In over 30 years of working in the parts department at Kern Machinery, Chris Schott has seen a lot of changes. When he first started, a 24-hour turnaround on getting a part was amazing. “That’s not good enough any more. There are thousands and thousands of dollars on the line, so 24 hours is too long,” he says. “That creates the need for more inventory because customers want solutions and they want to be rolling now. If they have a piece of equipment down, they may have 3 pieces that operate behind it that can’t operate because the other one’s down. Well that adds up to big money fast. Downtime is a big thing for our customers and they’re under a lot more pressure.”

Schott started working at the Delano store as a “counter man” in 1984, eventually managing the parts department at the store for 25-plus years. He then spent 3 years managing the Bakersfield store parts department.

Today as the parts operations manager, it is Schott’s job to find solutions that will alleviate that pressure for both Kern Machinery’s customers and the parts departments.

Coordinating Orders

Schott is responsible for programming Kern Machinery’s business system to stock inventory, making sure the dealership’s stock order rates are high enough. He oversees all of the parts purchasing for the dealership’s 4 stores. “Are we buying enough on the programs, are we saving enough money? I create a log of savings, like we combined mower orders, for example, so management can see how much I’ve saved the dealership by doing it that way.”

Schott works with corporate aftermarket manager Charlie Moe and management to improve the dealership’s ordering. Schott will look at different ordering options and then creates a matrix to rate each option and tells management what can be done to improve their ordering decisions.

Schott works with all the parts managers to coordinate processes and bigger purchases. “Back in the old days each store was more individualized and now we’re more of a single unit, an enterprise, with all 4 stores using coordinated processes. So each store uses the same processes and handles tasks in the same manner, which allows us to use employees at any location if we need to. It wouldn’t be a big deal for an employee from one store to fill in at another one because everyone’s doing things the same way,” he says.

By coordinating the big purchases the dealership makes, Schott is able to take advantage of their buying power. “I use all of our combined buying power to purchase parts. For example, I’ll have a shipment delivered to one location instead of four separate shipments. This way we’re only paying one freight company. Then we’ll move the inventory around,” he says. “I’ll do the same with returns back to suppliers. I’ll coordinate the returns among the stores and do one shipment instead of four.

“I do a lot of group orders when there are some added discounts to reach a dollar level that the parts managers can’t reach individually. My job is to get with all three parts managers and to drop at one location so we can get that extra 3-4% savings. If they were all buying on their own all the time we wouldn’t get that.”

Schott views his role as taking some of the load off the individual parts managers so they have more time to meet with customers and work with employees. “I help them manage their inventories, get the turns up and the zero-sales down. I try and lend assistance to the parts managers wherever I can,” he says.

Special Focus on Specialty Lines

Dealerships in California, like Kern Machinery, aren’t afforded the luxury of an off-season. “We don’t have a lot of downtime, maybe the 2 weeks between Christmas and right after New Year’s it’s very slow. But that’s it. There’s always something going on here,” he says.

With so many specialty crops coming out of the region, Kern Machinery handles a lot of different specialty equipment, which presents some challenges. “That’s a little harder to manage than the John Deere product line because you’re dealing with lots of different personalities and manufacturers. They really don’t understand the big game because they’re a lot smaller in comparison. That’s always a challenge and they don’t see as much of the specialty equipment in the Midwest I’m guessing. We don’t have time to recoup, we’re never recouping.”

Working with so many specialty lines, which generally are coming from smaller manufacturers, means Kern Machinery’s inventory is quite a bit bigger. “The manufacturers aren’t able to respond as fast, so we have to decide what kind of effort we’re going to make to get the parts because it’s our reputation on the line with the product. We can’t rely on them like we can rely on John Deere. We have to be a little bit more aggressive and stock some things we probably wouldn’t with John Deere parts because they can get it to us in 24 hours,” Schott says.

Freight costs are higher for these manufacturers too, and Schott says some are still sending hand written invoices. All of this plays into how he orders inventory and determines how much inventory to stock. Distance is a big factor, too.

“The farther away the vendor is, the more we have to stock because they can’t make a quick run. I mean if you have a supplier that’s a 2 hour drive and have a customer down, we’ll get in a truck and go get it. Well, if you have one that’s 2 states away, obviously that it isn’t going to happen. So all that plays a role in how we’re going to stock our parts inventory.”

Planning for the Future

Planning, whether day-to-day or more long term, is essential to Schott’s job.

“My calendar’s full for 6-8 months with tasks that I’ve got planned,” he says.

While Schott does not have to do much in terms of long-term planning — what’s going to happen in the next 5, 10 or 15 years — he is typically looking out 6-12 months. That’s been more difficult the last few years though. “The California drought has made it really hard to plan parts orders. I’ve been real gun shy here the last 6 months about the volume of parts to order.”

Looking ahead, Schott’s goal for the next year is to get Kern Machinery’s stocking criteria changed to be more aggressive and to correctly order more inventory when they need it. He’s working on getting the dealership’s Aspen business system software updated to reflect the new criteria, which will help the parts managers with their orders.

“I don’t have it balanced where it needs to be to get the numbers we need to have a higher fill and higher customer satisfaction that comes with that. I’ve committed myself to get this done this next 12 months. I hope to get it done in the next 60 days. That’s the thing on my shoulders right now.”

More Dealership Minds Profiles February 2016 Issue Contents