Controlling Parts Costs
“Are you out of your mind, Art? I’m not giving my checkbook to the builder!”
That is what I was told by an old-school owner when I was the general manager of his three transmissions shops back in the day. We were arguing back and forth trying to figure out how to get our parts costs in line, like many of you nowadays. His position was that it was, and always has been, the manager’s responsibility to control our parts costs. My position was that we should change that policy and make the rebuilder responsible for which parts we buy and make the manager responsible for selling the repair for enough to reach our parts-percentage goal. That policy change would make the manager accountable for the sales amount and the builder accountable for the parts amount. The installers worked for the builder, and all R&R parts were approved by the builder. The new policy, in effect, would have employees share accountability as a team in an effort to reach our parts-percentage goal.