Corporate Support CenterDepartment Structure and Responsibilities

Loss Prevention / Risk Management

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Day 2Question from Day 1Operational Audit

SectionsPolicies/ProceduresFront End ControlsInventory ControlsHousekeeping

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Policy/Procedures

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ALI Vehicle Lifting Points GuideLocated either on the first two post rack or in a

work order pouch attached to the pre-set torque wrench set

Improper Racking

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$25,744.71

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All No visible tattoos No facial hair other than a neatly trimmed mustache No ear rings (Male) and one in each ear (Female) Side burns no lower than bottom of earlobe Hair neatly trimmed and off collar

Technician & General Service G&K uniform service Black pants/shorts, belt, socks and shoes Black diamond polo shirt

Management & Sales G&K uniform service Black pants, belt, socks and shoes Red short sleeve button down shirt Red long sleeve button down shirt required if there are visible tattoos

on arm(s)

Dress Code

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A mat and seat cover is to be placed in every vehicle Even if management and sales pulls vehicle

in/outTech or General Service associate may have to:

Start vehicle or operate controlsVehicle may be taken on a test driveVehicle may be relocated to alignment rackEtc.

Note: Make sure hands are washed prior to driving a customer’s vehicle

Mats & Seat Covers

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Check the oil, Check the oil, Check the oil  Prior to removing the oil, note oil leaks and any damage to drain plug or

filter. Make management aware of findings. (e.g. oil leaks or engine noise). Red Shirt associate must verify the oil filter to the application Any associate can verify the level on the dipstick (mandatory) Clean the drain plug and filter

After the oil change is completed; Lower the vehicle and start the engine. When proper oil pressure is obtained shut off the engine and check the oil level. Raise the vehicle and check the drain plug and oil filter are clean and tight.

Lower the vehicle and complete the Quality Assurance (QA) checklist. Note: If a customer returns, or has their vehicle towed in, claiming an oil out situation, check the oil level, filter and drain plug upon arrival with the customer present.

Oil Change Procedures

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Engine Failure Investigation

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Customer called and stated that they were driving when the engine failed. Vehicle taken to their mechanic for inspection. There is not any oil in the engine.

Customer Statement

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Vehicle arrived with no oil registering on the dipstick

Engine had a noticeable knockingEmployee did not inform his manager of

vehicle conditionOil filter had a double gasketOil blow back on underside of vehicle$1,405 for new engineAssociate received final counseling and was

retrained on performing oil changes

Findings

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What are signs of an oil out?

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Every “Wheel Off” is a potential fatality Torque chart“Stick It & Click It”Hand Torque with tires just touching floorEnsure all rust is removed with a wire brush.Wheel must fit flat against face of hub.No wheel modifications or spacers are to be

used—proper fitment is required.

Wheel Torque

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DO not like them and prefer to decline service

Knock Off Wheels

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Torque Chart

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Torque Wrench Testing

Test accuracy of every torque

wrench daily, it only takes a

second.

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Wheel off Investigation

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You just finished mounting tires back on the customer’s vehicle. The customer leaves your location. The next day the customer calls back and stated they were driving home when the front right tire came off their car. Their car went off the road and struck a guard rail. Another car struck the wheel and tire.

Write the appropriate comments you would say to this person: 

Customer Scenario # 1

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Customer stated that the driver’s rear wheel came off his 1997 Ford Ranger. There is damage to both sides of his truck. A couple days prior to the wheel coming off, he felt a vibration in the vehicle. He was planning on bringing the truck back to Kauffman Tire for an inspection, but had not made it back yet. The customer stated he was making a right hand turn when the wheel fell off of the vehicle.

Customer scenario # 2

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Struck concrete wall when wheel came off

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Installed 4 tires, rear brakes and one studVehicle only drove 394 milesOblong lug holes on wheelThread patters in lug holesMarks on one lug hole as wheel finally came

loose

Findings

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Location did not torque the left rear wheel.

Result

$4,546How could we have prevented this?

