GM to automate parts supply chain

27.03.2006
General Motors Corp. is turning to automation to improve its distribution of auto parts to dealers, ending practices that produced a bumpy ride for its parts supply chain.

By the end of 2007, GM expects to have about 8,000 U.S. and Canadian dealers using the Retail Inventory Management, or RIM, system, which relies on intelligence gleaned from nationwide parts-sales data to recommend restocking policies at dealerships.

Today, GM parts distribution relies heavily on the judgment and practices of parts managers at individual dealerships, who typically wait until the end of the week to submit parts orders in batches. The result: A large percentage of parts orders arrive all at once at GM distribution centers, increasing overtime costs while workers rushed to fill orders.

"Our order variation from Monday through Friday was 21 percent. Monday and Tuesday, we're working overtime, and toward the end of the week, we're looking for volume," said Bryan L. Burkhardt, global director of retail inventory management at GM Service and Parts Operations.

Earlier this year, a pilot program involving 350 dealers and a regional distribution center in Jacksonville, Florida, showed the benefits of the RIM technology. Instead of operating as a batch-ordering system, the RIM system responded to actual daily demand, which cut the Monday-through-Friday order variance to 2 percent at that center, Burkhardt said.

More important for GM is ending the customer satisfaction problems created by its legacy ordering system.