership commitment,
the Dealer should schedule and announce an introductory meeting and then
follow-up with regular meetings at least every other month to report and receive
information on progress.
Prepare a meeting checklist prior to the initial meeting that includes :
Meeting date
Reviewing the Dealerships intent (or progress, once Parts Excellence has been
initiated)
Reviewing customer satisfaction record (or talk about beginning one as an
opening element to Parts Excellence)
Alerting managers prior to the meeting that customer satisfaction will be
talked about
Selecting a meeting place that is both comfortable and convenient.
Planning to have Parts Excellence recognition plaques with any module
certification bars that the Dealership has earned or wants to earn displayed at
the meeting either as the real objects earned or as photographs of those to be
earned
Reviewing arrangements and rehearsing your comments
Letting others in the Dealership know if they are expected to participate and,
if they are to present, what their topics are
Planning to offer an award for the best suggestion on how to improve
customer or profit satisfaction. Use this as a discussion starter
Preparing a meeting guide with :
Opening remarks (we are here as a team, we are moving in the right
direction, Parts Excellence as a resource to make use of, it will take time
and will power, our goal is total customer satisfaction, we are open to
suggestions, etc.)
Parts improvement suggestion contest
Conclude meeting by re-emphasising customer satisfaction, product
excellence, operational excellence and the importance of people to make
it a reality

- Decision Grid
IMPROVING PARTS MARKETING

EXPECTATION (WHO)
RESPONSE (WHAT)
PROMOTE A
POSITIVE
EMPLOYEE
ATTITUDE
Indicate a sincere desire to help

Provide attractive uniforms
Expect excellent personal grooming and
hygiene
Provide a positive, clean, working
atmosphere
EXHIBIT SKILLS,
TECHNOLOGIES
INVENTORY
CAPACITY
Display awards, plaques, recognition letters

Inspect Parts facility for cleanliness,
organisation
Encourage a display quality everywhere in
the Dealership
MAINTAIN HIGH
HOUSEKEEPING
STANDARDS
DEMONSTRATE
EFFICIENT
OPERATIONS
Expect rapid, professional phone call

handling
Require quick counter service, no waiting for
either technicians or outside customers
Use computer, microfiche and other
automated techniques to improve delivery
service
Expedite all transactions whenever possible
DEVELOP MENU
PRICING AND
COMPETITIVE
ATTITUDE
Package prices for parts/labour, particularly

maintenance and highly competitive service
tasks
Promote an image of competitive prices
through specials, sales, mark downs,
availability, fast service
Inform Service Department of prices for
frequently requested parts so that customer
gets firm quotes quickly
MAINTAIN
CUSTOMER
FOLLOW-UP
Assign individuals to notify customer when

special orders arrive
Develop formal, documented, notification
methods
Emphasise importance of delivery (and
customer claiming)
Customer contact areas kept spotlessly clean

Dusted, straightened inventory storage
Clean, clear signs, posters, banners etc.
Encourage fastidious, continuous cleaning
during working hours
Basic Perceptions - Evaluators
QUALIFIER
DEALER ACTION
THE DEALERSHIP
PARTS MANAGER
KEY REQUIREMENTS
VALUE
Dealership has a Parts Department Facility

Shipping and Receiving areas
Parts Display Area
Convenient customer parking
Retail/Wholesale counter space
Separate, exclusive, parts storage area
Full time Parts Manager

Manager has executive status
Retailer personally involved with Parts
Department Operations
Retailer meets regularly with Parts Manager
Assigned, exclusive Parts Department staff
10
4
4
4
4
6
10
4
4
4
6
Parts Manager included in Dealership

management meetings
10
Inventory control method or system
4
Carry (stock) inventory
6
Parts manager controls Department
merchandising budget
4
Expected to contribute to Dealership profits
4
Regularly develop goals and objectives
4
Identification and direction signage
4
Expected to cooperate with other departments 4
Assessment Score (100 points possible)

Certification requires a score of 80 or above
Basic Perceptions - The Dealership
Franchised automobile and truck Dealers (Owners, operators, or General

Managers of establishments which sell, service and provide factory parts or vehicle
owners) are a unique group of retailers. In much of the world they represent a
major economic force that is unrecognised simply because the Dealer is usually an
independent business person operating within a specified region. And while the
Dealership may be considered a franchise having close ties with specific vehicle
manufacturers and relying on public recognition of those brands to help generate
sales usually the dealerships operations reflect the individual who owns and
controls it.
This unconscious link between the Dealer as a person and the Dealership as an
establishment is so strong that the term Dealer often means both, and assumes
that the Dealerships physical expression and operating behaviour reflect its
owner.
Often, this is true. Many dealerships are family-run, with the Dealers name
prominently displayed along with the manufacturers name. The Dealer takes
great pride in the family business. Each Dealer, along with thousands of others
around the world, purchases vehicles from a manufacturer and offers them for
resale. Thus, while the Dealer may technically be the final phase in the
distribution process, few consider themselves as simply an extension of the
manufacturer. Instead, they are independent enterprises with essentially total
control over their operations and business potential.
10
Basic Perceptions - The Dealership
In the past, when there were fewer vehicle competitors, when low fuel prices
made transportation inexpensive, when the demand for new vehicles was high
and when competition was not as fierce, dealerships thrived almost exclusively
on the profits of new and used vehicle sales. New Dealers were usually developed
from successful salespeople. They learned and practised the business from a sales
perspective; rewarded with instant gratification of closing a sale, impatient with
abstract numbers, interested in people rather than systems and procedures.
When they became Dealers themselves, these personality traits tended to
dominate operating characteristics.
Thus the Dealerships focus has almost always been on vehicle sales. From the
point of view of fixed operations, and particularly the Parts Department, this
causes problems. Since typical automobile dealers built a career out of vehicle
sales, most have little or no direct experience with parts operations. This causes
confusion not only between Dealers and their Parts Departments, but among
other departments as well.
In addition, Dealers have had little incentive or reason for concentrating on any
portion of their business other than vehicle sales. Losses in other areas could be
offset by vehicle sales profits. However, as competition increased not only from
other Dealers, other brands and a volatile global economy, but also from an
expanding base of aftermarket services Dealers find themselves in different,
and often difficult times.
11
Basic Perceptions - Parts Manager
Parts Managers generally receive very little formal training. Many entered their
management position without proper experience, understanding or resources.
They may have learned from a previous manager, or perhaps they were hired away
from a competitor or an aftermarket supplier. In any case, Parts Managers seldom
have a complete, accurate, operating procedure and philosophy. They learned by
making mistakes. Even among superior Parts Managers, operating errors remain
undetected and uncorrected simply because no formal, thorough approach to all
aspects of the Parts Department has ever been considered. In some dealerships the
Parts Manager is little more than an ordering clerk, collecting the requests of
technicians, retail customers, wholesale customers and the dealer.
Perhaps the most significant reason for developing Parts Excellence is to provide a
knowledgeable, proven, complete operating formula for Parts Department
effectiveness based upon strong management from a knowledgeable Parts
Manager. Parts Excellence is the response to an industry-wide need for training
that helps Parts Managers approach their Departments with wisdom and
accuracy. For, unlike the Service Department which sells and resells the
knowledge and skills of its technicians every day, the Parts Departments business
is totally dependent on two things which must come from outside the Dealership:
parts and customers.
Only with a systematic approach, and a Parts Manager who can activate and
orchestrate that approach, can the Department effectively predict and respond to
customer demands. Without a system, the Parts Manager is forced to make
decisions based on limited experience, incomplete data and intuition. The results
are seldom excellent and are usually expensive, time consuming and wasteful.
12
MANAGEMENT RESPONSIBILITIES
Use the worksheet to list five responsibilities which you think are the most
important. For the Dealer this means to list those things that are considered most
important for the Parts Manager to manage. For the Parts Manager, this means
to list the five most important things that it appears the Dealer wants managed.
Dealer and Parts Manager should complete their lists separately and privately,
then compare lists.
The Parts Manager is responsible for managing:

1. ______________________________________________________________
2. ______________________________________________________________
3. ______________________________________________________________
4. ______________________________________________________________
5. ______________________________________________________________
Do your expectations and priorities match? Is the Parts Manager concentrating

on what the Dealer expects? If the lists dont match, both parties should discuss
them thoughtfully and thoroughly. Both should understand what is expected,
required and needed. Reach agreement. Review what is discussed periodically to
make sure both Dealer and Parts Manager are still in accord, especially when
there is a change in market conditions, the Dealership or the Parts Department.
13
It is vital that Dealers and Parts Managers understand and agree upon what each
expects of the other. The Manager is responsible for Department operations and
outcomes. (The term Manager is used to reflect the title of the person assigned
the tasks of administering the Department. This person might be called the Parts
Department Director, Controller, Fixed Operations Vice President, etc.)
The Parts Manager should be held accountable and expected to achieve specific,
understood objectives. However, authority must accompany this responsibility.
The Parts Manager is given authority by the Dealer to run the Department
without interference as long as objectives (customer satisfaction, financial,
operational and behavioural) are met. A Parts Manager who has responsibility but
no authority is severely limited in the capacity to perform effectively. Frustration
will result.
In order to help the Parts Manger achieve desired results without undue
interference and conflict, the Dealer must be able to :
Stress customer satisfaction
Ask the right questions
Define expectations of personnel
Determine and assess profit expectations
Establish and measure operating standards
Monitor Department efficiency
Realise reductions in Department waste, loss and unproductive time
The Dealer approaches these tasks from a leadership position. The Dealer leads
the entire establishment, providing direction, examples, standards and goals. The
Parts Manager runs the Department, providing support to the Dealers direction,
translating goals and standards into operating objectives and remaining accessible
to Department employees for assessment, assistance and problem solving.
14
MANAGING THE PARTS DEPARTMENT

The Parts Manager DOES:
The Parts Manger DOES NOT:
Place profit ahead of customer

satisfaction
Perform tasks assigned to others
Allow individuals to choose tasks
Assign tasks to personnel who are
unable to do an assignment
Over monitor task as it proceeds
Generalise on expected outcomes
Dictate all phases of operation
Change expectations unilaterally
Order people to do things
Use authority for intimidation
Censor achievement oriented
employees
Expect work to be its own incentive
Dehumanise work environment
Show distrust of employees
Criticise someone in the presence of
others
Show favouritism
Tolerate inferior performance
Fear to change
Stand apart from others

Supervise quality of work done
Assign tasks to individuals
Adequately train personnel to do
tasks assigned
Monitor results
Specify how results are evaluated
Solicit and use suggestions
Encourage constant improvement
Act as a team leader
Require high quality work
Help people reach career goals
Provide constant reinforcement
Expect professionalism
Closely monitor security
Privately inform someone of errors
Publicly acknowledge good work
Expect superior results
Include all good and reasonable
suggestions
Lead and direct
15
The Dealer guides the Parts Department through a full-time, knowledgeable

dedicated Manager. The Parts Manager should be:
Recognised as an executive in the organisation with the rights and
privileges given to other department managers
Included in management meetings, in planning sessions, in goal setting
activities and in the flow of information and discussion relative to
Dealership affairs
Provided with a competent staff of parts personnel devoted exclusively to
Parts Department operations
Granted an operating space and methods to perform all ordinary
Departmental asks of receiving, allocating, selling, controlling transactions
and monitoring practices and results
Supplied with elements necessary for meeting customer needs such as
counter space, waiting area, customer parking, directional signs, parts
displays and merchandising budget
Required to produce (and given the mechanisms for producing)
Departmental profits
Supported adequately to maintain high levels of customer satisfaction
through sufficient parts availability
16
Basic Perceptions - Key Requirements
Parts Excellence is not possible unless the Dealership is committed to having the
necessary departmental, physical, monetary and operating essentials. It begins
with the Dealer who encourages and rewards the Parts Department for satisfying
customers and generating profits. To do this, the Dealer must be intimately
involved with the Parts Manager and the Department.
The personally involved Dealer can benefit Parts Department operations in
many ways. Dealer involvement helps to :
Provide guidance based on the Dealers professional experience
Build the status of the Parts Manager and Parts Department
Allow close monitoring of the Departments emphasis on customer
satisfaction
Recognise problems quickly and suggest appropriate alternatives
17
Basic Perceptions - Decision Grid
GETTING INVOLVED
EXPECTATION
RESPONSE
DEALER IS
COMMITTED TO
UNDERSTANDING
AND GETTING
INVOLVED WITH THE
PARTS DEPARTMENT
Personal involvement with Department

operations
Working understanding of basic
Department functions
Recognise Departments importance in
Dealerships overall profitability and
customer retention (customer satisfaction)
Hold regular meetings with Parts Manager
Encourage free and open exchange of
ideas
Develop reasonable, agreed upon
objectives to reach customer satisfaction
and profit goals
Hold meetings at least monthly, preferably
weekly
Show an attitude of trust and confidence in
Parts Managers decisions back up those
decisions and discuss any reservations with
the Manager
Avoid conflicts, edicts and undermining
the Managers authority over the
Department
Include Parts Manager in Dealership
planning meetings
Solicit Managers ideas for merchandising,
marketing, promotions, new market
prospects, operational improvements,
potential competitive pressure or changes
in competitor mix
Develop an expectation among all
departments for cooperation and
understanding
Provide capital to support parts and
accessories purchases of adequate inventor y
18
The Parts Department - Evaluators
QUALIFIER
DEALER ACTION
VALUE
DEALER ROLE
Familiar with basic Parts Department

operations
2
Establish Parts Managers responsibilities 10
Solicit Department suggestions
2
View Parts Department as a business
10
Provide consistent, predictable
leadership
8
Set objectives based upon quantitative
rather than subjective criteria
7
Recognise inventory investment
necessary to satisfy the great
majority of customers
7
BUSINESS
PERSPECTIVE
Parts Manager granted Departmental

authority
Managers goals prepared in writing
Financial accountability and
information utilised
Develop formal, documented daily
operating methods
Parts and supplies purchasing
centralised in the Parts Department
Utilise controls to verify operational
integrity
OPERATING
METHODS
Parts Manager analyses return on

investment
Activities implemented meet realistic
standards
Parts Manager controls the
Departments daily work
Agreed upon goals are met
All activities are documented

19
8
7
2
8
2
2
7
2
7
7
2
The Parts Department - Dealer Role
FUNCTIONS
The Parts Department is responsible for:
Proper inventory planning
Accurate parts, accessories and supplies ordering
Precise receiving, stocking and delivery procedures
Sufficient security and safety
Maximum use of existing facilities
Housekeeping
Wise investment of the Dealerships available capital
The benefits of applying Parts Excellence to Dealership operations are quantitative
resulting in measurable increases in business potential. These measurements
involve all aspects of Parts Department activities:
Customer satisfaction
Profitability (Return On Investment)
Systems efficiency
Procedural proficiency
Consistently applied controls
Established standards
Recognise and address changes in trends
Each of these areas requires the Dealers direct involvement. Performance
expectations should be discussed, agreed upon and written so that Parts Managers
know what is to be expected of them and Dealers know what goals are to be met.
The Dealer provides the leadership. The Parts Manager activates it through
efficient management.
20
The Parts Department (and, perhaps less frequently the Service Department) is
considered by some Dealers, at best, as an unprofitable customer support area,
and, at worst, as a capital draining expense that exists because it is a franchise
requirement.
PROFITABILITY
Many Dealers have realised the optimum profit and growth their Parts
Department could yield. In some cases Dealers are unfamiliar with essential Parts
Department systems and operations. Thus the Department appears complex,
difficult to understand, often uncontrolled and in constant crisis.
The Parts inventory is a major investment in the Dealership. It influences the
Dealers overall capacity to respond to change, compete effectively, and realise
profits at the same time. Dealers themselves, usually unaware of the details of
Parts Department operations, can feel vulnerable to a system they do not
understand.
Some simply ignore the Department leaving it to their Parts Manager to run
indiscriminately or without executive control. Others may get involved by
getting upset or impatient, and worsen already difficult problems. Still others
may attempt to use their sales experience as a method for developing or defining
Parts Department operating structures. In all cases the results are usually
disappointing and sometimes disastrous.
21
BUSINESS STRENGTH
The Dealer should clearly state to the Parts Manager that customer satisfaction is
an important goal of all Dealership departments. Further, the Dealer should
personally reaffirm with the Parts Manager that every attempt should be made to
provide more parts and accessories, to increase the number of customers demands
fulfilled and to emphasise sales as an important planning element.
The Parts Manager is responsible for increasing parts and accessories sales. The
Dealer actively supports this, and confirms it by making it clear that:
Handling only the business that comes to the Department is not
sufficient to accomplish aggressive sales growth goals
Any reduction in the Service Departments traffic or capacity will make it
more difficult for added parts sales, and therefore the Service Department
should be given consistent attention and Parts Department support
A strong Service Department provides a continuous source of parts and
accessories business
Even if the Parts Department is operating at peak efficiency and does not
have sufficient capital to expand, the Parts Manager should annually
submit ideas so that plans are prepared when expansion can occur
Any reduction in customer satisfaction directly affects the Dealerships
reputation and makes it more difficult to sell vehicles
The quality and capability of the Parts Department affects the entire Dealership.
Fixed Operations (Parts and Service) are extremely important in maintaining
customer loyalty. In fact, customer satisfaction after the sale plays a major role in
keeping customers for future sales. Parts and Service excellence often determines
the Dealerships capacity to compete and remain successful.
22
CUSTOMER LOYALTY
A positive experience with the Parts Department helps customers to:
Consider the Dealership for all their parts needs

Consider the Dealership for service
Consider the Dealership first for their next vehicle purchase
Recommend the Dealership to friends, relatives, neighbours and business
associates
Remember: A single bad experience jeopardises the relationship that exists

between the customer and the Dealership. Every contact with the customer is an
opportunity to build that relationship or damage it. Excellence in service to
customers is vital to the Dealerships future potential.
CUSTOMER LOYALTY
POTENTIAL
CUSTOMER
VEHICLE SOLD BY
YOUR DEALERSHIP
CUSTOMERS EXPERIENCE
WITH PARTS AND SERVICE
POOR
DISSATISFIED
CUSTOMER
POTENTIAL
CUSTOMER
RETURNING
CUSTOMER
GOOD
SATISFIED
CUSTOMER
VEHICLE SOLD
BY COMPETITOR
23
POTENTIAL
CUSTOMER
The Parts Department

- Business Perspective
BUSINESS ELEMENTS
The Parts Department must be approached as a separate business. Properly
managed Parts Departments already contain all the elements necessary to conduct
affairs in this manner including:
Inventory
Capital investments
Sales
Public relations
Planning and forecasting
Facilities
Specific procedures and work activities
Maintenance and housekeeping
Merchandising and advertising
Security
Worker safety programme
Shipping and receiving
Accounts payable and receivable
Personnel
Training
Administration and payroll
All decisions made by the Parts Manager occur within this business setting. The
majority of these decisions have nothing to do with Parts financial
considerations are what direct operations. To pay expenses, purchase stock and
respond to customers, the Parts Department must first pay for itself, as does any
business.
24

CUSTOMER ORIENTATION
Inventory should be considered as money; parts are currency; not simply items.
Generally, only profitable items should be stocked. To accomplish its business,
the Department is responsible for:
Providing requested parts and accessories
Delivering them at the appropriate time
Having them available in correct quantities
Offering them at an acceptable price
Realising a reasonable profit
Directing all operations with adequate controls
The Parts Departments operating methods are business oriented. They also
reflect the expectations and personality of the Dealer. But business methods are
a mechanism, not a conscience. They can help orchestrate operations to best
serve customers and attain profits only if the Dealership makes the commitment
towards clarifying, formalising and supporting those operational standards.
The Dealership that concerns itself only with profits will reduce its customer
base. The Dealership that concerns itself only with customers without knowing
what its operations cost, may spend itself into bankruptcy. The Dealer has a
responsibility to maintain a profitable business in order to continue to serve
customers who depend upon the facilities for parts, service and new or used
vehicles. Thus, reasonable profits are also ultimately in the customers interest.
25

