Outstanding Innovation in Service Systems Engineering Award — Third Place
“Increasing automotive dealership service retention”
June 9, 2022
UNIVERSITY PARK, Pa. — Researchers from the General Motors Advanced Analytics Center of Expertise developed a web-based computer tool to help car dealers better understand how and in what ways customers are loyal to various dealerships. The project won third place for the Outstanding Innovation in Service Systems Engineering Award, co-sponsored by the Institute of Industrial and Systems Engineering and the Penn State Harold and Inge Marcus Department of Industrial and Manufacturing Engineering.
Service systems engineering is the end-to-end design and management of every component needed to meet a specific need, according to Vittaldas Prabhu, Charles and Enid Schneider Faculty Chair in Service Systems Engineering and director of Penn State’s Service Systems Engineering initiative. He said that each of the winning projects clearly and effectively demonstrated how service systems engineering connects seemingly disparate items to understand an entire system, allowing the researchers to then engineer a streamlined approach to achieve the desired results.
The researchers identified new performance and bench-marking metrics to better compare how car dealerships attract customers and to better understand why customers may choose one dealership over another for obtaining car maintenance or repair. The multiple metrics replace a previous single-value metric to avoid Simpson’s paradox, a statistical phenomenon that describes how a trend in multiple data groups reverses or vanishes when the data is combined. The new metrics account for the complex variables influencing why a customer may buy from one dealership, obtain service at another and live closest to yet a third. Over 90% of dealers now use the web-based tool, and the new metrics and accompanying analytics helped dealers increase GM’s customer loyalty by 4%.
Team members include Michael Harbaugh, manager, General Motors Advanced Analytics Center of Expertise; Robert Inman, research fellow, GMAACE; and Jonathan Owen, director, GMAACE.
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