Issue Date: Parts Manager May 1, 2010, Posted On: 5/5/2010
From the Parts Manager Forum GM parts manager finds a way to improve cash flow without increasing sales The great benefit of online management forums is that a dealership manager can get immediate assistance in solving problems from other managers who have already confronted the problem. Here's a case in point. General Motors has tests that parts managers can take to measure their knowledge of the GM parts system. One parts manager took the test and didn't like the results. Here's what he said on the DealersEdge Parts Manager Forum:
"I was under the impression that if you wanted to return parts over and above your return reserve you could do that. You would be charged a 35% restocking fee if you did it. I am not in that situation but I had a test question that related to this and they say I got the answer wrong. GM Parts Bulletin 09-212 is what I used as my reference. Did this change somewhere along the way that I missed it?"
Here's the question word-for-word:
Question: Two parts consultants are discussing the Parts and Accessories Return Plan. Consultant A says that dealers are prohibited from returning parts and accessories in excess of their earned reserves. Consultant B says that dealers NOT on DDS service with material applications that exceed 50 lb, should call Schneider Logistics for common carrier to local cross dock. Who is correct?
A. Parts Consultant A
B. Parts Consultant B
C. Both Parts Consultants A and B
D. Neither Parts Consultants A nor B
Gerry Laughlin, a parts manager and regular contributor to the Forums says, "Who cares?" I carry no "return reserve," I use GMs cash conversion option, then do a CSO MR11 return and pay the 35% using the money from my cash conversion to cover the cost. You have 12 months to return the CSO type 11. Doing it this way you can more than double your return reserve that can be used for CSOs.
Here's how I do it: Go to EPIC on GMGlobalConnect. At EPIC choose "Cash Conversion Election;" change it to "Yes." Then in the following month you will get 75% of whatever is in that account. Even though they only give you 75% in cash, it works quite nicely.
Let's say you have $1,000 in return reserve. If you take the cash conversion they give you $750. So even at a 35% restocking charge you can return $2,150 in CSO orders without spending any extra money.