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PSB 123s: Increasing PG&A efficiency

Liz Hochstedler, Associate Editor
August 6, 2012
Filed under Features, PSB 123s

1. Measure employee production. “Track all measures of employee production: average ticket, count of tickets, gross margin percentage, discounted tickets and parts sold below cost,” advised Hal Ethington of ADP Lightspeed. “This is the start of the profit process, and if profit can’t make it out the gate, it will never get to the bottom line.”

2. Hire high-quality employees. “Ultimately, your dealership’s success is dependent upon the quality of your staff,” said Steve Jones of Gart Sutton & Associates. “Too often, I find dealers with untrained, inexperienced parts personnel. They were hired because they were affordable. Unless you have people in this department who possess the proper aptitude, attitude and training, you will never be efficient or productive.”

3. Stock seasonally. “Buy ahead of the game and plan for it,” said Tucker Rocky’s Jennifer Robison. Some dealers stress over last season’s gear not selling, so they find themselves late into ordering for next season. “You really need to be at least two months ahead,” Robison added.

4. Keep inventory in check. “I try to keep inventory in check,” explained Janice Lutz of Fun Unlimited in Gouveneur, N.Y. “Like if someone doesn’t come pick up a part that I normally don’t keep in stock, I try to send it back. I don’t just try to stock something that someone orders and doesn’t come pick up.”

5. Lay out the department efficiently. “The physical layout of the department obviously has a huge impact on efficiency,” Jones said. “Utilizing kiosks can improve efficiency for some dealerships, since less time is consumed waiting for access to terminals. Having a cashier station separate from the counter will free up parts staff to locate and sell more P&A.”

6. Organize your stockroom. “You want to see efficiency? You’ve got to organize your stockroom,” Robison suggested. Many dealerships have messy stockrooms, and if someone in parts can’t find something, they may reorder it even though it’s there, she said. “The No. 1 efficiency that every parts department can fix is the condition of the stockrooms.”

7. Log lost sales. “True demand for a part will never be known if lost sales are not logged,” Ethington said. “The start of demand for a part is always small and difficult to identify without some program to detect an increase in requests. Teach counterpersons how to log lost sales, report on them and be responsive to new-shows.”

8. Incentivize the staff to up-sell. “We run a contest on how many ticket items are on each ticket per employee,” reported John Roth of Midwest Motor Sports in Hartford, Ill. “I think it keeps the guys on their toes, trying to ask for a couple more things when they’re only buying one.” The dealership has incentives with that program.

9. Stock faster-moving parts near the counter. “From an efficiency standpoint, having faster-moving parts located closest to the counter is critical,” Jones said. “Fewer steps equal more selling time at the counter. This requires that parts are properly set up with bin locations in the DMS. This allows them to be located by sales frequency, rather than part number sequence. The parts person looks up the part number, finds the bin code and pulls that part — quickly.”

10. Clean your inventory. “Over the winter, the slow time, you’ve got to clean up your inventory,” Robison advised. Dealers should run reports and categorize their PG&A in more specific areas than just “accessories.”

PSB 123s is a regular department in which our editorial team consults with experts from around the industry to bring you tips to help you with specific segments of your business. If you would like to recommend a topic, send an email to dmcmahon@powersportsbusiness.com.

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