Appendix I: Definitions
Appendix II: Organization Charts and information
Appendix III: Implemented opportunities
Appendix IV: Extra assignment: Culture versus
Business Process Improvement for U.S. Military
Appendix V: COMPANY DEF Authorization forms
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Appendix I: Definitions
Authorized military customer
(i) "Authorized Exchange Customer": U.S. military and civilian personnel who, at the time of purchase, are (i) stationed overseas and (ii) entitled to exchange privileges pursuant to Department of Defense Directive No. 1330.9. Authorized Exchange Customer shall include Navy personnel aboard deployed ships.
(ii) "Authorized Diplomatic Customer": (a) any U.S. citizen or permanent resident alien of the U.S., who at the time of purchase, (i) is an employee of the U.S. Department of State or any U.S. Federal Agency, (ii) is serving an overseas assignment; or (b) the current spouse or dependent minor child (either natural, adopted or foster), who is living overseas with such person as defined in I. C. (ii)(a), or (c) any overseas based foreign embassy official of an Authorized Country scheduled for a future assignment to the United States.
(iii) "Authorized Expatriate Customer": A customer who is either: (a) a U.S. citizen or permanent resident alien of the U.S., who at the time of purchase, (i) resides overseas and has resided overseas for a minimum of 120 days prior to the sale of the vehicle by COMPANY DEF, (ii) is employed overseas by a corporation, business or international non-profit organization such as the World Bank, United States Agency for International Development or the World Health Organization, on a temporary basis; and (iii) is scheduled for future return or reassignment to the United States; or (b) a foreign national who is scheduled to transfer or relocate to the United States for a minimum period of 120 days.
Warranty claim systems
During the course of preparing this thesis, different kinds of warranty systems were named but not specified. This will be completed in this section.
GWA: (Global Warranty Applications)
GWA is the home page where all of the systems cited below are found. In addition to these links, GWA is also the place to come for all Claims Authorization, Chargeback’s, Vehicle Information updates, Part Price Inquiries, Parameter Maintenance, Coverage code
information.
WIS: (Warranty Information System)
Utilized to measure quality improvement. Source for EPUS (Expense per Unit Sold) WDSS: (Warranty Decision Support System)
WDSS is a Web-Based system that is used to run reports on claim data directly from the mainframe. In the event that potential warranty waste has been identified, this system gives the user the power to run reports to better summarize dealership activity. With an accurate view into the number of claims submitted, the dollar amount of each claim and any other attribute (parts, labor, etc..) of claims can be tracked in the system.
DWIN (Dealer Warranty Information Network)
The DWIN system is used to compare dealer warranty activity with other dealers. Claim data is “normalized” to better understand warranty activity within a market, region, country or district. DWIN generates reports for the Country manager to use to identify potential problems. Some of the reports in DWIN include:
Actual Time - searches for high cost repairs with regard to labor.
DARE - Dealer Above Region Expense. This report identifies were a dealership
stands with regard to the rest of the dealers in the comparison group.
POPPS - Process Overview and Potential Problem Summary. This report guides a
dealer in the “out of line” areas based on claim data for the prior months activity. The dealer uses this report to perform a CAP (Claims Analysis Process) within the dealership.
3 WDSI: (Warranty Dealer Service Information)
WDSI is not just a place to control dealer labor rates and parts mark-up. This system is a powerful tool that effects claim submission, payment, authorization requirements and restrictions. Previously discovered potential waste can be halted before the claim is paid or even submitted with the proper use of program codes, claim type and labor operation restrictions.
GCS: (Global Claims System)
This system is the heart of claim submission. Claims are edited against Parm tables, WDSI information and message codes that look for potential errors on the claim itself. In the event that an error is found, a message code is applied to the claim and it is rejected and returned back to the dealer. Authorization requirements control how and if a claim is paid after it has been rejected.
