montivette

There has been much talk of allocation and the ordering system. I am curious if we could further define how allocation works in one thread.

I would like questions asked in this thread to be asked by forum members.

I would like questions to be answered by forum Dealers who have accurate insight into the process.

Here are some questions to start it off.

1. Is there a specific day of the week when Chevrolet tells you what your allocation is or does the day you are informed vary?

2. After being notified is there a specific day which you are allowed to use the allocations?

3. Does the dealer have a general idea several weeks or months in advance how many cars he will get allocated?

4.Once the allocation is offered to you, do you have a specific amount of days to use your allocation or lose it?

5.When you put a vehicle order in the system, and receive allocations, will your oldest orders automatically get filled (barring constraint issues) or does the system allow you to specify which car you want to use your allocation on?

6A. As a dealer why do you think other smaller dealers would not input orders into the GM system and not give out order numbers?

6B. Are they doing this to control their allocations to keep the oldest orders from getting built first?

Example, if they are allocated two Verts and have two customer orders for Coupes, they don't want to "waste" the allocation on the customer's coupes, and instead put in two orders for Verts instead. So by waiting to put orders into the system they ensure they are in control of what vehicle gets ordered.

7. Are there any penalties within the GM system or any control over dealers which lie to the customers about their allocations to get an order placed and then string them along for weeks as they had no allocations but did not want to lose the sale? Or are they pretty much free to make up whatever they want?

Thanks

TedG

The dealer told a friend of mine that they get 1.2 allocations for each C6 they sell.

mpuzach

You've asked some excellent questions. I'm looking forward to seeing if we get any useful replies. Thanks.

vrodder64

Hmmmm. Very good, clear, and well pointed questions. I wonder if the forum dealers will chime in? Usually when things like this happen they go silent.

I hope this thread gets the answers it deserves.

MONICA@MAXIEPRICE

1. Is there a specific day of the week when Chevrolet tells you what your allocation is or does the day you are informed vary?
The order week runs from Thursday to Tuesday. On Thursday, we learn what our allocation for the week is. We have until Tuesday to finalize orders. On Wednesday we get an update before starting the order week new again on Thursday. For example, today I learned we have 6 vettes to order this week to be placed by Tuesday. Yesterday I updated my website with orders from the weeks before.

2. After being notified is there a specific day which you are allowed to use the allocations?
We can start placing the orders for the week on Thursday but we have until Tuesday to finish. So we have that time frame in which we're allowed to use the allocation.

3. Does the dealer have a general idea several weeks or months in advance how many cars he will get allocated?
Yes, we have a general idea of the total number, just not the break down or the constraints.

4.Once the allocation is offered to you, do you have a specific amount of days to use your allocation or lose it?
Allocations given out on Thursday have to be used by Tuesday.

5.When you put a vehicle order in the system, and receive allocations, will your oldest orders automatically get filled (barring constraint issues) or does the system allow you to specify which car you want to use your allocation on?
You can order vettes two ways - for stock or sold. GM places a higher priority on vettes ordered as sold in a customers name.

6A. As a dealer why do you think other smaller dealers would not input orders into the GM system and not give out order numbers?
The vette allocation system is hard on smaller dealers. Think of it as getting your first job. You dont have experience so no one will hire you, but if no one hires you, how can you get a job? Its similar with allocation. GM will send you vettes if you can prove you can sell them, but how can you sell them if you dont have any? Dealers have to build up allocations over the years. Say a small dealer gets 25 vettes a year allocated. You would think they could take one from that number any time they get an order, but it doesnt work like that. GM tells the dealer when they can place the order, making it weeks & weeks or sometimes months before a vette order is acceptable. GM tries to spread out your allocation evenly throughout the year. The more vettes you're allocated, the more you get a week.

6B. Are they doing this to control their allocations to keep the oldest orders from getting built first?
The only reason I can think of for a dealer not giving you an order number is because they dont have it. They can place your order but the vette will sit at a 1100 status event code forever, meaning it is in the dealer's order system, but not accepted by GMs order system which is a 2500 status event code.

