Cars

Failure To Launch: A Case of an After-Sales Service Center for Auto Dealership

SMC used to be one of the major Palestinian auto dealers for several world leading German, English and French car brands. After a series of financial and managerial problems, the company had lost, or was forced to sell several of its exclusive dealership agreements to other competitors. Having only one or two major brand names remaining under its umbrella, the company was finally bought out by a major Palestinian car leasing and financing company by the name of GL, originally based in Jerusalem.

One of the first major projects that the new management decided to implement is the establishment of a new After-Sales Service Center for the purpose of performing vehicle maintenance and providing service to their customers. Since the company was an authorized dealer for a major French auto manufacturer, they had been awarded a grant from the French government in the amount of 500,000 Euros as an assistance to establish their new service center. The only condition is that they buy only French-made equipment and money will be reimbursed after submitting the invoices for the equipment.

For the implementation of the project, the company hired a well known local engineering and design firm. The project was initially given a period of 12 months from initial design to final completion. The engineering and design firm had extensive experience in traditional commercial and infrastructure projects in the country, but this project was not a traditional project. It required specific knowledge of the entire processes, work flow, utilities, special equipment, and design standards dictated by the French auto manufacturer. In an ideal situation, the most qualified person to provide all necessary feedback to the design firm would be the company After-Sales Manager. Unfortunately, the after-sales manager had recently left the company after the new take over, and the company needed a new project manager.

By the time the company hired a new after-sales manager, 3 months had passed by and the design firm had already taken the lead and established the preliminary design of the center. The new after-sales manager was assigned as the project manager, and in turn he made some major modifications to the design, which set the project further behind schedule. There were also some financial disputes between SMC and the design company regarding the agreed design service fees. The design company required additional fees for the rework they had to do as a result of changing the design concept, while SMC Company argued that the rework was a result of the design company not doing the right research and homework in the first place.

After that specific disagreement between the customer and the design firm, the later became very cautious about proceeding with the design and demanded accurate information from the customer about the requirements of their proposed facility. Such information included equipment specifications, utility requirements, process work flow, branding standards and design codes. Such data was not easy to obtain due to communication barriers between the design firm, the customer (SMC), the equipment suppliers and the French auto company.

More than 2 years after the initiation of the project, and having changed 3 project managers, the new service center still remains as an exquisite and evolving design concept on engineering blueprints. Whether this project will ever see the light and be transformed into reality is yet to be seen.

Question for discussion

1. In your opinion, what are the major reasons for the project delays and failure to launch?

a) Absence of a qualified project manager/ switching of multiple project managers.

b) Lack of proper communication channels between the different stakeholders.

c) Non sufficient planning by the customer as well as the design company.

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