Case Study: Specialized Logistics Solution Enhances GM’s Warranty Parts Recovery Process
Automotive industry is witnessing a high competition in recent years. Every automotive manufacturer is continuously seeking to enhance products and customer service. The automakers are also recognizing the need of fuel improvements by revving up the reverse logistics of materials recovery.
These automakers face challenges to build ease and accountability into the supply chain especially for warranty parts, and increase efficiency in the root-cause analysis process.
One such company automaker is General Motors (GM), a vehicle manufacturer driving its business results by making innovative vehicles. Engineers working for GM closely monitor the trends of warranty parts repairs to make crucial decisions about parts, requiring analysis. The logistics process is very challenging for GM as the company receives various parts from approximately 9,000 dealers in Canada and the United States. Plus, it gets some additional parts from other countries too.
Previously, GM dealers used to package these parts, address them to the designated suppliers at more than 200 locations, and then take them to a post office by paying the shipping costs. This process required GM to repeatedly communication with the dealers and suppliers to track these parts. As the process was very hectic and time consuming, GM was looking for a solution to save time, cost and increase the efficiency.
“We wanted a more responsive process with flexibility and accountability built in,” said Gary Smits, GM Manager of the Warranty Parts Centre.
To boost business performance, GM selected UPS Supply Chain Solutions to deliver an accurate solution for its materials recovery of parts which are under warranty, a key factor to reduce costs and enrich customer satisfaction.
UPS Supply Chain Solutions offered GM solutions right from door-to-door package delivery to inventory management. Also, the technological advancement enabled GM to streamline and control its supply chain. Advanced process and analysis centre serve as the engine powering the whole process engineers and suppliers conveniently.
This implemented system generates electronic reminders to every dealer for up to 28 days and creates a month-wise debit file for the cost of repair work if any part is not returned. When a part arrives at the Warranty Parts Center, it is audited on the basis of data pre-loaded into the system, having bar-coded label, and placed in inventory for about 60 days.
“Our engineers and suppliers are very pleased with UPS Supply Chain Solutions,” said Smits. “We concentrated on the new vehicle launches this past year—a very important area of the business. Their system enabled us to request 100 percent of the identified parts for newly launched vehicles, and we returned them quickly.”
Along with these benefits, the UPS system improved recovery time of materials from 3 to 10 days, increased dealer return rate from 60 to nearly 90%, enhanced visibility of root-cause analysis results and helped to speed up product enhancements.
“With UPS Supply Chain Solutions, we’re driving resolution time down, and that’s helping us stand out when it comes to customer satisfaction,” Smits said. “They keep making improvements in our logistics and supplychain processes so that we can focus on making improvements in cars.”
Neha writes articles on sectors including medicine, food, materials, and science & technology. A qualified statistician, she has the ability to observe and analyze the trends in global markets and write compelling articles that help CXOs in decision making. She is a bookworm and loves to read fiction, lifestyle, science and technology. Neha comes with 6 years of experience in content writing and editing that involves blog writing, preparation of study materials and OERs.