Example, if they are allocated two Verts and have two customer orders for Coupes, they don't want to "waste" the allocation on the customer's coupes, and instead put in two orders for Verts instead. So by waiting to put orders into the system they ensure they are in control of what vehicle gets ordered.
Vette model allocations differ from dealer to dealer. For example, we have 6 vettes this week, one of which is a vert. Lets say I have an order for 2 verts to fill, but only one allocated. But the dealer in your example has 2 verts allocated but has 2 coupe orders to fill. What will happen is that the dealer in your example places an order for his sold coupes, giving up his allocated verts & I place the orders for our sold verts, giving up our allocation for coupes. At this point it becomes a drop/add system. I drop the coupes, he picks them up & pick up his verts. It doesnt alsways work like that though, its the luck of the system, but it does happen. For example, the Z51 was on constraint heavily a few weeks ago. We didnt get any allocated, but I had orders for Z51, so I placed the orders in hope that another dealer who can order the Z51 wont need it. We were able to pick up two Z51s that week.

7. Are there any penalties within the GM system or any control over dealers which lie to the customers about their allocations to get an order placed and then string them along for weeks as they had no allocations but did not want to lose the sale? Or are they pretty much free to make up whatever they want?
There are no such penalties that I am aware of - caveat emptor. However, we cant order a vette in a customers name & then the customer not take delivery of that vette, that does hurt our allocation.

I hope that helps to clarify some of your questions. Let me know if you need further clarification & I will do the best I can. Bottom line is that you should ask your dealer what their vette allocation is. Find a dealer that will keep you up to date of your order so you're not worrying about it. Smaller allocated dealers will be a longer wait, there is no question about that.

Ken Fichtner

First, I am not sure why someone would think that supporting dealer(s) wouldn't post answers to the questions proposed.

Second, the distribution system is very difficult to understand at times yet explain.

Third, let me try to answer the questions:

"1. Is there a specific day of the week when Chevrolet tells you what your allocation is or does the day you are informed vary?"

Every dealer knows one month in advance the number of allocations that they will receive by week for the next 4 weeks.

2. After being notified is there a specific day which you are allowed to use the allocations?

Actual allocations are generated to dealers on Thursday mornings and with those allocations a dealer can review the constraints and their share of the constraints.

3. Does the dealer have a general idea several weeks or months in advance how many cars he will get allocated?

A dealer can view their estimated shipments report at any time which clearly displays their allocation totals for the next 60 days of production.

4.Once the allocation is offered to you, do you have a specific amount of days to use your allocation or lose it?

Again, allocations are generated on Thursdays. The dealer has the ability to approve order requests that they have submitted within the allocation total and within the constraints on Thursday. If the dealer does not approve one of his orders or have orders which are not constrained in the system there is a chance that they will lose the allocation. The dealer can approve orders, change priorities, modify order requests on Thursday, Friday and Saturday. The system will not permit any further action by the dealer on Sunday and Monday. On Tuesday morning the dealer can view the order requests submitted and approved over the weekend. On Tuesday the dealer can modify approved order requests within the constraints. On Weds. the order requests approved on Tuesday can no longer be modified.

5.When you put a vehicle order in the system, and receive allocations, will your oldest orders automatically get filled (barring constraint issues) or does the system allow you to specify which car you want to use your allocation on?

The dealers order requests are approved by priority within the constraints imposed. For example:
Mr Smith, Convertible, Z51 Pkg Order, Priority 10
Mr Jones, Coupe, Z51 Pkg Order, Priority 11
Ms McCormick, Coupe Order, Priority 12
I always prioritize my order requests with the oldest order getting the lowest number and thus the first order to be placed within constraints.
Now, today, Thursday I have one allocation for a Corvette. Because of constraints Chevrolet is not giving me a Convertible nor are they giving me the Z51 pkg. Ms McCormick's order will be placeable and thus I will approve her order within my allocations and constraints. If I don't approve her order and the two orders with lower priorities are constrained, I might find myself without ANY Corvette orders approved next Tuesday! A dealer cannot afford to have non-buildable, constrained orders with the lowest priority and not move a buildable order up. The system will pass me by and move to another dealer and I might lose my allocation!

6A. As a dealer why do you think other smaller dealers would not input orders into the GM system and not give out order numbers?

