When Mike Veltre came on as the collision parts manager at Budd Baer Inc., a Buick, Mazda, Subaru and GMC dealership in Washington, Pa., he says the parts department was a veritable mess. Two counter people worked with the collision center under little supervision with few standard operating procedures and frequent last-minute purchases. The result was a 26 percent gross profit, neglected credits and returns, higher cycle time in the body shop and poor relationships with vendors and the collision repair department.
Three years later, however, and gross profit has climbed to 35 percent and cycle time to 7 days with $400,000 work in process in the collision repair shop.
“Instead of the traditionally adversarial relationship between the parts departments and body shops in a dealership, Mike’s leadership has created a mutually productive and profitable atmosphere working hand in hand with our collision operation,” says Greg McVicker, body shop manager at Budd Baer.
While Veltre implemented numerous processes to create a more profitable and efficient parts department, he says the biggest key was creating a parts standard operating procedure that directly outlines all processes for ordering, receiving and mirror-matching parts:
- Veltre started by rebuilding vendor relationships to ensure they were the right fit and could offer the deepest discount.
- He requires the use of technology during parts ordering, such as creating purchase orders in Dealertrak, checking the workflow software, utilizing rebate programs, and using CollisionLink for price matching.
- Running daily reports on credits and returns to ensure parts are returned immediately or within 24 hours, at the latest.
- Finally, when it comes to receiving parts, Veltre emphasizes mirror-matching, checking all parts for damage and accuracy, staging on parts carts and marking any part requiring a core return.