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With new-vehicle sales down 9 percent
through April, new-car dealers are increasingly
focusing their attention on used-vehicle
sales to meet the changing consumer preferences
and build profitability in a struggling
economy. Dealers also face declining selling
price values of SUV and Pickup Trucks due
to soaring gasoline prices. Dealers struggle
to control rising expenses and costs in
order to cope with declining revenues and
profits.
According to a government report, consumers
battling soaring gasoline prices and a slumping
economy, cut back further on their spending
in April. Even gasoline stations rang up
lower sales in a month that saw gasoline
prices spike.
According to AutoExec,
A Vermont Dealer, Jim Hand was recently
recognized for his efforts to “go
green” when he won the USA Today
Dealer Innovation Award. Hand Motors expects
to save $30,000 a year in energy costs through
such initiatives as heating the mechanical
and body shops with a vegetable oil and
used motor oil combo; installing Super T8
fluorescent bulbs throughout the store;
and adding motion detectors and programmable
thermostats. But Hand says his most important
move was working with the nonprofit state
utility Efficiency Vermont, which provides
technical advice, design guidance, and rebates
on energy-efficient products. Hand spent
$35,000 to upgrade lighting in both of his
buildings, and got back all but $4,000 in
rebates. He also saved about $6,000 in energy
costs over six months, “so I’ve
got my investment back.
Lon Wojtowicz, Manager of
Audit Services
About PMG’s
Audit Department
Our audit experts combine professional knowledge
and expertise to review expense categories
for our clients. PMG's Auditing Service
ensures that clients receive quality products
and services at the agreed upon price and
business terms.
Audit
Objectives |
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Ensure
Supplier pricing matches quoted pricing
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• Implementation
audit soon after 1st billing cycle |
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• Repeat
audits as required, at least once
a year |
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• Client’s
request |
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Report on
client usage of preferred/ recommended
Supplier status when possible |
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Verify Supplier compliance with
contract terms, payment terms, shipping
charges, etc. |
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Identify additional opportunities
for savings |
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Detail corrective actions |
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Report audit results to client
and supplier |
Audit Benefits |
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Verification
of correct pricing |
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Verification
of business terms, payment terms and
shipping charges, etc. |
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Corrective
action and follow-up |
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Cost-savings are
identified |
Audit Results |
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Price
Compliance – Consistent over
last 3.5 years |
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182,000+ items and $7+ million in
spend audited |
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Suppliers average 76% compliance,
resulting in  significant
credits |
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Business
Terms – Common issues |
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• Payment
terms are not on invoices and A/P
clerks
miss savings opportunity |
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• Shipping
charges are added when delivered pricing
was quoted |
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Client’s
Compliance – Common issues |
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• Order
higher price non-quoted items or brand
name
vs. generic items |
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• Continued
use of other suppliers, higher rates |
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• Order
Inadequate quantities, paying more |
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PMG
expands into CT, MA, ME, NH, NY, RI,
VT, NC, IN, IL, OH, MI, KY and TN
with two new regional offices in Hartford
and Chicago; expanding its coverage
to 37 states, serving over 400 client
locations nationally. |
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PMG now offers
Strategic Purchasing Training &
Development
(view brochure) ,
a new service to help dealer clients
accelerate their purchasing initiatives
and control expenses. |
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PMG
to introduce new web-based purchasing
and content management tool, StrategicSource.com
for online ordering, usage analysis,
auditing and tracking to enhance purchasing
process controls.
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PMG introduces
UpNRunning (view
brochure) , a new
store purchasing service to help dealer
clients accelerate store openings
to get their dealerships up and running
profitably at lightening speed. |
PMG broke a new record
in 2007 delivering its 300+ client locations
nearly $14,000,000 in aggregated cost saving
recommendations.
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The 2008
estimated aggregated recommendations
for clients in 2008 is expected to
break $18,000,000. Actual recommendations
as of 4/30/08 were $3,215,678. |
PMG has assisted numerous
dealers with renovations of existing or
new building efforts to reduce costs and
become more eco-friendly. Below are examples
of how PMG has assisted clients in reducing
the environmental impacts associated with
business while saving money.
Client Example:
PMG worked with a client who decided to
undertake the challenge of reducing their
dealership energy consumption and lower
the utility costs at two dealer locations.
PMG worked to source and recommend energy
efficient alternatives to the client.
New lighting retrofit
kits were installed and in some areas completely
new light fixtures all with T8 lamps. Reflectors
were incorporated with these fixtures and
retrofits to make the most efficient use
of the light. The electrical energy consumption
for lighting was reduced by 52.4%! The investment
in lighting improvements not only reduced
the utility bills but greatly increased
the efficiency of the lighting and in some
cases more lighting was provided.
Client Example:
The energy efficiency improvement
goal for this client was to reduce their
natural gas usage/cost and to spend no more
for heating with waste oil than with natural
gas. Once the 3.5 year ROI period is completed
the cost of waste oil heat will prove to
be much less than natural gas. The improvement
made to meet the goal involved replacing
four 350,000 b.t.u. natural gas furnaces
with a single 500,000 b.t.u. waste oil fired
furnace.
In addition, a “closed loop”
delivery system was installed to carry the
waste oil from a storage tank, through the
service center to the body shop. This line
supplies the waste oil to the furnace in
that area. The loop was constructed with
several “drop downs” in the
line to allow the client to supply waste
oil to additional waste oil furnaces when
their existing heaters need to be replaced.
Not only did this client choose to recycle
and become environmental conscience, but
it is estimated that the reduction in natural
gas use at this dealership has been 20%
less on an annual basis.
PMG continues to save
clients money in typical expense categories
such as Uniforms, Check Processing and Office
Equipment. But, did you know that we can
also serve your dealership in some expense
categories that you may not have thought
of such as: Beverage Services, First Aid
Kits, Shredding Program, Showroom Plant
Maintenance, Helium, etc...? Below are some
examples of typical savings in some of PMG's
more obscure categories.
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