ATTN: GM PARTS MGRS RE: APRIL RSG UPDATE

[mbowers]

Until now, we thought that the changes in the recommended stocking guide affected only multi-line GM stores.

We heard today from a single-point Chevy store that has seen RSG compliance drop from a steady 91-92% into the low 70s.

The manager just got his RSG update for the second quarter and will have to add more than 150 part numbers to his inventory. That would be OK if the parts were fast movers. But they're not. A quick review of the list indicated some instant obsolescence.

How are other GM parts managers handling this?

[Rex]

Mike,
When you say instant obsolescence, do you mean based on that dealer's history, or from many dealers in the area? This is a curious subject to me because the concept seems so perfect, yet I see a lot of complaining about it. The program says the parts on the list are the ones that are the fast movers out of the PDC. Sounds good. Is it a lie? I know a parts manager who, before the combined lists, got the lists from other divisions and even from other PDC's and brought the parts in. He is at a large dealership, and maybe that just allows him to absorb it, but why would he go to the trouble if the parts were not sellers?

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Rex Vandermeer
www.dspower.com

[Chuck Hartle]

I see where Mike is going with this and I think he is absolutely right. One man's trash is another man's treasure. While large sales trends at the depot level are a good indicator for dealerships, it should not be the only indicator. Tracking total demand and lost sales and letting the part(s)phase in correctly based on customer demand is the best way period.
As a suggestion, setting up a non-factory source as a test source for all RSG parts and testing their demand with a liberal phase in of say 2 months sales in 6 months might be the answer. I think it is wonderful that GM supplies you with a list of their fastest moving, but the 90% stocking criteria for the 2% rebate is like putting the carrot in front of the horse's nose. General Motors should adjust that percentage based on the dealership size and location.
One other comment would be that if General Motors were so confident that these parts would sell and that all dealerships should carry them then offer the RSG parts as part of an "inventory protection" plan for the dealership. Allow the dealerships to send back RSG parts that don't sell for 9-12 months without penalizing the return allowance.
I have talked with several dealers over the past couple of weeks, both large and small. As you mentioned Rex, the larger dealers seem to love the RSG and have no problems but the smaller stores are caught in the pinch and cannot begin to carry some of the product on this list and comply. Any more thoughts on this out there?
Chuck Hartle'

[Garry House]

Hey guys..
See my message (Pon-Bu-GMC Hard Parts?). This dealer has only $100,000 to Invest; he has an experienced (but non-GM) Parts Manager, and they don't "BELIEVE" the RSG recommendations fit their dealership! I agree...if GM were prepared to "100% Protect" the dealer investment according to RSG, we would all be a lot more comfortable.
Garry House
NCM Consulting Division

[sallen1]

just back from a meeting an here's an interesting comment from a dealer...

He's a pretty good size wholesaler in the midwest and GM is pushing him to stock more part numbers. He also says that his local PDC is going away and feels like GM is making his warehouse (and expense) part of GM's distribution chain. Fortunatly, I'm out in So. Cal and our PDC is getting bigger. Perhaps GM learned from the strike that 'just in time' and 'daily deliveries' cannot happen from their end so they'll make the dealers provide the service. YUK!

[sallen1]

Another comment on the RSG issue. When we ran last months tape (march)our RSG dropped from a typical 95% to 80%. We picked up a bunch of new numbers for C/K thinking they were parts for the Escalade (we're Cadillac exclusive). The RSG incentive is good money for us so we ordered the parts. Then we got a bunch of bulletins stating a mistake was made and after the April tape ran, our number went back to 95% without the new parts. We're trying to get GM to take back the stuff we ordered last month without a hit to our reserve. They say they are working on it!

[cwalden]

March 1 when the new GM parts system came to be.Remember the big returns every one did when you could still pay a % to return inventory that wasnt moving?RSG'S are made
from PDC'S top selling parts in your area,all
those parts that you returned when you had the chance,where do you think those parts went?My guess is on the RSG list.
Our dealership(RETAIL PHACILITY)isnt doing
the guide for my area,i have given every part
number on the list a chance by posting a lost
sale on the part numbers that arent in my test source already and using lost sales religously.The % of the list that i stock is
constantly 48 to 50%.

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