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Process #6:  Materials and Parts Management

On order to achieve our objective to become ,”TRPOC,” in our community parts procurement is one of the most critical aspect of the process that must be well coordinated.  As critical as a complete estimate so is one initial 100% parts order.  Nothing will increase cycle time more than an inaccurate parts order or an incomplete parts order.

Effective utilization of preferred vendors and in some cases multiple exact orders may be required to achieve our objective. Full attention is required in this department regardless of who or how parts are procured.

Parts Process:

  1. Ultimate objective is that all parts are received same day or within 24 hours of order, if other minimally when promised.
    1. Use your management system daily to review parts status report, BR allows for no short orders, accept only 100% parts orders. Any orders missing parts need explanations, most cases there is no acceptable explanation.
    2. Use parts information to discuss in morning and afternoon meetings. Are all parts here for the cars coming in do we have any issues, why?
    3. Resolve all pending, damaged, or wrong parts issues immediately.
    4. Update parts status daily, some parts procurement programs will instantly receive parts and update PPI’s’ etc.
  2. Utilize preferred vendors always, needing parts instantly is a result of poor estimates, these issues should be looked into rather than constantly using unauthorized vendors.
    1. LKQ parts should be second choice after repair option is not an option. Please take into account cut & trim cost, rental cost and day delays when determining if a part is cost effective to repair. A part that is 3 days away and would carry a vehicle over the weekend now has $100 – 150 in additional cost. You could add 2-4 hours additional repair time and even if very close, 4 days of time saved would tremendously improve final CSI on this file.
      1. APU and real steel for local vendors should be used in pricing.
    2. All sublet work should be scheduled timely and from preferred vendors. Check their schedules they cannot always meet our timelines when we only give them short notice. Many things can be done while we have down time, think!
  3. Utilization of OPStrax, UParts and other parts procurement programs can greatly enhance the parts procurement process.
    1. All parts options and cost can be determined with one search, no multiple phone calls required and time lost waiting for call backs.
    2. PPI determined on initial upload.
    3. Parts input automatic and no individual input required.
  4. All parts deliveries to be verified upon receipt, for price, parts, and damage. Again, some programs out there now will automate the process except for mirror match and damage which will still need to be done.
    1. Mirror match all parts at time of delivery.
    2. Remanufactured parts always need to be inspected for flaw’s, sometimes multiple orders may need to be placed to insure on time delivery. OEM parts as well need to be checked for damage.
    3. All LKQ parts require inspections; many have had previous work or may currently have excessive damage.
      1. Reject and return poor quality parts at drop off. Take into account when another part will be available and the cost of rework, many times you can get credits to fix part and save a lot of time.
      2. Make sure proper paper work is done to receive credits for rework.
    4. All parts need to be organized as per Cart program on carts. Go to labeled carts and store for input into the system.
    5. Determine who is authorized to handle parts returns.
      1. Parts must be available before returns are processed, do not create a return and then go and try to find the part.
      2. Credits need to be acknowledged by authorized personnel. Who will receive credits?
    6. Parts scanning systems are available, streamlining this process is critical.
      1. When available scan parts, one program scans parts into your system when the parts go through your door.
      2. Scan all parts invoices by whatever method you have available.
      3. Utilize AM invoicing religiously, Kent, fluids, etc.
      4. Collect and file all invoices as determined.
      5. Check your parts dashboards in the management system you are using and clear or address any open items. Do this throughout the day.
      6. Insure all returns are 7 days or less and follow up on your credits daily so it does not become a problem. What does U-Parts have to check returns.
      7. Go to any dashboards you are currently using daily and insure you have completed all task before you go home.
    7. Paint budgets and redo trackers should be utilized by your paint team and management. All materials for all departments should be on the approved list.
      1. Monthly paint budgets will be prepared by the 1st of every month. The budgets can be determined by reviewing a quarterly average in your management system. Remember you need to talk to your paint rep. and determine if your numbers are in line before just setting budget based on last quarter’s use.
      2. Purchases should be manipulated however according to your need, not just budget, if you have excess stock cut your orders back. Be aware of weekend usage, holiday schedules, and end of month dates. Never accept a large order last day of the month.
      3. All material purchased should be tracked and compared with appropriate people on a weekly basis comparing it to your budgets.
      4. Review the redo tracker to determine cause and repeat offenders, you may need to make some changes or at the very least let people know you are aware of their mistakes. What we expect we inspect.

How do we measure are success?

  • Center invoicing same day or less. We should have a paperless system in track.
  • Paint material margin Top 20% , 30-40% liquid cost. Our cost should be 50%
  • Parts overall gross profit Top 20%, 32%
  • Pending credits Top 20%, 7 days or less. Want credits resolved immediately 24 hour max.
  • Vendor utilization report reviewed weekly.

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