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What is repairable? Puncture must occur in the tread area of the tire at least 1

inch away from where the sidewall meets the tread. Puncture cannot exceed 1⁄4 inch in diameter, slits can not

exceed 1⁄4 inch in length. Tires that have a damaged inner liner and exposed

polyester carcass are not repairable. Tires with inner liner rubber debris are not repairable. Punctures must be more than 3” apart, no more than two

repairs.Only tires with serviceable tread depth of 4/32nds of an

inch or greater are repairable. Less than six (6) years old, up to max of eight (8) years

with thorough RMA inspection.

Flat Repairs

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Use cleaner fluid to clean and scrape area around puncture. Drill puncture with carbide bit installed on tire repair drill. Follow the angle

and path of the puncture. Install plug stem with cement until thick part of plug is fully in the drilled

hole. Trim plug just above inner liner surface. Buff area around puncture larger than the patch being used. Use a wire brush to remove rubber dust from area. Apply a thin and even layer of cement. Carefully remove the plastic coating from the patch being careful not to

touch and contaminate the rubber compound underneath. Install the patch directly over the injury.

Stitch the patch down starting in the middle and working your way out. Remove poly film cover.

Apply repair sealer all around the patch and any buffed area not covered by the patch. Trim the protruding plug flush with the tread surface.

Flat Repair Procedure

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Kauffman Tire primary focus is tires and related services. We do not want to get caught up services that can not be consistently performed throughout the companyList of approved servicesApproval process

Brian Pechin or Andrew BaileyDocument approval code in invoiceNever are valve cover or intake gaskets

allowed

Authorized Services

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Open Order Valid

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Open orders less than seven (7) days old (Tirepro 1-5-1)Change to “Quote” unless a valid appointmentAffects visible availability of product “F2”Do not use to hold product more than 7 days as

it will tie up product that can be soldInvoice ALL “No Charge” or “Warranty/Come

Back” orders and have them signed by customer

Open Work Orders

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PCI ComplianceApplications & Resumes

Must be secured in a locked file cabinet at all timesCredit Applications

Must be secured at all timesSend to corporate office weekly

At no time can a customer’s credit card information be written on an unsecured documentTake number over phone and process in credit card

machine at that timeNever write on Work Order or Invoice

Non compliance could result in losing the ability to accept credit card payments

Identity Theft

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“Let me speak to your manager. I was reviewing my credit card account and noticed that someone used my credit card to purchase $1,252 at your store. HOW COULD YOU HAVE ALLOWED THIS TO HAPPEN!!!!! I bet you it was one of your employees.”

What would you do?

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Listen first, don’t talk They are mad at the situation and not you personally, even if it does

not feel that way Do you have a moment for me to gather some information?

Name Location of service (i.e. 3 Suwanee, Ga. locations) Date Amount

Have you contacted your credit card company to dispute this claim? Have you contacted the local police department to file a police

report? We are not able to give account or customer information to anyone

other than the actual customer We will fully cooperate with the police and credit card companies to

resolve this very unfortunate situation

Possible Responses

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Who is eligible to receive the discount Employee Employee’s Parents Employee Dependents

Tire/Wheel Purchased at cost plus installation and fees

Parts/Services No carry outs 25% off menu prices

Anytime a vehicle is in the shop it must have a work orderEven if an employee works on their own car they must pay above

pricing structure Employee discount program and promotional offers cannot be

combined All work orders MUST be invoiced!

Employee Discounts

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Clock-in and out Lunch punches

Any employee working five hours or more must clock out for a minimum 30 minute lunch

“Lunch Out” iconManual punches

At end of week print time card, have associate sign it, and then file at store level

Vacation Requests

Time Cards

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Radio Shack 5.8 m suit

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Maintain Manifests for 36 monthScrap TireWaste OilUsed FilterWater Separator, if applicable

Hold pick-up copy until fully executed copy is receivedGeneratorTransporterProcessor

EPD Regulations

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Generator

Processor

Transporter

Scrap Tire Manifest

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Generator

ProcessorTransporter

Waste Oil/Filter Manifest

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Customer Supplied Parts“CSP”

NEW Tires (major U.S. domiciled brand), light bulbs, wiper blades and engine oil (Meet or exceed O.E.

standards and be in original factory sealed manufacturer container).

