IN THIS ISSUE FEBRUARY 2013
(This is a continuation of the report, "How Business Has Changed for Dealers," which appeared in the January 2013 issue of Farm Equipment.)
While West Central’s parts operations are exceeding the averages in most pertinent operational metrics, Hoburg says, there’s still room to grow. By “grow,” he’s referring to changing and making best practices uniform throughout all locations. “So you may meet that customer’s expectations at one of your locations, but you may fail at the other three simply because you’re not implementing superior practices throughout your organization.”
He says each store had good procedures, and those turned out to be the hardest ones to change. “When you’re doing something wrong and you can show someone a better, easier way to do it, everybody’s on board with that.”
When things seem to be working well, but differently at different locations, managers are tempted to leave it alone. But as a dealership expands into a multi-store organization, uniform, best practices must be established at each location, says Hoburg.
This was a challenge that Hoburg faced in establishing best practices across the West Central’s locations. “We brought the parts managers all together, spent a couple days actually, sitting down and just talking and mapping out each practice and developing a policy for it, whether it was ordering a part, receiving it, direct ship or monthly returns. Once we got everybody working together, the benefits were so numerous, you can’t count them.”
Even beyond the financial benefits that were achieved by the process of bringing the parts managers together, “It was the best money we ever spent,” says Hoburg. “As we went through that process together we ironed out our bumps and we spent time together, which is something that just isn’t normally done, working on common goals. We find now we work much better together as a team than we had prior to that.”
He says the dealership’s next step is to diminish its zero sales inventory “a little bit further.” In the last year alone, West Central had reduced zero sales inventory by just about half. “We’re running about 8% less deadstock than our division average, but our goal is to reduce dead inventory by another 2-3%,” say Hoburg.