MEASUREMENTS
The Retailer reviews and adjusts Parts Department activities from a business
perspective, and for good reason as long as the Department is meeting profit
objectives and satisfying the great majority of customers, it is succeeding well. The
Parts Department itself needs to control and organise information about its
activities. Numerous analysis forms keep the Parts Manager aware. These include
reports on:
Expenses, gross and net profits
Inventory
Sales to all customers
Lost sales
Special orders
Back orders and arriving shipments
Parts sales per repair order trends
Parts to labour sales ratio trends
Employee productivity trends
Overdue accounts
These detailed, comprehensive measurements allow the Parts Manager to more
clearly picture the future based upon accurate data.
ACCOUNTING
Precise and accurate figures must be kept current based upon the Financial
Statement. Business management the routine accountability, control and fiscal
assessment of operations is useful only when the information is accurate,
understandable and utilised to set future objectives. Perhaps the greatest
difference between the Parts Department as a business organisation and the Parts
Department merely as a supply source is that the business (and profit) oriented
Parts Department monitors its affairs from a financial perspective. This does not
mean that its progress is decided by the Financial Statement alone, but that
business health and prospects are measured first, by firm financial data.
26

FINANCIAL STATEMENT
Accuracy is central to business success. The Parts Department views its activities,
opportunities and challenges from a profit making perspective. The key resource
for this review is the Financial Statement. Parts Department accounts (which
should be on the Financial Statement) help the Parts Manager monitor trends,
predict future needs and detect problems early. The most common accounts are:
Parts and Accessories Warranty Claims usually made to the factory for
parts and accessories used on Warranty covered service work
Parts and Accessories Internal which includes a proportion of those items
sold through the Service Department and Body Shop. This account also
covers those parts and accessories for used car and truck reconditioning and
in maintaining Dealership vehicles (excluding warranty) as well as
accessories sold to the New Vehicle Department
Parts and Accessories Counter Retail which are sold at retail prices to a
customer who is usually the user
Parts and Accessories Wholesale which are sold to customers below
the retail prices, usually for resale to their customers
Inventory Adjustments which may be necessary to remove obsolete and
discontinued items from the documented inventory and to compensate for
price changes
Petrol, Oil and Grease, Paint and Body Shop Materials, Miscellaneous
and Non-Automotive Merchandise and other Franchises are also given
separate listings
Allowance for Doubtful Accounts which provides for possible losses from
credit sales that do not pay
Salaries, Supervision which indicate compensation for the Parts Manager
or Department Director and other supervisory personnel
Salaries, Clerical which indicate compensation for employees, some of
whom may be part-time or shared among departments
27

Other Salaries and Wages which indicate compensation for Parts
Department employees such as counter people, drivers, etc.
Company Vehicle Expense for operating and maintaining Parts
Department Vehicles
Other Supplies including light bulbs, rags, solvents, cleaning and
washroom supplies, etc.
Policy Works Parts and Service for the internal selling price of parts
which are not charged to a customer or the manufacturer
Outside Services including data processing, security, rubbish removal,
inventory services, etc. which are shared among departments
Training expense for tuition, films and materials, meals, lodging and
transportation while Parts employees attend schools
Depreciation of equipment as a monthly provision for the routine
devaluing of furniture, fixtures and parts and accessories equipment
The Financial Statement is, understandably, a sensitive and private document. Its
information is privileged and personal. If a Dealer cannot allow full disclosure to
managers, a compromise should be found in which appropriate portions are
provided so that managers have all the details they need in order to assess the
productivity of their departments. Without this information, the Dealer is
essentially not giving the Parts Manager the authority to take command of the
Departments affairs.
28

GOAL SETTING
Goal setting should address not only immediate situations, but also long-term
planning. In a continually expanding and changing market the Dealership must
be prepared to simultaneously expand and alter its operations to consistently
reach its potential. In markets affected by government price controls, import
controls, explosive inflation, severe shortages or any supply/demand ratio that is
severely unbalanced, the Dealership must take time to consider long-term plans.
A simplified goal setting method (such as expecting a specific percentage increase
year after year) may not be appropriate. Consider all the variables in the market
special circumstances, changing Dealership needs or capacities, added or
different competition, etc. so that goals wisely reflect expected possibilities, not
just blindly increased sales growth.
In those Dealerships with strong Service Department operations, use the
expectations defined by the service market to help determine parts sales goals.
29

- Operating Methods
RETURN ON INVESTMENT
To further assess the Parts Departments minimum requirements for profitability,
the Parts Manager should analyse Return On Investment.
The chart on the opposite page shows an appraisal formula which can be applied
to Parts Department operations. All the figures contribute to a basic standard
the Return On Investment.
In the upper bracket, determine total working capital, plus permanent
investment. Divide this total investment into total parts sales to
determine gross turnover an approximate (and certainly not exact)
estimate of the number of times the total inventory investment sold in
one year. (Note: this is gross turns, not accounting for which part
numbers are selling how often, nor whether parts and accessories
purchasing is occurring in the most cost effective manner)
In the lower bracket, the total cost of sales is subtracted from total sales
to provide net profits. Net profit divided by total sales yields net profit as
a percentage of sales
Percent Return On Investment is calculated by multiplying the turnover
figure by net profit as a percent of sales
These generate approximations. Use them as a starting point for setting a
reasonable Parts Department standard. It should be emphasised that proper
conclusions can only be drawn when calculations include scheduled (stock) order
efficiency and exact attribution of costs. The Dealer and Manager can use the
calculations presented here until more accurate methods are introduced and
applied in subsequent modules.
30
The Parts Department - Operating

Methods
Parts
Inventories
+
Accounts
Receivable
+
Currency
Cost of
Parts
+
Wages, Salaries
& Commissions
+
Freight &
Delivery
+
Administration,
Other Expenses
excluding taxes
Working Capital
+
Permanent
Investment
Sales
Total Investment
Investment
Turnover
X=Basic % ROI
Sales
_
Net Profit
Sales
Ultimate Cost
of Sales
31
Net Profit
as % of Sales

- Operating Methods
STANDARDS
There is a saying, When there is no specific destination, any path will lead to it.
An operating plan is essential to efficient, predictable Department results. The
advice and knowledge compiled in Parts Excellence contains standards relative to
all aspects of Parts Department operations. It is tested, practical information.
However, each Dealership must independently determine its own approach to the
standards generally presented.
Regardless of what information and elements the Dealership implements in its
own system for Parts Excellence, the determination must meet realistic standards.
These standards imply that Dealer activities relative to its Parts Department (and
all departments for that matter) must be:
Quantitative (mathematically determined if at all possible)
Measurable (comparable numerically to other plans or options so that
results are factual and narrowly interpreted)
Specific (precise and objective, rather than general or subjective)
Realistic (attainable, moderate, honest, achievable in the context of
current Dealership possibilities and motivation)
Understandable (simple to implement, assess and communicate, as well
as acceptable and motivating)
Reviewable (flexible, capable of change, periodically examined so that
adjustments can be made and modifications are understandable)
32

- Operating Methods
CONTROLS
Standardised operations undergo continuous checks and balances or controls.
These controls are specific devices that ensure procedures are properly
implemented in order to reach departmental objectives.
Controls become the final link to complete, working operations. Controls
provide for reassessment, security and confirmation. They need not be dictatorial
tests which judge or confront individuals. Instead, controls can be used as
specific points which measure how well procedures are working, and how
uniformly and accurately those procedures are performed.
In many cases simple documentation (sign-out forms, requisitions, etc.) that
require an individuals signature or some other non-confronting method of
overseeing will keep procedures in order and personnel performing optimally.
Taken together, procedures and controls help assure that system expectations are
met and that Departmental profitability and customer satisfaction goals are
achieved.
Systems
for defining overall
standards and expectations
Procedures
for organising formal,
consistent methods
33
Controls
for reassessment, security
and confirmation of operation

- Operating Methods
The Parts Department is essential to the Dealerships ability to satisfy customers
and have it continue as their business preference. The Dealers personal
involvement helps assure that all employees are aware of and adhere to good
business practices.
WARRANTY GUIDELINES
All Parts Department operations occur within the context of fair and forthright
treatment. As a general operating rule, Parts Department personnel should be:
Disclosing to the customer the fact that parts and accessories not marketed
by General Motors or an affiliated company are not included in GM
furnished warranties
Advising the customer that a vehicle which is altered, adapted or modified
in order to install parts and accessories ordered and not marketed by
General Motors will void the otherwise applicable warranty
It is also essential that the standards established for daily business include the
elements necessary for proper and complete operating behaviour. This includes a
Department which has:
Authority over its requirement

Responsibility for its results
Communications that are open and frequent
Documentation that parallels and tracks parts flow
Processes that organise transactions and handling methods
AUTHORITY
The Parts Manager controls the Departments daily work. The Parts Department
should be the central parts and supplies purchasing agent for the Dealership,
making all purchases, canvassing all departments for prospective needs, organising
all supply requisitions, soliciting quotes, approving transactions, receiving all
shipments, etc. The Department does not have authority over the requirements
of others, nor can it operate outside what the Dealer considers the Dealerships
best interests. The Parts Department exercises authority in the interests of the
entire Dealership, not simply to benefit itself if that puts the Dealerships welfare
at risk.
34

- Operating Methods
RESPONSIBILITIES
The head of the parts Department must also achieve agreed upon goals.
Certainly the Parts Manager should be given every opportunity to succeed by
having proper training, sufficient resources (financial, physical, human) and
achievable (but not necessarily easy) goals. The manner in which the
Department is run should properly be in the hands of the Parts Manager. By
being granted this operating flexibility, the Manager is also agreeing to be
responsible for meeting Dealer expectations. One cannot be in charge of the
Department and not be responsible also for what it must accomplish.
COMMUNICATIONS
Communication systems must be created and utilised to circulate information.
Business organisations cannot rely on verbal orders, unspecific suggestions or
unresolved discussions to conduct its affairs. Communication must be precise,
and in writing.
Communication is an exchange of information. The Parts Department, as a
recognised entity within the Dealership, becomes a source of expertise and
opinion that is solicited and acknowledged. The Dealer can activate the
Department and its business prospects by developing a meeting routine in which
department managers discuss and resolve problems, plan together and in general
become more familiar with and understanding of each others needs.
The Parts Manager must have sufficient information and direction to respond as
a true member of the Dealerships management team. Authority and
responsibility are meaningless unless the manager is fully informed and is
included in planning sessions among department heads.
35

- Operating Methods
DOCUMENTATION
Documentation is a central, formalising feature of the efficiently controlled Parts
Department. All activities within and between departments are accompanied by
a complete documented history. For the Parts Department this is most critical
since the only practical way in which it can make proper business decisions and
protect itself from loss is by paralleling every part, accessory and unfulfilled
customer demand with a written record. The Dealer must have a Parts
Department that rigorously documents all transactions and resolves the status of
any missing documents.
Documentation is particularly critical where the forms themselves represent
money. These money controlling documents repair orders, parts requisitions,
sales receipts, credit invoices, counter tickets and purchase orders must be
carefully monitored.
PROCESSES
These are precise, written, handling methods for both the parts and their
paralleling documentation. These are specific, interrelated rules or routines that
ensure the Department utilises personnel most efficiently and functions with
appropriate security. A complete discussion of these processes is the subject of
Modules 2 through 5.
These operating routines are designed so that the Department has adequate
control over all parts, accessories, materials and supplies throughout the
transaction from supplier to final user. Included with the ordinary operating
routines are a series of controls which help assure that processes are complete and
accurate.
36
The Parts Department - Decision Grid
MANAGING OBJECTIVELY
EXPECTATION
RESPONSE
EXPECTATIONS
ARE SET
ACCORDING TO
OBJECTIVE
RATHER THAN
SUBJECTIVE
STANDARDS
Wherever possible, analysis of operations

should be:
Quantitative
Measurable
Specific
Realistic
Understandable
Reviewable
Operations are standardised and undergo
continuous checks and balances
Parts Manager is routinely provided with
information concerning the Dealerships
focus and direction
Parts Manager and Parts Department are
regularly included in communications and
management information
Parts Department is granted:
Authority over requirements
Responsibility for results
Open, frequent communications
Full documentation of parts flow
OBJECTIVES AND
METHODS ARE UNDER
CONSTANT CONTROL
Signatures are required for dissemination of

critical documents such as Repair Orders,
Counter Tickets and other receipts which
represent money
Critical documents have a written, formal
procedure for tracking and verification
Procedures for tracking and verifying critical
documents are rigorously followed
Employees are taught to be concerned about
document flow and procedural integrity
Employees are taught to take pride in
following procedures strictly, in filling out
forms completely and legibly and in
attending to detail to reduce errors
37
MAINTAINING A BUSINESS PERSPECTIVE

EXPECTATION
RESPONSE
PARTS DEPARTMENT
IS VIEWED AS A
SEPARATE BUSINESS
ENTITY
Department controls its inventory, sales,

marketing (promotions that are not related
to the efforts of departments such as
Service), facilities and personnel
Full-time Parts Manager dedicated to Parts
Department
Separate parts storage area completely
enclosed with full height walls and lockable
entrances
Exclusive areas utilised for shipping and
receiving parts and accessories
Specific counters for retail and wholesale
customer transactions
Parts displays prepared and maintained
within Dealership proper
Personnel assigned exclusively to Parts
Department and under the control of its
Manager
A separate parts merchandising budget is
controlled and administered by the Parts
Manager
Parts transactions occur within formalised
controls:
Inventory control system utilised (pad,
card or computer)
Dealer and Parts Manager support and
improve efforts to devise and maintain
procedures, routines and paralleling
documentation that track each sale
Parts Department location is indicated with
signs that lead customers through the
premises and from other departments
38
MAINTAINING A BUSINESS PERSPECTIVE

EXPECTATION
RESPONSE
OPERATING
METHODS ENCOURAGE
A BUSINESS PERSPECTIVE
Parts Manager has authority over

Department operations
Parts Manager is held responsible for results
and helps plan and set objectives
Customer satisfaction and profit
considerations are balanced with each other
whenever management or operating
decisions are made
Dealer to hold regular meetings with:Parts Manager and managers from other
departments. Dealer meets with staff of
different departments at least twice per year,
Dealer has all employee gatherings
Financial information (sales, cost of sales,
expenses) is separated into accounts for each
department, particularly dividing fiscal
reporting for Parts, Service and Vehicle Sales
Operating routines are diagrammed,
formalised and reflected in written job
descriptions
CRITICAL DOCUMENTS
ARE USED TO RECORD
EVERY TRANSACTION
NO EXCEPTIONS
Repair Orders, Customer Demands

Purchase Orders
Counter Tickets/Sales Receipts
DOCUMENT HANDLING
METHODS ARE
FORMALISED
Written policies for issuing, preparing, and

accounting for critical documents
Policies prepared and published concerning
business practices including warranty
disclaimers, concern for the customer,
quality replacement parts, fairness,
competitiveness, etc., which the Dealer
determines are appropriate to signal the
daily operating philosophy of the Dealership
and its Parts Department
39
THIS PAGE INTENTIONALLY LEFT BLANK
40
The Parts Transaction - Evaluators
QUALIFIER
DEALER ACTION
DEMAND
Parts Department is assigned to monitor all

purchasing (parts, accessories, supplies)
10
Scheduled stock orders are used
5
All departments surveyed to determine
future demand
4
Lost Sales Record maintained
4
Dealer routinely reviews Parts Department
Purchasing methods
4
CONTROL
Department operations are uniform

Parts Department utilises basic
business control forms (Purchase Orders,
Repair Orders, Counter Tickets,
Customer Demand)
Authorisation Stamp utilised
Forms issued and recorded sequentially
Dealer emphasises importance of
documentation
Dealer has list/description of all reports
available to Parts Manager
ANALYSIS
PLANNING
VALUE
Parts Department uses essential Analysis

forms (SAR and Trend Report)
Financial information routinely made
available to Parts Manager
Parts Manager has access to Financial
Statement
Parts Manager makes business decisions
based on Return On Investment
Department and Dealer recognise the
importance of systematic operations
Dealer expects Parts Department to have a
planned approach to goals
Dealer regularly reviews Parts Department
operating plans and performance

41
10
4
4
4
4
10
5
4
4
10
4
5
The Parts Transaction - Demand
Comprehensive procedures depict the complete cycle of the part as it passes

through the Parts Department. This is called the Parts Transaction and represents
the flow of a part or accessory as it move from the manufacturer through the
Dealership to the user.
Procedures do not eliminate the need for effective people, but they can help
people work more effectively. People exit from the operational stream in different
ways (such as by leaving the Dealership, leaving the Department, getting
promoted or changing jobs). But with procedures, the Department maintains
integrity and productivity during transitions or when inexperienced personnel
join the organisation. When the Department is run procedurally, the Parts
Manager and Department personnel can manage the exceptions, rather than react
constantly to crisis.
It is the responsibility of the Parts Manager or a designate to thoroughly
understand and use Parts Transaction procedures. However, the Dealer should be
familiar with the basics.
The Parts Department acquires all parts, accessories (and perhaps supplies) in
three different ways:
Scheduled stock orders
Interim orders to fulfil unexpected customer demand
Immediate orders
These three ordering methods differ based upon how critical the need for the part
is. Scheduled stock orders are usually used for the more predictable, less hurried
requests such as inventory restocking. Interim orders are used for unexpected
customer requests and to replenish stock due to unusual demand. Immediate
orders are used when the need is critical because the vehicle is inoperable or unsafe
to drive until repaired.
42
ORDER
RECEIVE
ALLOCATE/SELL
INVENTORY
PLAN PURCHASES
1 SCHEDULED
2 INTERIM
3 IMMEDIATE
(WIP)
Each of the three ordering methods vary in their handling. Yet every parts
request must go through the Parts Transaction cycle that consists of:
Ordering (procurement)
Receiving (delivered to Dealership)
Allocating (or stocking)
Selling (customer receives)
Inventory control (record system)
Inventory management (analysis)
Purchase planning (source selection)
These are essentially chronological steps, which occur from the moment a part
is required until that part has been accounted for in inventory (both when
received and when sold). The Parts Transaction is essentially an operating cycle
a continuous flow of parts from the manufacturer through the Parts
Department to the customer. But it begins each time a customer requests a part.
43
The moment a customer makes a request the Parts Department is doing

business. Thus the customer's demand is considered the starting point for
every Parts Transaction.
It is at this point that the Parts Department's ability to satisfy demand
determines the relative success, profitability and customer satisfaction that is
achieved:
If the part is available from inventory (i.e. purchased in anticipation of a
sale), the Parts Department usually captures the greatest potential profit
If the part is not available from stock but can be obtained from someone
else's inventory (another Dealer, the manufacturer, the distributor), the Parts
Department is fulfilling the demand and thus satisfying the customer, but
most likely at reduced profitability
If the part is not available and either cannot be obtained or the customer
will not wait for the Parts Department to acquire the part, the sale is lost
SALE
AVAILABLE
CUSTOMER
DEMAND
SCHEDULED
NOT AVAILABLE
ORDERED
NOT
INTERIM
ORDERED
IMMEDIATE
LOST SALE
44
ROUTINES
The Parts Department is a complex array of routines which must synchronise.
Each step in the operating cycle (order, receive, allocate, sell, inventory control,
inventory management, plan purchases) contains its own set of subroutines. The
result is a managed approach to customer expectations that improves the
Departments capacity to predict future demand, and thus make anticipatory
scheduled stock purchases at lower total cost while satisfying more customers.
The Parts Departments ability to predict demand must be:
Accurate
Quantitative
Systematic
Complete
DATA SOURCES
Four data sources help develop predictable demand:
Customer demands fulfilled (either delivered from inventory stock or
other sources)
Customer demands unfulfilled (tracked through a record of lost sales)
Manufacturer stocking suggestions and Dealership expertise for the parts
and accessories historically required for the local trade base
Tested expectations relative to changing conditions perceived in the local
trade base
Procedures and forms installed in the Parts Departments daily operating
method are sources for the data.
45
Fulfilled customer demands are a matter of inventory control records. Inventory

control systems record sales, and add replenishments routinely. Accuracy is vital
so that inventory records duplicate actual shelf counts. When these records are
precise, the Department has an excellent source from which to predict future sales
based upon demand and current stock levels.
LOST SALES
Unfulfilled customer demands (lost sales) should be recorded whenever a
customers request cannot be met, either because the part/accessory is unavailable
(back ordered, unobtainable from any source) or because the customer chooses to
go to another supply source. Every Lost Sale should be carefully reviewed since it
represents not only lost business, but a potentially lost customer for future
business. The Parts Department should use the Lost Sale record to:
Train counter persons and other customer contact people how to
accurately document what the customer requires even when the Parts
Department cannot supply it
Closely examine each Lost Sale for possible future stocking
The Lost Sale record can also be used to:
Track demands which may predict changing trends and expose the need
to stock emerging demand items
Confirm specific deliverability conditions using the record as an
unbiased basis for interdepartmental discussions concerning why certain
items are not stocked (or should be stocked)
Generate reports from inventory control that substantiate why an item
was not available and what the recent sales demand has been
46
SAMPLE
LOST SALES
Date
Part Number/Description/Year
Reported
By
INVENTORY CONTROL
Cause*
Demand
(last1/2 year)
*Cause:
O/S (out of stock)

