1. automotive and vehicles
2. auto parts

How to Plan for Parts Department
Success in 2013
with
Mike Nicholes, President
Nicholes Capital Management
Moderated by
Mike Bowers, Executive Editor at DealersEdge
Thursday, December 13, 2012
1 – 2:30pm ET
Mike Nicholes, President of Nicholes Capital Management
Mike Nicholes, was the founder of Mike Nicholes, Inc., has earned international
recognition as a consultant and seminar speaker. He has conducted hundreds of
seminars during the past 35 years for more than 42 major vehicle manufacturers. In
addition, Mike has functioned as an in-dealership consultant/trainer (in a seminar
mode) to over 10,000 automobile, truck, agricultural, and construction equipment
dealerships and distributorships. He has been directly involved in fixed operations
consulting and training for over 35 years. During his career as a consultant, Mike worked with many
dealers, and manufacturers, specifically Saturn Corporation during the design phase of the company,
to implement the parts management concept "Beyond EOQ", or source by movement, resulting in
greatly improved fill-off-the-shelf to the technicians without a significant increase in inventory
investment. In addition, he has researched and assisted many manufacturers as a subject matter
expert in the area of daily stock order implementation.
He has hosted a television show called Parts and Profits for the cable network Automotive Satellite
Television Network (ASTN), and is in demand as a '20 Group' speaker. He is also has been a frequent
workshop speaker at the National Automobile Dealers Association (NADA) and American Truck
Dealers Association (ATD) annual conventions. Mike is the author of several publications and articles
on inventory management including 8th Edition Inventory Management, Inventory Management for
Daily Stock Orders, and 3rd Edition Advanced Inventory Management used in his past seminars. In
1994 Mike Nicholes Inc was acquired by a major DMS system. That relationship dissolved in 2004
with Mike starting Nicholes Capital Management LLC to pursue a course on non-endorsing, neutral
inventory management training and consulting. Mike has been an active guest lecturer for the
Entrepreneurial Lecture Series at Brigham Young University in Provo, UT. Mike and his wife Lynne
reside in Portland, OR.
Parts Department Business
Planning for 2013
…ARE YOU READY?
DealersEdge Webinar
December 13, 2012
The Parts Department…
a Business within a Business
The Parts Department…
a Business within a Business
What are the main goals
for my business?
“He who fails to plan, plans to fail”
Bad Planning on your part does not
constitute an Emergency on my Part
Don’t stomp out fires; prevent Fires
Planning is bringing the future into the
present so that you can do
Something about it now.
3 Problems to Overcome:
• 1. There is no Time to write or design a plan
• 2. I don’t know what to put down on paper
• 3. I am not sure what measurements should
apply to my plan and it’s execution; getting it
done and done right.
Biggest Problem with “Future”
Planning? …too many good ideas
sit stagnant; never happen.
What should I include in a good
Business Plan?
What should I exclude in a good
Business Plan?
Plan the Future by Knowing the Past
• 1. Where have I been (measurements) for the
past year?
• 2. Where am I now at the beginning of the
new year?
• 3. Where do I want to be at the ending of this
new year?
• 4. Don’t add things that cannot be measured.
The Mission Statement:
Overall, when the Year is done
what do I want to have
Accomplished
in the Parts Department?
4 Critical Steps:
1. A “one line” description of the
overall objective.
2. How do/did I build the model; past
performance to Future Goals
3. What conditions could prevent
accomplishing the goals; market,
people, etc.
4. Why am I, the parts manager, the
best qualified to direct the parts
department?
Measurements:
When we deal in generalities we will never
succeed. When we deal in specifics we will
seldom fail. Where performance is measured
performance improves; and where
performance is measured and reported, the
rate of improvement accelerates!
Thomas Monson
Checklist and key are free; at www.partsconsulting.com
Benchmark Measurements
Items shown in Red Circles on the Checklist
tell the Dealer “what is really going on in
the Parts Department”. Too many rely on a
couple of nebulous measurements on the
financial statement.
…along the Way towards the Goal;
If there are problems:
Fix Them!
Fixing Problems:
A Time Line
Fixing Problems:
A Time Line
Existing Problems
Not Qualified nor
Quantified
Fixing Problems:
A Time Line
Existing Problems
Not Qualified nor
Quantified
Base Correction Point
Fixing Problems:
A Time Line
Existing Problems
Not Qualified nor
Quantified
Identify Measurement
Parameters: How much
& How Well
Base Correction Point
Fixing Problems:
A Time Line
Existing Problems
Not Qualified nor
Quantified
Identify Measurement
Parameters: How much
& How Well
Base Correction Point
Repetition
Fix Programs
Fix Procedures
Fix Policies
Fixing Problems:
A Time Line
Existing Problems
Not Qualified nor
Quantified
Identify Measurement
Parameters: How much
& How Well
Repetition
Maintain corrected
Policies & Procedures
Base Correction Point
Fix Programs
Fix Procedures
Fix Policies
Fixing Problems:
A Time Line
Existing Problems
Not Qualified nor
Quantified
Identify Measurement
Parameters: How much
& How Well
Repetition
Maintain corrected
Policies & Procedures
Base Correction Point
Fix Programs
Fix Procedures
Fix Policies
Problem or situation
Is now fixed or repaired
Continual Analysis
• Management of the Asset: “Moving the
needle”
• Guidelines and goals; real and unreal
• Monthly Checklists
• Trend Analysis
Remember in Parts
It’s not the MONTH that is most important
It’s the TREND that is most important
Remember in Parts
It’s not the MONTH that is most important
It’s the TREND that is most important
Some Trends should be going “UP”!
Remember in Parts
It’s not the MONTH that is most important
It’s the TREND that is most important
Some Trends Should be Going “Down”!
Remember in Parts
It’s not the MONTH that is most important
It’s the TREND that is most important
Some Trends Should be “Flat”!
Dealer and Parts Manager should
meet together monthly to review
progress toward the goals.
The Parts Manager can solicit help
and assistance from the Dealer to
reach the goals.
Help is usually only a question posted
on the Forums, or assistance from
Professionals who are trained and
skilled in assisting Managers attain
their goals.
Many of these can be found within
the Dealerships themselves
Questions?
Now’s The Time
Contact Information
Mike Nicholes Capital Management Inc.
9721 SE Clatsop St, Portland, OR 97266
Phone: 503-788-9972
Fax: 503-788-9974
Email: [email protected]
www.partsconsulting.com
Thanks for
Coming Watch Out
For the
Crazies!