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Appendix II: Organization Charts and information
II.1 The Company ABC Group
The preceding paragraphs in this chapter were given to present the broad Company ABC perspective. As stated in the historical overview and the company structure, as well as in the reasons for the merger, the and Company ABC part of the organization have some shared functions throughout the company, but are certainly not totally integrated.
This is why the focus is on Company ABC. The research addresses Company ABC, Jeep and Dodge vehicles that belong to the Company ABC division of the Company ABC organization. This
difference is furthermore important because it is a main driver for this research as can be seen in 2.1. After initial information about Company ABC, further focus will be on WEU/S.
WEU/S is the main focus of this research and it plays different roles and has varied responsibilities to the Company ABC organization. To provide a complete picture a short description of the two most important departments are provided.
II 1.1 Global Service &Parts International (GSPI)
A division of this Company ABC part of the Company ABC organization is Global Services & Parts. This division consists of 28 people located throughout the world, with a majority located at the
Company ABC headquarters in Auburn Hills, U.S.A. The GSPI organization supports the international Company ABC market organizations for the Company ABC, Dodge and Jeep brands in achieving their national targets in the field of service and parts.
The Western European Services and Parts Department (WEU/S) officially falls under the umbrella of GSPI and has a financial and reporting responsibility to the GSPI director located in Auburn Hills. The responsibilities and structure of GSPI can be seen in the organizational structure in appendix 2.
II.1.2 Company ABC Group Western European Region (CG/WEU)
The CG/WEU department is located in Stuttgart and is also dedicated to the Company ABC group (CJD). Due to the international focus of the WEU/S department and the obvious relationship between the after sales with sales focus of the CG/WEU department (see also chapter 4.1), there is a functional and practical relationship between the WEU/S and the CG/WEU. There is no financial responsibility, but a “dotted line” responsibility to the CG/WEU director located in Stuttgart. Perhaps because they do not belong to the same financial reporting structure, sales and after sales are entangled and thus influence each other. WEU/S and sales from CG/WEU are located next to each other physically, have a lot of contact and share and combine information, which is focused on the European Company ABC Jeep and Dodge market. The responsibilities and structure of CG/WEU can be seen in the
organizational structure in appendix 2.
II.1.3 Western European Service and Parts Department (WEU/S)
It is in this department where internship takes place. The current WEU/S department, comprised of seven people was initiated in early August in 2006. The organization did exist in any other form and was located in Brussels before relocating to Stuttgart.
The WEU/S organization supports the European national Company ABC market organizations for the Company ABC, Dodge and Jeep brands in achieving their national targets in the field of service and parts, and addresses after sales.
This after sales market management for Europe is divided over different managers. Each of these managers covers numerous countries or/and MPC’s, which they support as illustrated in the department structure figure. The countries and MPC’s are distributed over the managers so that each manager has approximately the same workload to cover. Further information about the WEU/S department and the justification for this research can be found in 2.1. The area where most of this research concerning the U.S. military after sales process takes place is highlighted.
5 The WEU/S department target responsibilities are tied to seven focal points.
First and second, parts revenues and the group contribution targets;
third and fourth, the Customer Satisfaction Index (CSI) and the Fixed First Visit ratio (FFV); fifth the warranty payments; and sixth and seventh the service contract contribution and service training success ratio.
These points or targets are at the foundation of this research, as can be seen in chapter 2.1. Amongst the central reasons for this research are the focus points and strategy of the WEU/S department.
II.2 Market Performance Centers and Distributors
In order to possess focus, control and support, markets have to be divided into manageable size. For Company ABC in Europe, this usually means the size is a country as a whole, but this is not always the case.
When reviewing these markets, there are several options concerning responsibility and support. First, CJD vehicles (import) must be available to the market, second selling the vehicles, and third present market vehicle servicing..
