To VOMS or not to VOMS...That is the Question
What is your opinion of General Motors' VOMS delivery system?
Inventory Manager: (laughter) If the damn thing would just work, it wouldn't be a waste of my time. The VOMS system, basically is the same distribution process they've had for years. The difference is that they've taken us from the factory having 300 or 400 people handling it during the course of the week and dumping it all on the dealer. So with VOMS, you've got 4,000 people online just in Chevrolet alone, you put another almost 5,000 people online and it just overloads the system. On Tuesday morning when this thing fires up, we sit and watch the hourglass. Sometimes it takes 25, 30 minutes to watch one order change. You get two, three, four hundred orders in a week, there's not enough hours in the day.
Mr. Dealer, how do you view it?
Dealer: From day one it's been an absolute pain in the ass. I can remember when they first tried to put the system in place, especially for a volume dealer like us, it was a nightmare. My inventory manager was here until two or three in the morning, two or three times, because the system was so slow. But the worst part was that it was not responsive to us. The worst part of the system is that it does not recognize transit time and if you're not near one of the plants, it absolutely kills you. We spent years and years building these big inventories to be a volume dealer and about 20 years is now flushed down the toilet.
You lost all the advantages you had being a volume dealer?
Dealer: Yes. For example, in the month of January I think we got 185 total units in and we sell over 500 units a month. Do the math.
How is this affecting your dealership?
Dealer: I can tell you that from a profit standpoint, it really hurts. From a morale standpoint it really hurts. I would think that if you asked one of your top five volume dealers, you would sit up and notice, General Motors, that you're probably costing yourself some volume in sales.
Inventory Manager: They'll come out a couple of months in advance and sit down and "consensus" with us, basically trying to get our numbers to match with what they want to give us.
So you're selling less cars, you're making less profit and the customer is not being handled as well as they were before. In your opinion, Mr. Dealer, how is this affecting GM's market share in your area?
Dealer: Well, of course, it's hurting the market share. In fact, that's what's so silly about the whole thing. They first instigated VOMS coming off the strike October or November of '98. Here we are all this time later and we have heard now for 14 months, 16 months, "It's gonna get better, it's gonna get better" and the truth of the matter is, it hasn't gotten better. So if your top volume dealerships, if their sales are slipping, and General Motors has always said that 20% of their dealers sell 80% of their volume, then I have no earthly idea how in the world they think they're gonna gain that 31% of the market that they claim they're going to try to recapture. I'll give you another good example of how screwed up the system is. In our market, there are less than ten GMC truck dealers. For the first 60 days, half of them have the new Yukon Excel and half of the dealers didn't have even one.
So what happens when a customer goes to their nearest dealership and they don't have it? What do they do then?
Dealer: They try another dealer.
But what if they went to three that didn't have it? Then they're going to go to a Ford dealer.
Dealer: Exactly. They're going to go for a Chevrolet dealer, or a Ford dealer or a Dodge dealer, but they are going to go somewhere else. And as every dealer knows, the worst thing that can happen is to have a customer come onto your lot, you don't have what they want and then have them go somewhere else.
Have you not seen any improvement at all? I mean, can you say that at least they're trying to improve it, it just hasn't come through yet? Is there any attempt being made that you can see?
Dealer: I'm still running now with about a 50-day supply of inventory, coming into the spring, the hot time of the year for us to sell vehicles, and quite frankly I'm very nervous about the prospects of us keeping our sales where we need to be. It creates all kinds of problems for us.
Can you at least see that maybe the idea behind the system was correct? What could they have done differently to make the current system work properly-or does the whole thing need to be scrapped?
Dealer: As far as I'm concerned, if they have been on the system this long and they're still facing the problems that they are, and we're still facing the problems we are, they obviously made a mistake with this system. I would just as soon they go back to the old system.
Inventory Manager: I don't know what they're using to calculate these days' supplies. There are dealers back East that have Corvettes. I see these things sitting on their ground for 100+ days. Out West, everybody is sold out. How they base their calculations on these things to spread their stuff out, I have no idea. It absolutely amazes me. I've talked to field people, they know there's problems. Nobody's listening to them either.
Let's back up a little bit. What do you think the purpose was in putting this system in in the first place?
Inventory Manager: My personal opinion, it's just General Motors' attempt to alleviate positions and take some workload off of their people, to put it back on the dealer.
Dealer: I agree with that. They've been using that approach for quite some time. Interestingly enough, on two different occasions, once I was asked to fly to Los Angeles, once I was asked to fly to Detroit to have two different meetings with Mr. Michael Grimaldi to explain to me that they now have the problem fixed-and I promise you, they don't have the problem fixed. Far from it.
Who's fault is it that VOMS is such a mess?