N/S (not stocked)
B/O (back ordered)

O/M (other make)
P/D (part discontinued)
P (price)
N/M (new model)
1986, Bill Marcus Incorporated
47
Manufacturers and other suppliers often suggest quantities of specific parts and
accessories the Parts Department should have. The suggestions are based on
statistical averages and cannot account for differences in markets and areas. The
Dealership can use these suggested quantities as a guide. However, it must decide
for itself if more or fewer of each item is appropriate (based upon historical needs
for similar items and on the Parts Managers judgement concerning the normal
sales of each item). For those parts and accessories that are new and have no prior
equivalent, the Parts Department should set up testing criteria to determine its
own sales volume expectations, and then purchase accordingly.
Tested parts sales provide the most accurate and reliable prediction of future need.
Only parts and accessories which have passed the stocking test should be
purchased for inventory. Do not rely on intuition. Test for demand, and then
purchase for inventory quickly when an item meets the test criteria.
The Parts Department maintains and records its routines through a series of
control forms. This documentation tracks demand and its fulfilment. Much of
this occurs during inventory control where inventory stock and special order
sales are accounted. All remaining demand should be contained in the Lost Sale
record.
48
The Parts Transaction - Control Forms
The Parts Department cannot operate efficiently or securely without basic

business forms. The content and design of these forms may vary depending upon
the Dealerships requirements and operating methods. Successful Parts
Departments employ specific forms during each phase of the Parts Transaction
to record, track and use as source documents for future purchase planning. Vital
forms include:
Purchase Orders
Scheduled and Interim Orders
Immediate Orders
Counter Tickets
Customer Demands
In addition, an Authorisation Stamp can be used to verify and track the
movement of each part and accessory as it travels through the Parts Department.
Samples and discussions concerning each of these control forms (Purchase
Order, Repair Order, Counter Ticket and Customer Demand and Authorisation
Stamp) are presented on the next pages.
49
THE PURCHASE ORDER

The Purchase Order (PO) can be used to:
Check accounts payable
Relate parts purchases to appropriate Repair Orders, Customer Demands
or Counter Tickets
Review purchases as a method for controlling operations and expenses
CONTENTS
The PO should contain the following information (sample on facing page):
Name and address of supplier
Quantity (specific and verifiable)
Specification of item or service purchased
Purchase terms (price quoted, when and how payment is to occur for
items received)
Repair Order number, Counter Ticket number or customer name if
purchase is charged to a specific transaction
Signature of person with the authority to make the purchase
CONTROLS
The PO serves as a method for reviewing and controlling purchases. It is a critical
document that must be rigidly monitored:
Pre-numbered and used sequentially
One authorised person (plus alternate if the first person is not available)
to request parts/accessories or supplies
One PO book or pad used throughout the Dealership for all non GM or
outside purchases. (Each department should not have its own PO book)
Prepared without mistakes. If an error is made in filling out the PO it
should be marked VOID and sent to the Accounting Office
Reviewed periodically and randomly by matching PO with Counter
Tickets or Repair Orders ascribed to it to assure that purchases are indeed
reaching the customer attributed to the purchase
50
SAMPLE
PURCHASE ORDER
#123456
S
U
P
P
L
I
E
R
Quantity
Part Number
Description
GM# (if applicable)
Price
Terms
TOTAL
RO#
CT#
Dealership Logo, Address, Telephone
Customer
Name:
Ordered by:
51
CUSTOMER ORDER
The Parts Department must have a record of the actual parts and accessories
ordered. The Purchase Order acts as both an authorisation for purchase from an
outside source and as a record of the order itself. The Customer Order form is
used to maintain a record of GM orders. It is also used to notify the customer
when the part arrives.
CONTENTS
A summary of information required for the Customer Order is:
Dates request was made and order was submitted
Ordering method used
Date to return if unclaimed
Employee placing order
Department managers authorising signature
Customer information (name, address, telephone number)
Quantity, description and part number
Counter Ticket or Repair Order assignment
Vehicle Identification Number (VIN)
Vehicle information (year, make, model, mileage)
Customer deposit verification and notification
Inventory control sign off
CONTROLS
For effective ordering:
Managers only should approve this order so that duplication does not
occur
Employee making request (or manager or someone assigned the task) is
responsible for contacting the customer when the order arrives
The originating department is responsible for any penalties incurred if
the requested part is unclaimed
All parts and accessories are entered into inventory
Pre-numbered, used sequentially
52
SAMPLE
CUSTOMER ORDER
Date Requested
#123456
Return By
Date Ordered
GM: Scheduled
Non-GM:
Immediate
Name
Requested By
(notify when part arrives)
Authorised By
(Department Manager)
Repair Order or
Counter Ticket Number
Quantity
Vehicle Identification Number
Code/Part#
Vehicle Make/Model
Year
Mileage
Description
CUSTOMER:
CUSTOMER NOTIFIED:
Name
Address
Telephone
INVENTORY CONTROL:
Card
Date
Telephone
Date
DEPOSIT AMOUNT
By
Date
1984, Bill Marcus Inc.
53
THE REPAIR ORDER

Repair Orders provide many functions:
Assures that payment is made for all parts and labour
Technician's work order
Often used as a purchase authorisation for parts
Customer receipt which details everything billed
Confirms warranty work
Provides legal evidence in case of disputes
Generates information and acts as a data source to guide Parts Department
operations (in those Dealerships where the RO is jointly used by Service
and Parts)
CONTENTS
Individual Dealerships usually design one to precisely fit their operating style.
Some prefer Work Order to Repair Order as they feel the word repair implies
that something is wrong when the work may be maintenance or preventative
repair. Some Parts Departments use a separate requisition ticket and never see the
Service Departments Repair Order. In any case, Repair Orders are important to
smooth running operations. (A sample is provided on the facing page).
CONTROLS
The Repair Order is a critical document, therefore it must be carefully controlled.
Procedures such as the following should be rigorously maintained:
Pre-numbered and used sequentially
Issue and account for all ROs by number using an RO check off sheet
(with numbers to match sequences of ROs issued for use)
Any missing ROs should only be open Work Orders
Have a standardised processing procedure so that all ROs are routinely
tracked
Account for internal ROs so that each one is appropriately charged to
the correct Dealership account
54
SAMPLE
REPAIR ORDER/WORK ORDER
Repair Order Invoice copy
Date
Vehicle Identification Number Engine Number
I hereby authorise the repair work herein after set forth to be done along
with necessary material and agree that you are not responsible for loss or
damage to vehicle or articles left in vehicle in case of fire, theft or other
causes beyond your control or for any delays caused by undeliverable parts
or delays in parts shipments by the supplier of transporter. I grant you and
your employees permission to operate vehicle herein described on streets for
testing and inspection purposes. An express mechanics lien is hereby
acknowledged on above vehicle to secure repair amount.
Odometer
Make Series
Year
Registered Number
REPAIR/WORK ORDER
Delivery Date
Name
Address
TERMS STRICTLY CASH without arrangement
Written by
Phone when ready
Operation
Yes
No
Residential Phone
Lubricate
Change Oil
Change Filter Cartridge
Balance Wheels
Front End Alignment
Free Service
Rotate Tyres
Repair Shocks Front
Repair Shocks Rear
Tune-up
Business Phone
Cash
Change
Internal
Transaction Number
Dealership Identification
Name, address, telephone and logo
Authorised by
100001
TIME PROMISED
AM
PM
Estimate
Labour
Customer Signature
Cost
Qty.
Part Number Description
Sale
Repair Information Labour Instructions
1
2
3
4
5
6
Cost
TOTAL PARTS
WARRANTY CLAIMS
Account Number
Sale
Cost
INTERNAL
Account Number
PO No.
Item
CUSTOMER PAY
Cost Account Number
Labour
Mech.
Labour
Body
Sublet
Mech.
Sublet
Body
Parts
Mech.
Parts
Body
Paint
materials
Petrol, oil,
grease
Sublet Repairs
Qty.
Sale
Company Name
TOTAL SUBLET REPAIRS

Litres Petrol
Litres Oil
Tyres
Grease
Misc.
TOTAL
TOTAL
55
TOTAL
Sale
THE COUNTER TICKET

Counter Tickets (or other invoices produced as a receipt for retail or wholesale
customers, or internal employees making parts purchases without service) are also
vital to the accuracy and security of operations.
CONTENTS
There are many different forms of counter tickets. However all should have the
following information:
Customer name, address, telephone number and account number if
applicable
Date of sale
Quantity, description and part number
Dealer cost and selling price (costs may be coded or obscured in some way
for privacy)
Any required levies or taxes
Totalled sale
Payment method and terms
In addition, the form should be personalised with name, location and
telephone number of the Dealership
CONTROLS
As with other critical documents, Counter Tickets must be rigidly controlled
since they represent money:
Pre-numbered and issued sequentially
Issued in batches to individuals and used in numerical order
Entries complete and error free
Tracked and traced so that all issued Counter Tickets are routinely
accounted for
Customer copy must accompany any refunds as proof of purchase
56
SAMPLE
COUNTER TICKET
Name
Date
20
Address
Customer PO No.
Phone No.
Cash
Charge
Cost Quantity
Returns Retail
Part Number
Wholesale
Salesperson
Description
List
Net
Amount
Counter Ticket Number 10001

Account
Dealership
Name and address
Cost
Acct No Amount
Retail
Wholesale
Internal
Petrol, oil, grease
Tyres
Tax
TOTAL
Cash Sale
Charge Sale
Policy Adjustment
NO REFUNDS WITHOUT THIS INVOICE

Received by
Cash Amount Received

Counter Ticket/Invoice customer copy
Counter Ticket
Distribution:
Original
Second
Third
Fourth
office
customer
inventory control
locked in dispensing machine drawer as back-up copy if machine dispensed
57
THE CUSTOMER DEMAND

The Customer Demand form is a central element to Parts Transaction control. A
form should be completed for every request whether the part is in stock or not,
whether the part is ordered or not, and whether the customer purchases or not.
Thus the completed Customer Demand form becomes a fundamental data
resource and operating document.
CONTENTS
Information contained in the form should include:
Name and/or account number of customer
Reference Counter Ticket or Repair Order number if requested
part/accessory is for service (this also becomes the Parts Departments
record of the transaction) or Purchase Order number if provided to a
retail or wholesale customer
Vehicle information (make, model, year)
Technicians name or number of the parts request is made by the Service
Department
Affirmation of posting transaction to inventory control
Part number and description
Fulfilment status (quantity requested, on hand, picked or not available to
meet demand)
Affirmation that invoice and Customer Order form or Purchase Order has
been written for unavailable parts, and posting of Lost Sale
CONTROLS
While the Demand form does not represent money, it does provide the data
necessary to track both requests and trends for future sales. Thus it is quite
significant to the Parts Departments ability to predict future needs and purchase
accordingly. Certainly any check in the lost sale column should be tabulated for
the Lost Sale record and scrutinised.
58
SAMPLE
CUSTOMER DEMAND
(Requisition Slip and Pick List)
Customer
V
E
H
I
C
L
E
Account #
Make
Purchase Order #
Model
Counter Ticket/Repair Order #
Year
Inventory Control
Technician's Name/# (if for Service)

QUANTITY
Description
Quantity
Requested
Part Number
Bin
Loc.
On
Hand
Pick
N/A
Invoice
Order
Lost
Sale
1985, Bill Marcus Inc.
59
THE AUTHORISATION STAMP

An Authorisation Stamp is central to controlling the documentation of parts and
accessories received by the Dealership. It is a rubber stamp that is used on all parts
and accessories payables. The information required on the stamp help track items
as they transfer from the source to the customer. The samp is designed to be used
with all three types of orders (GM Scheduled stock orders, Interim orders and
Immediate orders).
The Parts Manager should be thoroughly familiar with the application of the
Authorisation Stamp. It is a control feature of the Parts Transaction and is
extremely important to the proper conducts for Parts Excellence.
The Dealer can randomly review invoices and sales slips in the Accounting Office
to check that the Authorisation Stamp is being used on incoming payables, and is
properly completed by those responsible for the receiving, stocking, selling and
inventory control of parts and accessories.
PARTS DEPARTMENT AUTHORISATION

11 ORDER:
GM
PO #
22 RECEIVE:
33
Initials
RO/CT
Date
Quantity
Packages
Stock by
Date
I/C
Date
Initials
Date
44 INVENTORY CONTROL:
ALLOCATE:
BMI
60
The Parts Transaction - Decision Grid
USING CONTROL FORMS SYSTEMATICALLY

EXPECTATION
RESPONSE
SOURCE
DOCUMENTS ARE
AVAILABLE
Parts Department records transaction

and maintains business records through:
Use of an Authorisation Stamp
Repair Order or parts request form (such
as Customer Demand) for use with
internal requests from other departments
Counter Ticket or sales receipt form for
retail and wholesale or other requests from
outside the Dealership
Purchase Order authorisation as a
standard operating procedure for all
outside purchases (vendors and suppliers
are required to furnish the PO# with
every invoice)
Customer Order or similar internal
document prepared to authorise, initiate
and track requests made for parts and
accessories on a customers behalf
Lost Sales record or similar
documentation which tracks unfulfilled
requests and periodically reviews
accumulated figures
Dealer emphasises the importance of
documentation for every transaction
Dealership builds employees pride in
completing paperwork and office
oriented tasks
CONTROL FORM
USE IS CONSISTENT,
RIGOROUS AND
FORMALISED
Critical documents (RO, CT, PO) are issued

sequentially, signed for by individuals and
tracked during use
Line outs, erasures and other alterations to
critical documents are not allowed
Written policies for handling control forms
(and, in particular, critical documents) are
prepared, published and presented during
employee training
Dealer emphasises proper handling of
control forms and support Parts Manager in
developing employee attentiveness and
discipline regarding forms use
61
The Parts Transaction - Analysis Forms
SAMPLE
PARTS AND ACCESSORIES
SALES ANALYSIS RECORD
SALES FOR MONTH OF ________________19________

DAY
WARRANTY
INTERNAL
COUNTER
RETAIL
WHOLESALE
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
62
TYRES
PETROL,OIL
& GREASE
CUSTOMER
BODY SHOP
REPAIR ORDER REPAIR ORDER
The Parts Manager uses control forms to organise the Departments daily
routines. These source documents record transactions for future analysis. To plan
the right purchases anticipate customer demands the manager must also have
analysis forms that:
Collect the information on the control forms and other Department and
Dealership documents
Place data in logical, reviewable order
Facilitate decision making
Two essential documents provide the basis for analysis and planning. They are the
Sales Analysis Record and the Trend Report.
SALES ANALYSIS RECORD

The Sales Analysis Record (refer to facing page) is a daily total of parts and
accessories sales. The figures are divided among various accounts on the
Dealerships Financial Statement. A new Sales Analysis Record is opened each
month.
TREND REPORT
The Sales Analysis Record can be prepared by the Accounting Office so that the
Parts Manager need only review the sales results and compare them with forecasts
(predictions or objectives) that had been previously determined. To do this, the
Parts Manager copies the monthly totals of each SAR onto the Parts Department
Trend Report. (See next page for a sample report). Included with parts and
accessories sales are other financial data for calculating gross profits, expenses and
net operating results.
With an accurate, complete Sales Analysis Record and Trend Report the Parts
Manager has two important analysis tools for making wise business decisions.
63
PARTS EXCELLENCE
PARTS DEPARTMENT TREND REPORT
WARRANTY
SALES GROSS
JANUARY
INTERNAL
SALES GROSS
JANUARY
COUNTER RETAIL
SALES GROSS
JANUARY
WHOLESALE
SALES GROSS
JANUARY
TYRES
SALES GROSS
JANUARY
GAS, OIL, GREASE Customer Repair Order Body Shop Repair Order
SALES GROSS
SALES GROSS
SALES GROSS
JANUARY
JANUARY
JANUARY
Forecast
Forecast
Forecast
Forecast
Forecast
Forecast
Forecast
Forecast
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
FEBRUARY
Forecast
FEBRUARY
Forecast
Actual
Actual
MARCH
Forecast
Forecast
Forecast
Actual
Forecast
Actual
MAY
Forecast
Actual
MAY
Forecast
Actual
Forecast
Forecast
Actual
Forecast
Actual
JULY
Forecast
Forecast
Actual
Forecast
Forecast
Actual
Forecast
Forecast
Actual
Forecast
Forecast
Actual
Forecast
Forecast
Actual
Actual
NOVEMBER
Forecast
Actual
DECEMBER
Forecast
Actual
DECEMBER
OCTOBER
NOVEMBER
NOVEMBER
DECEMBER
DECEMBER
Forecast
Forecast
Forecast
Forecast
Forecast
Forecast
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
SEPTEMBER
JUNE
JULY
AUGUST
SEPTEMBER
SEPTEMBER
Forecast
Actual
Actual
OCTOBER
Forecast
OCTOBER
OCTOBER
Forecast
Actual
Forecast
NOVEMBER
NOVEMBER
Forecast
Actual
DECEMBER
Forecast
Forecast
Forecast
Actual
Actual
Actual
NOVEMBER
Actual
Actual
DECEMBER
OCTOBER
Actual
Actual
NOVEMBER
DECEMBER
MAY
Actual
Actual
Actual
NOVEMBER
AUGUST
Forecast
Forecast
Forecast
AUGUST
SEPTEMBER
APRIL
Actual
Actual
Actual
OCTOBER
JULY
Forecast
Forecast
Forecast
JULY
AUGUST
MARCH
Actual
Actual
Actual
SEPTEMBER
JUNE
Forecast
Forecast
Forecast
JUNE
JULY
FEBRUARY
Actual
Actual
Actual
AUGUST
MAY
Forecast
Forecast
Forecast
MAY
JUNE
JANUARY
Actual
Actual
Actual
JULY
APRIL
Forecast
Forecast
JUNE
MARCH
APRIL
MAY
Total
Expenses
Actual
Actual
Actual
MAY
Forecast
MARCH
APRIL
Forecast
Actual
DECEMBER
Forecast
64
OCTOBER
Forecast
FEBRUARY
Forecast
Actual
APRIL
Actual
Actual
Forecast
Forecast
Actual
DECEMBER
Forecast
TOTAL
SEPTEMBER
Forecast
JANUARY
FEBRUARY
MARCH
(Use Actual Figures)
Actual
Forecast
Actual
MARCH
Actual
NOVEMBER
Forecast
Actual
DECEMBER
SEPTEMBER
Actual
NOVEMBER
Forecast
Actual
DECEMBER
AUGUST
FEBRUARY
Forecast
Actual
OCTOBER
Forecast
Actual
NOVEMBER
AUGUST
Actual
OCTOBER
Forecast
Actual
NOVEMBER
Forecast
Actual
DECEMBER
Forecast
JULY
FEBRUARY
Forecast
Actual
SEPTEMBER
Forecast
Actual
OCTOBER
JULY
Actual
Forecast
Actual
SEPTEMBER
Forecast
Actual
OCTOBER
Forecast
Actual
NOVEMBER
Forecast
Actual
DECEMBER
Actual
OCTOBER
Forecast
Actual
NOVEMBER
Forecast
JUNE
JUNE
Forecast
Actual
Actual
AUGUST
Forecast
Actual
SEPTEMBER
MAY
Actual
AUGUST
Forecast
Actual
SEPTEMBER
Forecast
Actual
OCTOBER
Forecast
Actual
NOVEMBER
Actual
SEPTEMBER
Forecast
Actual
OCTOBER
Forecast
MAY
Forecast
Actual
JULY
Forecast
Actual
AUGUST
APRIL
Actual
JULY
Forecast
Actual
AUGUST
Forecast
Actual
SEPTEMBER
Forecast
Actual
OCTOBER
Actual
AUGUST
Forecast
Actual
SEPTEMBER
Forecast
APRIL
JANUARY
Actual
Actual
JUNE
Forecast
Actual
JULY
MARCH
MARCH
Actual
JUNE
Forecast
Actual
JULY
Forecast
Actual
AUGUST
Forecast
Actual
SEPTEMBER
Actual
JULY
Forecast
Actual
AUGUST
Forecast
FEBRUARY
JANUARY
NET OPERATING RESULTS