The first option is that there is a responsible Company ABC Market Performance Center (MPC) present that is responsible for importing, selling and servicing the specific country. Thus, supporting the local dealers present in that country and as stated, this is the situation for most European countries. Sometimes, the current volumes and/or potential of a country in the future is not significant enough for such an MPC to take form and other options are more efficient or cheaper for Company ABC. There are two ways to deal with smaller volumes.
The first is that there support exists from an MPC, but this MPC covers more than one country. This is the case with Company ABC Denmark and Sweden. In this specific case, the MPC has to literally cover a lot of ground, but it should be seen as an exception rather than rule. There have been plans to integrate other countries the same way but these plans were not initiated because the potential advantages were did not outweigh the costs.
The second option is to license an independent distributor to do the business for Company ABC and take the role of MPC in providing import, selling and servicing support to the dealers. This can only be successful if markets are too small and an independent distributor proves to be more efficient and cost effective. For Europe, this is the currently the situation in Ireland, Finland and Portugal.
The most important difference between these two options is that the import price for the distributors is lower because they have to complete the guarantee themselves. These are considered costs and are included in the price when a car is delivered to an MPC.
II.3 Official Company ABC Jeep and Dodge Dealers
As stated, the MPC’s or distributors main priority is to support the official Company ABC, Jeep and Dodge dealers for their specific area.
It is not easy to become an official dealer and it is even more difficult to remain one. There are many standards and rules that have to be met on a continual basis if the official dealership is to be
maintained. Service standards have to be high and a certain number of cars must be sold per year to remain an official dealer.
For an official dealer, Company ABC provides the dealers with valuable and experienced support in areas like marketing, after sales, financial management, IT and training. The dealer has access to and
Service & Parts International S&P Senior Market management Service & Parts
Market management A, CZ, NL, CH
Service & Parts Market management B, ES, UK, IRE, P
Service & Parts Market management DCAA, DCSCA, N, PL, FIN,GR
Service & Parts Market management F, D, I, COMPANY DEF Parts Accessories Marketing WEU/S department
6 is supported by the experience and expertise of the Company ABC MPC’s in its business, which is a great advantage to other garages and competitors.
The official dealers on the other hand provide Company ABC with valuable customer information. Input is encouraged to aid in improving the business and in turn it affects the whole organization. Official dealers can implement new ideas developed by Company ABC management. The dealers can in turn provide valuable feedback on the success or failure of approaches created by Company ABC management.
II.4 Overseas Military Sales Corporation
Next to the Company ABC organization and the focus within this organization, insight is needed into other relevant actors, which will be investigated throughout this research. The generation of
information will provide a better understanding of the after sales processes and relationship Company ABC and WEU/S have with the OMSO group. In this section, the OMSO group and the exchange relation managers, as part of the OMSO group, will be described. It is with COMPANY DEF GmbH that the WEU/S department has the most contact in providing overseas U.S. Military customer after sales service.
II.4.1 The OMSO group
The OMSO group consists of several companies and has their head office based in the USA. Within this group, the companies are independent entities and there is no sub-ordinate relationship between them. For this research, three OMSO locations are of importance and one in particular, COMPANY DEF GmbH. OMSO is the only factory- authorized distributor for Company ABC, Ford, Harley Davidson and Buell to U.S. Military personnel stationed or on temporary duty assignment abroad for at least 30 days. COMPANY DEF sells to the Army, Navy and Air Force personnel who meet the requirements specified in appendix 1. The OMSO group has a contract with Company ABC and functions as a service company but does not actually sell cars or parts.
The OMSO group provides, as a service company, the following services for U.S. military customers of Company ABC: warranty and service contracts, customer support, claims administration and handling, technical support and sales administration.
II.4.1.1 COMPANY DEF Inc
COMPANY DEF, Inc. is located in New York and is officially the head office of the OMSO group. They are responsible for the five points mentioned above and serve the U.S. Military vehicles located in the USA and Far East markets. They staff around 200 people.
