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Production: Navigating the Parts Procurement Minefield

Every department in your shop should have a process, and parts are no exception. Understanding the who, where and how is essential for achieving success.

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Angelo DiTullio started in the collision business in his father's shop at seven years old. He has been both a shop manager and regional manager for the past 20 years. He has worked for the insurance industry, family-owned body shops, regional MSOs and national body shops. He's currently a district manager for Abra. He can be reached at [email protected]

Parts

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The collision industry is an industry that has been forced to adapt over the last 25 years. When I managed my first shop in 1995, that adaptation was already underway. The old ways of repairing vehicles at a slow pace with each job carrying a strong amount of gross profit was already turning into a thing of the past. Like it or not, fair or unfair, the new way and still the way of today is that of turning several more jobs with each carrying less gross profit. So, over the past 25 years, we’ve had to get better, faster and cheaper than before.

One of the key components of all this was attaining quicker cycle times. We simply learned the hard way that we needed to become faster than before. Our industry adopted many new theories and ways to accomplish this. We began hearing about things like lean thinking, Theory of Constraints and the Toyota Production System. All of these new terms were meant to help us get better by becoming faster, hopefully with more predictable quality.

I know there are still shops that are still doing things like they did in the 80s, but they’re withering on the vine and, as time marches on, they will go away. The collision industry is no different than nature: you either adapt or die.

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The shop’s production line got faster and needed their raw materials faster in order to process the work. A collision shop’s raw materials are jobs, estimates, parts, and paint and materials. As we cycled repairs faster, our demand for these raw materials increased. As we were forced to adapt, we forced other businesses on our periphery to adapt as well.

Parts

One of the biggest key ingredients in this mixture is parts. You simply cannot do anything without them. Possibly in some future Star Trek world, parts will be beamed to us the instant we need them, or we will be able to make them ourselves on our 3-D printer. For now, there are certain things you should be doing that will ease parts-related problems and speed your acquisition of parts.

Just like every other department in your shop, you should have a process for parts procurement. This should include ordering, tracking, receiving, distribution and final paperwork. If having a parts department sounds too fancy, that’s OK. Maybe it’s not a department; maybe it’s just a person. The important part is that everyone understands the who, the how and the where.

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Before you figure out a process, you need to embrace the fact that parts are absolutely critical to your business’ success. You can’t function without them. Parts and everything that goes with them are the top complaint I hear in shops. So many headaches revolve around parts, it’s enough to drive you crazy. The good news is with some thought and with sticking to some solid processes, you can mitigate the damage done when things don’t go your way.

Anytime I want to figure out a process, I’ll sit down and walk myself through each and every step in the procedure from beginning to end. An estimate is written, where does it go? Who orders the parts? From where? When do we expect them? Who checks them in? How? Where are they put? Who enters the invoice?

Vendors

First of all, you need to decide who your parts vendors are. Don’t fall into the trap of, “We call so-and-so because we always have.” You need to align yourself with aggressive dealerships that are in the wholesale parts business. Don’t just use the same vendor you always have because they’re down the street. Look for vendors who have invested in what it takes to properly run a wholesale parts business. You should negotiate parts agreements and demand both good service and good discounts.

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You should expect a minimum of one delivery and a desire for two deliveries per day, and the availability for hot-shot or emergency deliveries as well. My expectation is that I’ll have my parts delivered on the next run or, worst case, the next morning. You need to make demands of your parts vendors and hold them accountable. If you find a company that fits your needs, you should reward them by paying your bills on time and trying to keep returns to a minimum.

So, first do your homework and find dealerships you can work with. Also, beware of empty promises. If a particular vendor isn’t holding true to their promises, don’t be afraid to replace them. Remember, timely part procurement is critical.

Who

Once you’ve established your roster for parts acquisition, it’s time to figure out the who and the how. Who’s going to order your parts? Do you have an internal parts department? A designated parts person? Is your estimator going to do it? Or maybe a manager or a foreman? I’ve seen it all different ways, and there are pros and cons to each one. You need to make sure that the person charged with the parts process understands the process and its many components.

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Once it’s established who the person is, they should be the one who handles all facets of the process. Whoever makes the order should be the person checking it and putting it away. That way, the shop won’t have loose ends that turn into major problems. If I ordered the part, then I know when it should be due. Since I know what I ordered, why would I check in a left headlamp when I know I ordered a right taillamp? Furthermore, if I checked in the part that I ordered, then I should know where I put it. It’s much easier for accountability when there aren’t too many hands in the pot. So, I would encourage you to put the parts equation of your shop in the hands of one capable and empowered person.

How

By now, you should know where you’re ordering parts from and who’s maintaining your parts process. Now it’s time for the big question: How?

