Automotive News Canada - December 2017 - 18
18
* DECEMBER 2017
PREVENTING AN
INVENTORY NIGHTMARE
More parts and tighter return policies require dealer vigilance
By ALEX KWANTEN
SPECIAL CORRESPONDENT
JUST FIVE YEARS AGO,
Stephen Snow recalls, Ford's
F series pickups offered three
choices of batteries.
Today, says the parts
director at Northstar FordLincoln in Fort McMurray,
Alta., "you're looking at six,
based on what the option
packages are." The F-series,
bristling with technology, has
a wide array of options. But it
isn't an exception: Since 2012,
estimates Michael Czach, the
global strategy and planning
manager of Ford Motor Co.'s
customer service division,
the automaker's parts numbers have increased by 15 to
20 per cent.
Ford isn't alone. Although
automakers generally seek
to limit their parts numbers,
many have seen growth anyway. As factories also toughen their rules for returning
parts, dealerships must plan
their orders ever more carefully to prevent expensive
bloat in their inventories,
especially for special-order
parts.
Several factors account for
the increase in parts numbers, car company officials
and dealers agree. These
include the need for new powertrains and lighter parts to
help automakers improve fuel
economy. Consumer technology also is a major driver of
growing parts numbers.
Most automakers have
stocking programs for the
parts that dealerships need
most frequently. They keep
track of the most demanded
parts from logged orders and
even lost sales among dealerships.
bonus cash and traditional -
if decreasing - return allowances.
SPECIAL-ORDER RISK
Despite automakers' efforts,
parts lists have grown, putting pressure on dealer budgets.
In-house stocking programs include Fiat Chrysler
Automobiles' Automatic
Replenishment Ordering
system, Ford's Top 300
and PartsEye, which is a
third-party vendor that
manages parts stocking for
Nissan, Kia and Subaru.
Most of these systems allow
free returns of unused parts
that automakers have recommended. Others tie parts
returns and stocking levels to
Special-order parts that
generally are not needed in
large volumes fall outside recommended stock. Some automakers permit returns of
these parts only through prescribed allowances or reimbursements for scrappage.
Many specialized and costly
collision, interior and electronic parts fall into this category.
Special-order parts can
account for 20 per cent
or more of a dealership's
monthly parts sales, says
Jim Richter, a fixed-operations consultant with M5
Management Services Inc. in
Pelham, Ala. But they also
create financial risks for
parts managers, Richter said,
because dealerships must pay
for such parts upfront.
This year, Nissan North
America reduced its return
allowance for special-order parts to two per cent
from seven, as a share of the
monthly dollar value of parts
a dealership orders. That policy change "means we need
to be very astute businessmen," says Don Schick, parts
director for Driver's Village
dealership group in Syracuse,
N.Y., which sells 21 brands.
Dealership tracks sales performance digitally, deletes sales manager
TagRail platform tracks
key metrics in real time,
like a Fitbit for sales
By KEN WYSOCKY
SPECIAL CORRESPONDENT
GENERAL MANAGER JENAN CULIC
figured there had to be a better way
for management at Downtown Toyota
in Toronto to work with and encourage the sales team, while at the same
time creating a better car-buying
experience for customers.
That nagging feeling dissipated this
year after Downtown
Automotive Group
(DAG) invested in
a customer-experience-management
platform developed
Culic: Can
by TagRail Inc. The
see who's
results: better rela'hungry'
tionships between
management and salespeople, higher closing ratios and improved social
media reviews from customers.
"In my 17 years here, I've seen
many interactions with our sales
staff and management team, and it's
always a debate that doesn't go anywhere," said Culic, whose store is one
of 10 in Toronto owned by DAG.
"The debate always centres on
how well salespeople did last month
or during the current month," he
said. "The salespeople think they did
the best they could and management
doesn't think they did enough. It ends
up as a race to see who can come up
with a better excuse."
The sales
staff uses
iPads to
connect with
the TagRail
app. It tracks
a variety of
performance
parameters in
real time.
FITBIT-LIKE TRACKER
All that changed when TagRail,
a Dublin, Calif., provider of digital
tools for auto dealerships, was added.
Culic compares TagRail's platform to
a Fitbit personal-fitness tracker. But
instead of monitoring exercise levels,
the platform tracks key sales metrics
for each salesperson in real time.
The sales team uses iPads to connect with the TagRail platform via an
app. The platform tracks, among other
things, how many sales appointments
were scheduled based on leads provided, number of test drives, times and
distances of test drives, sales versus
sales goals and quotes provided to customers.
"We now have total accountability for each team member," Culic said.
"There's no more hiding with TagRail
- everything is exposed. Everybody
knows their own stats. Before, we
never had total accountability for
every interaction. Now it's all automated. And when we have debates,
it's no longer my opinion versus
theirs. All the data is right there.