Dealer: I guess you would have to look from the top down. I have not had a fondness for Mr. Z since he came on board. I know that when a customer has a problem here at my dealership and he doesn't get satisfaction, he wants to come right straight to me and wants me to remedy the problem, so I guess I would have to point the finger and lay it right back in Mr. Zarella's lap. He's got a system that doesn't work and we've been on this for a long enough period of time and it still doesn't work. He could make that decision to tell somebody to remedy it, but evidently he doesn't have the ability himself to get it done, and the last time I met with him, he was really not nearly as concerned with the VOMS systems as he was in creating a system whereby a customer could order a car over the Internet and, within 10 to 12 days, that car could be delivered to the customer. And my response to him was, that's a bunch of bullshit. I can't get something within six months, yet a customer can get one in a 12-day period of time? You're looking me in the eye and telling me that you can build a car in a three and a half hour period of time and the customer can do it over the Internet? Hells Bells, man, I've got a big investment here, been with you a long time, why can't you give me that kind of service?
Well, that's just crazy. Do you think maybe they're thinking, "Well, gee, we're already entrenched in this thing and to start all over again would look bad?" I mean, how bad does it have to get before somebody in a position of authority says, "Wait a minute, we're screwing ourselves here?"
Dealer: I've been in the business over 30 years, I've never seen the perfect inventory system and I've never seen the perfect distribution system; however, generally I can at least have a lot full of vehicles. We don't have enough of anything now.
You're not just missing the hot sellers, you don't have anything?
Dealer: Exactly.
Inventory Manager: It's just the way the system works. It's like a roller coaster ride. They run you dry, then they load you back up and it just keeps going up and down like a roller coaster.
Dealer: And that was the very thing they tried to sell us on with this new system is that they would eliminate the ups and downs and the swells and the reductions in inventory. That's what this system was supposed to do.
Now it's worse?
Yes (from both).
Now, Mr. Dealer, you handle other makes and deal with other manufacturers. Compare some of the other manufacturers' delivery systems to this one.
Dealer: Well, some of the other manufacturers I handle ship their vehicles from all over the world, and we have not had a problem getting inventory from any of them.
They're shipping across the ocean and there's no problem?
Dealer: Exactly. It's because they still are using their tried-and-true system that they have used forever. Do we get some out-of-bounds situations? Yes. But we have never had a period of time with the other manufacturers where we have gone this long with inventory being so out of whack. GM should understand, surely by now, that they should have been able to fix this system. If they can't fix the system in this period of time, then there's got to be something wrong with the system.
Obviously you feel that the VOMS system should be done away with. Let's just assume for the moment that that's not going to happen. What do you think can be done within the current framework to make this system work better?
Inventory Manager: Right off the bat, build a different calculation process. Rethink in-transit units out of the mix so that way we're not handcuffed by vehciles stuck in the rail system. Coming out West, that's almost three weeks.
Okay. Let's say that that was addressed and was handled and smoothed over. What else would need to be tweaked?
Dealer: From the people that I have talked to at Chevrolet, they tell me that seems to be the primary problem and if they could correct the transit time situation, the system should work. However, it hasn't and evidently they haven't been able to do that. The other thing this system was supposed to do was to take control away from the regions and the zones so that nobody could tamper with the system. However, it's interesting that the brand managers seem to have a big influence on the system and when they have a certain area that they want to run a promotion in, they are able to, as they say, get inventory "that is not detected by the VOMS radar system." In other words, there seems to be a system whereby some people within General Motors can actually tamper with the allocation and where it's going and we're not sure how to get to those people and how to affect that, and that's the part that's been very frustrating.
I would think if anybody within GM was going to redirect vehicles, they would redirect them to somebody exactly like yourself, a volume dealer.
Inventory Manager: The best example is Corvettes. There's only so many cars per week that can be Millennium Yellow. We've got them backlogged, sold orders, so they automatically go out on Tuesday morning. You would think that over a period of about four or five months, that sooner or later one of them would come my way. I haven't seen one for quite some time. I have irate customers waiting eight months for a car and now I'm telling them they possibly can't even get it. I think they just funnel stuff, certain stuff to certain parts of the country and don't give a damn about the rest of us.
Mr. Dealer, do you have any thoughts on that?
Dealer: Yes, as the dealer, I question if they really do want to get 31% of the market. Nobody gets paid a bonus until General Motors hits that level, but it's obvious they have a system and a situation that they don't seem to be able to fix. Now if they have to hire an outside source, whatever they need to do, they need to go around the people that they have been using to get the problem corrected. It's hard to believe that they really could be that incompetent. I hate to use that word, but it's just hard to believe. It's just insanity to think you're going to get to 31% when you can't deliver the vehicles to those who are selling them and who have been doing the job for you. It would be interesting to have a map that charts where these inventories are. I promise you that if you're close to one of the plants, it spreads like a mushroom out from there, because of the lack of transit time that's not figured into the equation for this.
So Mr. Dealer, what should GM do?
Dealer: That's kind of like asking me if I had any idea how Chevrolet is going to overcome their restrictions on the NASCAR circuit right now. I don't know anything about racing NASCAR and likewise, I don't know anything about inventory control. All I know are the results and what pain it has caused us. No, I don't know how to fix the system, but I would just say that, good grief, if you've gone this long and the damn thing doesn't work, you've either got to be man enough to scrap it or make some major changes to the system. Plain and simple.
