In a few weeks, we will bid adieu to 2024 and greet the new year of 2025. As in the lyrics of one of The Beatles songs, it could be as easy as “You say goodbye and I say hello…”
Yet in a business, saying goodbye to 2024 and hello to 2025 might involve several important tasks to ensure that this year ends smoothly and next year begins correctly. In this month’s column, we will review some of those tasks that might be necessary to process, and we will identify other projects that could also enhance the transition from 2024 to 2025.
Your Dealership Management System (DMS)
Was your DMS installed during 2024, or have you been using your DMS for longer than the current year? This is important because if the DMS was installed in 2024, the year-end processes and functions might not be familiar to your personnel. If this is the case, then I suggest that now is the time to research the functions and processes that will need to be performed to finish up 2024 smoothly.
Whether your DMS was installed in 2024 or in a prior year, these questions could assist you in bringing 2024 to an easier close:
- What must you do to ensure that Dec. 31 ends one year of business transactions and that Jan. 1, 2025, commences another year? Do you “throw a switch”? Or do you answer a question in a specific file or field?
- Who is responsible for performing this function? Is there a detailed written procedure (DWP) to guide this person through the correct steps?
- Must this function be accomplished before any business transactions can be processed in 2025? And if this is the case, on what date will this be performed? Has the responsible person been scheduled to work on this date?
In regards to the parts and accessory department, it is important to know the number of months of transaction history that will be available for view and for data calculations commencing on Jan. 1. This could impact the suggested order calculation algorithms, especially if stock orders are calculated with seasonality being a factor. Are there any specific functions that must be performed in the parts portions of the software in addition to those processed for the overall DMS software? If there are parts-specific year-end functions, who will be processing them and on what date? Will these need to be coordinated with the overall year-end functions?
Personnel Scheduling — Parts Department
Do the quantity of parts department transactions historically increase or decrease during the last week of the current year and the first week of the new year? Have you scheduled your personnel accordingly?
If it is necessary that specific year-end functions are processed before any parts department transactions are posted for the new year, who has been scheduled to perform these functions? As mentioned previously, if your DMS was installed in 2024, this will be the first time that any year-end functions have been performed. Is there a detailed written procedure (DWP) available for this person’s reference? If there isn’t, when will you contact the DMS support department to research the proper procedure for any year-end parts department functions?
Yes, I know this might require extra effort; however, you might recall the five P’s, which are: Proper Preparation Prevents Poor Performance.
Your New Year’s Plans
Overall plans for the entire business are important to develop prior to the new year so that your personnel can hit the ground running. Since it is November, for what date have you scheduled the 2025 company plan meeting? These are some questions that could assist your management team in developing your 2025 company plan.
- Who should attend the meeting?
- What topics are included on the agenda? When will the agenda be distributed?
- What is the anticipated level of business for each department in 2025? E.g., increase, decrease, remain relatively flat
- What changes could be planned to achieve the forecast objectives for income and expenditures for each department?
- When will each of these changes be implemented?
Since my columns frequently relate to the parts department, and since the parts operations impact each of the other departments, which inventory performance factors (IPF) have been or will be identified as needing improvement? Some possible IPFs could be:
Slow Moving Inventory (SMI) — If the SMI value is greater than 15% of the total inventory value, what plans have been developed (or could be developed) to reduce this to less than 5%? If your total inventory value is at the planned level, then any of the money realized by eliminating the SMI could be invested in goods that are better aligned with the needs of your internal customers (other departments) and external customers (RV owners). Also, important to your SMI reduction plan would be to include methods of eliminating the SMI and methods of preventing future accumulation of SMI. Please refer to my columns in this year’s May and June issues of RV PRO for some information on SMI elimination and reduction.
Gross Turn (GT) — What overall gross turns are you currently achieving for your parts and accessories inventories? You might recall that I suggest an overall GT of six turns. If your overall GT are less than six, what plans could you develop to increase those turns? One of those plans could be to identify the days of supply (DOS) for your parts and accessories categories because if you are carrying more than two months DOS, then you cannot achieve six turns.
There are other IPFs that you could include in your parts department plan for 2025. Having said that, I think a review of some of these IPFs would be a good topic for my December column.
Why Plan?
By establishing objectives as part of your 2025 plans, as the year progresses you can more easily evaluate your performance and modify your methods of achieving any performance indicators or perhaps implement other methods. To paraphrase a line from a song by Bloody Mary in the musical “South Pacific,” “If you don’t have a plan, how ya gonna have that plan come true?”