Loyalty in Parts
By John Hennessy, Vice President, Concept Shopping, Inc.
“At heart, it’s about enhancing the ownership experience, and keeping those customers in the GM camp.” That’s how Bryan Burkhardt, global director of retail inventory management for GM service and parts operations, summarized a new General Motors (GM) parts management system.
“Our data tells us that the vehicle owners that don’t have a satisfactory dealership repair experience are only half as likely to buy that model car again,” Mr. Burkhardt told Information Week.
Prior to the new system, parts managers found themselves out of less frequently used parts. The result was GM’s parts department being able to satisfy the parts needs of its repair shops only 67 percent of the time.
In pilot implementations of the new system, parts requirements are satisfied 96 percentage of the time. This was due to: tracking parts used each day, comparisons to national and local parts use averages, adjustments for regional requirements and automated re-ordering.
Moderator’s Comment: How is (should) customer satisfaction be considered when companies are contemplating an operational improvement? How can businesses,
specifically retailers, communicate those improvements and their benefits to consumers?
While classified as an inventory management system, this is really a customer listening post. The system listens for the parts GM customers need; then works
to make sure those parts are available.
Considering customer benefit in planning and evaluation, operational improvements can increase the impact of those improvements.
When this program rolls out, GM should support it with a major marketing initiative around the reduced turnaround time for repairs at GM dealerships, as
compared to other dealership organizations and repair shop alternatives. In this time-starved economy, there’s something there. –
John Hennessy – Moderator