7 Recurring Problems You Can Eliminate from Your Dealership

Common Problems

1. Immobilized Parts Inventory
2. Open Repair Orders
3. Low Turnover
4. Low Efficiency, Productivity, Lack of Proper Measurement in the Service Department
5. Ordering Dead Stock
6. Detecting Decommissioned Parts That Haven’t Been Invoiced
7. Not Capitalizing on Customer Jobs

1. Immobilized Parts Inventory

Immobilized parts inventory signifies a high opportunity cost as it ties up money, takes up space, and incurs additional costs.

Ideas for Improvement:

• Implement a data-driven parts purchasing policy.
• Run sales campaigns for slow-moving parts, or offer them at a discount.
• Transfer unsold parts to locations where they can be sold.
• Use Autologica’s order suggestion feature for intelligent ordering based on customer habits and statistical data.

2. Open Repair Orders

The average dealership has 100 open repair orders per year that never get closed, which can lead to errors or financial leaks.

Ideas for Improvement:

• Analyze why each repair order remains open. Autologica Sky DMS users can easily generate a report of open repair orders that have been open past a configurable threshold.
• Quickly visualize this information using the Service Manager Dashboard in Autologica.

3. Poor Days Sales Outstanding (DSO)

Delays in settling customer debts, compared to the speed at which the dealership pays its suppliers, can lead to significant cash flow problems.

Ideas for Improvement:

• Track an Average Collection Period KPI, calculated as accounts receivable divided by sales, adjusted for the sales period.
• Monitor this indicator daily to facilitate quick decisions on financing policies.
• Autologica Sky DMS offers an “Account Suspension” feature to block customers from making additional transactions until they settle their account.

4. Low Efficiency, Productivity, and Lack of Proper Measurement in the Service Department

Measuring the hours worked by each technician is often a weak point in dealerships, with many workshops still using paper logs.

Ideas for Improvement:

• With Autologica Sky DMS’s Job Clock feature, technicians can quickly log each task, allowing the Service Manager to analyze technician time usage and increase productivity.
• Train technicians to reduce work times, and to make better use of their time.
• Implement an incentive plan to reward technicians who meet their goals efficiently and effectively.

5. Ordering Dead Stock

It’s common for parts managers to order parts that will never be sold, and which may in fact already be available at other locations, leading to unnecessary expenses.

Ideas for Improvement:

• Use Autologica’s “Order Suggestion” feature to purchase parts strategically, and to prevent overstocking and stockouts.
• Before purchasing, check if the part is available at another warehouse by centralizing information in a DMS.

6. Detect Parts That Were Subtracted From Inventory But Haven’t Been Invoiced

Some dealerships don’t immediately invoice parts that have been taken out of stock, which can lead to financial losses.

Ideas for Improvement:

• Use a modern DMS system to identify parts that leave inventory but go uninvoiced, preventing this problem from going unnoticed.
• Regularly audit parts inventory to detect anomalies.
• Perform inventory counts regularly.

7. Not Capitalizing on Services Customers Should Perform

Dealers should capitalize on all the potential jobs and parts sales to customers, to increase customer satisfaction as well as sales.. However, this opportunity is not fully taken advantage of.

Ideas for Improvement:

• Autologica Sky DMS has Service Marketing functions that automatically calculate the estimated date for each scheduled maintenance service for each customer.
• Run campaigns to offer these services.

These are some ideas you can implement to eliminate the most common issues in your dealership. For more in-depth information, check out our webinar on our YouTube channel.