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From time to time a customer may ask us to hold their wheels, tires, etc for pick-up at a later dateInform customer that you would be more than

happy to hold them for up to seven (7) daysMark them appropriatelyStore them as to avoid damage/theftIf not picked-up with in seven (7) days you need

to contact the customer for a status updateDocument each contact with customer

Discard if no customer contact or pickup after 14 days.

Customer Take Offs

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What do you do if a vehicle appears in your lot or a customer fails to pick up their vehicle?Make every attempt to contact the customer regarding the

removal of their vehicleMoney owedVehicle never entered a service bayAbandoned vehicle process

Contact Loss Prevention to start the abandoned vehicle process if no contact with customer for more than seven days

Negale will attempt to make contact with customerContact local law enforcement to see if vehicle has been reported

stolenIf not already, towing company sign will be installed at least 24 hours

prior to removal of vehicleTowing company will process abandoned vehicle, collecting any money

we are owed.

Abandoned Vehicles

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Front End Controls

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Drawer & safe should be locked at all timesDo not leave keys unattended at any time.Cash drawer is to be balanced prior to

opening and after closing dailyAny variance of +/- $1.00 need to be explainedLegibly document actual bill and coin totals

Ending cash on-hand recorded on EOD

Cash Drawer & Log

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Print End of Day Report (Tirepro 3-4-2)

BalanceCredit cardsCashChecksChargeROAPaid Outs

End of Day Process

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If there is a variance it needs to be documented under “Notes”Including Support Center ROA’s payments

End of Day Variance

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End of Day Report

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Send to Accounting at least twice a week.

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Required to be made on a daily basisSecured in safe until taken to bankLegible deposit slip

Note: If your location is making deposits through “Night Drop” you need to pickup deposit slips every few days to ensure the accuracy of the deposit

Deposits

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Kauffman Tire uses Certegy to guarantee customer checksFollowing information is required and must be legible

No counter checksPre-printed with customer informationPhone NumberStore number (i.e. “G46”)State of drivers’ license issuanceDrivers’ license numberDate of birthCertegy authorization numberSignature

Deposit stamp must be immediately placed on back of check, prior to placing in the cash drawer

Check Processing

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Correct Example

(404) 555-1212

Kauffman TireSeven Hundred Sixty Two and 94/100

John Doe

762.94

Tires and Oil

4/25/12AP342981GA

2-26-68DL1234567890 G46

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What checks are to be processed through Certegy for approval?All checks are to be processed through

Certegy, even if it is a business.Even business checks need the required

information for approval.If the check is declined then it can not be

accepted as a form of payment.

Certegy

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Receive call from Accounts Receivable Department that check has been returnedContact customer and inform that check was

declined and arrange payment within 7 daysContact Maleah Napier if payment is received

Check Returned NSF

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What do you do when the work has been performed and the customer’s payment method has been declined?Ask if they have another form of paymentSuggest applying for a Kauffman Tire credit

cardIf all else fails contact your District Manager

for direction

Payment Declined

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Process on day of purchaseProcess daily and change ending cash on hand

to reflect actual amount in tillParts and towing charges need to have the

work order number referenced on the receiptThe receipt must be signed by the individual

processing the paid out (giving cash out of drawer)

Mileage, fuel and meals need to be submitted on an expense report to your District Manager

Paid-outs

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Parts for customer vehicles

The work order number should be listed on parts invoices

Cost needs to be updated in invoice

Initials of associate giving cash out of drawer

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Store Purchases

Initials of associate

giving cash out of drawer

Must be processed on same date as

purchased

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Reference the original order number in the return

Manager or Assistant Manager must review and sign every refund verifying the accuracy

File with daily invoices

Refunds

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What Is One Of Our Most Important Legal

Documents?

