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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 - 16:25
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"So far, the increase has been less than $10,000 for a dealership," Turvey says. "Overall inventory at those locations has gone up less than 3 percent, so the impact has been relatively minor. The only parts we're asking the dealers to have are fast-moving parts that turn five or six times a year."

For distributors, that means dealerships may shift more orders to GM. According to some early reports, some distributors claimed that the reduction could cause them to roll back their discounts for dealerships.

Turvey says that GM also has improved its parts supply chain so that dealers can get the parts they need for same-day repairs as quickly as possible.

"We've done a lot of things in the supply chain to match this as well," Turvey says. "The dealers agree to stock this small group of fast-moving parts, and in turn we agree to do other things like performing a second sweep through the warehouses, and having cut-off times for all orders depending on the dealer location. If you place an order after that cut-off time, and it's a critical order, we make a second sweep, merge it with the dedicated route and it will show up overnight. If the parts distribution center does not have that part, we will overnight it at our expense."

GM also has put additional SKUs in the facing distribution centers in order to better meet demand for the SLP parts. "We took what used to be fragmented orders to dealers from ship-direct suppliers, and brought those in house to give the dealers reliable and predictable response times," Turvey says.

Forecasting nuances

Although RIM will be used to manage same-day parts inventories, that program has not been without its problems. Over the years, parts managers have complained of quirks in RIM's stocking recommendations that can produce what they feel are illogical or inconsistent inventory levels, given the sales data feeding the program.

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