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October 16, 2006: Providing solutions to a rural dealership

October 16, 2006
Filed under Archives

This series of articles recaps a portion of the opportunities that were uncovered by Gart Sutton and Associates’ powersports specialists during consulting visits. These opportunities are followed by recommended actions that address the issues.
The goal of this series is to provide you with ideas to help you improve your dealership.
Following the needs assessment of the facility and the processes, our consultants prepared a list of recommended actions and reviewed them with the dealer principal. The goal of this review was to determine if the dealer principal was willing and capable of accomplishing the action. Once the level of commitment and capability was established, the recommended actions were prioritized. In the case of this dealership, the highest priorities were assigned to improving the management of the P&A Department and building effective processes and tracking systems for this department.
Dealership Details
This multi-line dealership is located in a rural area that draws from surrounding communities and an established rural market. They recently moved into a new, highly visible facility, resulting in rapid growth. They have nearly doubled sales to more than 1,200 units per year. Their existing systems and procedures are not capable of supporting this volume. The focus of this report was the needs assessment of their parts and accessories departments. The goal for the recommended actions was to (a) improve displays, inventory levels, tracking systems and efficiency in the P&A department; and (b) install the processes necessary to make these departments into more profitable contributors to the dealership’s bottom line.
Issues and solutions
Issue: Lack of effective management and leadership in the P&A department. None of the profit centers in a dealership can operate properly without well-trained managers with leadership skills.
Solution: We assisted management in the development of a recruiting process for a new parts manager. It was decided to look internally before going outside the dealership. Potential candidates were encouraged to apply for the position. GSA consultants assisted with screening and initial interviewing. Ultimately, a qualified candidate was hired to assume the position.
Issue: Lack of job descriptions, policies and procedures in the P&A department. Employees can not be held accountable unless written job descriptions and operating procedures guidelines are provided and reviewed with them.
Solution: We assisted management in the development of written job descriptions. The outline for a policies and procedures manual also was developed. The new parts manager and P&A staff were involved in this process so they would assume ownership of these documents and processes.
Training was provided for the parts manager and staff on application of the procedures necessary to make this an efficient and profitable operation. These procedures included:

  • Ordering, receiving and stocking merchandise;
  • Departmental budgeting and an Open-to-Buy system;
  • Limiting access to receiving and inventory corrections;
  • Establishing a service parts position;
  • Requiring 100 percent deposits on all special orders;
  • Creating categorical or geographical bin locations for all parts, clothing and accessories;
  • Stocking hard parts by size and movement rather than part number sequence;
  • Eliminating non-moving inventory and increased stocking of items turning at least four times per year;
  • Cycle counting of all inventory, counting at least one bin per day;
  • Random part number audits
    Issue: Poor quality and ineffective layout of displays, lack of merchandising of parts counter area, inefficient parts counter operation and improper customer greeting. Poor displays, lack of proper merchandising, inefficient operation of counter tasks and failing to establish rapport with customers results in lost sales opportunities and decreased customer satisfaction.
    Solution: We assisted in the redesign and merchandising of the displays and parts counter areas, replacing of damaged or ineffective displays, the creation of a cashier station, and the addition of terminals.
    Training was provided for the parts staff to enable them to create more effective displays and control traffic patterns. Policies were established regarding customer greeting, telephone answering and rotation and cleaning of merchandise and displays. Training in daily planning and customer satisfaction selling was provided for all parts staff. psb
    Author, speaker and educator, Gart Sutton has been retained by every major powersport manufacturer/distributor. He is a frequent keynote speaker for national motorcycle conventions and state motorcycle dealer association events. Visit www.gartsutton.com.

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