"It's exciting because I can look
at, say, three different individuals
and see who's truly hungry - see the
[foot] traffic levels and what they're
doing with it," he said.
TagRail also has helped improve the
quality of test drives, which had been
a source of continual debate between
Table of Contents for the Digital Edition of Automotive News Canada - December 2017
Automotive News Canada - December 2017 - Intro
Automotive News Canada - December 2017 - 1
Automotive News Canada - December 2017 - 2
Automotive News Canada - December 2017 - 3
Automotive News Canada - December 2017 - 4
Automotive News Canada - December 2017 - 5
Automotive News Canada - December 2017 - 6
Automotive News Canada - December 2017 - 7
Automotive News Canada - December 2017 - 8
Automotive News Canada - December 2017 - 9
Automotive News Canada - December 2017 - 10
Automotive News Canada - December 2017 - 11
Automotive News Canada - December 2017 - 12
Automotive News Canada - December 2017 - 13
Automotive News Canada - December 2017 - 14
Automotive News Canada - December 2017 - 15
Automotive News Canada - December 2017 - 16
Automotive News Canada - December 2017 - 17
Automotive News Canada - December 2017 - 18
Automotive News Canada - December 2017 - 19
Automotive News Canada - December 2017 - 20
Automotive News Canada - December 2017 - 21
Automotive News Canada - December 2017 - 22
Automotive News Canada - December 2017 - 23
Automotive News Canada - December 2017 - 24
Automotive News Canada - December 2017 - 25
Automotive News Canada - December 2017 - 26
Automotive News Canada - December 2017 - 27
Automotive News Canada - December 2017 - 28
https://www.nxtbook.com/nxtbooks/crain/canada_20241021
https://www.nxtbook.com/nxtbooks/crain/canada_20240916
https://www.nxtbook.com/nxtbooks/crain/canada_20240819
https://www.nxtbook.com/nxtbooks/crain/canada_20240715
https://www.nxtbook.com/nxtbooks/crain/canada_20240617
https://www.nxtbook.com/nxtbooks/crain/canada_20240520
https://www.nxtbook.com/nxtbooks/crain/canada_202404
https://www.nxtbook.com/nxtbooks/crain/canada_202403
https://www.nxtbook.com/nxtbooks/crain/canada_202402
https://www.nxtbook.com/nxtbooks/crain/canada_202401
https://www.nxtbook.com/nxtbooks/crain/canada_202312_supp
https://www.nxtbook.com/nxtbooks/crain/canada_202312
https://www.nxtbook.com/nxtbooks/crain/canada_202311
https://www.nxtbook.com/nxtbooks/crain/canada_202310
https://www.nxtbook.com/nxtbooks/crain/canada_202309
https://www.nxtbook.com/nxtbooks/crain/canada_202308
https://www.nxtbook.com/nxtbooks/crain/canada_202307
https://www.nxtbook.com/nxtbooks/crain/canada_202306
https://www.nxtbook.com/nxtbooks/crain/canada_202305
https://www.nxtbook.com/nxtbooks/crain/canada_202304
https://www.nxtbook.com/nxtbooks/crain/canada_202303
https://www.nxtbook.com/nxtbooks/crain/canada_202302
https://www.nxtbook.com/nxtbooks/crain/canada_202301
https://www.nxtbook.com/nxtbooks/crain/canada_202212
https://www.nxtbook.com/nxtbooks/crain/canada_202212_supp
https://www.nxtbook.com/nxtbooks/crain/canada_202211
https://www.nxtbook.com/nxtbooks/crain/canada_202210
https://www.nxtbook.com/nxtbooks/crain/canada_202209
https://www.nxtbook.com/nxtbooks/crain/canada_202208
https://www.nxtbook.com/nxtbooks/crain/canada_202207
https://www.nxtbook.com/nxtbooks/crain/canada_202206
https://www.nxtbook.com/nxtbooks/crain/canada_202205
https://www.nxtbook.com/nxtbooks/crain/canada_202204
https://www.nxtbook.com/nxtbooks/crain/canada_202203
https://www.nxtbook.com/nxtbooks/crain/canada_202202
https://www.nxtbook.com/nxtbooks/crain/canada_202201
https://www.nxtbook.com/nxtbooks/crain/canada_202112
https://www.nxtbook.com/nxtbooks/crain/canada_202111_supp
https://www.nxtbook.com/nxtbooks/crain/canada_202111
https://www.nxtbook.com/nxtbooks/crain/canada_202110
https://www.nxtbook.com/nxtbooks/crain/canada_202109
