SDM and LFM Take on GM

Evan Mamas, Sandro Catanzaro, and Fernando Cela-DiazBrooke Kahl, Andy Louis, Sean Holly, Matt Hasik, Jeff Baer

By Amy MacMillan, ESD Communications Assistant
May 13, 2005

A team of SDM students and a team of LFM students won first- and second-place, respectively, in the 2005 GM-MIT Sloan Case Competition.

Evan Mamas, Sandro Catanzaro, and Fernando Cela-Diaz

The annual Case Competition is run by Sloan alums in GM’s MIT University Relations Team as a way to expose students to strategic issues in the company, and to bring in fresh ideas to help GM tackle real company issues. Initially, nine teams entered the competition, which is exclusively open to MIT students, says Tina J. Laforteza, business analyst for GM Strategic Initiatives and a Sloan alumna.

Brooke Kahl, Andy Louis, Sean Holly, Matt Hasik, Jeff Baer

The winning SDM team (all members of the Class entering in ’04) consisted of: Sandro Catanzaro (Lima, Peru), Fernando Cela-Diaz (Lugo, Spain), and Evan Mamas (Toronto, Canada), who received the $4,000 cash first prize. The LFM team included members from the class of ’06: Jeff Baer (Bedford, PA), Matt Hasik (St. Louis, MO), Sean Holly (Lafayette, LA), Brooke Kahl (Chesterfield, MI), and Andrew Louis (Raymond, NH), a member of the Sloan ’06 MBA class. The second-place team took home a $2,000 cash prize.

In the competition, the teams were asked to solve the following problem: What would you recommend to General Motors Order to Delivery (OTD) in order to help them better match supply and demand at GM dealerships?

The project involved gathering widespread data from GM and local dealerships, according to SDM team member Cela-Diaz. Following extensive data analysis, the SDM team identified three areas needing improvement: aligning GM and the dealers’ incentives, gathering more information from dealers, and exploiting more information from customers. These insights led to eight different initiatives involving recommendations for GM’s supply chain and information systems, says Cela-Diaz.

GM execs were impressed with the SDM team, Laforteza says. "[The plan] was very comprehensive and realistic in its approach, and seemed to have the most implementable recommendations," she adds.

The LFM team approached the problem by focusing on customer-company interface at car dealerships, says Matt Hasik, a team member. Hasik points out that although GM is conducting extensive research to understand what customers want, there’s a gap between dealers under pressure to sell cars on the lot and customer desires for a specific car.

"Dealers have an incentive to sell cars on the lot, and those aren’t necessarily the cars that customers want," he says. This means customers aren’t as satisfied as they could be, and dealers often lose out on revenue since they must heavily discount the less desirable vehicles.

The challenge was aligning sales strategy and manufacturing support with customer satisfaction. Hasik says the team viewed it from all perspectives – the customers’ and the dealers’, noting that the dealer is often caught in the middle between GM and the customer.

Hasik says one of the competition’s challenges was understanding the scope of the problem. "It’s a high-level problem, and there’s no way we could analyze it down to the level of detail that a GM person could." However, the LFM team proposed several areas of improvement for GM including providing more concise information to customers and better data collection and incentives in the dealerships. Laforteza says she was impressed with the creativity of the LFM solutions.

The teams made their presentations to several GM executives, including Katherine Benoit, executive director of GM North America Order to Delivery, in May. Competition aside, the contest gave the students a feeling of contributing to a real problem. "I felt like we were working on something that illustrated a real situation," Hasik says. "Maybe we provided a new angle and gave them fresh perspective."