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The Cycle of Recycle - back in the yard

global market
Reducing your returns rate can seriously increase your profit.
In this second article, USA based auto recycler, David Vercauteren takes a look at what happens once the salvage gets back to the yard. Although written for the American market, this article, which we are running over three months is as valid for the UK auto recycler as his American counterparts. Read on, if you want to seriously reduce your returns rate!

Salvage is towed to the yard and the breakdown begins. Inventory‘s position is to critique the buy, not to find profit on the vehicle. Of course there is an exception in some hard to find parts, from high end vehicles that can turn a pretty bizarre profit if you know what they are. The inventory inspection must be very accurate with damage codes, with decoding parts and tags, and also looking over the salvage for anything the buyer may have missed.

This requires someone who has integrity and truth written in there soul. This is important to the Cycle of Recycling because the customer expects the truth and if they do not get the truth, they will return it. One more time, they will return it and that will cost you! A good inventory person will also think about the Physics of the crash to reduce the amount of damaged parts inventoried, much like the buyer thought when he did his projection of profit.

In some cases, an inventory person might not know if certain parts are undamaged and have the dismantler take a look to see if there is any damage. This is not a good idea unless the part is high dollar. You can’t expect a dismantler to make choices with an inspection eye if they are tearing apart vehicle after vehicle. Just don’t include the parts in the inventory and crush it. You’ll be glad you did. Now the vehicle is off to be dismantled.

Andy Latham
With a background in Operations for the Marine Corps and Corporate Sales, David Vercauteren headed into Auto wrecking as a salesman with no experience. He says he found that his returns were way too high and couldn’t understand why. Later JC Cahill, his mentor at the time, would place David in the inventory department to learn more about the backside of the house. He noticed that salespeople, the front of the house, didn’t talk to inventory people and inventory people didn’t talk to salespeople. Why is that? With a background in international operations, sales, and business, he noticed quickly the pros and cons of the local operations for auto wrecking in the area; everything from small yards to corporate yards. David started to visit the yards to see what was working and not working. Today, David is writing a pamphlet called The Inventory Monster to help yards come up with a good foundation for inventory projections on parts and developing open discussions at sales meetings.
Dismantling the vehicle is very important for further inspection of all engines, transmissions, transfer cases, axles, etc. Codes should be noted right then and there to avoid going back to the part to decode. This could be a super long section of recycling different metals, how to treat metals and oils, and where to put metals and fluids, but I’m not going to. What I’m going to talk about are doors, lids, hoods, and lights. These items are included in the projection of profit and should be treated with much care. I have seen dismantlers in some cases have to rack doors, lids, and hoods because they need the damage codes to stay the same and not go out into the yard. If your dismantlers are lead by someone who cares about their day and cares about the Cycle of Recycle, the item should make it there safely. This requires leadership. If you care about your dismantlers, they will care for the items they rack. Just the way it is.

Is this impossible? Nope. It’s a matter of ergonomics. Put the racks in the right place and everything becomes easier for the puller. On a side note, any salesman will tell you they would rather have salvage that just got to the yard before dismantling rather than grabbing salvage that has been around too long. So take care of the sheet metal and profits will show. Buying sheet metal from another company is, in most cases, just too risky. Personally, I would avoid this practice unless you know for a fact that the Cycle of Recycling is alive and well at their yard.

Headlights have become a personal interest of mine due to the fact they are not your everyday headlights anymore. They are expensive to replace, come with the salvage, and easy to repair if you know what you’re doing. Scan it to a location and let’s go!

The Parts Puller pulls; let’s say the door, from the rack to the beater truck. This is where things can get even trickier. They are pulling more than one part most of the time. With these high dollar doors, lids, and hoods, I would recommend sending the most caring puller to make quick single rides from the rack to QC, no doubt. Why risk it? QC inspects what the damage code is and looks over the sheet metal for damage. It’s important this person understands what damage codes are, what over spray looks like, what should be included on the door, and has a goal to send the “door” out, without it ever coming back. Ever!

If something isn’t right with the salvage, it must not go out. The salesman should be called, emailed, instant messaged, so that they can then contact customer to inform them of the discovery. The QC person must know how to reach each salesman immediately. Doesn’t take that long to do and could save tons of time and money. Just need someone who cares about the Cycle of Recycle and understands how to communicate, what the return rates are daily, and can understand how inventory sees damage codes. A good leader will put these folks together and from time to time when codes don’t seem right; help get everyone back on the same page.

In the final part of this series, David will look at the delivery of parts. Click here to read The first article.

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