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GM rolls out new parts initiative

Carmaker wants dealers to boost inventories of certain parts, order direct from factory
Tuesday, July 16, 2013 - 15:25
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General Motors has launched a new parts initiative that will increase inventories of select parts at dealer service departments, and will incentivize parts managers to purchase more parts directly from GM, rather than using sourcing from other dealers and wholesale distributors.

The voluntary program, which went into effect April 1, provides bonus incentives to parts departments that increase their purchases of the targeted parts, and increase the use of GM and AC Delco parts during repairs. The OEM hopes to increase same-day repairs through its Service Lane Parts (SLP) system, which will require dealers to boost inventories of a sub-set of parts that have been flagged as those most commonly needed for those repairs. GM has revamped its warehouses to make sure the parts can get to the dealerships faster, and will cover the cost for overnight delivery for orders that can't be filled the same day.

"When we take a look at the data, parts availability is one of the key reasons why customer vehicles don't get fixed on the same day or next day," says Tim Turvey, executive director of sales and marketing for GM North America customer care and aftersales. "Parts are a key issue."

Which parts will be needed at which dealer location will be determined via GM's Retail Inventory Management (RIM) system, which has been in place since 2005.

"We look at individual dealers and what parts have been used historically, and RIM lets them know what parts they should have in their inventory," Turvey says. "It's specific to every one of our dealers. We've carved out a group of parts that can be used in repairs that can be done same-day, and then designated them as service lane parts. It's less than 2 percent of the parts we hold a retail dealer accountable for."

GM also wants the dealers to purchase more parts direct from the factory. Currently, if a needed part isn't in stock, dealers may order parts from neighboring dealerships or from AC Delco wholesale distributors. GM has revamped its incentives to provide larger bonuses for those that order the bulk of parts direct.

In order to receive the bonuses, dealerships need to use GM or AC Delco parts on 70 percent of repairs, and purchase at least 70 percent of the dollar volume of service-lane parts from GM. Meeting the minimum requirements will pay a bonus of 0.25 percent of the total parts purchases. Dealers that reach 90 percent on those metrics can receive the maximum 4.25 percent bonus. Dealers also have to maintain 85 percent RIM compliance on stocking polices.

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