Total
Gross
FIXED
Forecast
Actual
MAY
Forecast
Actual
JUNE
FEBRUARY
SEMI-FIXED
JANUARY
JANUARY
Actual
MAY
Forecast
Actual
JUNE
Forecast
Actual
JULY
Forecast
Actual
AUGUST
Actual
JUNE
Forecast
Actual
JULY
Forecast
JANUARY
PERSONNEL
Actual
APRIL
Forecast
Actual
MAY
(Add to Gross)
Actual
APRIL
Forecast
Actual
MAY
Forecast
Actual
JUNE
Forecast
Actual
MAY
Forecast
Actual
JUNE
Forecast
Actual
MAY
Forecast
Actual
JUNE
Forecast
TOTAL
EXPENSES
EXPENSES
Actual
MARCH
Forecast
Actual
APRIL
TOTAL
GROSS
=
ALLOWANCE ADJUSTMENT
Actual
MARCH
Forecast
Actual
APRIL
FEBRUARY
Forecast
Actual
MARCH
Forecast
Actual
APRIL
FEBRUARY
Forecast
Actual
MARCH
Forecast
Actual
APRIL
FEBRUARY
Forecast
Actual
MARCH
Forecast
Actual
APRIL
FEBRUARY
Forecast
Actual
MARCH
Forecast
Actual
APRIL
FEBRUARY
Forecast
Actual
MARCH
Forecast
Actual
FEBRUARY
Forecast
DISCOUNTS
SALES GROSS
SALES AND GROSS PROFIT
DECEMBER
Actual
DECEMBER
Net
Generally, performance reviewed is performance improved. The Dealer who

expresses interest in Parts Department activities, who routinely reviews
Departmental reports and who regularly expects the Parts Manager to submit
solutions and achieve objectives is likely to enjoy superior performance from the
Parts Department. The perception of regulations and Dealer concern is a valuable
psychological motivator that pushes the Parts Department to excel. Once the
routine is established, meetings with the Parts Manager require little of the
Dealers time compared to the potential results.
Formalised operating routines determine the Departments capacity to meet
expectations, generate profits and respond to changing conditions. The rigid
systematic approach to Department operations through control forms, analysis
forms and regular discussions enhances this capacity.
Of all Department resources, this system most separates the Dealer from the Parts
Manager in handling Departmental affairs. The Parts Manager is (or should be)
the expert on how the Department operates. The Dealer should support the Parts
Managers decisions regarding that operation. The Dealer should provide
discipline or direction only when problems are not being resolved.
The Parts Managers expertise at applying proper procedures determines the
Dealerships capacity to reach customer satisfaction and profit goals. The Dealer
may set requirements, but it is the Manager who must meet them, or help the
Dealer understand what should be done differently in order to meet them. In
general, the Dealer should concentrate on results and allow the Manager to
determine methods to reach those results.
65
MANAGING DOCUMENTATION
EXPECTATION
RESPONSE
PROCEDURES
REQUIRE STRICT
ADHERENCE TO
FORMS USAGE
Purchase Order accompanies all non GM or

outside purchases
Authorisation Stamp to be used on all
payables (packing slip or invoice)
All items in Authorisation Stamp filled out
when payable documents reach Accounting
Office for payment
Repair Order or Customer Demand
(requisition) required for delivery of parts to
other departments
Counter Ticket (or sales receipt) required for
delivery of parts to any wholesale or retail
customer
Lost sales diligently recorded
Critical documents (RO, CT, PO) strictly
monitored, issued numerically, tracked, and
missing ones found and accounted
Packing slip accompanies all scheduled
orders
ALL INCOMING
SHIPMENTS
ARE COMPLETELY
VERIFIED
Quantities received are fully verified with

packing slip
Packing slip or invoice checked against
appropriate Purchase Order to match and
verify request and receipt
PART NUMBERS
RECORDED AT ALL
TIMES
Correct part numbers always included in

documentation
GM equivalent numbers included whenever
possible
All items are assigned a part number
66
REVIEWING DEPARTMENT OPERATIONS

EXPECTATION
RESPONSE
PARTS MANAGER
SHOULD HAVE AND
USE ANALYSIS
FORMS TO
CONSOLIDATE
DATA
Financial Statement or condensation of

important facts outline on the statement
made available to Manager
Return On Investment calculations made by
Parts Manager and and reviewed with
Dealer to set objectives and indicate fiscal
results profits gained as a percentage of
the total business investment
The Parts Department Trend Report is a
comprehensive, brief review of key
Department activities and summarises
trends, goals and goal attainment. The
Dealer can use this analysis form to discuss
the status of Department operations with
the Parts Manager and to agree upon
remedies for problems revealed
Review status of back orders and assist
Manager in getting supply sources to discuss
delays and when orders can be filled.
Include trends showing back order
situations for previous month and same
month previous year to detect seasonal
problems
Review Parts Managers suggestions and
preparations for marketing programs
including:
Service promotions
Merchandise specials
Product campaigns
Other activities where the Parts
Department is acting on its own or
coordinating with other departments in
shared marketing activities
67
REVIEWING DEPARTMENT OPERATIONS

EXPECTATION
RESPONSE
Dealer can study the extensive list of
possible reports and decide with the Parts
Manager which reports can be generated
and which of those they should mutually
review. Selected reports should then be
discussed routinely and acted upon quickly
when the data are current and options
most clear
DEALER AND
PARTS MANAGER
SHOULD MEET
REGULARLY FOR
DISCUSSIONS ON
DEPARTMENT
OPERATIONAL
OBJECTIVES AND
RESULTS
Schedule meetings and keep meetings brief,

but thorough
Meetings should be held at least monthly,
preferably weekly until an operating routine
has been established
Discussion topics should be prepared in
advance of the meeting by both Dealer and
Parts Manager. Each should allow adequate
time to consider the opinions of the other
Discussions should be open and unlimited,
but not random or disorganised. Time is
valuable. The meetings should occur with a
sense of urgency, quick resolution and
efficiency
When one party is giving their opinion,
suspend judgement while discussion occurs.
Support new ideas, new thoughts, new
thoughts, new suggestions. Encourage
creative thinking
Avoid dictating expectations. The Dealer
should use meetings to develop confidence
and independent thinking. Help the
Manager search for improved business
methods and results
68
The Parts Transaction - Planning
THE PARTS TRANSACTION

PLANNING
Phase 1
Phase 2
Phase 3
Phase 4
PLAN
Establish, quantify and assess
challenges to business objectives
while setting parameters
ACTIVATE
Implement objectives using
specified strategies, clearly
determined and communicated
CONTROL
Measure change, control process,
track progress, direct strategic
plans against objectives
EVALUATE
Compare results achieved with
objectives desired, determine
factors contributing to success
Design Courtesy Deiss and Associates
69
When individuals are kept informed and can thus be confident that problems are
solvable, they begin to make positive changes that strengthen Profit Centre
business. Management action should be initiated within the Department by the
Parts Manager, with results reviewed by the Dealer. This management action
occurs in four phases:
P.A.C.E.
Plan establish specific objectives. This phase is exceptionally important to
set parameters and carefully assess possible challenges and outcomes so
that once action begins it is appropriate and accurate. Time spent in
planning reduces future chaos
Activate or implement objectives with clear instructions so that strategies
are understood. Written communications become enormously important
in this phase when everyone is preparing to make changes but not
entirely certain of outcomes. Precise understanding at this phase helps
make the beginning smooth
Control the process through measurable methods, quantitative outcomes
and check points in which interim progress readings can be taken.
Activities tend to acquire their own momentum. Controls assure that the
activities are directed as well as propelled
Evaluate results. Compare them to objectives and determine what
refinements must be made. These corrective actions can help the
Department realise objectives more completely by making sure everyone
involved with the plan maintains a clear understanding of the projects
purpose and direction. With this clarity, employees will not be confused
by modifications
70
The Parts Manager should prepare a comprehensive Parts Department Operating

Plan. It is a careful consideration of the tasks and purposes for which management
is necessary. This Plan charts all the major tasks the department must regularly do
and sets these tasks against a schedule of review (daily, weekly, monthly, quarterly
or annually). Those tasks which affect or include contact with the customer (such
as picking requested parts, greeting customers at the counter, answering incoming
telephone calls, etc.) are vital and are not deferrable (customer satisfaction
depends upon prompt attention to their needs). They should be given special
emphasis.
Every Parts Department is different, and each Dealer and Parts Manager
approaches problems and opportunities differently. However, the Dealership
must establish a climate for success in which employees understand:
Their tasks and responsibilities
How to approach tasks efficiently and properly
How their performance will be evaluated
What benefits will accrue by performing properly
Who is in charge of checking and verifying their work
Whom to seek for help
71
SAMPLE
PARTS DEPARTMENT OPERATING PLAN
Task
Frequency
Daily
F
A
Weekly
F
A
C
I
L
I
T
Y
I
N
V
E
N
T
O
R
Y
M
E
R
C
H
A
N
D
I
S
E
M
A
N
A
G
E
M
E
N
T
72
Monthly Quarterly Annually
SETTING OBJECTIVES
EXPECTATION
RESPONSE
SOURCE AND
ANALYSIS DATA
ARE UTILISED
Use of control forms is rigidly maintained as

standard operating procedure
Controls forms used are:
Purchase Order
Repair Order (work order) or Customer
Demand form
Counter Ticket (or sales receipt)
Customer Order
GM Scheduled and Interim orders
Lost Sale record
Financial Statement
Analysis forms are used to collect, organise
and distil source data and include:
Sales Analysis Record
Parts Department Trend Report
OBJECTIVES ARE
SET IN AN ORDERLY
LOGICAL MANNER
Control and analysis forms routinely utilised

to create operating structure and planning
mechanisms
Expectations formalised:
Objectives prepared in measurable
(quantitative) terms
Strategies developed with input from
managers and employees
Strategies are written and discussed
Staffing and financial resources agreed
upon and allocated
Methods for reaching objectives are
thoroughly communicated so that those
involved and those responsible understand
their individual assignments
Timetables and responsibilities organised
and prepared in writing
PACE (plan, activate, control, evaluate)
methods used for precise, methodical
problem solution
Everyone kept informed as strategies are
implemented
Frequent meetings held to keep people
informed, motivated and aware of
modifications
73
74
Department Management - Evaluators
QUALIFIER
FACILITIES
EMPLOYEES/JOB
DESCRIPTIONS
DEALER ACTION
VALUE
Inventory storage area is well lit and orderly

Department is clean and well maintained
Department entry is restricted and
monitored
Dealer routinely inspects Parts Department
for cleanliness, safety and security
Department has a complete, written
method for assessing facility condition
Customer care clean, organised
Customer area is pleasant and of
adequate size
Merchandising displays are current
and clean
Directional signage of professional quality
(i.e. not handwritten or deteriorated)
Parts Manager has an office or private
work area
Hours of operation are convenient to
customers
Show consideration and respect toward
each other and to all customers
Are well groomed and take pride in
appearance
Have uniforms or other Dealership
identification
Personnel policies include an organisation
chart and position descriptions
Hiring procedures are established and
followed
Expectations of individual employees are
mutually discussed, understood and accepted
Each employees performance is regularly
reviewed according to established
procedures
Dealership has a specific, prepared plan to
identify and develop supervisory skills
Dealership promotes from current
employees whenever possible
Dealer and Parts Manger coordinate all
compensation plans
Employee recognition plan developed and
established
Dealer regularly communicates with all
employees

75
8
5
3
4
2
8
5
3
2
8
8
9
3
2
2
2
5
3
2
5
2
4
5
Department Management - Facilities
The physical condition of the Parts Department should be carefully reviewed.

Minimum standards must be set and then the Department should be inspected
to ensure that standards are maintained and improved.
How the Dealership appears indicates much about the Dealership itself.
Customers see its housekeeping and physical organisation as a reflection of how
the Dealership sees itself how much the Dealership cares, how efficient it is,
perhaps even how capable it is. Thus a clean, straightened Parts Department is
likely to give customers confidence in its ability to deliver parts.
No area of the Dealership is invisible to customers. From what they glimpse
behind a cashier's window or beyond a parts counter they form an opinion about
the Dealers internal organisation. They get impressions that reflect upon the
Dealers operations. And this picture is formed instantly, subconsciously and
critically. The Dealer has no voice in this opinion which, when formed, becomes
a part of the customers reason for doing (or not doing) business.
This alone should cause the Dealership to critically review its physical condition
to ensure a positive image that is satisfactory to customers. But there are also
financial and operational reasons for keeping the Dealership and the Parts
Department in excellent condition. Consider the following brief list:
Efficiency improves when parts and accessories are stocked in a neat,
planned and organised pattern. Parts picking is fast and accurate
76
Storage space is more efficient when parts and accessories are stacked
rather than piled, and whey they fit (and nearly fill) the assigned space
Storage damage is reduced in properly maintained inventory storage that is
protected from dust, fluids, rust and other contamination that can result
from bad conditions. Sunlight fading a parts box can make it difficult to
sell or return to the factory. New parts must look new including the
container they come in
Security increases when the inventory is clean, carefully stacked (in fact,
given a look of display), neat and orderly. It gives the appearance of
tight control and accountability that the space is monitored and that
stolen items will be quickly missed
Safety improves when all parts and accessories are stored properly. Parts
that are in aisles are not only a safety risk, they may also be damaged by
traffic
Clean walls, carpets and counters actually last longer than dirty ones.
Rigorous maintenance can help the Dealer avoid refurbishment or
replacement costs later
Physical conditions influence employee attitudes with the appearance of
the Department affecting how employees think about themselves, what they
believe the Dealer thinks of them and even how graciously and
thoughtfully they treat customers
77
A strong maintenance programme does more than enhance the Dealerships

appearance. It is a physical advertisement and an opportunity to present a positive
impression to employees and customers.
To enhance the Dealerships appearance:
Make it a matter of pride instil an atmosphere in the Parts Department
for cleanliness, orderliness and neatness
Develop positive work habits make it a necessary routine for employees
to clean as they work. They should be wiping counters, sorting,
stacking, straightening as an ordinary part of their work. It should
become an ongoing process, an automatic activity, rather than a
weekly chore
Attend to detail leave nothing undone, hidden, missed or forgotten.
Often, little things overlooked create a poor impression. The Dealers
close examination will demonstrate how important superlative
maintenance is
See the space as the customer sees it. View the facility as if seeing it for
the first time. Be critical. Be particularly aware of dirt, grease,
discolourations, poor or needed repair, insufficient or badly needed
painting, etc. that ruin appearance
The Parts Manager is responsible for bringing the Department into conformance
with the Dealers expectations. The Dealer supports this action by accompanying
the Parts Manager on regularly occurring facility tours.
These tours should be made important to signify the Dealers concern with
appearance. Employees should be reminded that an excellent appearance
contributes significantly to the Dealerships and the Departments success.
Therefore, approach facility tours with rigour.
Use the following Appearance Assessment to make the tours complete and logical.
Mark any shortcomings. Discuss and decide upon remedies. Then, periodically
check on the progress of the maintenance programme.
78
Department Management
- Facility Checklist
APPEARANCE ASSESSMENT
Satisfactory
SIGNS
1.
Outside signs in good condition (no weathering)
2.
Major (Dealership, GM) signs visible during night-time hours
3.
All signs have a uniform (similar family) design
4.
All signs professionally presented (not home-made)
5.
All entrances and exits clearly marked
6.
A clear traffic flow is created by sign placement and directions
7.
Interior signs are clean and in good condition
8.
Interior signs maintain common, uniform look with

exterior signs
9.
No handwritten interior signs for any reason
SIGNS LEAD UNFAMILIAR VISITORS EASILY TO

10.
Shipping and receiving dock/door
11.
Wholesale/retail parts counter(s)
12.
Cashier
13.
Restrooms
14.
Customer waiting area
15.
Departments other than the Parts Department
GENERAL EXTERIOR IMPRESSIONS

16.
All parking surfaces clean and not deteriorated
17.
Customer parking stalls clearly marked, freshly painted
18.
Any grass, trees, shrubs are trimmed and healthy
19.
Fences, walls, exterior features not overgrown or

unmaintained
20.
Customer parking kept free of snow, ice, other hazards
21.
Customer parking is near entrance doors
22.
Customer parking stalls have stops (curbs) so that walking in

front of parked cars is convenient
23.
Any area that is accessible to customers is free of mud,

tar, debris, oil, grease, dirt, sand, etc.
24.
All windows are clean, unbroken, not boarded or covered
25.
All doors painted or finished and not weather-beaten
26.
Entrance doors for Parts Department are clearly marked
27.
Adequate night illumination to show entrances, routes
28.
Area adequately lit (no sinister shadowy spots on grounds)
29.
Outside refuse areas well maintained and hidden from view
30.
General outside conditions are pleasant on close inspection
79
Need
Improvement
Satisfactory
GENERAL INTERIOR IMPRESSIONS

31.
Provide a secure place for customers coats, hats, boots, gloves
32.
Place for customers outerwear is convenient for them to use
33.
Floors clean, undamaged, carpet not torn or dirty, high

traffic areas in good condition, cement floors smooth
34.
All walls and ceilings clean and well maintained
35.
Department is pleasantly painted (attractive,

complementary colours; no peeling or unfinished painting)
36.
All lights operate properly (no flickering fluorescent)
37.
Area is well lit (no dark spots, no glare)
38.
Parts Department temperature is comfortable (no cold or hot

spots, especially in customer areas)
39.
Department is quiet, subdued, not gloomy
40.
Department is generally pleasant and uncluttered
41.
All visible heating, ventilating, air conditioning, plumbing

and electrical is dusted, well maintained and in good repair
42.
All aisles clean, no obstructions caused by parts, chairs,

carts, etc.
INTERIOR DETAILS INDICATE CLEANLINESS, REPAIR

43.
Desks and chairs (no taped seats)
44.
Partitions and dividers (no scuff marks, dust)
45.
Windows and mirrors (no cracks, smears, discolourations)
46.
Doors, grates, railing (in excellent repair, clean)
47.
Cabinets, drawers (organised, clean, sturdy, closed)
48.
Picture frames, poster frame (straight, clean, display quality)
49.
Any shiny or glossy objects (chrome, tile, metal fixtures) are

polished, not tarnished, free of fingerprints, etc.
WHOLESALE/RETAIL COUNTER(S)
50.
Counter is of uniform, mar-resistant surface
51.
Counter is well lit and appears orderly and organised
52.
Carpet or other flooring in front of counter is clean,

undamaged, uniform and visually complementar y
53.
Counter and surrounding area is free of grease and garbage
54.
Counter is undamaged or carefully repaired
55.
No litter, marks, piles, etc. behind or beneath counter
56.
No posters, signs, calendars, displays, etc, that are damaged,

out-of-date, dusty, unprofessional or in poor taste
57.
Signs designating counter areas are clearly visible
58.
Signs at counter clearly indicate areas where customers are

not admitted or authorised
59.
All items (parts, boxes, manuals, etc.) are put away except
during use
80
Need
Improvement
Satisfactory
60.
Every surface is clean (including terminal keys, microfiche

computer screens, telephone, ash trays, light bulbs, etc.
TECHNICIANS COUNTER (IF APPLICABLE)

