Today we are looking at those extra items that cause costly trend issues. There are small items that can really add up in parts cost per repair that you don't even realize are on a repair order. 

Example 1:

In one very well run dealership- I kept running into repairs with 16.00 adhesive charged out on at least 3 claims a day.  This was a manufacturer that the adhesive should have not even been able to be accepted. But it was sliding right through.

I found it on shocks, on transmissions, and the weirdest repairs.  I finally called the parts director and asked if they were just gluing stuff in. No one could ever figure out what the techs were getting it for- but they put a stop to it.

This was making the dealership at least 20.00 or so higher than their peers in parts per repair.

Example 2:

Another well run dealer we ran into zip ties. 10.00 of zip ties were being charged on several claims throughout the week.

Turned out that the tech needed a couple for harnesses or such and every time the parts department was charging out a full canister of zip ties, not just 1 or 2.  Again making them higher than peers.

Example 3: 

There are many repairs that are one-time usage bolts.  But in a case were your admins see many gaskets, bolts, or other misc items other than the main part with the manufacturer’s defect that would be a good time for them to stop and ask the manager questions.

A good rule to operate under is all parts replaced must list a manufacturer’s defect in the story.  Technicians please list in your story statements like:

• “Bolts are one-time usage.”
• “Gaskets needed for seal.”
• “O2 sensor stuck in converter unable to remove.”

Statements like this protect you in an audit and further the understanding to everyone involved reviewing the repair.

Example 4:

I have been in several dealerships where, for certain repairs, the parts department just puts out all items THEY feel are necessary for the repair.  The tech just takes everything and uses what he needs.

A good example was a water pump replacement. Parts would set out and change the water pump, a tube of FPIG sealant, and 2 gallons of antifreeze.  The sealant will do several repairs and 2 gallons of coolant would not be needed on every repair.

We all know that shop supplies are not reimbursable – but in some cases, the lines become fuzzy on what is and isn’t a shop supply these days. Some manufacturers will pay for the items that do have a part number or as a miscellaneous part.

Take Away:

Technicians:  Help us, administrators!  Write in your story why each part was replaced. Plus customers want to know as well when they are paying the bill.

Advisors:  Review the parts charged and make sure it makes sense and is logical

Administrators: Give it a double check and make sure you KNOW when reading the story why all parts are replaced.

For more tips like this one visit awninc.com.