The New York location has fairly good access for obtaining spare parts. They are geographically close to the source (the vehicles are produced in the U.S. and imported to Europe) and know from
experience whom to contact. COMPANY DEF does not sell parts (or cars for that matter), but sometimes support official dealers, service points or independents to obtain parts faster through their contacts in the U.S. They sometimes assist Europe to keep the Vehicle Off the Road time (VOR) and the inconvenience for the U.S. military customer as short as possible.
II.4.1.2 COMPANY DEF Ltd.
This is the European head office and is located in Vilars-Sur-Glane, Switzerland. This location is an administrative office only. The administration of sales is done here as well as accounting and payment sales fees to the independent sales people located in Europe. Nothing is serviced or sold at this
location. They support the European U.S. Military market and staff of approximately 12 people.
II.4.1.3 COMPANY DEF GmbH
COMPANY DEF GmbH is located in Kronberg in Taurus, Germany. They are responsible for the five points mentioned above, except the administration of sales. This is done by COMPANY DEF Ltd. They serve the markets in Europe and have a staff nearly 35 people, mainly all in administrative positions. There are two staff in the customer support section providing initial customer support and transferring questions to other departments within COMPANY DEF GmbH. One of these is the warranty department. It consists of seven staff members and has frequent contact with WEU/S. Furthermore, there are also two people dedicated to technical questions and assistance, which have
7 direct access to U.S. bases. Finally, there are two people responsible for IT, and some staff at the accounting and administration department.
II.4.1.4 Exchange Relation Managers
There are several exchange relation managers (ERM) located throughout Europe.
They have a coordinating role and function between the independent sales people (1.7) and the OMSO group. They are employed, recruited and paid by COMPANY DEF GmbH. Their focus is on a specific area or country, which is mainly dependant on the number of sales people and subsequently the sales volume per area or country. For Europe, there are ERM’s located in Turkey, Italy, Holland & Belgium, Great Britain and several in various bases across Germany.
The most important responsibilities of an ERM are as follows:
- The state of the sales locations. ERM is responsible for the offices and the location.
- Training of sales personnel. There are four different levels for sales personnel. The ERM
monitors, trains and develops these sales persons.
- Organization of diverse promotion activities. Most of these activities are aimed at
strengthening the relationship between ENCS and AAFES and between ENCS and the military community. The right conditions have to be created in order to sell cars and create a positive image that ENCS is not just there to take their money but also invest in the
community.
An important difference with the independent sales people is that they fall under the responsibility of the OMSO group but are also a component of the group.
II.5 Independent sales agents
A Company ABC, Dodge and Jeep vehicle is sold to an authorized U.S. Military customer either through the NCS website or in most of the cases, through independent sales agents.
COMPANY DEF Ltd. Switzerland recruits, selects and pays the independent sales agents. They receive a basic salary, which can be raised through provisional fees per vehicle sold.
The independent sales offices are usually located on the U.S. Military bases. This is due to the fact that the OMSO group has a contract with the Army and Air force exchange service (AAFES), which allows them to sell the vehicles on the U.S. Military bases. It is only because of this contract that independents are allowed on the U.S. bases, which would otherwise have been impossible. This is an advantage over ‘European’ made vehicles, which can also be bought by U.S. Military personnel, but AAFES only allows U.S. made cars to be sold on the base.
COMPANY DEF GmbH
8 As these independent sales agents work for the OMSO group, they not only sell Company ABC vehicles, but Ford, Harley Davidson and Buell on the U.S. army bases as well.
The number of sales people appointed per base, either in full or part time employment, is mainly dependent on the volume of past vehicle sales and possible opportunities or developments in the future. An example would be a new U.S. Military base planned somewhere nearby, or the further development of a current base. Furthermore, the amount of independent sales people is also dependent on the geographic distribution of the military installations.