61.
Counter is clean, free of grease, smears and marks
62.
Counter is undamaged, free of abusive wear
63.
Area behind counter is uncluttered and organised
64.
Counter has no posters or signs that are damaged,

dirty, dusty, out-of-date or in poor taste
65.
Shop supplies and items normally stored behind counters

are organised, stacked neatly, clean, secure, out of sight
66.
All boxes, containers, books, papers, etc. are kept in assigned

places except while in use
67.
Every surface is clean (including microfiche, clipboards, time

clock, baseboards, etc.)
LOADING DOCK (SHIPPING/RECEIVING AREA)

68.
Outside is free of clutter, scrap, litter, dirt, leaves
69.
Entrance door is clearly marked and visible from a distance
70.
Appropriate areas kept clear of snow, dirt, standing water, etc
71.
Area is well lit during night-time business hours
72.
Convenient buzzer, night bell or call device available, functional

and quickly answered during business hours to meet deliveries
73.
All furniture is clean, maintained and undamaged
74.
All surfaces clean, finished, no peeling or fading
DISPLAYS
75.
Special attention to clean/polish all glossy surfaces
76.
Displays clean, undamaged, unscratched, well maintained
77.
Display glass is clean and shiny; no streaks
78.
Displays not empty, nor appear neglected or forgotten
79.
Displays are current and complete
80.
Display materials in assigned places, not scattered on tables or

piled on window ledges or partitions
81.
Display items have common, consistent look whenever possible
82.
Display items reinforce Dealerships name, reputation and identity
83.
Displays are full but not crowded or overly filled
84.
Lighting accentuates displays wherever possible
85.
Items and materials on display are given the same showroom

attention as new vehicles on display
81
Need
Improvement
Satisfactory
CASHIER AREA
86.
Customer greeting space is clean, clear, free of litter
87.
Area is well lit, clearly marked, efficient appearing
88.
Cashier service is always prompt, professional and courteous
89.
Convenient call button or bell available (however, should

seldom be needed by customers since cashier should be there)
90.
Area visible to customers behind cashier is clean, uncluttered
91.
Window ledges, partitions, etc, free of clutter and dust
92.
Customer vending machines and telephones are clean

and functional
93.
Signs to inform customers where to go with complaints

or to have questions answered
ADMINISTRATION AREA
94.
Comfortably lit, clean, free of litter and clutter
95.
Have relaxed quality wherever possible with green plants,

indirect lighting, muted colours, framed pictures, awards
96.
Offices kept neat and organised during working hours
97.
Hallways/aisles between offices and other common areas

are clean, well maintained and in excellent condition
98.
No dark or shadowed appearance; all area bright, lighted

and as spacious appearing as possible
INVENTORY STORAGE AREA

99.
All open storage methods (sheet metal, bulk, pegboard, glass)

have some display quality in appearance
100. All aisles, stairways, stairwells, corners, tops of bins, etc.

are free of dust, debris, clutter
101. All aisles, stairs, corners, hidden or isolated places have
no parts or accessories, junk, clutter
102. Bins are dusted, painted appropriately and in good repair
103. Inventory gives appearance of uniformity and organisation
104. Tops of bins clean and clear unless items are neatly stocked
there and appear as if they should be there
105. Bins have no tags, bits of paper, box flaps, edges of
items sticking out into aisles
106. Specially constructed or custom bins share a similar
appearance to other storage devices (uniform colour, appear
secure, sturdy, etc.)
107. No isolated or forgotten places (such as under stairways
or behind cabinets) that remain undusted or piled with
discarded items
108. Lights in storage area are bright enough for easy reading
82
Need
Improvement
Satisfactory
109. No bare bulbs or unshaded light fixtures in storage area:
all have a finished, pleasant appearance
110. No extra boxes, parts without their appropriate boxes or look
of confusion or disorganisation anywhere in storage area
111. All items are put away, not hidden away
112. All areas clean and organised, not just those visible
to customers
113. Bins, racks, aisles, trays, etc. have a symmetry; straight
rows, straight stacks, square corners, aligned, even, level
114. Inventory has a look of organisation, of security and value
that the area is important, monitored and safe
EMPLOYEE APPEARANCE
115. Dressed in clean, properly fitting, maintained uniforms
116. Employees encouraged to have nicely polished shoes and
appropriate belts, in good condition and repair
117. Laundry service provided or clothing maintenance standard
written, published and understood regarding fresh,
clean uniforms
118. Employees encouraged to keep high standards of personal
hygiene (grooming, shaving, nails and teeth clean)
119. Employees in contact with customers have facilities (and
utilise them) for quick wash up and grease removal
from hands
120. Employees frequently reminded and encouraged to
maintain high standards of work area straightness and
organisation
121. Employees discouraged from decorating walls with notes,
messages or other unprofessional or personal materials of
an inappropriate nature
122. Bulletin board provided, maintained and current with
employee directed information
123. Employees reflect a pride in their Dealership through their
dress, attitude and manner
BMI
83
Need
Improvement
Department Management - Employees
DEALER INVOLVEMENT
Effective systems, procedures and controls put routine into Parts Department
activity. At best, this formalised structure allows employees to be more productive.
People may come and go in the Parts Department, but as long as logical,
complete, accurate operating architecture remains, the Department can function
optimally and with fewer problems during personnel transitions. The strength
and flexibility of Dealer operations still rest with employees who are dedicated,
concerned and capable. And that is a management function.
Employee management is a complicated process that may be as much an art as it
is a science. Through the Parts Manager, the Dealer motivates employees to
perform at their best. This motivation occurs by understanding the human
being's critical need for:
Security and stability
Recognition and acknowledgement
Growth and change
Self-realisation and independence
A sense of belonging and community
Respect from peers and those in authority
Certainly, the study of human behaviour is complicated and inexact. Yet, the
Dealer should be knowledgeable in the basics of what people need, and how those
needs translate into things the Dealer must do. A Dealers willingness to listen is
paramount, and forms the basis for other positive possibilities.
84
Department Management - Employees
PERSONNEL MEASUREMENT
Prepared, written, accurate documentation helps to instil accountability and
reliability into how employees approach their work. Such documentation should
be prepared regarding:
Job descriptions
Task assignments
Performance review
Career reviews
Training schedules
The Parts Department becomes flexible rather than rigid when operating
methods are documented. Freed by a routine that efficiently fills expected
customer orders, parts personnel can focus on Departmental activities that require
their creativity, problem solving skills and imagination.
Satisfied, committed employees result from excellent management. This occurs as
Dealerships apply a balanced programme of incentives, benefits, compensation
plans, recognition, training and career development. Its likely that each employee
will require a slightly different combination that reflects individual needs and
wants. A complete approach to personnel management begins with
understanding understanding what employees want, and knowing how to
generate a policy which will benefit the Dealership even as it responds to
employees.
85
- Job Descriptions
PURPOSE
The Dealer should establish the Parts Managers duties and use formal, written
methods to evaluate the Managers performance. The Parts Managers Job
Description, along with those of other Parts Department employees should clearly
define their duties, the expectations for fulfilling those duties and the methods by
which evaluations will be made. In other words, each person must know what
they are to do, what the results of their work will be and how supervisory
personnel will review those results.
The Job Description is a complete, realistic statement of an employees
responsibilities. The Description must be clearly written so that the meaning is
the same to both the employee and the supervisor. Thus the words must be clear,
concise and fully understood.
When new Job Descriptions are prepared, their content and intent should be
discussed with employees for their input and consensus. New employees should
have Job Descriptions explained to them during orientation. All employees
should know what their Job Descriptions require of them. Supervisors should
ensure that this is so by discussing and clarifying each employees Job Description
with them.
It may be included in the Parts Managers tasks to prepare and discuss Job
Descriptions with employees. Or the Dealer may decide to have a committee of
people prepare Job Descriptions. Or, the Dealer may personally prepare them. In
any case, the Job Description should define the job functions or tasks for which
the employee is responsible. Each employee in the Parts Department (and in the
entire Dealership) should have a written Job Description. The Description should
reflect the responsibilities determined for that employee as well as the organisation
chart for the Dealership. It should provide a clear statement so that both the
employee and the supervisor understand what tasks must be accomplished.
86
- Job Descriptions
PREPARING JOB DESCRIPTIONS
Job Descriptions are important to a smoothly operating Parts Department.
Clearly written, accurate, realistic, complete Descriptions provide a working basis
for both employee and supervisor, create confidence and fairness between them
and organise the Departments work. Suggestions for preparing Job Descriptions
follow.
STEP 1: LIST JOB TASKS

List all the job tasks to be performed for each position. If no formalised task form
is acceptable, prepare a list of tasks by tracking everything done for a month. Each
employee may be asked to list their job tasks. Be sure to include the occasional
jobs (such an annual inventory, ordering supplies, filling out annual reports, etc.)
so that nothing is forgotten.
STEP 2: REVIEW FOR COMPLETENESS

Review the lists for completeness. Add, delete, alter as necessary. Have others look
at the changing lists. It is likely that each reviewer will think of another task which
was overlooked.
STEP 3: REVIEW CHANGES WITH EMPLOYEE

Review any proposed changes with the employee involved. Make sure the new Job
Description fits the employees working habits and responsibilities or, if a change
in routine is required, that the employee is clearly aware of the new expectations.
87
- Job Descriptions
STEP 4: CONSIDER JOB DESCRIPTION
PURPOSES
Consider each of the critical uses for properly prepared Job Descriptions:
Establishing a basis for compensation which may also be used to justify
differences in amount based upon different responsibilities, capabilities or
proficiencies
Organising the jobs in the Department assures that every necessary duty
is assigned and completed but not duplicated and that all Department
duties are logically completed
Helping employees understand their positions in the Department
clarifies reporting relationships so that both those supervising and those
supervised are fully aware of requirements
Evaluating performance is simplified when Job Descriptions thoroughly
describe expectations in a measurable way. Employee reviews can then
become a discussion of outcomes, not an argument about processes. And
in this way, both supervisor and employee are working together for
consistent improvement in task performance
Orienting new employees is aided because the Job Description provides
a format for describing tasks that the new employee can study. For this
reason alone, be sure that Job Descriptions are easy to understand
Reviewing Department functions help both the supervisors and the
Dealer assess how well employees are performing and how adequately the
important work of the Department is being accomplished. Department
responsibilities must be well integrated into the individual Job
Descriptions. Thoughtful preparation of each Job Description is vital.
Remember, an inadequate, out-of-date or inaccurate Job Description will
make supervising people more difficult. The time spent in preparing an
excellent Job Description for each person in the Department will yield
enormous benefits
88
- Job Descriptions
STEP 5: WRITE PRELIMINARY JOB
DESCRIPTION
A complete Job Description should contain:
Position title (using a proper and descriptive General Motors title)
Purpose: stating in a few words what the overall position is created for
Relationships defined by briefly identifying normal reporting and
working assignments; listing (by name) those to whom reporting and
supervisory roles are made
Minimum qualifications or prerequisites for the particular job are
outlined as capabilities. In many cases the differences in these
qualifications justify differences in compensation, particularly when job
titles are the same but task capabilities may be far more sophisticated for
one Job Description than for another
Tasks are described briefly as duties and responsibilities. These should be
determined from the lists prepared in steps 1 and 2
A final section should describe the limits of an employees actions as well
as provide the authority for the person to act within the limits prescribed.
Combined with this should be precise, measurable methods for
evaluating results. Wherever possible these results should be prepared in
terms of agreed upon outcomes, approved plans, programmes or budgets
that apply to the job. These accountability factors form the basis upon
which the immediate supervisor evaluates performance
89
- Job Descriptions
(Refer to sample on following page)
STEP 6: CONFIRM WITH EMPLOYEE

After the preliminary Job Description has been prepared, discuss it with the
employee for which it was written. Confirm the expectations with both the
employee and the supervisor. Clarify contents; reach agreement. Alter the Job
Description as necessary to ensure the Parts Department and the Dealership as
well as the employee are receiving fair, reasonable and equitable treatment.
STEP 7: UPDATE REGULARLY

As tasks in the Parts Department change, or new titles are developed, the Job
Descriptions should reflect what the employee actually does. Properly written, a
Job Description gives the employee a sense of belonging, control and purpose and
a feeling that supervision is equitable. It can also help resolve antagonisms which
may arise when task assignments between people come into conflict.
90
- Job Descriptions
SAMPLE
JOB DESCRIPTION
Department
Manager
Title
Purpose
Date Prepared
Tasks
Reports To
In Charge Of
Capabilities Required
Major Responsibilities (Authority and Accountability)
BMI
91
- Accurate Job Descriptions Help
The Employee:
The Parts Manager:
The Dealer:
Know what is expected
Clearly define responsibilities
Control work output
Know when something must be

done
Manage by delegation, not

doing
Delegate personnel
management
Know how well it is being done
Measure performance
accurately
Measure Department
productivity
Know when help is needed
Identify development needs

faster
Encourage constant
improvement
Know when to ask for help
Recognise procedural and

human errors
Keep systems running at peak

efficiency
Know what should not be done
Provide control and direction
Delegate overseas duties to

managers
Participate more fully
Utilise experienced people as

training peers and examples
Build loyalty to the Dealership
Develop superior job skills
Isolate individual performance
Highlight the best employees
More clearly understand

objectives and standards
Orient employees faster and

establish results oriented work
Reduce expenses and improve

productivity
Become more able to achieve

personal goals
Identify promotability and

special capabilities
Build equity and reduce

favouritism
Understand Dealership goals
Minimise duplication and

confusion. Select and hire more
effectively
Reduce wasted time, generate

employees involvement and
hire better people
Understand their individual

role in the total operation
Maximise uniformly high effort

among people with similar
jobs. Supervise a growing
organisation. Build teamwork
capability
Maximise efficiency, create

positive teamwork setting,
build the Dealership wisely and
painlessly, encourage leadership
Recognise duties and tasks of

others
Avoid implied favouritism.

Build impartial atmosphere
with each person fulfilling their
part
Build manager and employee

rapport. Encourage each
employee to strive to excel
BMI
92
Customer Satisfaction - Evaluators
QUALIFIER
DEALER ACTION
APPROACH
Dealerships parts and accessories
REQUIREMENTS
prices are competitive with surrounding

area prices
Customer orders receive added
attention
Personnel indicate they have sufficient
time to perform tasks
Dealership values employee contributions
Department operations help employees
respond to customer demand (make
tasks easier)
Customer questions answered quickly
ATTITUDE
VALUE
and completely by Parts personnel

The great majority of parts requests
are filled
All efforts are made to find and secure
parts for requesting customers
Fast moving parts are always in stock
except for an unusual back order
7
6
4
5
6
5
7
4
Customers greeted promptly

10
Telephones answered within three rings 5
Unanswered customer questions are quickly
researched and promptly reported

to customer
Dealership committed to customer
satisfaction
Dealership solicits customer comments
Parts Department expected to treat
Service Department as a customer
Dealer involved in customer relations
Parts Department employees are made
well aware of customer communication
(showing interest and concern, listening
carefully, being patient, etc.)

93
6
8
5
6
6
Customer Satisfaction - Approach
CUSTOMER SERVICE
The Parts Department must:
Meet customer expectations for quality, durability, design and value
Respond to Sales Department requirements for parts and accessories
applied as options to new vehicles and to refurbish or upgrade used
vehicles for resale
Provide complete support after the sale for vehicles sold by the full
service Dealership as well as react quickly to Service Department needs
Establish and maintain sufficient quantities and part numbers to meet
most customer requests
Three basic Parts Department concepts business structure, customer service and
profits shape its activities and purpose. No Parts Department can be expected
to serve customers at an operating loss. Nor can any Dealer expect customers to
patronise a Parts Department that is not offering parts and accessories at
reasonable, competitive prices.
The Parts Department that is most accurate at predicting customer requests, at
purchasing wisely to meet those requests and at protecting stocks from waste or
loss will be the Department that serves customers best and makes a suitable profit.
Thorough, complete Parts Department systems can give it the accuracy,
predictability and profitability it requires. This is the reason for and purpose of
Parts Excellence.
94
Customer Satisfaction - Approach
OPERATING STYLE
The Parts Department is critical to the Dealerships general reputation and
personality because it serves customers, not prospects. Each person who comes to
the Department is there to make a purchase, not just looking around as they
might be in the showroom.
We exist by customer approval. Everything the Dealership does influences the
customer favourably or unfavourably. The Parts Department should tailor its
activities to customer needs, not the reverse.
OPERATING RESULTS
The General Motors system for Parts Excellence is a long term approach to
achieving total customer satisfaction. It is important to note that all useful Parts
Department measurements of customer satisfaction are immediately verifiable:
Parts and accessories available from stock are rapidly delivered (stocking
proficiency measurements)
Parts and accessories not available from stock are quickly located and
furnished (customer order efficiency measurements)
Customers are greeted quickly and their requests are handled properly
Customers experience the transaction positively and easily
Thus, in the chronology of Parts Department operations, customer satisfaction
occurs at the moment a request is made when the customer telephones, enters
the Dealership premises or expresses a requirement in any other way.
95
Customer Satisfaction - Requirements
RECOGNISING EXPECTATIONS
The Dealership must see and judge itself according to the customers perspective.
It must be fully aware of what the customer expects of the Dealer. A single bad
experience (defective or incorrect part, unkept promise, rude treatment) can cause
a customer to eliminate the Dealership for future service and sales. Know what
the customer requires and fulfil that requirement.
The customer appreciates:
Pleasant surroundings
Clean, organised work habits
Rapid acknowledgement (quickly noticed)
Complete attention
The customer expects to deal with people who:
Know their business
Show interest and concern
Listen carefully and patiently
Are pleasant and competent
Are clean and reasonably well groomed
Keep them informed
Keep promises and deadlines
The customer expects a quick response if they:
Need to complain
Have a question
Need to bring the vehicle back
Received an incorrect part
Call the Parts Department
The customer expects to pay for parts, and wants:
Value for the money spent
A legible, itemised invoice
To be valued, not ignored
Meaningful guarantees on parts installed
Parts availability
96
EMPLOYEES AS PROBLEM SOLVERS

Customers need someone within the Dealership to represent them someone
who has answers to their questions someone who takes the time to explain what
they do not understand on the Counter Ticket someone to comply with their
wishes when they are dissatisfied with the parts they receive someone who is
interested in their welfare and satisfaction. The Customer Representative must be
able to answer the customers questions quickly, completely and authoritatively.
The Customer Representative must soothe an angry customer, show an interest in
a shy customer, get results for an irate customer.
Who are these Customer Representatives? Dealership employees anyone in the
Dealership who comes into contact with a customer across a counter, in the
parking lot, over the telephone. Note that these are called Customer
Representatives, not Dealership representatives. The subtle difference is
important. The Dealership must prepare its employees to meet customer needs
and wishes to represent the customer to champion their interest to respond
on their behalf.
Customers are the Dealerships most important outside resource. Employees must
put the customers first, must make every attempt to fulfil customer demands,
must nurture and protect that delicate association between customer and
Dealership. It is the best way to achieve total customer satisfaction, and in doing
so, of achieving a successful operation. Without satisfied customers, sooner or
later, there will be no need for a Dealership.
97
Written policies, methods, procedures, commitments and expectations help keep

employees informed about what the Dealership requires for appropriate
performance. In addition, the Dealership should prepare and publish statements
of policy and procedure so that customers are also informed. Enormous
credibility and a powerful positive impression are created when the Dealership
makes a statement of public policy and then adheres to it.
Customer satisfaction is essentially being sensitive to customer needs. Customers
need to be informed. They need to know that the Dealership is interested in their
welfare and concerned about their satisfaction. This interest is not simply
humanitarian it has a sound business purpose because satisfied customers build
the Dealerships success.
On the facing page is an example of a policy statement. Use it as a guide to
prepare one for your Dealership. It can be enlarged and framed as a formal
statement of policy that is proudly displayed in the parts and service areas. It can
also be rewritten as a letter and used as part of a follow-up programme to keep in
contact with fixed operations customers and new vehicle owners.
98
STATEMENT OF POLICY
Dealerships letterhead or logo
QUALITY PARTS AND SERVICE
TO:
DATE:
SUBJECT: EACH NEW CAR OR TRUCK CUSTOMER IS INFORMED ABOUT THE

