Wolf Motors Success Story

fanny masher, president of beast Motors, had just returned to his office by and by visiting the companys youthfully acquired automotive dealership. It was the fourth Wolf Motors dealership in a network that served a metropolitan domain of 400,000 people. Beyond the metropolitan area, but within a 45-minute drive, were another 500,000 people. severally of the dealerships in the network marketed a different make of car and historically had operated autonomously. Wolf was particularly excited about this new dealership beca employment it was the low gear auto supermarket in the network.Auto supermarkets differ from traditional auto dealerships in that they change multiple makes of automobiles at the same location. The new dealership sold a rise line of Chevrolets, Nissans, and Volkswagens. Starting 15 years ago with the obtain of a bankrupt Dodge dealership, Wolf Motors had grown steadily in size and in reputation. Wolf attributed this success to three spiritedly dependent f actors. The world-class was volume. By maintaining a high volume of sales and tour over inventory rapidly, economies of scale could be achieved, which reduced cost and provided customers with a large selection.The second factor was a marketing approach called the hassle-free acquire experience. Listed on each automobile was the one pricelowest price. Customers came in, browsed, and compared prices without world approached by pushy salespeople. If they had questions or were ready to buy, a walk to a customer attend to desk produced a knowledgeable salesperson to assist them. Finally, and Wolf thought perhaps most important, was the after-sale process. Wolf Motors had established a substantialness reputation for servicing, diagnosing, and repairing fomites correctly and in a timely mannerthe first time.High-quality service after the sale depended on three essential components. commencement was the presence of a highly qualified, well-trained staff of service technicians. Sec ond was the use of the latest tools and technologies to support diagnosis and repair activities. And third was the availability of the full range of part and materials necessary to complete the service and repairs without delay. Wolf invested in training and equipment to ensure that the trained personnel and technology were provided. What he demented about, as Wolf Motors grew, was the continued availability of the flop move and materials.This maintenance ca utilize him to focus on the purchase process and management of the service separate and materials flows in the supply chain. Wolf thought back on the stories in the newspapers business pages describing the failure of companies that had not planned suitably for growth. These companies outgrew their existing policies, procedures, and control systems. Lacking a plan to update their systems, the companies go through myriad problems that led to inefficiencies and an inability to compete effectively.He did not want that to po p off to Wolf Motors. Each of the four dealerships purchased its own service part and materials. Purchases were establish on forecasts derived from historical take aim data, which accounted for factors such as seasonality. Batteries and alternators had a high failure rate in the winter, and air-conditioner part were in great demand during the summer. Similarly, coolant was requisite in the spring to service air conditioners for the summer months, whereas antifreeze was needed in the fall to winterize automobiles.Forecasts also were adjusted for special vehicle sales and service promotions, which increased the need for materials used to prep new cars and service other cars. One thing that made the purchase of service parts and materials so difficult was the tremendous number of different parts that had to be kept on hand. Some of these parts would be used to service customer automobiles, and others would be sold over the counter. Some had to be purchased from the automobile manu facturers or their certified wholesalers, and to support, for example, the guaranteed GM parts promotion.Still other parts and materials such as oils, lubricants, and fan belts could be purchased from any number of suppliers. The purchasing department had to remember that the success of the dealership depended on (1) lowering costs to support the hassle-free, one pricelowest price concept and (2) providing the right parts at the right time to support fast, reliable after-sale service. As Wolf thought about the purchasing of parts and materials, two things kept going through his mind the amount of space available for parts storage and the level of financial resources available to invest in parts and materials.The acquisition of the auto supermarket dealership put an increased strain on both finances and space, with the need to support three different automobile lines at the same facility. Investment dollars were becoming scarce, and space was at a premium. Wolf wondered what could be done in the purchasing area to telephone some of these concerns and alleviate some of the pressures. How can supply-chain management concepts help John Wolf reduce investment and space requirements while maintaining adequate service levels?