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Mike Anderson

mike anderson autobody newsMike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.

 
Monday, 11 February 2019 22:37

From the Desk of Mike Anderson: It’s Time to Create New Parts Code

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So why not switch the parts code from alternative to OEM when transferring to the management system? One reason: Some shops offer some insurance companies a discount on OEM parts. So they may already be taking a hit by buying an OEM part but only charging for non-OEM, and then get hit again with the OEM discount to the insurer.

 

A third potential downside to all this for shops: It’s known that many automakers are moving toward using scorecards to evaluate the performance of their certified collision shops. Shops that are certified and have DRP agreements will be faced with the risk of coding an OEM part they use as an alternative part to not hurt their DRP score, only to have that hurt their scorecard for OEM parts usage with the automaker certifying their shop.


Some people will suggest that price-matched parts could be coded as “opt-OE.” But that label has become so convoluted and misused as a parts type category. Some automakers have an “opt-OE” part that they sell, for example, and others don’t recognize that label at all. The California Bureau of Automotive Repair has said “opt-OE” and “alt-OE” aren’t adequate as parts descriptors.

 

At the end of the day, I believe there’s a simple solution to all this. We need to recognize a new parts-type code in the estimating and management systems. If you price-match a part, you use that new code so your management and accounting systems recognize the sale and cost as an OEM part. You get accurate financial statements without skewing your OEM or alternative parts usage numbers with either an insurer or an automaker.

Now, some stakeholders in the industry may not want this to happen. But it’s not fair for shops to suffer from the current accounting nightmare and the risk of “being damned if they do, damned if they don’t” in terms of competing scorecards.

I’m imploring the organizations in our industry that can make this happen---the information providers, CIECA, the Collision Industry Conference, the trade associations, etc.---to make this a priority.

It’s time to make this change.


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