Every certified Corvette dealer can input order requests sold or for stock. When it's their turn for an allocation their order requests will be approved within the allocation and constraints. It is our practice to have stock orders in the system ready for placement if all of our sold orders are constrained. Further, I always input my sold orders the same day that I make a deal with a customer. This is important so that my customer's are "price protected".

6B. Are they doing this to control their allocations to keep the oldest orders from getting built first?

I can't speak for other dealers but we always make sure that our oldest sold orders are produced first if they are unconstrained. If a constraint exists we always call our customers and give them the choice of amending their order request or waiting for the next allocation.

7. Are there any penalties within the GM system or any control over dealers which lie to the customers about their allocations to get an order placed and then string them along for weeks as they had no allocations but did not want to lose the sale? Or are they pretty much free to make up whatever they want?

No, there is not.

Let me offer this thought:
When you agree to place an order with a dealer, request to see the following reports:
1) Their estimated shipments report (you will then know what the dealer has for allocations for the next 60 days)
2) Their final placement by week report (you will then know the dates (Thursdays) on which the dealer will receive their allocations)
3) Their present preliminary order request report (you will then know how many orders are ahead of yours)

Lastly, here is a basic explanation of the system.

This type of information is included in EVERY newsletter that I have published since the early days of the Corvette Forum.

You can read my newsletter under the first topic, Kens Newsletters.

Have a successful day!
Ken Fichtner
Fichtner Chevrolet
GM Vehicle Distribution System – Basic Explanation

Estimated Shipments Process

Distribution of the production schedule is based on the following:
• Controlled Allocation
• Available Days’ Supply (ADS)
• Forecast

These calculation methods are explained below.

GMVOM Timing Cycle

The Estimated Shipments process occurs each month, and is completed on Thursday of Week 1 in the GMVOM Timing Cycle.
NOTE: The Estimated Shipments and Consensus processes do NOT apply to Regional Consulting Center (RCC) dealerships. Also, constraints are distributed to RCC dealerships ONLY for constrained allocation groups.

Estimated Shipments Process Tasks

Plan Production Volumes
GM plans production volumes for each allocation group by analyzing several inputs, including marketing strategies, production estimates, production constraints, and dealers’ sales forecasts. During the analysis, GM must answer the following questions related to each of these inputs:
• Marketing strategies – How should GM position the vehicle in order to achieve maximum market penetration? Are there major advertising or incentive programs planned for specific periods during the year?
• Production estimates – How many vehicles can the plants produce for a specific period?
• Constraints – What models and options are available only in limited quantities because their production capacity is too low or their demand is too high?
• Dealers’ sales forecasts – What quantity of vehicles have the dealers determined that they can sell?
Dealers’ sales forecast quantities are an important factor in the production planning process.

Process Temporary Allocation Requests
Based on specific qualifying criteria, GM assigns temporary allocation quantities to dealers in order to supplement the normal sales planning and allocation processes.
NOTE: For information about the qualifying criteria, dealers should consult with their respective Zone Teams.
Calculate Estimated Shipments
GM calculates estimated shipments for each dealer based on the following inputs:
• The estimated production volume for the allocation group.
• A specific production period.
• A selected calculation method.

GM has three methods for calculating estimated shipments—Controlled Allocation, Available Days’ Supply (or ADS), and Forecast. The method that GM selects for calculating estimated shipments is based on:
• Whether or not the allocation group is a new vehicle line that is just being launched.
• Whether the demand for the allocation group is greater than or less than the supply.

CONTROLLED ALLOCATION CALCULATION METHOD

• When does GM use the Controlled Allocation method? GM uses the Controlled Allocation method during the launch of a new vehicle, at the time when demand is greater than supply and the marketing team wants to target a specific market. GM also uses the Controlled Allocation method when the long-term demand for a vehicle (such as the Corvette) exceeds the vehicle supply.
• How does the method work? When using Controlled Allocation, GM will typically allocate vehicles to the dealers based on a defined launch strategy or equitable distribution; for example, based on marketing strategies, GM may allocate a new pickup truck to dealerships that are located in rural areas.