QUALITY OF SERVICE AND PARTS AVAILABLE AT THIS DEALERSHIP
As part of their sales presentation after closing the sale, all salespeople are
to inform and remind each customer about the quality service and genuine
original equipment parts available at our Dealership.
All new vehicle salespeople should describe in their own words that we are:
Proud of our General Motors vehicles

Committed to providing service and parts quality that is every bit as good as the vehicle itself
Always working to improve the quality, reliability and competitiveness of our Service and Parts
operations
Devoted to complete Customer Satisfaction before, during and in the years after the sale
Continually encouraging customers to take advantage of our superior Parts and Service
commitment. Were proud of its excellence, and diligent about keeping it that way
Mentioning these important points with our customers is to their advantage. The customer realises that
we are realistically recognising the fact that vehicles will require periodic maintenance and repair work as
long as the customer owns it. It also tells that we are emphasising our responsibility to make service and
genuine GM parts available for the vehicles we sell.
It is also to your advantage. Word-of-mouth comments of our Service and Parts availability and desire to
service what we sell can result in more and better customer referrals now and more return customers in
the future.
Dealer
Sales Manager
99
REINFORCING POSITIVE PERCEPTIONS

The following is a list of key questions which are presented to focus Parts
Department operating behaviour relative to general public perceptions. Every
affirmative answer to a question represents a positive image to customers one
that builds customer satisfaction and reinforces a reputation for Dealer interest
and concern. It is this positive reputation that encourages customers to return in
the future and to recommend the Dealership to their friends and associates.
Is the Parts Department:
Communicating with customers?
Conveying interest and concern for their wishes?
Listening carefully and completely to what they have to say?
Giving them sufficient time to express themselves without interruption?
Giving customers full attention while they list their concerns and
opinions?
Helping them feel comfortable from the moment they enter the
Dealership premises?
Helping customers feel important always, especially when they call the
Dealership on the telephone?
Speaking directly and sincerely to each customer, each time?
Using the customers time efficiently, with no waiting?
Making it easy for customers to do business their way, instead of forcing
them to conform to Dealership methods?
Showing a neat, groomed, professional appearance?
Keeping promises made to customers?
Letting customers know immediately when unforeseen changes occur?
Providing the parts and accessories they require?
Notice that all questions except the last one relate to how the Dealership interacts
with its customers, and not how efficient it is with business. Customer
satisfaction begins by treating customers well. Profit satisfaction occurs by doing
things correctly before the customer makes a request.
100
Customer Satisfaction - Decision Grid
ANSWERING CUSTOMER QUESTIONS

EXPECTATION
RESPONSE
PERSON(S) ARE
ASSIGNED THE
RESPONSIBILITY
OF ANSWERING
CUSTOMER
QUESTIONS
Specified Parts Department employees are

selected to meet with the public and answer
questions
All employees know who the Customer
Representatives are so that customers with
questions are directed to those people
A procedure for handling customer
questions should be discussed, prepared,
written and distributed
Employees should be instructed to direct
questions concerning work or product to
the responsible person, not try to answer the
questions themselves. The cashier should
particularly be informed so that customer
requests are responded to promptly
After Parts Department operating hours, the
Customer Representative must have all
information available to answer questions.
When customers complain, the representative
should have documentation at hand to take
care of incorrect or defective parts, entries on
completed Repair Orders or Counter Tickets,
records to repairs made and any other sources
deemed essential for them to find answers
PROCEDURES
SHOULD BE
INSTITUTED SO
THAT QUESTIONS
OR PROBLEMS CAN
BE QUICKLY
RESOLVED
Procedures should provide the responsible

person with access to :
The complete and legible Repair Order
A secure file of all Counter Ticket
transactions
A complete service history of the vehicle in
question
A parts manual for a representative
selection of vehicles
Basic understanding of automotive repair
Thorough knowledge of warranty
Any sublet data
The responsible persons must have the
authority to implement corrective actions
if/when required
Responsible persons must be thoroughly
trained in Dealership operating policies,
customer handling and, perhaps most
important, straightforwardness
101
BUILDING A CUSTOMER SATISFACTION POLICY

EXPECTATION
RESPONSE
POLICIES
PREPARED TO
PROMOTE AND
ACHIEVE
CUSTOMER
SATISFACTION
Employees appointed to inform customers

and to keep them informed of the status of
their parts orders
Devise formal checklist which tracks
vehicles in for repair and customer orders
awaiting delivery
Reinforce with all employees that the only
significant measure of Parts Department
success is its ability to blend all other
requirements effectively in an effort which
better serves its customers and the parts
customers brought by other departments
Devise and enact formal business office
procedures to improve the capacity to satisfy
parts customers:
Make credit available
Separate from a cash only image
Encourage customer convenience
Develop credit card programme (check
with local banks to seen how the
Dealership can perhaps make available its
own credit cards for corporate wholesale or
frequent customers)
Get agreement on how customers are to
pay so that every customer hears the
same policy
Write, publish and post a policy
Consider extending business hours if
customers can be better served without
excessive expense
Determine policies and methods of
quoting parts prices to customers in advance
Develop methods for making prices
available so that Service people can quote
total costs for common Parts/Service work,
especially maintenance jobs and current
specials
Develop written methods for handling parts
delivery, rush or critical parts orders and
customer notification
Prepare Service/Parts availability and benefits
policy for use by Sales Department:
Present a copy to each vehicle salesperson
and each person in the Parts and Service
Departments
Discuss content and meaning of the policy
with each person
Use policy as a sample method that
includes a walk-through of the fixed
operations departments as a part of
vehicle selling or delivery process
102
BUILDING A CUSTOMER SATISFACTION POLICY

EXPECTATION
RESPONSE
Include customer satisfaction as an evaluation
method for employee performance
Emphasise customer relations through:
Clear, adequate signs that provide directions
Plans for peak load times that reduce
waiting at counters
Methods for expediting waiting customers
Person to person communication
POLICIES AND
PROCEDURES
DEVELOPED TO
MONITOR
CUSTOMER
SATISFACTION FOR
CONSTANT
IMPROVEMENT
Customer surveys taken to determine their

satisfaction with parts quality and delivery
Customers are kept informed and involved
with Dealership activities:
All invoices (regardless of what department
originates them) include notices of any
price specials currently being offered
All cheques sent out carry such notices so
that suppliers also have the opportunity to
become customers
A mailing list should be maintained with
notices of specials sent to all recent
owners and regular service customers as
well as to non-active customers to
encourage their return
All departments should cooperate in
informing their customers about the
Dealerships commitment to quality
Service and Parts as well as keeping them
aware of special offers made by the Service
and Parts Departments
Wall displays should announce every
special currently offered and all employees
should be informed about them. Menu
prices should be predominantly displayed
so that a customer who comes to the
Dealership for any reason realises the
competitive prices offered
When customers are in for service,
Dealership personnel should make special
efforts to personally talk with them, greet
them and inform them of specials or
items of interest
Identify reasons prospective customers go
elsewhere (perceived high price, inconvenient
business hours, inconvenient location, long
waits, poor previous experience, perception
of inferior parts or service, etc.)
Devise a programme of corrective action to
overcome any perceived weaknesses that
may contribute to customer problems or
dissatisfaction
103
104
Profit Centre Basics - Evaluators
QUALIFIER
DEALER ACTION
VALUE
GENERAL
CHARACTERISTICS
Dealership uses a Financial Statement

Parts Manager uses Financial Statement as
a resource to improve Department operations
10
5
Sales, Cost of Sales, Gross Profits and

Net Profits are calculated
Expenses are separated and charged to

individual departments
Dealer has determined profit and

expense objectives
Dealer believes fixed operations are

vital to Dealership stability
Profits are placed equal to, but never above,

customer satisfaction considerations
ADVANTAGES
Parts Department has access to financial

information
Parts Department figures are separated from

other departments
INCREASING
PROFITABILITY
Business objectives are translated into specific,

quantitative, measurable terms
Dealer regularly reviews financial information

with Parts Manager
Dealer encourages Parts Manager to be a

business person as well as an operations head
Dealer and Parts Manager regularly discuss

and determine Department objectives
Parts Manager understands what the Dealer

expects, in order to meet objectives
Dealer is committed to Profit Centred

departmentalisation
Fixed Operations share financial information

about their departments
Dealer is personally involved with employee

understanding of Profit Centring

105
Profit Centre Basics

- General Characteristics
SEPARATION
Operating each department as a Profit Centre is fundamental to appropriate
business management. From an accounting standpoint, the departments then
exist as separate businesses. Each is responsible for paying its own expenses and
producing a profit.
The Dealer is better able to measure Parts Department strengths by assigning it
Profit Centre status. In this way, the Department becomes immediately more
subject to quantitative, understandable, meaningful objectives. A Parts
Department does not become a Profit Centre by simple edict. The Dealership
must change its approach to departmentalisation. It requires the willingness and
understanding of everyone in the Dealership.
STABILITY
In recent years, as competitiveness has increased and the margin between retail list
price and Dealer invoice has decreased, the Sales Department has become less able
to withstand unprofitable or inefficient Parts and Service Departments. These
fixed operations must be capable of generating their own profits. Well managed
Parts and Service Departments deliver financial stability, strong market identity,
excellent profitability and improved future prospects to the entire Dealership. The
Dealer is right in supporting fixed operations knowing that the returns are
valuable. The wise Dealer also knows Parts and Service are vital.
In fact, the Dealership which thrives in the future will most likely be one with
stable fixed operations that can absorb most or all the fixed operating costs of the
entire Dealership. The Dealer who enjoys this strength in fixed operations is the
one who can compete vigorously for new customers and maintain strong
operations during market declines or fluctuations.
106

A Profit Centred Parts Department is generally defined by the following
attributes or features:
FISCAL SEPARATION
It operates fiscally as a separate business with all expenses, cost of sales and
profits calculated independently, separate from other departments. Thus, it is
responsible for profit goals and able to achieve them because it is informed of
and responsible for its own costs and expenses.
PROFIT REQUIREMENT
Business expectations are placed upon a Profit Centre. It is not subsidised.
Results are reported as profits and losses which, if it were a separate company,
would require that it make radical changes to remain in business. A Parts
Department that is a Profit Centre must feel compelled to provide a return on
the Dealers investment.
PRODUCTIVITY
Operating essentially as a separate business, the Parts Department Profit Centre
constantly improves its operating style. Processes are continually refined to
eliminate expense and waste. It is always seeking to improve its profitability and
responsiveness to customers. Its personnel are professional, capable and
involved. The mark of a successfully Profit Centred Department is not only that
it makes money, but also that its people are aware of and motivated by the
Departments financial success. In many cases their compensation is directly
related to profits.
CUSTOMER FOCUS
Customer satisfaction is the key method by which the Parts Department Profit
Centre realises its financial goals. People do not do business with companies,
they do business with people. Thus, the term Profit Centre does not imply that
the Department operates isolated from its customers. Instead it means that the
Parts Department recognises that customers are its reason for existing. By its
dailyoperating manner, the Profit Centred Department demonstrates that it
places fundamental importance on satisfying customers, and takes no customer
for granted.
107

EFFICIENCY
The Parts Department is an important contributor to the Dealerships ability to
satisfy customers profitably. Enormous waste and loss can occur subtly, slowly and
continually in the unregulated or inefficient Parts Department. A Dealer would
certainly notice a vehicle missing, and yet not know that even greater losses may
be occurring in the Parts Department. By organising the Department as a Profit
Centre responsible for its own profitability the Dealer can motivate the
Department to look critically at itself.
Improved procedures can drastically reduce losses which occur through:
High holding expenses caused by overstocking, obsolescence, redundant
stocking of superseded part numbers, etc.
High acquisition costs due to poor purchase planning, understocking,
insufficient or inaccurate demand tracking, failure to record lost sales, etc.
High operating costs because of inefficiency, poor facility maintenance or
operation, overlapping or duplicated individual work efforts, insufficient
expense management, inadequate control over Department procurement
or Dealership use of supplies, etc.
High costs of sales occurring from poor stocking or handling which
damages items, loss through theft, high percentage of emergency
purchases, failure to use discounts completely, duplicate ordering, etc.
Profit Centring causes the Parts Department to challenge itself, to step away from
old, inefficient methods and refine itself into a profit making, customer satisfying
business. Considering how important fixed operations have become in these
competitive, unpredictable times, this change in operating style is significant,
even necessary.
108
Profit Centre Basics - General

Characteristics
CONFLICTS
Profit Centring encourages departments to do what is necessary to meet
customer satisfaction and profitability requirements. It will include and affect all
persons in all departments and may initially cause discomfort and even
disagreement. For the Dealership this is likely to mean that:
Discussions between and among departments will increase since each has
a voice in the conduct of its affairs relative to other
Other internal departments may no longer be able to insist on large price
breaks for parts and accessories purchased for their customers, especially if
these price reductions greatly affect Parts Department profits
Disagreement may arise between Service and Parts Departments over
which should realise profits on parts, how much that percentage should
be, when profits should be taken, who is responsible for ordering based
on a customers request and who should contact the customer when their
order arrives. All disagreements among departments should be given
thorough, careful discussion so that each understands the others view and
final decisions appeal to logic and fairness in the best interest of the
customer and the Dealership
Dealership employees will not be allowed to purchase parts for personal

use at prices below what the Parts Department can tolerate to meet profit
goals, and certainly not below the total cost to the Department
(including proportional handling expenses associated with every item it
acquires)
109

The Parts Department will become far more restrictive in allowing access
to the high security areas of inventory storage, shipping, receiving and
customer order holding
The Accounting Office will monitor parts transactions and pay only from
invoices approved by the ordering authority. It is recommended that the
Parts Manager (or a designee such as a financial officer or inventory
control manager) be charged with initiating all scheduled stock orders
and approving all other parts and accessories customer orders, especially
those requested by other departments
Communications will become extremely important and will be written
rather than verbal and accompanied by confirming documentation
Orderliness will be required from all departments, particularly in their
requests to other departments
In those disputes between departments which they cannot resolve
themselves, the Dealer must make the final decision in the Dealerships
best interest and with all possible fairness to each disputing department
From the Dealerships perspective, many of these areas for potential disagreement
may appear to be merely procedural since profits ultimately go to the Dealership
even though they are attributed to the department which generated them.
However, diverse strategies and opinions will surface as departments recognise
their business perspective and search for opportunities to increase profits. These
struggles for advantage are normal and healthy among dedicated departments and
ultimately work to the benefit of both Dealer profits and customer satisfaction.
110
Profit Centre Basics - Advantages Benefits

An appropriately Profit Centred Parts Department should develop business
capabilities superior to an operation which remains simply a supply function of
the Service Department or the Dealership. Worthwhile rewards accrue to the
Dealership that grants its Parts Department Profit Centre status.
PRECISE CONTROL
Separate accounting provides the Dealer and the Parts Department with an
accurate measure of its productivity. Its business capability can be precisely
reviewed so that required changes will be accurate, realistic and measurable.
Thus, the Dealer has greater control over Department outcomes without having
to become involved with Department processes.
IMPROVE STATUS
Parts Department employee status is always raised when the Dealer recognises
the Department as a separate operating unit. Parts Departments notoriously
receive less respect and attention than other departments. The Dealers interest
and involvement in parts operations encourages parts people not only to do
better, but to want to do better.
Separation and recognition of the Parts Department also elevates its status
among other departments, improving the communications and understanding
that must occur among departments if customers are to be better served.
111

- Advantages - Benefits
INCREASE UNITY
With the Parts Department as a partner in the customer satisfaction process, other
departments improve their capacity to service. This occurs first, because Parts
Department expertise can help other departments better anticipate customer
needs and better prepare for future demands and second, because cooperation is
preferable to conflict. The Profit Centre concept adds friendly competitiveness
into departmental efforts. Each will try a little harder, to the benefit of the
Dealership and the customer.
BUILD MOTIVATION
Parts employees who exercise some control over their efforts gain confidence and
consider themselves as equals and partners in the Dealership. Their attitude
improves, they tend to enjoy what they do more, become more involved and work
to satisfy their customers and other departments as customers. The Dealership
benefits from this reawakening of interest.
ENCOURAGE INVOLVEMENT
Profit Centred managers also recognise greater responsibilities and rewards which
encourage them to work harder to improve their business. This builds confidence
and self-reliance, increases their expertise and encourages continued
improvement. The Dealer develops a strong cadre of department managers who
view themselves as business people and not simply as employees.
112

- Advantages - Benefits
ALLOW CREATIVITY
Profit Centring encourages independent thinking, resourcefulness when solving
problems and greater communication and respect among employees. For many,
their work ceases to be a job and becomes a career. This business interest can
ultimately improve the Dealerships service possibilities more than any other
single aspect.
DEVELOP TEAMWORK
All employees tend to feel more involved and part of things. Feeling this way,
they are friendlier, more concerned about their work and their customers and
more rewarded by the work they do. The entire environment of the Dealership
can change, become more attentive, more resourceful and even more fun.
The Profit Centre concept gives everyone (and in particular the individual
department managers) a greater sense of control and responsibility. This alone
should yield happier, more loyal, dedicated and responsive employees. It is
certainly not a complete or perfect answer, but the Dealership benefits
enormously in this atmosphere where interest in customers and the business is
paramount. Thus, although the Profit Centre is formally a method for
separating and assessing individual fiscal elements in the Dealership, it can also
become a significant way of improving operations, developing dedicated
employees and satisfying customers as well.
113

- Increasing Profitability
Profits are the foundation for a Dealerships continued success. Without profits
there can be no future business. But profits are the result of sales. And sales occur
because of satisfied customers. The determining factor is the customer, not the
profits. The Dealer must first deliver on customer satisfaction. By doing this
efficiently, profits naturally follow.
The Parts Department (and, in fact, all competitive businesses) must develop
operating excellence which assures that customer requests are filled in most
cases at the time the request is made. The Parts Department is a supply source,
not a mail order catalogue. Customers do not and should not expect to wait for
most of the parts and accessories they require. Each time a customer need is
fulfilled, the parts transaction occurs.
Operating excellence implies that not only are requested items immediately
available to fill demand, but that ordering, storing and handling methods are as
efficient as possible to assure the lowest total cost to the Dealership.
Profitability is created, and can be increased through three methods available to
the Parts Department:
Increased parts sales
Reduced cost of sales
Controlled operating expenses
114

METHODS TO INCREASE SALES
Most Dealerships seek to improve overall profitability by developing more
customers or by selling more parts and accessories to each customer. This is
growth that usually requires added investments in marketing, advertising,
promotions and even facilities and personnel.
Objectives and strategic plans to increase sales should be written completely
outlining merchandising and selling expectations.
A formal, logical approach includes the following stages:
Estimate primary parts market potential
Include Parts Department in the emphasis for vehicle sales as well as parts
and accessories sales
Outline merchandising and selling objectives
Develop simple, inexpensive merchandising methods
Devise advertising strategies that keep customers informed as well as call
attention to Dealership offerings
Include cost estimates and prepare business case for merchandising plans
Above all, plan rather than react
115