Independent in this case means they are under contract with COMPANY DEF Ltd. but have a certain amount of latitude to do their work, assuring the independent completes the work within the
limitations of the contract with OMSO group. They are paid by the OMSO group, but work as
independent contractors. OMSO only provides the five points mentioned in 1.6.1 and does not sell any cars, this is the role of the independent sales people.
II.6
The history of Company ABC AG
The founding of the ABC Company in 1926 was the result of a merger and dates back to the mid-1880’s. At that time, and only miles apart (curiously enough not knowing of each others early work and existence) Gottlieb (1824-1900) working with Wilhelm Maybach (1864-1929) and Karl ABC (1844-1929) independently invented the internal combustion engine.
ABC, based in Mannheim, invented the world’s first truly internal combusted automobile in 1885 and received a patent for his invention which was named “ABC Patent Motorwagen”.
and Maybach, based in Stuttgart, were also granted a patent in 1885 for what is generally recognized as the first prototype of the modern gas engine, the “The Grandfather Clock Engine”.
Through further development, and Maybach produced the first four stroke engine in 1889, founded Motoren Gesellschaft (DMG) in 1890 and sold their first automobile in 1892 to subsequently become the largest manufacturer of automobiles by 1900.
By this time, the DMG automobiles were also used in racing. One of the first successful enthusiasts was Emil Jelinek. He painted the name of his daughter ”” on his race automobiles for good luck. Jelinek, also a DMG dealer, wanted faster cars and promised to buy 36 of the new 35-horse power (hp) DMG model. This deal was based on two conditions. First, he could suggest some design
specifications and second, Maybach would name the engine the engine. Within weeks, Jelinek ordered another 36 automobiles form the eight hp DMG line. He was given the exclusive rights to sell these new DMG automobiles in Austria-Hungary, Belgium, France and the USA, which made Jelinek a wealthy man.
The deal with Jelinek had two other advantages. First, DMG had sold the technical rights exclusive use of the name “” to foreign companies. The name was a great way of overcoming legal issues and other problems. Second, the influence of Jelinek provided a very important advance in automotive design. It was only due to necessity caused by a poor German economy after of the First World War that DMG and ABC & Cie started to cooperate in 1924 and later merged to become -ABC AG in 1926.
It was during this time that the Company ABC Company first saw light. The company was formed by Walter Percy Company ABC and the remaining assets of the Maxwell Motor Company in 1925. In 1928, Company ABC founded the Plymouth brand at the low end, the DeSoto and purchased the Dodge Brothers automobile company. This was done to set up a full range of brands similar to General Motors (GM).
The company evolved over the next decades, nearly went bankrupt at the end of the 1970’s, but subsequently became one of the top three largest automobile producers, setting it’s first steps in Europe in the early 1990’s. (http://en.wikipedia.org/wiki/Company ABC)
Due to various reasons, globalization, economies of scope, quality, innovativeness, and enhancement, both companies decided to investigate a possible merger, this became reality in 1998. (see also appendix 1 )
9 The two companies are a perfect fit of two leaders in their respective markets.
Both companies have dedicated and skilled workforces and successful products, but in different markets and different parts of the world. By combining and utilizing each other’s strengths, we will have a pre-eminent strategic position in the global marketplace for the benefit of our customers. We will be able to exploit new markets, and we will improve return and value for our shareholders. This is a historic merger that will change the face of the automotive industry.
This is much more than a merger; today we are creating the world’s leading automotive company for the 21st century. We are combining the two most innovative car companies in the world.
Chairman of the -ABC Management Board
(M. Blasko et al. / International Review of Financial Analysis 9 (2000) 77–102)
II.7 Company ABC AG Today
Company ABC StrategyIt is Company ABC’s ambition and strategic intent to become the worlds biggest and leading car company. Following this ambition the new management designed a strategic scorecard. It depicts the different goals for the new management.
The Company ABC strategy rests on a foundation of for principles summarized in the figure below. The pyramid illustrates the company’s philosophy leading to the ultimate goal of most for-profit organizations, that of sustainable profitable growth.
