PPG Aerospace
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MVP Parts Process, Part 2: The Cost of an Unorganised Parts Department

How to convert your parts department from a place of lost opportunities to a well organised business profit centre.

Last issue, Greg Tunks, MVP Business Solutions Manager ANZ, looked at the importance of the parts department as a key profit centre and, hence, the need to have a dedicated person to manage it. He also explained strategies to better organise the parts area and the part ordering process. Now, having stripped the job using X-Ray Planning, identified all the parts required and ordered them, it’s time to organise for their arrival.
Does your collision centre have an organised parts receiving process? We have seen many repairers where the parts delivery person simply dumps the parts inside the door, finds the nearest staff member to sign for them and they are gone. Better managing this process can bypass a whole lot of downsides.
  • Sign on to efficiency – When you or a staff member signs to indicate the parts have arrived, it’s effectively accepting what has been delivered and that they are all accounted for. Obviously, this is taking a risk. To avoid arguments with the parts supplier, someone should physically check off each part while the delivery person is there.
  • Use a job number – Consider use the job number as the ‘parts ordering number’. Not only would each part include the job number it’s meant for but it can also list how many parts. For example, if five parts are ordered for a particular job, they will be marked ‘1 of 5’, ‘2 of 5’, etc. so it’s easy to spot if one is missing.
  • Mirror match – When a part arrives in a box or packaging, the part number may match with what has been ordered but does the part inside actually match? Every part should be physically removed from its package, checked for any damage and mirror match against the original part which was taken off the vehicle. For example, it may be a bumper which is fitted with sensors, or vice versa, where the job actually requires the opposite. This simple task avoids time-wasting surprises further down the track.
  • Store in dedicated parts area – Correct parts should be placed against the job, in their appropriate location, in the dedicated parts area.
Credit where credit is due
It defies logic to pay good money for a part and then just leave it sitting on a shelf somewhere but this is something that happens in far too many collision centres. The key reason is that there is no organised parts credit process in place. A mezzanine floor or a store room are the typical places where you will find perfectly good but unwanted parts. These are parts which were ordered, delivered and paid for but found to be incorrect for some reason so never charged out to a job. In other words, it’s a drain on profitability. Some people will say they are too busy to organise to return them but, when it adds up to tens of thousands of dollars over time, is this really a good argument?
  • Parts credit process – Setting up a parts credit process is very straightforward, particularly after you have organised the parts area. It’s as easy as having a parts credit shelf where spaces are labelled for each of your part suppliers. Any parts which need to be returned are placed in the appropriate place on the shelf. When that supplier makes the next delivery of parts, they can simply check the shelf and take any parts that are applicable to them.
  • Whiteboard – As an alternative, or if the parts credit shelf is not right where the parts are delivered, you can use a whiteboard. Then, all the delivery person has to do is check the whiteboard to see if there are any returns for them.
  • Delivery drivers – Make sure to clearly communicate your parts credit (and parts delivery) process to your parts suppliers and their delivery personnel. Keep reminding them!
Documented processes
Given that parts are a key profit centre for repairers, it literally makes dollars and sense to have your parts processes documented. Once done, don’t keep them filed away in a folder somewhere – print out the step-by-step processes and put them in a visible place. Whether you have a dedicated parts manager or not, this is a quick reference and reminder to everyone that this is the way we process parts in this business.
Leadership and culture
Have you stopped to consider to sheer dollar value of the parts which flow through your collision centre? For larger operations, it can easily head into the millions per year. Like anything worthwhile, getting it right takes leadership and a consistent reinforcement of the processes from management. With commitment over time, the correct process becomes the default choice and embeds itself in the culture of the business. That is when you know you are on to a winning strategy!