SAMPLE
COMPETITION SURVEY PARTS

Area
Date
GENERAL INVENTORY
S B H D D
M U A R I
A L N A S
COMPETITORS L K G W P
NAME AND
L
I E L
LOCATION
N R A
G S Y
C
U
S
T
O
M
O
T
H
E
R
QUALITY
ATTRACTION
ADVERTISING
Notes on
Department
Cleanliness
Personnel
Notes on
Services
Conveniences
Hours Open
Notes on
Appeal used
Media
Frequency
Estimate Number and Size
116

SAMPLE
MERCHANDISING PLAN
Plan Year
Page
of
POSSIBLE ACTIONS
(Things to Consider)
ACTIONS PLANNED
(General Outline)
117
ACTION EFFECTS
Number
Owners
Parts
Sales
Costs

METHODS TO INCREASE SALES
Parts Excellence provides the Parts Manager with many options which can be
integrated into a growth programme. Consider any of the following as a method
to stimulate added sales:
Devise incentives for retail customers to encourage trade such as discounts,
package pricing, parts auctions, etc.
Develop cooperative sales programmes between departments to focus
them on additional parts and accessories sales
Expand the wholesale business
Expand the customer retail and do-it-yourself business
Develop a full service response within the Service Department to better
react with quick maintenance services (oil changes, lubrication, tune-ups,
brakes, etc.) often lost to aftermarket competition
Promote seasonal specials
Sponsor clubs, clinics, school auto shops and specialty programmes (for
women, beginning drivers, older drivers, etc.) to build traffic and meet
new prospects
Of all the profit building options available to Dealerships, the one most often
sought is growth through unit sales increases. It may be the most immediate,
dramatic (and simple) method for changing the profit picture, but it may not
necessarily be the best method because it concentrates on finding new customers
looking beyond its own operation to realise better income. Yet, within its own
walls are two other methods, discussed next, which are under the Dealers
immediate control, and offer exceptional (though not often simple or quick) ways
to realise greater profits with little risk.
118

METHODS TO DECREASE COST OF SALES
Improvements made in planning purchases and buying properly can generate
excellent increases in Dealership profitability. Further, any reduction in the cost
of sales also translates directly into profits. The Dealer should support the Parts
Managers efforts to reduce cost of sales. Together, they can discuss and form
operating plans to reduce the cost of sales by many methods:
Purchase at the lowest total cost (and with careful consideration of all
costs, including hidden ones such as delivery charges, lack of support,
reputational losses from inferior parts, etc.)
Increase the percentage of scheduled stock orders compared to total
orders since scheduled orders usually offer parts and accessories at the
lowest total cost
Increase the percentage of fill rate from inventory by improving the
purchase choices. Pretest items for their saleability and stock them
quickly after they pass the stocking test
Improve purchase planning through accurate inventory and lost sales
records so that inventory stocks correctly reflect historic customer
demand and thus more accurately predict future demands
Much of the Parts Departments ability to generate profits is created when it
makes proper and effective buying decisions. That, coupled with an efficient
handling process not only makes money for the Dealership, but also better fulfils
customer demands. Customer satisfaction and profits always interlink.
119

METHODS TO CONTROL EXPENSES
Expense and wastefulness is created whenever a person is not working at full
potential, is duplicating another persons task, when facility utilisation and
security is not optimal and any time the individual departments are not working
at peak efficiency.
Significant improvement in profits can occur when expenses are managed so that
money is wisely spent. Any savings generated through improved expense control
becomes direct profit to the Dealership. Furthermore, any savings that more
effectively utilise Dealer operating funds usually do not incur any expenses of
their own. Consider any of the following methods to control expenses:
Increase personnel efficiency through time management and more accurate
and complete task/labour assignments
Lower inventory holding expenses and acquisition costs by balancing
purchasing decisions with customer satisfaction
Tighten security
Install supply and materials monitoring documentation and devices to
discourage unnecessary use or waste
Minimise obsolescence by routinely determining and removing nonselling items
Use space more efficiently through improved stocking techniques,
organisational changes and storage methods
Improve upon item availability without overstocking through wise
purchasing practices and thorough purchase planning
Develop more efficient parts and accessories handling procedures which
minimise wasted time and motion
Styled for Profit Centre processes, Parts Excellence methods naturally seek to make
operations as efficient as possible without endangering customer
satisfaction. Thus, the Parts Department which operates with excellence will
realise the benefits of reduced costs and controlled expenses while serving
customers well.
120

A realistic financial plan begins with accurate assessments of costs and expenses.
Before future financial plans can be made, the Parts Manager (perhaps with the
help of someone in administration) should prepare a strict review of previous
financial experiences.
FINANCIAL PLANNING
Monitor monthly trends, comparing expenses to determine fluctuations,
potential problems, unforeseen increases from year to year, elements out
of proportion from common experiences or previous years, any
unjustified increases in personnel, compensated hours, parts costs, parts
purchased, etc. without any comparable increases in productivity, sales or
work output. Adjust figures for inflation, volume changes, etc.
Establish a list of controllable expenses over which the Parts Department
may have authority including:
Supervisory salaries
Clerical salaries
Company vehicle expenses
Advertising
Repairs to equipment
Training
Fixed overheads (employee fringe benefits, payroll taxes if applicable,
rent, fees, insurance, depreciation, etc.)
Carefully track Parts Department personnel expenses including salaries,
wages, bonuses, commissions and benefits. Calculate expenses as a
percentage of sales
Total Personnel Expenses = Expense as a % of Sales
Total Parts Sales
Carefully monitor supplies to ensure their wise and frugal use. A simple
method is to have individuals sign for supplies when the make requests.
They receive their supplies without admonishment, yet historically, when
signatures are required, supplies used (or misused) have been reduced by
nearly one half
121
Profit Centre Basics - Decision Grid
IMPROVING SALES FOR ADDED PROFITS

EXPECTATION
RESPONSE
DETERMINE
PRIMARY MARKET
POTENTIAL
Summarise historical Dealership sales based

on service, internal, retail and wholesale
sales totals
Market areas are geographic. Estimate the
basic size of your primary market and
encircle it on a map for reference
Research for vehicles in operation (VIO) in
the trade area generally ser ved by the
Dealership
Survey competitors to determine their
approach to parts and accessories
merchandising and service (see form on
page 116)
Solicit cooperation from Sales and Service
Departments to build a more thorough
understanding of both the market and
competition within the market
EMPHASISE
VEHICLE SALES
SUPPORT AS A
PARTS DEPARTMENT
FUNCTION
Reinforce the Parts Department as a

contributor to the Dealerships reputation,
financial stability and customer loyalty
Emphasise Parts Departments significance
in maintaining and enlarging customer base
Focus on parts availability as a vital support
to help other departments such as Service
and Body Shop respond satisfactorily to
customers
Remind all employees that parts availability
can be an inexpensive advertisement for the
Dealership, enhancing its reputation and
thus drawing and retaining sales and service
customers
122

EXPECTATION
RESPONSE
OUTLINE
MERCHANDISING
AND SELLING
OBJECTIVES
Determine all customer attractions the

Dealership does (or should) present:
Availability
Convenience
Price
Quality (original equipment)
Employee friendliness
Positive uniqueness
Consideration and customer assistance
Determine advertising and promotional
parameters:
Purposes
Theme/message
Methods/media
Clinics, sales, etc.
Survey personnel effectiveness make
corrections and improvements
Training
Incentives
Supervision
DEVELOP
MERCHANDISING
METHODS
CONSIDER ANY
POTENTIAL
ENHANCEMENTS
FOR PRINTED
ADVERTISING
Vary advertisement sizes according to selling

situation and area, compare to competition
Allow sufficient blank space around and
within advertisement
Select simple, readable typefaces
Consider advertisement positioning for
maximum readership at greatest value
Make sure advertisement is distinct and lets
reader know instantly who you are
Consider colour for dramatised effect
Select outside help if necessary to develop
superior advertisements
Cooperatively create Service/Parts menu lists

Eye appealing posters and displays
Create exploded parts information displays
Utilise free publicity sources such as local
newspapers, business papers
Display worn parts (such as brake linings,
wiper blades, tyres) in Parts Department to
stimulate service sales
Display accessories in Service and New
Vehicle Sales
123

EXPECTATION
RESPONSE
DEVELOP AND
MAINTAIN STRONG
COMMUNICATION
LINK THAT
INCLUDES
EMPLOYEES AND
CUSTOMERS
Keep present customers informed of current

specials, advertisements, etc.
Make use of competitive advertising if
comparisons are possible or worthwhile
Test selling appeals with customers before
building a final campaign
Involve Dealership senior management
Advertise everything selectively:
Cars
Trucks
Special vehicles
Parts and Service
Body damage and painting
Body trim and upholstery
Fleet service
Maintenance parts
Planned maintenance programmes
Quick, no reservations service
Specialty services
Specialty parts
Inform employees of advertising plans,
expectations, and the employees
responsibility in it
CALCULATE ALL
COSTS ESTIMATED
FOR MERCHANDISING PLAN
Added personnel (compensation, overtime, etc.)

New tools, equipment, facility changes required
Extra purchases
Advertising, promotions, display setup and
related costs
BE PREPARED
Project the future based upon the past

Know your market (potential/competition)
Set quantitative objectives
Consider frequency of advertising for
impact/cost
Consider scheduled, predictable advertising
with similarities of layout, copy, or theme
to build memorability and consistency
Consider testing different advertising
approaches to determine superior and most
effective ones
Make necessary facility, budget and training
preparations (you must be able to provide
what you promote!)
Reorganise, alter or adjust to fulfil on promises
Outline expectations in writing and present
them for discussion and alternative ideas
Monitor outcome for mid-course
corrections if necessary
124

EXPECTATION
RESPONSE
MANAGE EXPENSES
THROUGH
HISTORICAL
PATTERNS
Compare with previous figures for all

supplies, compensation, fixed expenditures
and repairs
Establish a list of controllable expenses in
advance and determine calculations for
reach item on the list
Know historical trends in order to measure
significant increases and decreases
Carefully monitor internal work costs or
parts returns incurred to satisfy customers as
a result of a complaint. These areas not
included under warranty are important
since they can significantly improve the
Dealerships reputation for fairness and
concern. However, these costs should not
be planned as deliberate expenses. Monitor
them as inevitable expenses which the
Dealership should make very effort to
eliminate by doing things correctly the first
time
INSTITUTE A
BUDGETING
METHOD
Recognise that expense control does not

necessarily mean cutting costs. To budget
does not mean to restrain. Rather, it
means to plan to spend
Have a budgetary method or approach that
is rational, predictable, logical and
reasonable. In this way, fluctuations can be
determined earlier and reductions
performed with less severity
Set expense budget so that capital is
assigned for typical expenses
Monitor expenses so that increases are
moderate
Encourage everyone in the organisation to
search for methods to cut expenses. If
necessary, solicit suggestions and reward
those selected
125
126
Working Together - Evaluators
QUALIFIER
DEALER ACTION
CONFLICTS
All managers have equal status

Management meetings encourage open
discussion
Employees trained in customer handling
techniques
Dealer is receptive to individual problems
Dealer demonstrates listening with patience
Solutions always attempt to be a compromise
between opposing ideas and fair to all
COOPERATING
INTER-DEPENDENCE
DEALER
INVOLVEMENT
VALUE
Dealer emphasises the importance of each

department to the others
Dealer committed to Dealership unity
Dealer recognises the importance of teamwork
Individuals encouraged to present opinions
Judgement withheld from early discussions
Discussions focus on overcoming problems,
not complaining about personalities
Dealer emphasises value of individual ideas
and employee input
Dealer supports each managers authority
Dealership emphasis is on concern for the
customer
Dealer has frequent (at least monthly)
management meetings
Dealer emphasises open communication
Each department is exposed to the problems
and expectations of the other departments
Dealer encourages creative thinking and
solicits new ideas

127
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5
8
3
4
4
6
7
6
5
5
7
5
6
5
6
4
4
4
Working Together - Conflicts
The Parts Department must satisfy customers and make a profit. It would appear
that these two expectations conflict with each other and could create problems
within the Dealership.
OBJECTIVES
Parts customers (including the Service Department) want every parts
request filled. They want the lowest price. They want the fastest service.
The Dealerships reputation for parts and service depends upon rapid,
efficient, economical, accurate delivery. This delivery of the correct
parts, at the correct time, in the appropriate quantity, for an acceptable
price is made possible through interlocked systems and operating
controls
The Dealership itself must make a reasonable profit while it satisfies
customers. It must pay for the purchase, storage and handling of parts
and accessories. It must pay salaries, benefits and fees. It must balance
customer needs with Dealership profits in order to remain in business. In
essence, profits are a measure of the efficiency and accuracy of operating
routines. The Parts Department only provides what it can obtain from
somewhere else. It has no internal capacity to manufacture its own parts
and relies on predicting what customers will want and looking for parts
not stocked so that customer requests are totally filled. It is a difficult,
complex process that must be embraced rather than avoided by the Parts
Department employee
128
SEPARATE METHODS
Conflicts may also arise within the Parts Department itself, among different
departments within the Dealership, and even between the Dealership and the
manufacturer. This conflict may result because, although the goal may be shared
by all concerned, the methods to reach the goal may be incompatible.
To reduce this conflict it is important to:
Recognise that there will be different views with merit
Assume that all parties share in the important goals of customer satisfaction
and Dealership profitability
Concentrate on problems, not personalities, when conflicts arise. Discuss
and attack possible solutions not individual idiosyncrasies judge
problems, not people
Seek solutions that benefit and require compromise of everyone. No one
should win everything and no one should lose everything. It is the art of
resolving conflicts between well intentioned people
129
Although different internal departments, the Dealership and the Manufacturer

have the same goals profitability and customer satisfaction they may approach
those goals with different strategies. Each responds appropriately in their own best
interest. This creates conflict. The chart below illustrates how different that focus
can be when the conduct of Parts Department affairs is given a sales perspective
or a supplier perspective.
Department Strategies
Sales Strategies
Supplier Strategies
Increase all sales
Stress sales affecting personal

income
Increase brand market share
Introduce new products
Minimise problems, sell!
Support slow sellers
Raise prices
Offer discounts
Encourage competitiveness
Maintain best margins
Attract more business
Improve efficiency
Tighten credit
Relax credit restrictions
Provide additional credit
Introduce more controls
Reduce paperwork
Follow company policy
Promote balanced sales
Meet customer needs
Promote all products
Develop long term business
Solve todays problems
Reduce past errors
Improve skills frugally
Stick with proven methods
Invest in training
Improve inventory turn
Sell fast moving items
Increase stock inventory
Order as needed
Stock everything
Encourage routine ordering
Pay slow (improve cash flow)
Avoid problems (keep

customers satisfied)
Collect fast (improve cash flow)
130
Working Together
- Interdepartmental Cooperation
WHY COOPERATE?
No individual department within the Dealership can satisfy customers on its
own. Each relies on others to develop and maintain a strong customer base with
loyalties to the Dealership. For this reason alone, cooperation is vital. But this is
not the only reason.
Cooperation itself is a delicate and complex interaction. It cannot be taken for
granted. Cooperation doesnt simply happen it must be learned like any other
skill, it must be supported like any other process, and it must be acknowledged
like any other task. Cooperation is not simply the outcome of people who work
together. Rather it is the prospect of people to want to work together, who
respect and consider each other, who realise that working together can at times
be difficult and who believe that the rewards of working together outweigh any
perceived negatives or problems.
Cooperation is aided when understandings among people are clear. When
individuals know who does what through precise communications of
formalised procedures, misunderstanding and conflict can be avoided.
To assure greater cooperation, people must approach all meetings with a purpose
as business, not simply friendship. There should always be an agenda.
Individuals should prepare for meetings in advance. And, whenever possible,
meetings should be scheduled, short, specific and sensitive to the needs and
expectations of all involved.
131
Working Together
Every department in the Dealership is presenting an image to customers an
image that the customer either likes or dislikes. The Parts Department has a
responsibility to help other departments present a positive image by having the
right parts and accessories readily available for them to deliver to their customers.
Thus, the Parts Department must view other departments as customers and
treat them accordingly.
The Dealer must work closely with managers to assure that they understand the
responsibilities and purposes of each other and, perhaps most importantly, so that
each respects the others ability to do what is best for the Dealership. Working
relationships must be developed among all departments. The Dealer should
emphasise communication that develops cooperation. It begins with respect
between departments.
A formalised approach is critical to the Dealerships focus on and commitment
to cooperation. The value of written policies cannot be underestimated,
particularly in those areas where invisible conflicts or vague misunderstandings
can cause severe problems between people. For this reason, a written guide
concerning interdepartmental cooperation should be prepared. The sample
policy on the next page may be used as a guide or thought starter.
132
Working Together
POLICY FOR COOPERATION AMONG ALL DEPARTMENTS

TO HELP ACHIEVE OUR GOAL OF
COMPLETE CUSTOMER SATISFACTION
It is the policy of this Dealership that all departments work together to help assure satisfaction
for our customers.
To that end, the following understandings and procedures will be established and maintained:
1.
All managers understand and support the goal of complete customer satisfaction.
2.
The areas of common concern between different departments shall be clearly identified
and understood. Managers should consider it their responsibility to identify and resolve
those areas of common concern through regular, comprehensive meetings.
3.
The specified procedures for working together in areas of common concern shall be
prepared, written, and provided to all affected employees. The written procedures should
be discussed so that all areas are understood and followed by all department managers
involved.
4.
Individual departments will meet with each other regularly on a planned basis.
5.
Department communication activities, designed to satisfy customers, will be reviewed

periodically at Dealership staff meetings so that opportunities for improvement may be
determined and discussed.
No department can properly serve customers without the support and understanding of the
other departments. Thus, each must respect and show interest in the others.
(Dealership Logo)
(Dealer signature)
Working Together
COOPERATING WITH THE SERVICE
DEPARTMENT
In most Dealerships the Parts Departments best customer is the Service
Department. Conflict between these two departments can occur for many
reasons:
Department personnel are familiar with each other and therefore feel less
need to treat each other with the respect and courtesy they would give to
ordinary customers
The Departments are essentially captive the Service Department has no
choice but to get parts from the Parts Department and the Parts
Department is responsible for fulfilling Service Department requests.
This captive association must never be taken for granted
Antagonism can magnify between the two Departments simply because
they know each other well and work together daily. This increases the
chances for abrasiveness, poor relations, which grow upon themselves and
discontentment because they are always together
As each learns more about the other, they tend to criticise each others
performance capabilities. One Department knows just enough to
complain about (but not enough to solve) a problem that the other
Department is having or causing
The Parts Department must have profitable parts and accessories
available from stock the majority of all items requested. However, the
Service Department wants to be able to get all its needs filled from stock.
Both have legitimate reasons for making these requirements. And this
can cause conflicts
134
Working Together
Parts and Service Department Managers should meet once per week in
addition to casual meetings that occur each day to review activities that involve
the two Departments. A regular agenda should be created which is discussed at
each of these planned, weekly meetings. Areas of common concern which could
be discussed are:
Advertising
Service specials
Parts and Service displays
Seasonal promotions
Vehicle inoperative orders (vehicle off road)
Back orders
Parts and accessories ordered but unclaimed
Pricing and price menu questions
New parts and accessories additions to inventory
Parts overstocked and understocked
Procedures being followed for service to technicians
Procedures technicians are following to receive parts
Recall campaigns
GM newsletters and bulletins
Procedural elements which will improve cooperation and efficiency
135
Working Together
POLICY FOR HANDLING TELEPHONE INQUIRIES

