Ford has one of the more liberal warranty parts scrapping policies in the industry. Because of that liberal policy, dealerships sometimes struggle insuring that scrap warranty parts are retained in an orderly manner.
Near the top of page 7-2 in the Warranty & Policy manual is this statement regarding the Parts Department's responsibilities:
"Stamp the work order to indicate when warranty return parts have been turned in to parts department."
While most of you are "self-scrapping" dealers, all that means is that you are free to discard parts that are not listed for return on your Parts Entry and Return System (PEARS) Daily Register. This does not override the requirement that the warranty scrap parts be retained until the PEARS report is generated. We are noticing too many dealerships that have to go searching, often under the technician's bench, when the PEARS listing requests the return of a specific part.
Lead warranty consultant for DealersEdge, Walt Ginther, tells me that he sees this policy often being ignored. "It is not only important because it is Ford's rule, but it is also an important part of shop control. Without getting the used parts back from the technician, there is no guarantee that the part was actually replaced."
Not having a defective warranty part on hand when it is called for will always result in a chargeback. Also, supplies of scrap or new parts in a technician's work area could be a sign of, or a facilitator of, parts theft. Remove the temptation and demonstrate control.
Just last year there was a reported instance of three technicians in Florida being arrested for selling stolen warranty parts on eBay. It was only caught when a parts manager in another state found brand new, OEM parts being listed and sold at a fraction of dealer cost. It seems the technicians were inventing warranty repairs, gaining the new replacement parts and putting them up for sale on eBay.
Here are four steps to help make sure this does not happen in your shop -
Step 1: Watch and control add-ons- The rationale for Ford's rule for add-on repairs is to have management exert some control over what repairs are performed without a customer complaint.
Step 2: Parts retention- As noted above, every old part that is replaced under a warranty claim needs to be turned in for retention. Some shops have gone to requiring the old part before releasing the new one. That can be a bit extreme, but it would assure that the technician is at least doing the work that is being claimed. If the part is not available, then service management needs to step in and note why it is missing (flew off while driving, etc.)
Step 3: Indicate scrap part receipt on the R.O.- As required by Ford, use a unique stamp or mark that indicates parts where turned in for retention. Get in the habit of never closing a ticket without proof that the parts are actually returned and on the scrap shelves.
Step 4: Scrap out every day- You might delegate this responsibility to the parts department, but service management needs to be actively involved with parts retention and scrapping. If you have a thief on your staff, you need to be made aware of it. Occasionally, conduct your own scrapping with a PEARS report. If you notice holes in your parts retention, that would be a good time to plug them. Sit down with the individuals involved, or even the entire staff, and stress the importance of turning all parts in.
Those four steps will help make sure you aren't the next victim being exposed for the whole world to see on eBay.