Understanding Your Dealership Management System

The must-knows of DMS and how it can benefit your dealership.

What Does It Do?

A dealership management system can provide reports of parts and accessories inventory performance that can – and should – be reviewed by a parts manager. The software can collate data into useful formats that can identify aspects of the parts and accessories that might require action by management; however, it cannot make decisions for the manager*.

*Caveat: Future DMS applying artificial intelligence (AI) might be capable of managing a parts and accessories inventory.

Why Should the Parts Manager Know the DMS?

The parts and accessories manager should know the capabilities and the limitations of the inventory management software so the reports necessary to identify exceptions to the inventory can be created or applied. Perhaps an example could clarify this previous sentence. This example derives from my early years as a parts manager and illustrates the importance of knowing how the inventory management software works in order to properly and effectively manage inventory.

The year was 1979, and I had recently been hired to assist the parts manager in her duties. She had been directed to train me to use the inventory management software. She was named parts manager, yet had not been offered the training necessary to effectively understand the software, and she had not requested that training. While showing me how to generate a stock order, she remarked that the software was generating very large quantities of parts and accessories relative to the actual sales volumes and she didn’t understand why that was occurring. A week or so later, she went on her honeymoon, and I was instructed to cover for her.

When I processed a stock order and reviewed some of the items for which quantities had been suggested, I compared the recommendation against the reported sales volumes and decided that the suggested quantities were too large. So I called technical support and asked what might be causing the apparent miscalculations. The support technician accessed our system, researched some setup parameters and determined that the stock order recurrence period had been set at two weeks, which was the stock order cycle for that OEM. However, the technician also determined that the suggested stock order process had not recently been finalized. This caused the software to assume that the sales history was for a two-week period, rather than the many months that had occurred since the most previous reset date. Had the parts manager contacted technical support when she noticed the apparent suggested order quantity error, she could have saved herself substantial time when processing the stock orders.

My success with contacting technical support taught me to use that resource and learn about the software capabilities and limitations. I began recording all contact with technical support, which assisted me in learning how to use the inventory management software more effectively. Eventually I was offered the opportunity to take over the position of parts manager.

How Could the Parts Manager Learn About the DMS?

As explained in the previous section, taking advantage of the technical support function of the DMS vendor could be one method. And by developing a technical support call log to record each request, the parts manager could better understand the features and functions available within the software package.

Most computer system vendors offer training, which could be off-site at a training venue selected by the vendor or on-site at your dealership. Both the technical support and the training are usually included in the purchase and maintenance cost of the system, so it is important to use these services to get a sufficient return on your DMS investment.

There is one other training option that might not be as evident as those mentioned above. Consider interacting with other parts managers who are using the same DMS provider. They are operating the same inventory management software and must process the same types of procedures to operate their parts departments, so they could be possible sources for how to perform specific functions within the system.

What Else Is Important?

Most DMS vendors occasionally update their software, so it is important to be aware of those updates and to review them to determine if the updates require changes to the way features and functions operate. One update type could be the data-match update, sometimes called a price update, which could be processed as frequently as each day. It also could be processed on a cycle established by the suppliers of the parts and accessories. It is important that the parts manager is made aware of any updates impacting the parts and accessories software. Most DMS software has a communications function that can automatically direct specific communications to the parts manager’s inbox. I suggest that you verify that this communications function has been set up properly.

The data-match update usually contains a very important feature that the parts manager should process each time the update is generated. This is the supersede feature, which indicates items that have been changed and have been assigned a different part number. Because a supersession can be a mix-and-sell or an engineering change that doesn’t permit using the old part number, the parts manager must manually determine if the old part number items can be mixed in with the new part number items or not. If this manual assignation is not processed, then the information in the database is not accurate and could result in less than efficient sales transactions.

Who Should Be Involved?

The dealership operator (dealer principal or general manager) and the parts manager should be involved in making certain that the parts manager is taking advantage of the DMS training that is available. They should also ensure that appropriate application of the inventory management software features and functions is in place. Keep in mind that those parts and accessories represent money and that they need to be sold in order to secure a return on the inventory investment. Actual physical confirmation should be made to ensure that the inventory management software is being applied consistently and correctly. Don’t assume or accept a verbal affirmation.

To quote Lou Holtz: “When all is said and done, more is said than done.”

Mel Selway

Mel Selway is the president of P.A.R.T.S. Inc., a Sahuarita, Arizona-based firm providing business management analysis and training to retailers. He can be reached at 520-336- 8606 or melselway@aol.com.

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