RSG's .......AGAIN

[Richard]

As you can see, I am angry at GM....AGAIN. RSG's....how can anyone justify these things? I have a $200,000 inventory, of which approx $32,000 is over 12 months. I recently did a return, and as I pulled, I watched the bin tags closely. (When I order RSG parts, they get a temporary bin of RSG). Almost 90% of the parts that went back were parts I had ordered for RSG compliance, that had NEVER sold. We are getting between $500-$1500 a month, but I honestly think we could do better without the RSG, and clean our inventory down to less than 10% Obs very quickly. How should i show that this is not a very good practice for this particular dealership, or should I do what someone else suggested, add another 50K of good inventory, and let that help hide the problem? (the last was a joke, btw).

OH....at at the 1st of the year, we get yet ANOTHER new PDC to move to. Which means anything we order now for RSG compliance, might be OBS within 6 monthes.

[This message has been edited by Richard (edited 10-27-2000).]

[DMuller]

Richard,
RSG...everybody hates it. Personaly I don't know anyone who thinks it's a worthwhile venture. However, I have found that some of the items I started stocking to meet RSG actually sold quite quickly. It's very hit and miss overall though.

If it weren't for the 2% CFI I would not even bother with it. But, I like the extra $40,000 a year it adds to the bottom line of my department. So, from that stand point I can deal with a few thousand in obso every year. I too use a certain portion of return reserve on these items. I actually return them to GM and wind up reordering them again to sit on the self another year. But, once again I'm money ahead in the long run.

Here's a suggestion, if you don't already do this, fulfill the RSG by stocking all the least expensive items. That way you minimize your investment and future obso exposure.

Dan

[This message has been edited by DMuller (edited 11-03-2000).]