https://www.nxtbook.com/nxtbooks/crain/canada_202108
https://www.nxtbook.com/nxtbooks/crain/canada_202107
https://www.nxtbook.com/nxtbooks/crain/canada_202106
https://www.nxtbook.com/nxtbooks/crain/canada_202105
https://www.nxtbook.com/nxtbooks/crain/canada_202104
https://www.nxtbook.com/nxtbooks/crain/canada_202103
https://www.nxtbook.com/nxtbooks/crain/canada_202102
https://www.nxtbook.com/nxtbooks/crain/canada_202101
https://www.nxtbook.com/nxtbooks/crain/canada_202012
https://www.nxtbook.com/nxtbooks/crain/canada_202011
https://www.nxtbook.com/nxtbooks/crain/canada_202010
https://www.nxtbook.com/nxtbooks/crain/canada_202009
https://www.nxtbook.com/nxtbooks/crain/canada_202008
https://www.nxtbook.com/nxtbooks/crain/canada_202007
https://www.nxtbook.com/nxtbooks/crain/canada_202006
https://www.nxtbook.com/nxtbooks/crain/canada_202005
https://www.nxtbook.com/nxtbooks/crain/canada_202004
https://www.nxtbook.com/nxtbooks/crain/canada_202003
https://www.nxtbook.com/nxtbooks/crain/html_test
https://www.nxtbook.com/nxtbooks/crain/canada_202002_v2
https://www.nxtbook.com/nxtbooks/crain/canada_202002
https://www.nxtbook.com/nxtbooks/crain/canada_202001
https://www.nxtbook.com/nxtbooks/crain/canada_201912
https://www.nxtbook.com/nxtbooks/crain/canada_201911
https://www.nxtbook.com/nxtbooks/crain/canada_201910
https://www.nxtbook.com/nxtbooks/crain/canada_201909
https://www.nxtbook.com/nxtbooks/crain/canada_201908
https://www.nxtbook.com/nxtbooks/crain/canada_201908_v2
https://www.nxtbook.com/nxtbooks/crain/canada_201907
https://www.nxtbook.com/nxtbooks/crain/canada_201906
https://www.nxtbook.com/nxtbooks/crain/canada_201905_v2
https://www.nxtbook.com/nxtbooks/crain/canada_201905
https://www.nxtbook.com/nxtbooks/crain/canada_201904
https://www.nxtbook.com/nxtbooks/crain/canada_201903
https://www.nxtbook.com/nxtbooks/crain/canada_201902_v3
https://www.nxtbook.com/nxtbooks/crain/canada_201902
https://www.nxtbook.com/nxtbooks/crain/canada_201901
https://www.nxtbook.com/nxtbooks/crain/canada_201812
https://www.nxtbook.com/nxtbooks/crain/canada_201811
https://www.nxtbook.com/nxtbooks/crain/canada_201810
https://www.nxtbook.com/nxtbooks/crain/canada_201809
https://www.nxtbook.com/nxtbooks/crain/canada_201808
https://www.nxtbook.com/nxtbooks/crain/canada_201807
https://www.nxtbook.com/nxtbooks/crain/canada_201806
https://www.nxtbook.com/nxtbooks/crain/canada_201805
https://www.nxtbook.com/nxtbooks/crain/canada_201804
https://www.nxtbook.com/nxtbooks/crain/canada_201803
https://www.nxtbook.com/nxtbooks/crain/canada_201802
https://www.nxtbook.com/nxtbooks/crain/canada_201801
https://www.nxtbook.com/nxtbooks/crain/canada_201712
https://www.nxtbook.com/nxtbooks/crain/canada_201711
https://www.nxtbook.com/nxtbooks/crain/canada_201711_v2
https://www.nxtbook.com/nxtbooks/crain/canada_201710
https://www.nxtbook.com/nxtbooks/crain/canada_201709
https://www.nxtbook.com/nxtbooks/crain/canada_201708
https://www.nxtbook.com/nxtbooks/crain/canada_201707
https://www.nxtbook.com/nxtbooks/crain/canada_201706
https://www.nxtbook.com/nxtbooks/crain/canada_201705
https://www.nxtbook.com/nxtbooks/crain/canada_201704
https://www.nxtbook.com/nxtbooks/crain/canada_201703_v2
https://www.nxtbook.com/nxtbooks/crain/canada_201703
https://www.nxtbook.com/nxtbooks/crain/canada_201702
https://www.nxtbook.com/nxtbooks/crain/canada_201702_v2
https://www.nxtbook.com/nxtbooks/crain/canada_201701
https://www.nxtbook.com/nxtbooks/crain/canada_201612
https://www.nxtbook.com/nxtbooks/crain/canada_201611
https://www.nxtbook.com/nxtbooks/crain/canada_201610
https://www.nxtbook.com/nxtbooks/crain/canada_201609
https://www.nxtbook.com/nxtbooks/crain/canada_201608
https://www.nxtbook.com/nxtbooks/crain/canada_201607_test
https://www.nxtbook.com/nxtbooks/crain/canada_201607
https://www.nxtbook.com/nxtbooks/crain/canada_launch2016
https://www.nxtbookmedia.com