Parts on Time, Every Time
Latuff Brothers Auto Body in St. Paul used to have parts delays painfully often, adding days onto repairs. At its worst, the shop’s touch time dropped to a mere 1.7-hour average, and cycle time crept up to nearly 12 days.
On top of that, the shop had several late deliveries, they received grief from insurance companies on rental expenses and customer satisfaction scores were nothing to brag about.
“There is a whole gamut of negative aspects that result from late deliveries caused by parts problems,” says Will Latuff, the shop’s manager.
The same was true for Arizona Collision Specialists in Scottsdale, Ariz. Owner Daren Pierse says the shop had a parts problem on every single job when the facility first opened six years ago. He noticed the glaring problem immediately, and says it was blatantly obvious that aspect of the business needed to improve.
“I talked to my managers and staff who had been doing this for 30 years. They told me this was just the way of the industry. This is the way it’s always been, and this is the way it’s always going to be,” Pierse says.
But that’s an unacceptable mindset if you’re running a shop. Pierse was determined to change—recognizing that several simple improvements could be made to the parts process that would have a big impact on the business.
Both Pierse and Latuff, who participated in a panel discussion on this issue during the 2011 NACE Expo, have implemented similar processes to tackle the parts dilemma. Latuff says resolving parts delays is a two-pronged issue: It’s the vendor’s responsibility to send the correct, undamaged part in a timely manner, and it’s the shop’s responsibility to use every tool and process available to them to send the correct orders up front. Both Latuff and Pierse implemented similar processes to tackle both aspects, which reduced cycle time, increased touch time and reduced stress and chaos in the shop.
Avoiding Common Pitfalls
The shop owners agree that curbing the parts problem is a slow process because there are several issues to address. But implementing small improvements one at a time can begin to have an enormous impact on business performance. They say you first need to clean up your own backyard by solving four common problems:
Problem: Shops commonly submit incomplete and inaccurate parts orders up front. The more often you place additional orders, the more often you experience slowdowns.
Solution: Blueprinting repairs is the first key step to improving parts problems, Latuff says. That allows you to identify all vehicle damage up front, and place only one parts order for each job.
Problem: Latuff says the most common parts that hold up deliveries are air shields, clips, retainers and one-time fasteners because some estimating systems don’t have them listed. In those situations, shops will describe the part to their vendor over the phone, often resulting in miscommunication and delivery of the wrong part.
Solution: You have to ensure your estimates include accurate part numbers on the first try. Latuff uses various parts websites available online for free to look up specific part numbers and list prices. He can type those directly into the estimate so he orders the exact item needed on the first attempt. He uses the following websites:
Problem: A large portion of Pierse’s past parts problems resulted from poor receiving processes—nobody was inspecting orders upon arrival. Technicians commonly discovered parts didn’t fit on the day of scheduled deliveries.
Solution: Proper intake procedures for parts are critical. Pierse implemented a mirror-matching procedure to squash his problem. Now, it’s one employee’s sole job to open and inspect every part.
Problem: Latuff says damaged aftermarket and recycled parts also cause routine delays. Many parts need to be sent back or repaired.
Solution: Latuff takes advantage of price-matching programs from OEM vendors as often as possible. He knows those parts come ready to install, which takes another variable out of delivery dates and part slowdowns.
Getting the Most From Vendors
As effective and efficient as your processes might be, you’re still likely to experience problems on the vendor’s side now and then—such as delays in the actual delivery of parts. Although seemingly out of your hands, Pierse and Latuff offer four ideas to battle the problem:
1. Submit parts orders electronically. Latuff says he despises faxing parts orders to vendors. They’re able to claim they never received it if a problem arises. He says his best vendors subscribe to electronic services, such as OE Connection’s CollisionLink. That allows Latuff to submit parts orders online, it’s guaranteed to be delivered, and he can see when the vendor got the message.
2. Don’t wait for delivery. When Pierse’s parts orders are ready, he says the vendor will commonly inform him that the delivery person is out, and it will be hours or even the next day before he is attended to. Pierse now has his own parts runners who will pick up orders directly to ensure constant timely deliveries. “That helps tremendously. It easily shaves an entire day off cycle time on small jobs,” Pierse says.
3. Proactively check your vendor’s inventory. Latuff says it’s sometimes necessary to acquire parts from other avenues if your vendor is out of stock or experiencing a back order. He says many parts websites allow you to scan your vendor’s live inventory.
If they don’t have the part, or if the delivery is scheduled for weeks out, Latuff will source the part elsewhere immediately to ensure it doesn’t cause a delay. He uses websites such as carpart.com, parts.com and partsvoice.com.
4. Hold vendors accountable. Latuff suggests it’s important to have a concrete tool in place to discuss with vendors if you notice their service is slipping. He uses management system reports to track reasons for part returns, damaged parts, wrong parts and delivery delays by vendor. Those reports serve as a communication tool to help resolve vendor issues that are impacting business performance.
Pierse does that, too. He is in the process of generating monthly and quarterly vendor reports. He plans to visit with them to illustrate the shop’s performance and the role that parts deliveries played in that performance.
Communication is Key
Pierse and Latuff say that establishing an open and honest line of communication with your vendor is imperative. Vendors can become relaxed in their client relationships, and their level of service can slip. Conveying your shop’s business needs and expectations to vendors annually can help keep them in check.
Pierse used to do sporadic business with a variety of parts vendors, and wanted to consolidate purchases through one multi-line vendor to simplify operations. Before finalizing the agreement, he wanted to make sure they could follow through on certain expectations.
Through in-person meetings, Pierse highlighted how he needed the vendor to help improve the shop’s touch time and cycle time through consistent and on-time deliveries. He explained that his business is based on throughput production and repair volume, and illustrated how their good service would also benefit the vendor financially. On-time deliveries improve the shop’s key performance indicators (KPIs), which leads to more work volume, which leads to more parts orders for the vendor, Pierse says.
“Explaining your business needs and getting vendors to understand how quickly you need parts helps motivate them to go above and beyond to fit your company’s business model,”
Pierse says. “They now understand what we’re trying to do, and know we’re judging them on throughput performance—the number of jobs they help push through the shop.”
Now, Pierse’s vendor established a specific daily delivery schedule that he can count on: 10 a.m., 3 p.m. and overnight. In addition, the vendor will inform him proactively when a backorder is in sight, and helps find parts elsewhere when something is out of stock in the warehouse. They will even call direct competitors so Pierse doesn’t have to.
“The vendor was very receptive to offering additional assistance once we had that conversation,” Pierse says. “They understood how it would be a win-win for everyone, and how they could serve us appropriately.”