February 22, 2022

The Parts Shortage in 2022

NAC Blog
NAC Blog

The Parts Shortage in 2022

2021 was a challenging year for industries across the country. It hit the parts and service industries especially hard. And it may get worse in the coming months, extending into next year. Kaylee Felio, Sales and Marketing Manager for Parts Edge, joins Corey to talk about what's going on. She explains why the supply chain issues persist and what dealerships can do to retain their customers and their satisfaction scores in the middle of a supply chain crisis. 

The Outlook for Parts & Service Industries in 2022

Shutdowns ended up delaying everything, especially at an international level. Global suppliers couldn’t get goods shipped out at their normal rates. That meant dealerships and customers were waiting for much longer than normal for shipments of parts. 

The outlook for 2022 is going to be more of the same. Global shutdowns have (for the most part) come to an end, so manufacturers are once again shipping items out. It's now the carriers at the end of the supply chain that are having issues because there simply aren't enough drivers to go around. The supply chain is now broken in those final miles, between getting parts from the dock to the parts department door. That means parts managers are spending more of their time tracking parts and making claims on a daily basis.

It's not just obscure parts that dealerships are waiting on, either. Dealerships are running out of parts that are so common, no one ever expected them to run low. Who thought air filters would ever be hard to come by?

What Parts Managers Can Do to Mitigate Supply Issues

The broken supply chain issue shouldn’t be solely on the shoulders of the parts manager to overcome, especially when there is no playbook for a situation like this. Most parts managers understand how to deal with inventory management and handling the parts once they get to the dealership. But if the parts aren't there, what can they do?

This is when the dealership needs to come together as a whole. As a team, the dealership must understand what issues every department is facing as a result of the COVID-19 pandemic. To do that, dealerships will need to: 

  • Remove the blame. You won't do anyone any favors--including your customers--by blaming one department or the other. Work with sister stores or friends in the industry to create mutual support networks that could help you overcome current challenges. They may be able to share parts or even mentor new parts managers in how to handle shortages. 
  • Create a structure for communicating with customers. Be honest with your customers about what's happening. If you are upfront and honest with them, most of them will understand why a part isn't available for their vehicle. 

What Dealer Principals Can Do to Help

In a recent poll, PartsEdge asked parts managers that if they could have more of anything, what would it be? Thirty-nine percent of those surveyed said that they'd have more staff, and 46 percent said that they'd have more time. Parts managers are spread thin, and they aren't just managing inventory anymore. They are dealing with shortages in both their supply chain and in their workforce. Those issues aren't coming to an end anytime soon, either. At the earliest, says Kaylee, it will be the third quarter of this year, but it’s likely to last longer. 

That means tensions are high in dealerships and could remain high without dealer principal intervention. combat growing tensions, they can:

  • Make sure departments understand the challenges that other departments are facing. Encourage them to find ways to support one another and create a unified front for the customers. 
  • Beware of employee burnout. That might mean doing things like scaling back hours, eliminating Saturday hours for parts and service.
  • Support parts managers as much as possible. This is especially true for new managers. The situation is frustrating for everyone and giving them a chance to vent can go a long way towards easing tension.

The Takeaway

So, what can dealerships and parts managers do to provide a superior level of customer service during this supply chain crisis? Kaylee recommends: 

  • More meetings. Keep everyone up to date on supply chain issues and what's happening now and in the future. That will keep everyone on the same page and ease tension between departments. 
  • Find additional support for your teams. That might be downloading an e-book for them or finding mentors in sister stores. Whatever you can do to give them     more support will go a long way towards avoiding burnout. 
  • Stay positive. It might be difficult, but a good attitude will help everyone get through this tough time. 

Want even more insight from Kaylee on the supply chain crisis? Head to our YouTube channel for the full video interview of her latest Fixed Ops 5 episode with host Corey Smith. And be sure to subscribe to the YouTube channel as well as to the Fixed Ops 5podcast on Spotify, Apple Podcasts, or wherever you listen, so you never miss a new episode!

 

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