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Parts Manager Jul 2007
| - A parts managers' primer on analyzing the department's income statement
Editor's note: To get full value from this article, readers should have a copy of the recent financial reports for the parts department in their dealerships. Most parts managers get these statements routinely but some dealer/principals are still reluctant to share this information. If parts managers are to be held accountable for results, it is imperative that at a minimum they get a copy of the income statement for their department. Back to basics: There are three financial reports that are integral to a proper analysis of any business's operations: the balance sheet, the income statement, and the sources and uses of funds statement. The balance sheet is usually described as a snapshot of an enterprise at the close of business on a given day. It lists assets, liabilities and shareholders' equity. The income statement describes a business's operations over a period of time. Revenues, expenses, and difference between them, either a profit or loss, are depicted. The sources and uses of funds statement essentially reconciles the effects of the income statement and other financial activities on the balance sheet.
| - How the wholesale parts business fits into today's dealerships
Once upon a time, there were a couple of dozen or so dealerships around the country with very large wholesale parts operations. The mantra at the time was "Get big or get out" of the wholesale trade. That's because carrying and delivery costs were high and gross margins were relatively low in this segment of the parts business. But that's changed
| - Is your parts storage area everything you want it to be?
Your parts storage facility is not just a big room with bins for housing parts. It must be a significant component in supplying adequate space for existing parts storage to meet today's needs as well as responsive to storage requirements for future customer demand. Additionally, the facility must be designed and arranged so that it enhances efficiency and productivity. In other words, how quickly parts are stocked when orders arrive and how quickly parts are picked to fill customer orders.
| - Tips for tracking emergency purchases
What do we mean by the term "emergency purchase?" It is a term frequently used in the dealership inventory business, but one that is open for interpretation at the individual dealership level. We thought we had a pretty good grasp of the definition of an emergency purchase, but have found so many different interpretations, we thought we should spend time listing some of the ways the term is used, right or wrong, and the real role emergency purchases can play in measuring your inventory performance month in and month out.
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