Essay About Biggest Challenges And Parts Operations

Gettng on the Right Track at General Motors
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SECTION A
READ THE FOLLOWING CASE STUDY CAREFULLY AND ANSWER ALL THE
QUESTIONS THAT FOLLOWS
GETTNG ON THE RIGHT TRACK AT GENERAL MOTORS
“Our data tells us that the vehicle owners that dont have a satisfactory dealership repair
experience are only half as likely to buy that model car again.” Think about the
ramifications of that statement. If a vehicle owner has a poor experience with something as
simple as an oil change, that person is only half as likely to spend $30,000 or more on that
model of car again. That is quite the return on investment (ROI) for providing a good
experience for an oil change that costs about $50.
Bryan Burkhardt, global director of retail inventory management for General Motors (GM)
service and parts operations, made the above statement. Bryan very clearly understands
the relationship between after-sales and service and retaining the loyalty of a customer.
Unfortunately, left to their own devices, most parts managers at any of GMs 7,000 North
American dealerships overstock too many of the more commonly sold parts and seldom
have those on hand that are infrequently purchased. As Bryan explains, there is “not
enough breadth of parts, but way too much depth on the ones they do have.”
That “not enough breadth of parts” means that GM repair shops have been providing
customers with a satisfactory repair experience only 67 percent of the time. Bryan and his
team set out to change that and implemented a new inventory management system,
upping the satisfactory repair experience to 96 percent of the time. The new inventory
management system is a centralized, Web-based system that tracks inventory levels in
real time. If the quantity-on-hand for any part ever falls below 5, the system notifies the
parts manager and automatically routes an order for parts replenishment to one of 16
national parts distribution centres. The system can even accommodate regional
MMP 122 2/3
differences and keep more of certain parts on hand for dealerships in a given region of the
United States, such as more windshield wipers for dealerships in the northwest during the
spring. All told, the system tracks over 500,000 GM parts from 4,000 different suppliers.
One of the biggest challenges facing Bryan and his team is that each of the dealerships is
allowed to choose its own dealership management system, resulting in the use of 28
different systems. So far, the new centralized inventory management system has been
certified to work with only 6 of those systems. Because of the increase in productivity and
inventory efficiencies, GM is working with the new inventory management system to
provide certification for more of the dealership-