Work Order

A customer’s invoice is a legal reflection on the service(s) we performedAccurate information

Customer, vehicle, services, recommendations and notes

Recommendations and pricing updated from work order

What was found

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Invoice accuracy

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Entire DOT data must be accurate, as it is filed electronically for customer

Verify all customer and vehicle information is accurate

Update tag to vehicle being serviced

Any red shirt who verifies the actual filter application should initial

Any associate, other than one performing service, who verifies level should initial

Document accurate condition of car after services completed

Federal RequirementAt Kauffman Tire we electronically file every

tire DOT number for our customers at no chargeVerify customer’s current addressAccuracy & Legibility of “DOT” numbers are

imperativeUpdate accurately into orderIf more than one DOT number, list each

separately

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DOT numbers

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Full

Partial

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Must have a copy of “State of Georgia Department of Revenue Sales Tax Certificate of Exemption – Georgia Purchaser of Dealer”

Sales Tax Exempt

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Why do you use them?Why not use a discount code?POS Audit Report (Tirepro 1-5-5)

Price Over-Ride

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Inventory Control

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Inventory Control Stock Status (Tirepro 4-6-1) Adjustment Procedure Quick Stock Count (Tirepro

1-5-12)

Inventory Transfers (handling and cleanup)

Excess Inventorywww.ktintranet.comShop Management

Quick Count (Tirepro 1-5-12)

Compare actual number of new tires in location to system

Cycle Count (Tirepro 4-6-1)A count of specific manufacturers

Full Inventory (Tirepro 4-5)Every new tire in the location is verified and

compared to the System inventory

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Three Types of Inventory Control

Stock Status report

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Stock Status Report

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Intercompany Transfers - StatusOPEN STATUS – G43 TO G90

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Intercompany Transfers (cont)IN-TRANSIT STATUS – G43 TO G90

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Intercompany Transfers (cont)COMPLETED STATUS – G43 TO G90

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Intercompany Transfers (Audit item)Intercompany transfers must not be left in

“Open” status for any period longer then four days. This will help to ensure that inventory is available to be sold!

In-transit transfers must be completed immediately when the merchandise is received at the location.

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Transfer DiscrepancyMost often, a transfer discrepancy occurs

when a “buying” location receives tires from the “selling” location in incorrect quantities (over/short).

Tires that are short received ARE NOT put back into the selling location’s inventory without a manual adjustment.

Transfer Discrepancies print automatically to the selling location’s printer.

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Transfer Discrepancy

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Receiving an intercompany transferMatch physical quantity of tires received to

tires delivered from selling location.Circle quantities on transfer documents.Transfer document should be signed by

driver who delivered tires/red shirt who received tires.

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On-hand adjustmentsManual adjustments to inventory can only be

done by District Managers and Loss Prevention team.

All variances should be adequately researched prior to making adjustments.

If variance results from transfer discrepancy – it should be corrected in the same manner when possible.

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Tire Storage Area OrganizationEasiest way to prevent variances is to be ORGANIZED!

Tire Storage Areas should be organized by Brand, type, item number – this makes it easier and more productive to pull tires while reducing the opportunities for errors

All tires MUST be labeled and the label must be facing outward on the rack.

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Run on tire(s) not processed through manufacturer adjustment process and placed in racks

Pre-sold tiresTread Depot Outside Purchase Tires (OPT)UnorganizedCounted wrong on last inventoryTires actually installed on vehicle are not invoicedWrong tire installed on vehicleReceiving error/mis-labelTransfer discrepancies not researched and corrected

(Tirepro 10-2)

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Causes of Variances

Define Manufacturer AdjustmentsDefine Road Hazard AdjustmentDefine high treadHow do I create and adjustmentStaging adjustmentsAdjustment / high tread pick-upClaim Journal (Tirepro 1-5-7-12)

Research / Follow-up

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Adjustment Tires

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Manufacturer Claims Journal(TirePro 1.5.7.1)

Look in employee history to see what they paid for the tire.

Calculate the adjustment based on what they actually paid.