TO HELP RESPOND APPROPRIATELY TO CUSTOMER NEEDS
It is the policy of this Dealership to emphasise telephone etiquette and expertise as a significant factor in the
customers perceptions about us. To assure continued good will and to separate us from competitors, the
following procedures will be established and maintained.
1.
Incoming calls shall be answered within three rings.
2.
Transferred calls shall be answered within twenty seconds.
3.
When the caller asks for a total estimate, parts and labour, for any given service operation, personnel
handling the question must provide the caller with a total price estimate without switching them
among departments.
4.
In instances where you do not know the parts or service labour prices find out as quickly as possible.
Add all elements together and quote a combined estimate, unless the caller has asked for separate
prices.
5.
When searching for estimated prices, do not put the caller on hold for more than three minutes (and
tell them that they may be waiting on the phone for some time!). If it takes longer, politely take the
caller's name and telephone number and call back as quickly as possible. Never transfer the caller to
another person for other department prices. Develop them yourself or have them developed for you
and then give them to the caller personally.
6.
Always avoid having the customer waiting on the telephone. This is particularly true with calls already
transferred from the office. Listen for irritability in the caller's voice and attempt to take special care
of that person since we never want a customer to think we are inefficient. Time slows down when you
are waiting on the telephone for an answer. Be especially sensitive to this and always keep the customer
foremost and informed.
Our goal is a completely satisfied customer with every customer, every time. This is as true of telephone
inquiries as it is of customers visiting the Dealership. Both are important to us.
(Dealership Logo)
(Dealer signature)
136
Working Together
COOPERATING WITH THE BODY SHOP
Conflicts often arise between the Parts Department and its Body Shop because of
delivery tensions. Vehicles in the shop are off the road. Their owners are waiting,
perhaps impatiently, for repairs. Thus, the cooperation between the Parts
Department and the Body Shop can suffer because of the frustration of not
having parts available quickly enough.
The Dealer should help the Body Shop and Parts Department recognise and
understand each others needs. Cooperation between the two Departments can
help build a superior image of customer service only if each realises the patience
and support required to keep highly volatile situations under control.
COOPERATING WITH THE SALES

DEPARTMENT
Conflicts sometimes arise between the Sales and Parts Departments because of a
lock of understanding and respect. In many Dealerships the Parts Department
does not enjoy the status or Dealer interest that the Sales Department has. When
Parts Department people feel slighted, they may rebel by frustrating salespeople
who make requests. The customer and ultimately the Dealership suffers.
The Dealer must build a teamwork atmosphere in which each department feels
important and respected. An uncooperative Parts Department can frustrate other
departments and injure their ability to satisfy customers. Wisdom dictates that the
Dealership best succeeds when its individual departments share in the feeling of
commitment to each other and to the end customer. No department should be
given second class status, and instead should be included, and appreciated, as a
member of the Dealership team.
Excellent relationships among departments and employees are vital to Dealer
success. What the Sales Department does not know about parts and accessories
can hurt and the reverse is also true.
137
Working Together
COOPERATING WITH THE ACCOUNTING
OFFICE
Fixed Operations, particularly the Parts Department, often view the Accounting
Office as a distant group with little interest in or knowledge of their problems or
needs. This feeling is reduced when the Department is a Profit Centre because it
better understands financial matters and exercises more control over the fiscal side
of its business.
The Accounting Office can actually help the Parts Department reduce its
paperwork. The office can make payments, track invoices and support Parts
Department requests yet the Department retains authority over purchases and
payments. Parts Excellence provides a complete method (using the authorisation
procedure described earlier) so that the Department controls its purchases and
payments but can have the Accounting Office actually make those payments.
Thus the Department manages its affairs, but has the office help with the work.
For this cooperativeness to flourish, the Accounting Office must understand that
the Parts Department is the purchasing authority, and that the office is acting as
implementer, not decision maker. This separation of responsibilities also gives the
Parts Department status within the Dealership. The Dealers involvement as a
mediator, as a leader and as an interested observer will help build rapport and
understanding between the Parts Department and the Accounting Office.
138
Working Together
SUCCESSFUL INTERDEPARTMENTAL COOPERATION

The Dealership that believes in the cooperative approach to interdepartmental operations should consider
(and fulfil) the following basic requirements for success:
1. Management committed to Dealership objectives of customer satisfaction, employee morale and parts
profitability in that order. A subsidy of fixed operations may be necessary before resulting profits occur.
2. Objective assessment by the Dealer that is firm and fair. The Dealer should be able to affirmatively
answer three primary questions:
Are parts facilities adaptable to cooperative operations?
Is there the right balance of supervisors and line personnel?
Is there sufficient market for expanded parts volume?
3. Management information methods and operating controls must be instituted to provide accurate, daily
results on parts operations and sales.
4. Superior parts management requires a Parts Manager who can appropriately and wisely direct the
Department. The Manager must have the authority to:
Set up team oriented operations
Evaluate staffing skills and personalities for cooperating strength
Overcome resistance to change and get the Department to respond to cooperation as an operating style
Set gross profit, productivity and fixed overhead objectives and motivate staff to meet or exceed them
Continually develop parts employees through counselling, training, testing and performance review
Recruit new people to replace or add to staff
Maintain strong expense controls, maintenance and merchandising programs
Conduct regular Department meetings to solve problems and motivate staff
5. Capable counter persons are needed to greet customers, fill orders efficiently, diagnose problems and
develop an operating behaviour focused on customer satisfaction.
6. Proper balance of staff positions held by competent people as counter persons, parts specifiers, inventory
control, receiving and delivery people.
7. Fair and adequate compensation, evaluation and promotion.
8. Careful staffing and preparation of procedures enhance the cooperative spirit of people who are willing
to work together (indeed, they enjoy working with each other), and are supported by accurate, thorough
and well understood policies which give methods to operations and help resolve problems or questions.
This consistency is necessary for people to work together productively, and for the long term.
139
Working Together - Decision Grid
BUILDING SERVICE/PARTS COOPERATION

EXPECTATION
RESPONSE
COMMUNICATE
COOPERATION AS
A DEALERSHIP
POLICY
Written policy is prepared and published

which reinforces the Dealership policy of
interdepartmental cooperation
Special meetings held periodically to get
everyone working together for Parts
Excellence
Service and Parts Department meetings held
on a scheduled, weekly basis
A planned agenda is discussed at these
formal, weekly meetings
Meetings are held between managers, on
occasion with the Dealer present
All personnel in both Departments
are regularly provided with parts and service
information that results from these
meetings
The Dealer promotes a feeling of
community among everyone in the Parts
and Service Departments. No one is isolated
or ignored
COOPERATIVE
POLICIES ARE
FORMALISED INTO
PREPARED
PROCEDURES AND
OPERATING RULES
Written procedures should be prepared for

Technicians requesting parts and accessories.
There are several methods Dealerships use
in addition to Repair or Work Orders:
Parts person fills out inventory slip listing
part or accessory number and name.
Technician signs it
Service Technician fills out parts
requisition (such as a Demand Form) and
presents to parts person
Foreman makes out parts requisition at
Technician's request
Intercom at each stall makes it possible
for Technicians to call in for parts in
advance of the time they are needed. In
this way, parts are waiting for them to
claim at the parts counter (or are delivered
directly to the Technician)
An intercom at the write up desk permits
Service Advisors to check on parts
availability and avoid making promises to
customers they cannot keep
140

EXPECTATION
RESPONSE
FORMALISED
POLICIES
Rapid service to Technicians is a standard

operating procedure for the Parts Department
Parts Department is made conscious of fast
parts delivery to Technicians with no time
spent waiting at the counter or during
the repair
Consider creating satellite Parts Department
stations, orderers or messengers to help
Technicians receive parts they need more
quickly and more accurately
Devise written handling methods and forms
concerning customer notification and
responsibilities for specially ordered parts
Develop price menus for commonly
requested parts many of these fast moving
parts are the ones likely to be advertised by
competitors. Therefore make every effort to
price them competitively and never run
out of them
Prepare master parts/labour price lists to
compile information so that customers only
need to talk to one person to get prices fast.
Avoid shuffling customers between Parts
and Service for quotes or cost estimates
Maintain list keep it current
Develop a written policy on properly
handling telephone inquiries:
focus on importance of training in
telephone call handling
Review policy as a training measure with
all employees who talk to customers on the
telephone (see sample on page 136)
Call a special meeting to introduce
telephone etiquette and handling to staff
141

EXPECTATION
RESPONSE
ENHANCE
ADVERTISING
COOPERATION
Parts and Service Departments routinely

develop and share costs and decision
making in advertising which combines
service and parts promotions
Both Departments share in deciding upon
the selection and timing of the advertising,
with the Dealers approval of their
suggestions
Parts discounts are decided upon and agreed
to by Parts Manager based on volume
increases to compensate for profit
reductions
Parts scheduled for promotion are procured
in advance so that Service Department is
assured of full availability when special begins
Estimates for quantity and selection of parts
required are cooperatively reached through
discussions between Parts and Service
managers
CO-OPERATION
INSTILS
PRODUCTIVE,
SECURE
INTER-REACTIONS
Paperwork minimised to maximise efficiency

Any paperwork requirements are completely
discussed with all employees (technicians
and parts staff) so that each knows why
requirements are made of the other, and that
consensus is reached
Paperwork may not be eliminated if security
risks are increased. The Parts Departments
only real control over the flow of individual
parts is through the documentation created
to track that part. The Service Department
should be a willing partner in Parts
Department security from theft
Accuracy is maintained through effective,
thorough, rigorously followed
documentation procedures and
implementation:
For inventory management and
purchasing accuracy
For business projections that reflect actual
needs
For competitiveness through wise purchase
planning
142
Working Together - Interdependence
COLLECTIVE IMPORTANCE BY
RECOGNISING THE INDIVIDUAL
The Dealerships capacity to respond to customer needs is directly determined
by the ability of its departments to cooperate. In a sales and service operation,
no department can survive without the support and consideration of the other.
Each department, however, has its own approach to problems, its own
requirements, its own view of customer needs, its own way of making profits. A
dilemma is created between the groups need to have order among departments
and their individual needs for freedom to conduct business. It is not best
resolved by Dealer edict which forces departments to fit within predetermined
criteria. To do so can fragment operations and result in a Dealership that may
appear to run smoothly but lacks employee commitment and the flexibility to
react to opportunities or problems.
An alternative is the Dealership which promotes understanding among
departments. The Dealer nurtures cooperativeness by developing department
managers who operate with partnership aspects in mind, such as those listed on
the next pages.
143
PARTNERSHIP BEHAVIOUR
Responsiveness to fellow employees is a reflection of the ethic of
customer satisfaction. It means that not only do departments fulfil each
others requirements, but that they make an extra effort to meet those
demands because they know that the Dealerships image depends upon
each Departments ability to meet customer needs
Recognition of individual differences implies that where there is not
understanding there is at least acceptance and respect. Departments need
not know why another department may want something done a
particular way, but should believe that the request is legitimate.
Scheduled, routine meetings among departments should be used to
discuss problems and build respect for different approaches
Loyalty to Dealership prospects is necessary for the entire operation to
prosper. No department can exist on its own and requires the others to
maintain its business. This relationship is often forgotten in the daily
pressure to accomplish work and the familiarity that grows among
employees. The Dealer should reemphasise the value and strength each
department contributes to the success of the Dealership. This is done
through:
Frequent meetings with department managers
Showing interest and concern for every department
Demonstrating parity and fairness in the attention and recognition
shown to each department
Reducing conflicts by airing them and allowing departments to raise
issues that concern them
Encouraging discussion and openness among departments and managers
Allowing departments to control their operations and let them attempt
to resolve conflicts that occur between them without Dealer
interference
144
Commitment to the partnership occurs when departments realise not

only that they depend upon each other to satisfy customers, but that they
are partners in this objective. Thus, when they approach business with
one another as a partnership, not simply as a transaction, they show:
Concern for each others requirements
Trust in each others operating methods
Flexibility in problem solving
Openness and respect during times of conflict
Loyalty to each others interests
Patience even during moments of crisis
Understanding, especially when different needs conflict
No business is perfect, and no Dealership can expect its departments to operate
in complete harmony. However, the Dealer has a responsibility for the ultimate
benefit of the entire Dealership to promote partnerships among departments
and to support and acknowledge each department in its endeavours. It is the only
practical way to achieve customer satisfaction and profitability now, and in the
future.
145
Working Together - Dealer Involvement
PROVIDE SUPPORT
The Parts Department is an important partner in achieving complete customer
satisfaction. It can be a significant contributor to the Dealerships gross profits.
Further, it can make an enormous difference in the ability to meet customer
expectations. By having requested parts available, the Parts Department can serve
all the Dealerships customers well. But if the Department does not function
efficiently it can become an obstacle that makes it nearly impossible for any
department to satisfy customers.
The Dealers personal involvement is necessary for many reasons:
The inventory represents a large capital investment which should be
dutifully tended and carefully monitored
The Parts Department is vital to overall customer satisfaction and should
be nurtured and directed to that end
The Department utilises a complicated, detail oriented operating
structure that needs the objective support of the Dealer to attain goals
Dealer interest enhances the position of the Parts Manager, making the
Manager a member of the team
The Parts Department should be given more visibility within the
Dealership so that all departments work together with greater respect.
Dealer involvement can exemplify this
The Dealer can influence Parts Department personnel to treat customers
properly and respectfully by demonstrating customer handling techniques
that are common in other departments (particularly Sales and Service)
The more involved the Dealer becomes, the less confusing the Parts
Department will be to the Dealer
146
DIRECTING THE PARTS DEPARTMENT

The Dealer SHOULD:
The Dealer SHOULD NOT:

Control risk
Provide long term goals for profitability
Expect results on objectives
Communicate Dealership goals clearly
Require achievement of goals
Request and use employee suggestions
Lead and direct departments
Allow Manager authority
Expect quality and professionalism always
Monitor and maintain security measures
Provide operating systems/standards
Lead and provide direction
Acknowledge and reward superior work
Adequately train, inform and understand

Department personnel
Expect an individuals best performance
Be critical of problems or erroneous
methods
Place profit ahead of customer satisfaction

Discourage department innovation
Demand short term profitability
Over monitor Department procedures
Contradict Parts Manager decisions
Dictate methods to reach goals
Allow Department uncontrolled autonomy
Manage Parts Department
Relinquish control
Assume responsibility during crisis
Show distrust of employees
Dictate Department operations
Intimidate managers
Openly criticise by comparing Departments
Announce expectations beyond the

Departments capabilities
Threaten or chide
Criticise individuals (personalities)
BMI
147
ENCOURAGE RESPECT
Traditionally, the Parts Department has not been given the status equal to other
departments such as Sales or even Service. Too often considered little more than
a simple buying and storing function, the Department may suffer by feeling
unrecognised or unvalued.
Yet, the Department plays a critical role in supporting other departments in their
ability to satisfy customers. In fact, the well-run Parts Department may be
forgotten simply because it is doing its job so well. If a Parts Department only
get attention when it does something wrong, the Dealership is making a serious
error in its handling of the Department.
Parts personnel must recognise that their association with the customer is a
powerful influence for the Dealerships future business. Customer cooperation
means that the customer is never seen as a problem. It does not mean that the
customer must cooperate with the Department, but that the Department must
always cooperate with the customer. Yes, it is cooperation that is slanted in the
customers behalf. Yes, it means that the Department must do whatever is
possible (and affordable) to meet customer demands. And, yes, it means that
customers are really everything, for without customers the Dealership has no
reason for remaining in business.
148
The Dealer should:

Include the Parts Department in all planning meetings
Seek input from the Parts Manager and Department personnel on how to
improve operating phases, especially those in which different departments
interact with the Parts Department
Solicit Parts Department suggestions and involvement in Dealership
activities such as community sponsorships, customer satisfaction
improvements, resource use, advertising and public relations plans
Include the parts Department along with the Service Department in
facility tours which introduce new customers or prospective customers to
the Dealership
Encourage frequent meetings among all managers so that parts and
accessories needs are thoughtfully decided and the expertise of the Parts
Manager is included in this vital planning process
Help the departments develop and implement other ways of building
teamwork such as planning multi department promotions, having
departments give short familiarisation seminars to other departments,
creating committees that involve employees from different departments
to look for ways to improve the Dealerships image, reputation, business
position, etc.
The Dealer, working through department managers, sets the tone for the
Dealership. The ultimate usefulness of Profit Centring and departmental
cooperation is determined by what the Dealer requires and imagines for the
Dealership. Thus, it becomes one of the Dealers foremost responsibilities to
nurture a feeling of wholeness to the Dealership. This need for teamwork relates
the Parts Department to all other areas and departments of the business.
149
MAKING MANAGERS MEETING PRODUCTIVE

EXPECTATION
RESPONSE
AGENDAS SHOULD
BE SET
CAREFULLY
Each participant should know management

meeting time at least one day in advance.
Preferably, formal meetings are scheduled
for selected (and convenient) times so that a
routine for meetings develops
Each participant is prepared and brings to
the management meeting a list of discussion
elements of concern to him or her
A standard agenda has also been devised so
that all critical issues are routinely brought
up for discussion, even if no discussion on a
particular area is necessary at that particular
meeting. Areas of common concern which
should routinely be reviewed at
management meetings are:
Sales Department (service quality,
warranty, review of customer service
procedures to customers, customer
treatment and communication, special
services, marketing alteration or
expectations, etc.)
Parts Department (availability, prompt
service, communication on problem parts,
service snags or unclaimed customer
orders, back orders, price adjustments,
inventories on special promotions,
information on parts/service competitors,
market changes perceived, etc.)
Accounting Office (prompt Repair Order
analysis, warranty analysis, parts
purchasing prospects, credit arrangements,
counsel on Financial Statement, etc.)
Service Department (technician counter
time, specials, promotions, shop changes,
status of problems concerning vehicles
down, scheduling or repair shortcomings,
customer returns, etc.)
Dealer should frequently sit in on the
meetings
Other meetings should also be regularly
held which include all employees and are
designed to solicit and implement their
suggestions, not simply to report
management decisions
150

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PARTS EXCELLENCE

General Motors Dealer Development Systems

This reference library is to be used in conjunction with and is complementary to

2001 General Motors Middle East Operations

General Motors Dealer Development Systems

THE CERTIFICATION REPORT

Each principal area is comprised of specific standards that must be

THE DEALER ACTION GUIDE (Main Text)

DEALER DECISION GRIDS

Module One - Table of Contents

Retailer Certification Review Module No.1

DEALER DEVELOPMENT MODULE

THE PARTS DEPARTMENT

THE PARTS TRANSACTION

Module One - Table of Contents

PROFIT CENTRE BASICS

Dealer Development Module

IMPLEMENT: A dealership Certification Review for the Module is

Dealer Development Module

READ: Background information is the bulk of the text in this Module. It

CHOOSE: Decision Grids provide specific suggestions to help organise

Dealer Development Module

Dealer Development Module

IMPROVING PARTS MARKETING

Indicate a sincere desire to help

Display awards, plaques, recognition letters

Expect rapid, professional phone call

Package prices for parts/labour, particularly

Assign individuals to notify customer when

Customer contact areas kept spotlessly clean

Basic Perceptions - Evaluators

Dealership has a Parts Department Facility

Full time Parts Manager

Parts Manager included in Dealership

Assessment Score (100 points possible)

Basic Perceptions - The Dealership

Franchised automobile and truck Dealers (Owners, operators, or General

Basic Perceptions - The Dealership

Basic Perceptions - Parts Manager

Basic Perceptions - Parts Manager

The Parts Manager is responsible for managing:

Do your expectations and priorities match? Is the Parts Manager concentrating

Basic Perceptions - Parts Manager

Basic Perceptions - Parts Manager

MANAGING THE PARTS DEPARTMENT

The Parts Manger DOES NOT:

Place profit ahead of customer

Stress customer satisfaction

Basic Perceptions - Parts Manager

The Dealer guides the Parts Department through a full-time, knowledgeable

Basic Perceptions - Key Requirements

Basic Perceptions - Decision Grid

Personal involvement with Department

The Parts Department - Evaluators

Familiar with basic Parts Department

Parts Manager granted Departmental

Parts Manager analyses return on

Assessment Score (100 points possible)

The Parts Department - Dealer Role

The Parts Department - Dealer Role

The Parts Department - Dealer Role

The Parts Department - Dealer Role

Consider the Dealership for all their parts needs

Remember: A single bad experience jeopardises the relationship that exists