Let’s start here: once the estimate is generated, what happens? The days of picking up the phone and rattling off a parts order should be over. There are just too many things that can go wrong. I’ve been a fan of CCC’s products since the days of EZEST. We live in the golden age of technology and today, we can instantly order and get confirmation of our parts needs right from the estimating system itself. I won’t tell you how to order your parts, but I’ll tell you to stick to whatever method you decide on. Whatever method you decide, here’s what’s important that the dealership should understand as well:

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  • You should expect that when a parts order is placed you’ll receive it on the second run that day or the next morning’s run.
  • You should expect that any part that doesn’t fit into the criteria of No. 1 will immediately be communicated to you.
  • You should expect that any backorders will automatically be checked for the following by the dealer: a) can it be overnighted and at what cost; b) will local dealers be searched for stock; and c) will it be run on parts locators nationally for stock?

This should be the expectation each and every time, and your dealer partner needs to understand this. Sometimes, you need to keep them honest and trust them but verify, as President Reagan once said. If a part comes up backordered, check up on a, b and c on your own and try to locate the parts yourself before they do.

On the Lookout

Once you’ve secured step one and know the parts are on the way, you should be on the lookout for them. It should be instantly obvious to you when you’re expecting a part on a particular delivery truck and it’s not there. A good parts person knows what parts they’re expecting and when. The only thing worse than not getting your parts when you expected them is not knowing you were shorted in the first place.

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It’s important to have a process for keeping track of parts that are on order as well. Once again, if ordering through CCC, you can easily do that right in the system. If not, you still need a way to know when something is missing. Even with the best of intentions, human error can at times creep in. Then, a vehicle is in reassembly and you’re preparing to deliver it, only to find out you’re missing a $2 bracket and the vehicle can’t leave. There are a variety of ways to prevent this from happening: a clipboard with unfilled parts orders, a parts list taped to the window of each vehicle, or writing the parts list on the window of the vehicle with a car marker. All of these will help you not lose track of the parts you’re waiting for.

Delivery

Let’s fast forward to the actual parts delivery. The following are key items you need to check to have a successful parts delivery:

  • You received what you ordered.
  • You were charged for what you received.
  • You received correct and undamaged parts.
  • You received everything that you need to complete the repair.
  • You transfer the parts to the technician’s hands.
  • You correctly enter the invoice into your management system.

For me, the easiest way to accomplish this has always been a multi-step procedure. I take all of the invoices of the parts delivered and I take my parts list and take it part by part and invoice by invoice. As I grab each part, I mark it off on the invoice and the parts order as received. First, it shows me I received a part that I ordered, and second, it shows I received a part that I’m being charged for.

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Next, all boxes must be opened and all parts must be thoroughly checked. I don’t know about you, but I can’t see through cardboard or wrappers. How many times have you seen closed boxes and wrapped parts just sitting there? We’ve all seen it, and they represent problems just waiting to happen. Here’s advice I’ve always followed: assume the wrong parts are in the boxes and wrappers. Further, assume the parts in the boxes are broken. Until you prove otherwise, it’s safer to assume the boxes contain broken and wrong parts than to assume the correct parts are there.

Once you’ve marked everything off on the paperwork, take the time to open each box and package. Don’t just do it half-heartedly, either. Fully open the boxes and packages and remove the parts. Sheet metal should be put on a stand and thoroughly checked, with a technician’s help if necessary. Other parts should also be thoroughly checked inside and out, including mounting tabs. If you ordered a left, make sure you have a left. If you ordered a bumper for a GT model, make sure you received a GT bumper. If you ordered a headlamp with chrome trim, make sure you’re holding a headlamp that doesn’t have black trim. It’s not enough to just grab parts and put them somewhere. You need to ensure you receive all of the correct and undamaged parts you need to complete the job.

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Mirror Matching

The parts person needs to be active, dynamic and detail-oriented. They should not be afraid to walk to the vehicle or parts cart, multiple times if needed, in order to “mirror match” the parts. If you think you don’t have the time to mirror match or don’t have a person to do it, I would ask: Do you have the time or resources to paint incorrect parts, or have jobs grind to a halt because you don’t have the correct or undamaged parts? How many of your shop resources are being wasted currently by not mirror matching? Your shop needs to have specific areas where you’re going to put the parts once they’ve arrived. Here’s what has always worked for me. Once sheet metal has been checked, I bring that right to the paint department, assuming the part won’t be needed for prior fit. You need to make sure you have a safe method to store the parts. If fenders can be hung safely, that’s better than having them on the floor. For hoods and large pieces, I’ve always used the panel cart from Innovative Tools and Technologies. Bumpers, once unwrapped and checked, should also be stored in the paint shop. There’s no such thing as too many bumper racks in the paint shop, for both painted and unpainted pieces. For both sheet metal and bumpers, the job numbers should be written on them and also the paint code if known. Any small and easily misplaced items like emblems or stickers should be taped to the windshield or put somewhere clearly visible by anyone who moves the vehicle.

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Invoices

Lastly, all invoices should be entered into your management system ASAP. You need to do them as the parts are received, not aged in a pile. They should also be scanned or photographed for a paperless file. Be sure to check your actual parts discounts against the deal you made with your parts vendor. Having a defined process with defined responsibilities is a must. Nothing is perfect, but following a process like this one should help you navigate the minefield that can be parts procurement.

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