AVAILABLE DAYS’ SUPPLY (ADS) CALCULATION METHOD

• When does GM use the ADS method? GM uses the ADS method the majority of the time.
• How does it work? GM allocates vehicles to the dealers with the lowest Available Days’ Supply (ADS). A dealer’s ADS is based on the dealer’s Total Availability and Daily Sales Rate for the allocation group.
• What is a dealer’s Total Availability? A dealer’s Total Availability is the quantity of vehicles of the specified allocation group that a dealer has available. This quantity is equal to the total number of vehicles in stock (on ground), in transit to your dealership, in system (orders that are being built), placed orders (orders that are ready to go to the production management system), and balance-to-go allocation (the dealer’s final allocation units that have NOT been submitted as preliminary orders or selected as placed orders for the current production period).
• What is a dealer’s Daily Sales Rate? A dealer’s Daily Sales Rate is the average number of units sold per day over a sales period of 1, 2, 3, or 12 months. GM determines which sales period to use for each allocation group. (GM uses 12 months only during the start-up and build-out periods for an allocation group.)
• What is a dealer’s ADS? A dealer’s ADS is equal to the dealer’s Total Availability divided by the dealer’s Daily Sales Rate. (For example, if a dealer’s Total Availability is 30 and its Daily Sales Rate is 2, then its ADS is 15.)

ADS Example Step 1 – Calculate Total Availability
The Allocation application calculates the total availability for each dealer after receiving the availability data. Remember that Total Availability includes balance-to-go.

ADS Example Step 2 – Calculate Daily Sales Rate
The Allocation application calculates the daily sales rate for each dealer by determining the dealer’s total sales for a defined sales period of 30, 60, 91, or 365 days and dividing the dealer’s total sales by the number of days in the sales period. (GM decides which sales period to use for each allocation group.)

ADS Example Step 3 – Calculate ADS
The Allocation application calculates each dealer’s ADS by dividing the total availability by the daily sales rate.

ADS Example Step 4 – Assign First Unit Based on ADS
GM determines which dealer has the lowest ADS, and assigns a unit to that dealer.
In this example, Dealer D gets an additional unit, making its total availability change from 2 to 3. The dealer’s ADS is also recalculated, and changes from 7 to 11. Remember, the ADS is calculated by dividing the total availability by the daily sales rate—in this example, 3 divided by 0.27 is 11.11 units (which is rounded down to 11).

ADS Example Step 5 – Assign Next Unit Based on ADS
GM determines which dealer has the lowest ADS, and assigns a unit to that dealer.
In this example, Dealer C gets an additional unit, making its total availability change from 3 to 4. The dealer’s ADS is also recalculated, and changes from 10 to 13. Remember, the ADS is calculated by dividing the total availability by the daily sales rate—in this example, 4 divided by 0.30 is 13.33 units (which is rounded down to 13).
At this point, only two units have been allocated; however, this step is repeated until all available units of an allocation group are allocated. Each time this step is repeated, the dealer with the lowest ADS earns a unit.

ADS Example Step 6 – Determine National ADS Bar
When the last available unit in an allocation group is allocated, the ADS of the dealer who received the last unit is called the “National ADS Bar.” The National ADS Bar is the allocation cutoff point.

Dealers that had a beginning ADS that was less than the National ADS Bar received at least one unit for the production period. Dealers that had a beginning ADS that was greater than the National ADS Bar received no units for the production period.
For example, if the ADS of the last dealer to receive a unit is 20, then the dealers who had a beginning ADS that was less than 20 would have received at least one unit for the production period. Dealers who had an ADS that was greater than 20 would NOT have received any units for the production period.

FORECAST CALCULATION METHOD
• When does GM use the Forecast method? GM uses the Forecast method when calculating estimated shipments for the sales outlook period (or month). The sales outlook period is shown in the last column of the table at the top of the Estimated Shipments report. The column heading is “Estimated Shipments [Month/Year].”
• How does the method work? GM calculates estimated shipments by using each dealer’s Sales History for the allocation group.
• What is a dealer’s Sales History? A dealer’s Sales History is the number of vehicles that the dealer sold during the same production period one year ago, or the average number of vehicles that the dealer sold during the same production period one and two years ago or one, two, and three years ago. (GM typically uses one year for vehicles that have a high production volume. GM may use two or three years for vehicles that have a lower production volume.)

