The “New” Quest Parts Management – Unit I
What it looks like when it is Right
A more professional, productive and profitable Parts Operation is necessary for the distributors in the Capitals Goods Industries to be successful. To assist in the development of this Parts Management team we have designed a new series of training courses aimed at enhancing the skills of those charged with this responsibility. The “New Quest Parts Management Unit I” consists of 4 elements presented during a two day seminar.
The Principles of Management
The Basic Principles of Management – what we call the Pursuit of Performance: Planning, Organizing and Control; Job Descriptions and Responsibilities, Performance Standards and Targets – what it looks like when it is right; Employee counseling with praise and constructive criticism in Personnel Management; Time Management to set yourself free; The Business of Change and how to overcome resistance to change; How to survive in spite of ourselves.
Introduction to Accounting & Finance for Parts Personnel
Understand Financial Statements from the Parts Department Perspective. Clear and understandable definitions of the main financial terminology a supervisor/manager must have. Learn the Dealership Financial Fitness Model; and Profitability Pyramid. Asset Management and the value of Return On Assets. Pricing and Return on Capital Employed (ROCE) Discover new truths about the famous “Discount” and the consequences of it on the customer and the business.
The Operational and Process Foundation
Balancing Inventory Requirements with Customer Service: The impossible made understandable. Order Points and Order Quantities; Lead Times and the EOQ; Order Cost and Carrying Cost. Unleash your true power of knowledge by learning the theory of Inventory Control in all its glory. In physical distribution – the job everyone thinks they can do is easy but no one wants to do: Storage systems, transportation logistics; Shipping & Receiving; Parts Office, Sales Counter and Instore Merchandising Design and Layout that makes sense.
It’s All about Customers
Satisfying everyone’s requirements and developing relationships: “Up Selling”, Product knowledge, Features & Benefits selling, and effective telephone techniques. How you should use price as a marketing tool. Instore displays and merchandising; Value added selling; and the value of Customer Retention. Surveys to develop satisfied customers for life: Customer Profiles and all the background required to make customers your apostles.
This “New Quest Parts Management Unit I” provides a broad base introduction to Parts Management for the 21st Century. It is intended for Parts Lead hands, Instore Sales Lead hands, Supervisors, Managers and Executives. The material covers all of the management and operational disciplines required of a Professional Parts Manager.
Points to Ponder
This will become a regular feature of our blog. The points to ponder will be irregular in timing but they will be here often. Let’s start it off with some very pertinent questions.
In any classroom sessions I am involved with I ask for some simple definitions.
Three simple questions and most people eventually can figure it out for themselves. Of course I want that to happen as it is much more memorable if you come up with the answer by yourselves.
Do you know the answers?
Yes of course….
I am sure you all got the right answer – didn’t you. The time is now.
Service Management – Unit I March 21st & 22nd, 2012
The “New” Quest Service Management – Unit I
What it looks like when it is Right
A more professional, productive and profitable Service Operation is necessary for the distributors in the Capitals Goods Industries to be successful. To assist in the development of this Service Management team we have designed a new series of training courses aimed at enhancing the skills of those charged with this responsibility. The “New Quest Service Management Level I” consists of 4 elements presented during a two day seminar.
The Principles of Management
The Basic Principles of Management – what we call the Pursuit of Performance: Planning, Organizing and Control; Job Descriptions and Responsibilities, Performance Standards and Targets – what it looks like when it is right; Employee counseling with praise and constructive criticism in Personnel Management; Time Management to set yourself free; The Business of Change and how to overcome resistance to change; How to survive in spite of ourselves.
Introduction to Accounting & Finance for Service Personnel
Understand Financial Statements from the Service Department Perspective. Clear and understandable definitions of the main financial terminology a supervisor/manager must have. Learn the Dealership Financial Fitness Model; and Profitability Pyramid. Asset Management and the value of Return On Assets. Pricing and Return on Capital Employed (ROCE) Discover new truths about the famous “Discount” and the consequences of it on the customer and the business.
The Operational and Process Foundation
Balancing Labor and Skills Availability with Customer Service: Work Order Process Management; simplification is not just a nice word it is very possible in this clear exposure of the flow and needs of a service management job function. The impossible made understandable. Completion Dates and Meeting Them. Unleash your true power of knowledge by learning about flat rating and shop floor scheduling.
