Proudly serving the industry for which it was named for more than 50 years, Outdoor Power Equipment provides dealers who sell and service outdoor power equipment with valuable information to succeed in a competitive market.
Issue link: https://read.dmtmag.com/i/44370
FEATURE STORY parts counter. So, if you have two positions the customers can walk up to, you would want to have the same fast-moving parts in both loca- tions. Again, your goal is to reduce your transac- tion time, lowering your labor cost and improving your ability to have happy, satisfied customers walk out of your dealership In addition to being stored next to the Lista Parts Counter Storage Lista Outdoor Power Equipment Drawer Interior An extreme makeover can improve your bottom line D uring the past 20 years, the outdoor equipment industry — which includes outdoor power equipment, lawn and gar- den equipment, light construction equipment, and landscape equipment — has gone through a dramatic transformation. With wholegoods mar- gins slipping away year by year and customer de- mands increasing, today's outdoor equipment dealer is required to find new ways to improve profitability while reducing time, labor and re- source costs. Every business owner understands that inef- ficiencies and waste are the two greatest de- stroyers of profit in a dealership, and, in today's economic climate, neither can be tolerated if the business is to continue to grow and succeed. With little ability to control wholegoods mar- gins, more and more outdoor equipment deal- ers are looking at how similar industries, such as automotive and agricultural equipment dealers, have leveraged their people and their space to produce greater profits through their parts and service departments. One solution that dealerships are turning to is high-density storage solutions that use less space and make keeping track of inventory easier. By locating the highest-volume parts where they can be accessed easily and quickly, dealers can reduce transaction time and increase sales. For many dealers, replacing existing storage shelves with new high-density storage units allows them to re- duce their parts department footprint by 50 per- cent, while increasing the number of parts stored. Improve billing efficiency and customer satisfaction Because of the intimate tie between the serv- ice and parts departments, any improvement in one will make an automatic positive impact on the other. For example, the better job the service department does of communicating the parts it needs for a specific repair, the less time it will take for the parts department to fill the order, re- ducing transaction time for parts and improving billing efficiency for service. The same holds true for walk-in customers. If the parts department 24 can consolidate its parts into a tighter footprint and have more of the fastest-moving parts closer to the parts counter, it is easy to reduce the amount of time it takes to fill a customer's order. It's easy to reduce this transaction time by 40 percent, which improves customer satisfaction and reduces labor cost for the department. Tips for organizational layout, inventory management, and storage The key to increasing profitability of the parts and service department is getting a better handle on inventory and locating the inventory where it can be accessed easily and quickly. One major update is the use of a high- density storage cabinet near the service counter, stocked with 100 to 200 of the fastest-moving parts, located within easy reach (two steps) of parts department personnel at each point of sale. The goal is to reduce the average transaction time to around four minutes, allowing both the service department and walk-in customers to be processed more quickly. By keeping parts sold most frequently close to the transaction counter, you reduce foot traffic and movement. Time lost by having to go to the back room to find a part really adds up, increas- ing the average transaction time and resulting in lost customers and revenue. Storing these best sellers in high-density drawers also gives better inventory control by giving parts personnel a visual inventory. To discover the fastest-moving parts, run a report from your business management system for the past 12 months that shows your parts sales by unit volume. From that report, remove your fuel line, starter rope and oil, and focus your attention on parts that you have sold eight or more of in the past 12 months. Those parts, filters, blades, plugs and belts are your fastest- moving parts and should be located as close to the parts counter as possible. According to Bob Clements International, Inc., you might even consider duplicating your fast-moving parts at each checkout point on your OUTDOOR POWER EQUIPMENT www.outdoorpowerequipment.com counter, how parts are organized within the cab- inet is also key. The most efficient way to store parts is by type. Keep all your spark plugs to- gether, as well as fuel filters, primer bulbs, pulleys, spindles and springs. Once the drawers and bins are labeled, anyone in the dealership can look at the part and locate it more easily by visually find- ing it among like parts. Getting started As you begin the process of moving to high- density cabinets, it's important to understand that you will still need some shelving. You are not going to want to store the bigger, bulkier items in a cabinet. A 5-inch cube or smaller is the opti- mum size to really take advantage of the power of high-density storage. Shelving is probably still the best option for storing tires, large air and oil filters, belts, blades and spindles. Once you have determined what parts would be a good fit, think about how you would organ- ize them. In most cases, you will identify each part with an exact location using an alpha-nu- meric system such as Cabinet A, Drawer 1, Row A, position 1. Using primer bulbs as an example, if you had five different primer bulbs, they might be stored in Cabinet A, Drawer 1, Row A, posi- tion 1, position 2, position 3, and so forth. They are all together, easy to find, and easy to inventory. Better inventory control Just as you close out your cash drawer at the end of each day to make sure it balances, it is im- portant to inventory your fast-moving parts at least three times per year to make sure what your business management system says you have in in- ventory is actually there. By conducting a "rolling inventory" based upon the number of times a part turns each year, you can reduce the total time it takes to do an annual inventory and have a more accurate accounting of what you really have on hand. Using the high-density cabinets makes conducting an inventory check quick and efficient. You can assign a parts person the task of inventorying a drawer or a cabinet as the cus- tomer flow changes on an hour-to-hour basis. Modular storage — let's get down to details Purchasing the type of aforementioned high- density drawer storage is a significant investment. Dealerships will want to look long and hard at their particular circumstances to make sure they