Forecast Example Step 1 – Calculate Sales History
The Allocation application calculates each dealer’s 3-year sales history for the allocation group and production period. The application adds all dealers’ 3-year sales history values in order to get the total (or national) 3-year sales history for the allocation group and production period.

Forecast Example Step 2 – Calculate Average Actual Sales
The Allocation application calculates each dealer’s average actual sales by dividing the 3-year sales history by 3. The application adds all dealers’ average actual sales values in order to get the total (or national) average actual sales for the allocation group and production period.

Forecast Example Step 3 – Calculate the % to National Value
The Allocation application divides each dealer’s average actual sales value by the total (or national) average actual sales value in order to get a % to National value. (In this example, the total average actual sales value is 45.) The total of all dealers’ % to National values must equal 100 percent.

Forecast Example Step 4 – Calculate Estimated Shipments
The Allocation application multiplies each dealer’s % to National value by the planned production volume for the allocation group and production period. (In this example, the planned production volume is 51.) The resulting value is the dealer’s estimated shipments quantity for the allocation group and period. The total of all dealers’ estimated shipments values must equal the planned production volume.

Send Quantities to Dealers
After GM calculates the estimated shipments quantities, they are sent to Order Workbench where dealers may review them as input for their sales planning and forecasting activities.

How can a dealership get more product if its sales are better than expected?

When a dealership's sales are better than expected, the dealership and its Area Sales Manager can get more product by doing the following:
Increase the dealership's production consensus quantity for the next production period.
Increase the dealership's desired allocation quantity in the weekly Order Vehicles process.
Look for trade or purchase opportunities by using the Locate Vehicles screens in Order Workbench.

What is the Available Days' Supply (ADS) formula?

In the Estimated Shipments process, the Available Days' Supply (ADS) formula is used in order to distribute available production volumes fairly and responsively to dealers.

In the Constraints Distribution process, the ADS formula is used in order to distribute available constraints fairly and responsively to dealers.

How do I determine which vehicle constraints were distributed to my dealership?

You can determine which vehicle constraints were distributed to your dealership by accessing the View My Allocation Summary screen in the Order Vehicles section of Order Workbench.

What is the difference between a preliminary order and a placed order?

A preliminary order is a vehicle order that a dealer configures and submits to GM for selection during the Vehicle Order Selection process.

A placed order is a preliminary order that was submitted to GM by a dealer and was selected to be built. A placed order is any order that is at Event Code 2000 (Accepted by GM), but has not reached Event Code 2500 (Preferenced).
How does the Vehicle Order Selection batch process place my dealership's preliminary orders?

The Vehicle Order Selection batch process places your dealership's preliminary orders based on the following factors:
The priority code that your dealership assigned to each preliminary order.
Your dealership's final allocation quantity for the target production period (TPP).
Your dealership's desired allocation quantity for the TPP (if additional allocation is available).
Your dealership's distributed constraints quantities for the TPP.

How can I tell whether a preliminary order has been placed?

When a preliminary order is placed, the vehicle order event code changes to 2000 (Accepted by GM). You can view the current event code for an order by accessing one of the following screens:
Order Detail screen in the Manage Inventory section
Preliminary Order/Stored Configuration Detail screen in the Order Vehicles section

How much time do I have in order to change or replace placed orders?

For a specific target production period (TPP), you can change or replace placed orders until 9:00 PM Eastern Time on Tuesday.

Can I change (or replace) a placed order that is based on a national pattern order?

You can change both the model and content of a placed order that is based on a national pattern order; however, the model must be within the same allocation group as the national pattern order and the model and content must be within any applicable constraints.

What happens if I try to add a constrained or restricted option onto a placed order?

The system will reject your change, and the placed order will revert to its original content.

How can I track a sold order for a customer?

You can track a sold order for a customer by using the Vehicle Order Inquiry screen. You can access this screen by clicking the Go to Vehicle Order Inquiry link on the Manage Inventory drop-down menu.