Figure 1 Company ABC Strategic goals
Due to the separation of and Company ABC further developments are unclear at this time. Company ABC will however remain active in Europe indendantly.
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Appendix III: Implemented opportunities
Identification process of genuine U.S. Military customers and vehicles
Situation: CG dealers performing warranty work on COMPANY DEF / military owned vehicles and the RISK might be considered grey market vehicles. It is critical we provide service to all ourlegitimate CG customers. The direction our dealers might take to assume COMPANY DEF / military owned vehicles are grey marketed and then charge our customers RETAIL rates for warranty work is an unfortunate situation. In general:
• The dealer can see in Company ABC Group (CG) policy and procedures that CG supports the warranty on military / diplomatic vehicles in each Overseas Military Sales Corporation (COMPANY DEF) sold vehicle's owners manual and the MPC’s know this policy.
•Not all vehicles owned by military personnel have been sold by COMPANY DEF, but dealers are also supposed to support them for warranty although there is no way to differentiate those vehicles from grey market ones.
How should European dealers recognise genuine military customers from grey market customers? Agree with the "Military Car Sales" organisation on a clear process for genuine military customers to identify themselves when visiting European Dealerships. Should dealers honor the U.S. warranty on this military vehicle? What is the method to confirm ownership and in turn warranty coverage?
• Company ABC does not allow Military Car Sales GmbH to submit any more claims for retail
costs when money can be saved if the claim is submitted directly by the garage.
• Certain documentation from our military personnel is confidential.
• COMPANY DEF supports military owned vehicles around the world, which are retailed by
the US dealer network.
• Dealers can see in CG policy and procedures that CG supports the warranty on military /
diplomatic vehicles and in fact each COMPANY DEF sold vehicles owner’s manual and the MPC's know the policy
• Not all vehicles owned by military personnel have been sold by COMPANY DEF, but dealers
are also supposed to support them for warranty although there is no way to differentiate those vehicles from grey market ones
• The USA retailed units sold to military personnel have CNA information, which will appear in
the VIP just as COMPANY DEF sold units. Therefore, the owner would simply need to provide identification (uncertain?). Would the VIP CNA match up properly on grey marketed vehicles? APO = American Post Office => indicates it is a military location
Guidelines:
1) Recalls should be performed on ALL vehicles, including grey market ones.
2) Dealers / MPC's should be able to run a VIP and determine warranty coverage and ownership
of COMPANY DEF vehicles. Please enter surname of customer in VIP to obtain service contract information as well.
3) If a dealer has a question they can certainly bring this matter to the attention of their MPC /
country office.
4) If the customer is in or attached to the Military, they will have an ID card that will confirm
their association. VIP will show if the car is registered to the person on the ID card (running the VIP function on DealerConnect)
5) DealerConnect will easily identify COMPANY DEF customers as military members. All other
U.S. customers who brought their vehicles to Europe can be identified by the Vehicle Registration Document, which (as I was told) will identify the customer as a member of the NATO Forces. This document can be photocopied and attached to the dealers warranty file. 6) The customer's military ID card will of course also identify him/her to be part of the family,
but since the ID card also contains security sensitive information, it should not be photocopied and distributed to third parties. The soldier is actually not even allowed to hand the card over to anyone else.
7) If there is any doubt regarding the military status of a customer, the dealership is quite
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Communication Template to increase sales - after sales connection
Communication template front side
Communication template back side
Appendix IV: Assignment: Culture and Business Process Improvement for
U.S. Military
Culture versus Business Process Improvement for U.S. Military
Appendix V: COMPANY DEF Authorization forms
In this research several authorization moments were mentioned that take place during the processes. This appendix provides examples of these authorization forms for the interested reader. These forms are send to dealers and independents by COMPANY DEF Kronberg.
The following forms are provided.