It’s All about Customers
Satisfying everyone’s requirements and developing relationships: “Inspections” to ensure Machine Reliability, Technical knowledge and advice. How you should use price as a marketing tool; variable labor rates and their application. Value added selling; and the value of Customer Retention. Surveys to develop satisfied customers for life: Customer Profiles and all the background required to make customers your apostles.
This “New Quest Service Management Level I” provides a broad base introduction to Service Management for the 21st Century. It is intended for Service Lead hands, Instore Sales Lead hands, Supervisors, Managers and Executives. The material covers all management and operational disciplines of a Professional Service Manager.
Parts Management – Unit I March 19th – 20th, 2012
The “New” Quest Parts Management – Unit I
What it looks like when it is Right
A more professional, productive and profitable Parts Operation is necessary for the distributors in the Capitals Goods Industries to be successful. To assist in the development of this Parts Management team we have designed a new series of training courses aimed at enhancing the skills of those charged with this responsibility. The “New Quest Parts Management Unit I” consists of 4 elements presented during a two day seminar.
The Principles of Management
The Basic Principles of Management – what we call the Pursuit of Performance: Planning, Organizing and Control; Job Descriptions and Responsibilities, Performance Standards and Targets – what it looks like when it is right; Employee counseling with praise and constructive criticism in Personnel Management; Time Management to set yourself free; The Business of Change and how to overcome resistance to change; How to survive in spite of ourselves.
Introduction to Accounting & Finance for Parts Personnel
Understand Financial Statements from the Parts Department Perspective. Clear and understandable definitions of the main financial terminology a supervisor/manager must have. Learn the Dealership Financial Fitness Model; and Profitability Pyramid. Asset Management and the value of Return On Assets. Pricing and Return on Capital Employed (ROCE) Discover new truths about the famous “Discount” and the consequences of it on the customer and the business.
The Operational and Process Foundation
Balancing Inventory Requirements with Customer Service: The impossible made understandable. Order Points and Order Quantities; Lead Times and the EOQ; Order Cost and Carrying Cost. Unleash your true power of knowledge by learning the theory of Inventory Control in all its glory. In physical distribution – the job everyone thinks they can do is easy but no one wants to do: Storage systems, transportation logistics; Shipping & Receiving; Parts Office, Sales Counter and Instore Merchandising Design and Layout that makes sense.
It’s All about Customers
Satisfying everyone’s requirements and developing relationships: “Up Selling”, Product knowledge, Features & Benefits selling, and effective telephone techniques. How you should use price as a marketing tool. Instore displays and merchandising; Value added selling; and the value of Customer Retention. Surveys to develop satisfied customers for life: Customer Profiles and all the background required to make customers your apostles.
This “New Quest Parts Management Unit I” provides a broad base introduction to Parts Management for the 21st Century. It is intended for Parts Lead hands, Instore Sales Lead hands, Supervisors, Managers and Executives. The material covers all of the management and operational disciplines required of a Professional Parts Manager.
I HATE DISCOUNTS
The people that know me and have worked with me in any capacity of the past forty plus years know that I HATE DISCOUNTS.
I know you have to offer some special pricing every now and again. However, too many people just change the price on an item in a transaction and that leaves a bad impression in the mind of the customer. Oh I get it. The customer feels good about getting a reduced price. Until, that is, they think about it. Sooner or later they begin to understand that if you changed the price on that item one time, without requiring anything more from the customer – well your price must have been too high.
If you have to change a price you must change something else in the transaction in order to justify the reduction in the price. Increase the quantity. Place it on a stock order and have the customer wait for it – anything that makes sense.
Why do I HATE DISCOUNTS??
Well look at this example from a typical service department…
Sell Price 100 Discounted 90
Cost Price 35 35
Gross Profit 65 55
Expenses 40 40
Net Income 25 15
A 10% discount on the selling price becomes a 15% reduction in the gross profit and a 40% reduction in the operating profit. I HATE DISCOUNTS.
I know you have to make adjustments from time to time. It is important that everyone understand the implication of a small discount in selling price. It becomes huge at the operating net income line. The time is now.
Updating the Add to stock blog from yesterday
Yesterday we had difficulty in format for the table of probabilities. With this update we hope we can clear up any misunderstandings. The first column is the time between the last two calls of a part number. The second column is the probability of a sale in the coming twelve month period of time.