C6 Girl

Wow, thanks for all the info Monica and Ken. Very useful stuff and very helpful in understanding how the system works.

I would suggest this gets placed in the FAQs, which I am sure it will.

jmess

Crystal Vette

very useful information...thanks to forum dealers for their time and execellent responses.

rudybeet

I agree that this is the single most informative thread on this Forum.

But what is sad, when you think about it, is that all of us non-dealers are forced to become experts on this whole process just so we have some idea when the hell we'll get our cars.

vrodder64

Monica and Ken,

Great replies. It's good to see the forum dealers stepping up to give some very well articulated answers.

Your answers are very insightful.

montivette

Very nice response indeed. Way more information than I expected.

It helps me in ironing out all the lies my local dealer tells me. I am now beginning to understand why many forum members by their vettes from the forum dealers as they seem to be way more informed and perhaps even ethical in their business practices (which seems to be rare in the auto business.)

Ken, is it possible to track an order in the system by a customer name or information rather than order number. My dealer will not give me my order number after 2.5 weeks since my order was placed.

Ken, on this part of your reply I was unclear:

2) Their final placement by week report (you will then know the dates (Thursdays) on which the dealer will receive their allocations)

Was the intent to find out how many allocations they have received each week, or only to find out what day they get their allocations? Or I could ask does every dealer get their allocation on Thursday across the country, or could they be given out on different days to different dealers.

burtonbl103

THis is well written and the best info on the allocation system to date
This should be put in the c6 info section
Thanks

3and8fan

Thanks to both Monica and Ken. I know you both put alot of time and effort into your replies. This does answer alot of questions.

huge.eug

Thanks for all the great info....really explained it a lot better than my local dealer.

But I still have a question: I've had an order in with a local dealer since late Jan/early Feb. It's a black coupe with the Z51 being the rate-determining factor. Now that I understand that dealers will fill allocations with stock orders in order to preserve their allocations when they can't necessarily fill their requested orders due to constraints, am I in danger of losing an allocation for my order if my dealer can't get one with the Z51 and keeps filling his allocations with stock orders?

montivette

huge.eug,
Wow, I am uptight about no progress on my order and no order number and it has only been 2 1/2 weeks since placing the order for my coupe which is also Z51.

And you have been waiting since January/February? Wow, very patient.

stinky

And thank you, Marcus, for posing this question that a lot of us have wanted to know!! Mike

Ken Fichtner

“Ken, is it possible to track an order in the system by a customer name or information rather than order number. My dealer will not give me my order number after 2.5 weeks since my order was placed.”

No, the only way for any dealer to view an order or order request is by order number. If your dealer placed an order request then he can and should provide you with the order number. If he is unwilling to provide an order number then find a new dealer.

”Ken, on this part of your reply I was unclear:

2) Their final placement by week report (you will then know the dates (Thursdays) on which the dealer will receive their allocations)

Was the intent to find out how many allocations they have received each week, or only to find out what day they get their allocations? Or I could ask does every dealer get their allocation on Thursday across the country, or could they be given out on different days to different dealers.”

Every dealer has the ability to view this report after the consensus closes. This report will clearly display on a week by week basis the days on which the dealer will receive allocations and the quantity of allocations. All allocations are generated to all dealers on Thursdays.

“But I still have a question: I've had an order in with a local dealer since late Jan/early Feb. It's a black coupe with the Z51 being the rate-determining factor. Now that I understand that dealers will fill allocations with stock orders in order to preserve their allocations when they can't necessarily fill their requested orders due to constraints, am I in danger of losing an allocation for my order if my dealer can't get one with the Z51 and keeps filling his allocations with stock orders?”

Yes, you are in danger of never receiving your car if your dealer does not receive an allocation for a car with the Z51 package. Further, a dealer can’t tell GM to keep the allocation and give it back when the Z51 is available. The week that we receive an allocation(s) we have to use it(them) period.

I hope that these answers are of benefit!

Have a successful day,
Ken Fichtner
Fichtner Chevrolet

need-for-speed

A big thanks to Monica and Ken. That is a lot of typing and we appreciate it

I will be saving this one to the hard drive.

Vette_DD

Yep, thanks.