What's the No. 1 challenge a dealership parts operation faces?
Keeping up with changes in the vehicles and being ready to supply the service department.
Do those challenges vary by the OE brand you're dealing with?
Very much so, depending on volume of each of the franchises. They each have their challenges. But you have to know how each manufacturer works to take into account how things are going to work for their product in your situation. The way Toyota works here is very different from what they may see at a dealership in New Jersey or upstate New York.
Given that the volume of vehicles we see is so different, it gives us a whole different set of challenges than a bigger dealership or a smaller dealership somewhere else. You have to know the manufacturer's system, and you have to know how it works given your service and sales volume.
Tell me about the wholesale business there. You've focused a lot of attention on the mechanical side of the business; a lot of dealerships think wholesale just means working with body shops.
There are a couple of different things that make mechanical important. It helps you build your database of information for supplying all of the vehicles your dealership services, whether they're in your shop or in your customer's shop. Just that information is invaluable.
For example, we have one brand here that we have such high loyalty in our own shop, there aren't any independents locally working on that brand. Therefore, the only data we get is from our own shop. With another brand, we have a lot more wholesales outside business. The data on that wholesales mechanical business helps drive up our parts availability.
Is there much difference in how you work with the mechanical shops versus the body shops?
You have to handle the mechanical shops quite differently because their needs are tremendously different from a body shop. They are usually dealing with short lead times, and usually less experienced parts people are calling. They are probably calling while the car is on the lift. That means time and money to them. You have to respond accordingly. You have to be quick for them, while not being afraid to educate them that there are ways they can manage things a little better.
I was lucky. Somebody did that for me when I was a young pup starting out in the business. I ordered every job as it hit the lift; I ordered five times a day from the vendor. Finally, he said, "You know, you might want to look at your schedule in the morning." I do the same thing for the young guys out there.
What is your relationship like with the OEs, in terms of making sure you have all of the repair information you need?
I'll start from the perspective of the wholesale customers. They often think we've got every piece of information anyone could ever imagine and want at our fingertips. On the new vehicles, we still have to work with (the OEs). They're still developing the databases on a lot of the vehicles we're working on.
With my three makes, I have some of the best manufacturing information I can imagine available. But the technology is constantly changing, the training is constant, the need to upgrade our available information is constant. There's a huge investment on our part in terms of both technology and training, and if you don't keep up with it you're going to sink.