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Employee Adjustment Tires

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2013 Retail Cycle CountsJan/Feb Mar/Apr May/Jun Jul/Aug Sep/Oct Nov/DecCooperMastercraftStarfire

GoodyearDunlopKellyKumho

ToyoMichelinBFGPirelli

Cooper MastercraftStarfire

GoodyearKumhoPirelli

ToyoMichelinBFG

• Cycle counts are performed every 60 days during the operational audit

• Retail stores will continue to submit weekly quick count data to Negale Brown in Loss Prevention

• Full Inventory will be performed based on (Weekly quick count data, investigations or cycle counts)

Organize by Brand, Model and SKUSpeed RatingSidewallSize

All labels facing outIf a label is missing, label tire accurately

ManufacturerBrandSizeSpeed RatingItem number

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Tire Stockroom

Kumho KR21

225/40R18 95V

# 1234567

An unorganized stock room can lead to a sales screen that you can not trust…Tires pulled incorrectly

SizeSpeed RatingWhite wall versus black wallLoad index

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Tire Stockroom – Cont.

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Which would you trust?Unorganized

From time-to-time, Kauffman Tire locations will need to purchase tires from and outside vendor t satisfy a customer’s request.When the tire is delivered to the location inspect the

tires and compare them t the actual invoice.Make a copy of the invoice and send the approved

original to accounting via inter-company mail.Attach the copy to the outside purchase tire if it is not

installed/sold within 24 hours.Place the tire in a segregated location.All outside purchase tires will be returned to the

vendor if not picked up/paid for by the customer within 14 days.

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Outside Purchase Tires

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Tires older than 4 years

The 51st week of 2015

What is the last week you can sell this tire?

Try to sell what is in your house if at all possible“Open” status“In-Transit” status“Completed” statusDiscrepancy

How createdWhat PrintsResearchOn-hand adjustment

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Transfers

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Transfer Discrepancy Report What is a transfer discrepancy

report? How do I get one? How do I research it?

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Housekeeping

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Shows customers and employees that you take pride in your location

Customers notice a clean location and appreciate that the same attention will be given to their vehicle

Housekeeping and Safety go right along with each other

Housekeeping Section

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Do you want to meet with a customer in this office?

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Good housekeeping shall be maintained in the showroom, shop, and parking lot. At a minimum, the following requirements must be adhered to:  Aisles and passageways shall be kept clear of tripping hazards Trash shall not be allowed to accumulate and must be removed Appliances, counters and manager’s office clean and organized

Would you be proud to discuss a customer situation in your office? Cleanliness and organization Smell (food, trash, etc.)

Tool boxes cleared of clutter above and below Rest rooms

Trash emptied daily Paper products and soap dispensers full Rinse sink when washing hands

Housekeeping

Never allowed

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Sidewalks/Bay Entrances Do not sweep or wash debris from shop to exterior of building Shop floors must be cleared of debris and spills. Place wheel weight bucket near balancer and tire changers so

removed weights can be thrown directly in to bucket, not on floorEquipment must be cleaned daily

Do not stick tire labels to equipment Pressure gauges and tire equipment must be clean and in good

working order at all times. Oil change pans must be cleaned and emptied as soon as

practicableLights (Interior, Exterior, Signs and Emergency Fixtures)

Housekeeping – Cont.

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Must be empty unless in use!Brown in color

Mop Bucket

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Hidden Hazards #1

Trash over flowing Oil and oil dry

not cleaned up

Tool and hose creating trip hazard

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Hidden Hazards #2Mop bucket blocking electrical panel

Access to eye wash and water fountain blocked

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Hidden Hazards #3Wheel weight bucket is right there

Missed bucket and will get swept up and thrown away

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Now that looks good!

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Make good housekeeping skills a part of your daily routine. Before beginning work, look around your

workstation for unsafe conditions. Your prompt action can prevent an accident.

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Opening/Closing ChecklistNo radios and cell phones in shop

Includes no use ear phonesPlease pull cars to the curb for our Elderly

customers

Misc.

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Lot to Remember?

Questions&

Answers108