Auto Industry

1
Auto Industry

• Presented by
• Teresa Addison
• Benjamin Pouillot
• John Schaefer
• With emotional support from
• Mathilde Prigent
• Paal Schiefloe

2
Topics

• Introduction
• Ford
• General Motors
• Covisint
• Learning Summary

3
Introduction

• Objective Share our knowledge of autos with
  other groups as if we are teaching the class.

4
Issues in the American car industry

• Have the right car, at the right place, time and
  price
• Must reduce costs of developing, building, and
  delivering vehicles
• Improvement in quality and design
• Improvement in the supply chain management
• Reduce Cycle Times
• Intensive competition with Asian car industry
  (including Toyota and Honda)

5
Dell - Ford

• Dell use technology to reduce working capital and
  exposure to inventory obsolescence
• Use Dell Direct Model as conceptual blueprint for
  what Ford wanted to attempt

6
Ford

• Take advantage of size and global presence
• Movement towards industry consolidation
• Work with suppliers and share techniques
• Order-to-delivery reduce from 45-65 days to 15
  days.
• Ford Retail Network Goals

7
General Motors Introduction / Vision

• Build a digital loyalty Network
• Loyalty for customer orientated products
• Network for coordination and leveraging through
  the value chain
• Digital for technology

8
General MotorsCustomer side

• GOAL
• Customer-centric-approach aligning vehicle
  content with customer expectations.
• Integrate customers in GM world
• SOLUTIONS
• Let them decide car, price, time for delivery
• Build a database tracking customers

9
General MotorsCustomer side Buy Power

• Creation of a customer portal Buy Power
• Enabling customer to find a car, with the price
  and the dealer they wants.
• Tracking customer interests and preferences
  enabling better sense of the market demand
• Post-Purchase portal Owner center
• Enabling customer to create an online profile of
  their car (vehicle information, maintenance
  reminders, service history)
• Coming soon fully address customer needs
• Enabling customer to choose every functionality
  in the car

10
General MotorsSupply Chain Management

• PROBLEMS
• Long scheduling lead-time and reliable production
  schedules
• Excessive inventory level
• Lack of visibility through the value chain
• Manual communication
• Expensive third party logistics provider
• Unable to move from Business-to-Stock to
  Business-to-Order

11
General MotorsSupply Chain Management

• SOLUTIONS
• Creation of a huge department Order-to-delivery
  focused on
• Order fulfillment
• Supply operation
• Logistics

12
General MotorsSupply Chain Management

• Creation of GM Supply Power
• Linking GM and its supplier
• Complete transaction
• Share information (purchasing, sourcing of
  materials, quality and production control,
  logistics, engineering and manufacturing

13
General MotorsSupply Chain Management

• Covisint B2B application
• Alliance with a third party logistic provider
  CNF
• Integration of Vector SCM
• Manage vast logistics network
• Integration of all 3PL into one IS enabling
• To track and trace shipment via the web
• To improve information and product flow
• To improve flexibility, reliability of GM
  products distribution

14
General MotorsConclusion

• DOES IT WORK???
• Highest loyalty percentage on the auto market
• 50 reduction on delivery time
• 32 improvement in delivery in 2 years
• RETURN ON HUGE INVESTMENT???
• Enable to remain competitive

15
Outsourcing in the Auto Industry

• Auto manufacturers use thousands of different
  suppliers to outsource different components.
• Reasons for outsourcing
• Sheer numbers of component
• Cost when demand is uncertain
• Cheaper, safer and faster to recruit a supplier
  than hiring more employees
• Creation of Covisint by the big three in 200
• This business-to-business (B2B) exchange
• Connection of automakers to thousands of
  suppliers.

16
Outsourcing in the auto industry

• Goal of Covisint provide auto manufacturers and
  suppliers with the ability to reduce costs in
  their respective supply chains and bring
  efficiencies to their business operations
• Covisint functions

17
Outsourcing in the auto industry

• Covisint best features
• Single exchange protocol (Standard systems while
  dealing with different automakers)
• E-public market connecting hundreds of customers
  to thousands of supplier (collaboration through
  the value chain)

18
How it works (Covisint)

• http//www.covisint.com/services/connect/

19
Learning Summary

• Right products in the right place at the right
  time and price
• Benefits better quality, higher customer
  satisfaction, improved customer selection, better
  plant productivity, stability for supply base,
  and lower dealer and company costs