The above percentages represent the probability of AT LEAST one call in the coming twelve months. This should give you more help in determining when to add a part to stock. The time is now.
Adding Parts to Inventory
Since we started this blog we have written on inventory management three times. Once on variable lead times, once on economic order quantities and once on the only part that matters. They have each received a lot of reads. Thank you.
Let me introduce a fourth line of attack on managing the inventory – when do you add a part to stock. For years if not decades we have added parts on the basis on two calls in six months or three calls in a year add the part to your stocking inventory. This has been the “norm” since I entered the Industry in 1969. It hasn’t really changed at all. How about we use probability theory in determining when to add a part to stock and yes when to drop a part out of the stock inventory.
The above table shows the probabilities of future events based on the time between the last two events. Take the first line “3 MONTHS”. The columns as headed 0, 1, 2, 3, 4, 5+. That is the number of calls in the coming twelve months. So under 0 is 2%, 7% under 1, 14% under 3 etc. Those represent the probability of the number of calls in the coming twelve months. Si there is a 7% probability that there will be 1 sale in the coming twelve months- or a 20% probability of 4 sales in the coming twelve months.
This is quite a good barometer to use for determining when to add a part to stock. If the last two calls are three months apart there is a 98% probability that you will sell at least one part in the coming year – 87% probability of at least one sale if the last two sales were 6 months apart etc… Don’t you think you should use this type of statistical truth in establishing when you want to add a part to your inventory? The time is now.
A Customer Service Tool
VoIP – voice over internet protocol. What a name. Well what it does is quite remarkable. This is where your computer drives your phone system. A call comes into your Company and the computer directs the call to the appropriate extension while at the same time it paints your computer screen with the pertinent information from your name and address on the customer. Not only that, it can delivery almost whatever information you want.
“Hello Dave, how are you? Wow, we haven’t spoken since last October, where have you been?”
“Hi Dave, congratulations on your anniversary, how many years has it been?”
“Dave I have been meaning to call you, congratulations on your recent purchase of our “xx” machine.”
I am sure you can imagine various pieces of information that you would like to have displayed before picking up the telephone. There is a machine in the shop, or there is backorder outstanding – pretty critical information that would help you in your discussion with the customer.This is similar to the “Vonage” service that runs through your cable. Contact your dealer business system provider or your telephone system provider and ask what is necessary for you to obtain this type of tool. It will give you a terrific tool for customer service. The time is now.
The 1st Weekend in March
Well here we are – the first weekend in March. The leap February got things all cross ways – a friend of mine had his birthday on Wednesday – he is now 17. Now wouldn’t that be amazing? I can’t say that I would want to go back to seventeen again. Once was enough.
Well I hope you all had a great week last week and that the coming week will be even better. Of course that is up to you. In the meantime enjoy your weekend. Get some chores done around your home. Share quality time with family and friends.
The time is now.
Friday Filosophy
Friends are angels who lift our feet when our own wings have trouble remembering how to fly.
It is not what happens to you but how you respond to what happens to you
No one has ever made himself great by showing how small someone else is.
Facts are awfully stubborn things
This is a most interesting time, isn’t it? I listened to Jimmy Rogers on CNBC the other night. He was pointing out there is an election this year in the United States, there is one in France. Germany has an election next year. In fact there are 40 governments that will face elections this year. There will be a lot of money spent by the politicians. Yes, they spend our money to get themselves reelected. Sorry to be so cynical.
But 2012 is going to be a good year – one way or another. If we have to show unemployment going down well let’s not look so closely at the shrinking size of the work force; If the deficits get too large let’s blame it on the recession or the conflicting arguments between one view of the economist Keynes and the rigors of the Austrian school followed by the later Milton Friedman. Politicians will be in the feel good best this political season
The total unit sales in the United States are still less than 50% of what they were at their peak. The customer fleets and rental houses are almost at the complement of units now. So where is the boom going to be coming from in the US? It sure won’t be housing will it? And as long as housing operated with depressed prices the pent up work force movement will not be released.
The only answer is that the market is what the market is and get over it. Get one with it and make the best of it. The happiest people normally DON’T HAVE the best of everything but they do MAKE THE BEST of everything. The time is now.