I truly believe that most of our dealerships operate in the reactive and somewhat in the proactive areas and only a few very progressive dealers are actually working on processes to work in the predictive arena. Some of you may be even wondering what I mean by these different categories. Let me give you a brief description of each and what I feel they represent.
Reactive – I believe this represents the largest group of dealers. We wait for a customer demand then our teams spring into action to help with the request. It has been like that for the past 100 years or more. For example, a customer has a part failure and comes into our dealerships and requests the part from us. We either fill the demand immediately by pulling the part off the shelf or we order apart from our supplier, either way we are reacting to the need. This is just one example of a parts department being reactive, but it happens in both sales and service as well. I am sure you can think of several examples for each of those other departments.
Proactive – Since I shared a parts department example already, lets stick with parts. When we place “Pre-Season” orders that would be one example of being proactive. We are thinking ahead and making sure we have certain parts on the shelves prior to the season. We are stocking up ahead of what is normally a busy time.
Predictive – We could set up on-farm parts cabinets and fill it with parts that we know are wear items for our producers on equipment that they have in their operations. Most of our large ag equipment is telematic enabled, but what are we getting out of the system? Perhaps someone is monitoring for codes that the equipment is throwing and assisting the producers with those trouble codes and that is great and that is being predictive. But what are we doing to be predictive? I think our dealer management systems have a huge opportunity here. They have the data from our work orders to help their dealers become more predictive on what items we should be stocking and when. Our business systems should ask us for year/make/model for parts tickets over the counter and YES, I know that most of our parts employees will shake when they read that and say, “Doesn’t Wayne know we are already too busy, and we certainly don’t have time to enter that data on a parts sales ticket?” The answer is, yes, I get it. You are busy; however, I feel like the upside for having the data would be worth the additional minute or two it would take to get the data and input that data on a part’s over the counter sales invoice. Most of the time you already had to have that data just to look the part up in the first place, so all I am asking is that we now record it on the invoice. Once we have that data, the business system needs to begin compiling that data and looking for trends in that data about when a specific part is being sold on those units while also matching that data up with service repair orders. Once we begin tracking this data, we can begin to stock parts that neither the parts manager or the producer would think we need and when the need arrives, as the data would suggest, we should be able to pull the part off the shelf and not have to be reactive and order it. We have the technology – we just need to start putting it all together and using it to serve our customers differently than we have in the past.
Some of you may read this and think, “we are already starting down this path” and to you I would say, great job! Others of you may read this and think, “this is never going to be possible in my dealership” and to you I would say, “never say never”.
Article Written By Wayne Brozek.
As always, I would love to hear from you if you would like to discuss this further. I can be reached at firstname.lastname@example.org. Thanks for your time and we will chat again soon!
WAYNE BROZEK is a trainer with NAEDA’s Dealer Institute. Prior to starting his own consulting business, Wayne trained dealers all over the globe on ways to improve both their parts and/or service operations. TOP METRICS TO WATCH is an ongoing feature brought to you by the association’s Dealer Institute to help dealers better understand key performance indicators and industry metrics to effectively manage their businesses.