Rocky Runeberg is the parts manager for McKie Buick-Pontiac-GMC in Rapid City, SD, as well as McKie Hyundai and Nissan. The McKie parts operation includes with employees at two different locations.
What are the biggest challenges facing your parts department?
I'd say the biggest challenge is just trying to keep up the sales per employee. With the economy the way it is, people just don't have the disposable income they used to.
Another challenge is availability. Warehouses seem to be, if anything, downsizing a little bit through the franchises. If we order something and they don't have it, sometimes they just cancel it out on you. Then you have to go back and research it and find out why, because it's canceled for no good reason. They've got stock on hand, you call them up and they don't know why it's canceled, either.
Availability is just tougher and tougher. And we have to keep up with GM's new RIM program.
Are you working more closely with your service department to increase sales?
We've always worked closely with the service department here. I've been to a lot of places where that isn't true, but we're more involved with service on that end of it, because I've got my counter guys trained to upsell. When the tech walks up and asks for brake pads, you know the brakes have gotten hot, so they will ask if they've priced out a brake fluid flush because the fluid's probably burnt. The back countermen are getting more in the mode of upselling. Normally they left that up to the tech and the advisor, but we had to get the back countermen more on board.
Even on a body shop ticket, say a wholesale account comes in and orders a bunch of front-end parts but not a hood, they will call the body shop and say, "I see you're ordering a grill and a bumper but no hood." If they say they're getting that part aftermarket or used, GM has that Conquest Collision program where you can try to compete with the aftermarket, and we'll ask for the sale. What will it take for us to sell you this hood, because it has factory fit and finish?
We've had to get a lot more creative in the last two years. It's such a specialized field, because of the caliber of people you have to retain. You can't just take any normal person off the street; not everybody is equipped for it. When a tech walks up and asks for a control valve, you have to know where to find it. It's getting to be more of a specialized field than it ever was because of all the variations and options. There used to be one spark plug that fit every small-block Chevy known to mankind. Now you have a different plug for every model out there.
Do you sell parts over the Internet?
We do, but we don't do a lot of it. We're in more of a rural area. We have that on our Web site and do have a parts request online. We see maybe two orders a month, and sometimes we don't even see that. It seems like the more time goes on, the less and less I keep hearing about Internet-based items. I'm not sure why. People realize it's just as quick to fax an order or call it in. There's so many firewalls with all the identify theft out there, a lot of times the orders won't even come through. People banking their business on the Internet could be losing sales from the messages just not coming through.
How has the RIM program affected your operations?
We're doing okay with it. A lot of dealers or parts managers kind of assumed GM was going to manage their inventory, so they didn't have to watch it as closely. If anything, it's just the opposite. You have to monitor it every day. Dealers aren't looking at the proposals they send you every morning. If you don't look at them within 20 days, they will automatically approve them.
It's a good program for the most part, as long as GM quits changing it and tweaking it. It works. It does put stuff into inventory that is selling, but it's a double-edged sword. It also puts items into inventory because they say it's supposed to be based on local area sales. But the stratification codes it's based on, if anything, are more national than regional. If we sell one of a part that under normal circumstances you would never order in stock, based on their criteria it will reorder it for you. Under any other real-world situation, there's no rhyme or reason why you would stock that part.
Essentially it took dealers from running at about 40 or 37 days supply of parts, and moved it up closer to 70 to 75 days. It increased everybody's inventories. If you don't monitor and watch it, it has a potential to be kind of dangerous in a way. If you follow the bulletins they send, and you stay on top of it, then for the most part it seems to be working.
They need to look at their stratification codes and group them more in an outlying area, because there's many parts that they can't even tell you, other than the code on it, why it would suggest that you have that in stock.