Global 21 Strategy Model

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Order ToDelivery
Connecting with Suppliers in the e-Generation
Harold R. Kutner GM Group Vice President
Worldwide Purchasing and North American
Production Control Logistics
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Trends of an e-Generation

• The Net Generation learns, works, thinks, and
  shops differently due to access to digital media
• The digital environment has created a rapid pace
  of growth and change
• Interactivity, and speed of the Internet has
  greatly increased communication.
• The Internet knows no boundaries (anywhere,
  anytime, 24x7)
• Companies will move from manufacturing-centric to
  customer-centric organizations
• Traditionally, customers came to a company for
  goods and services. With the Internet, companies
  have to take their goods and services to the
  customer!!!

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The e-Generation is growing rapidly!

• Worldwide e-commerce revenues were 39 billion in
  1998
• Revenues are expected to reach 1.3 trillion by
  2003
• Internet traffic doubles every 100 days
• Globally, users will increase from about 132
  million at the end of 1999 to about 320 million
  by the end of 2003
• 50 of new car buyers will use the Internet to
  shop for cars by 2001
• -A.T. Kearney and J.D. Power and Associates
  statistics

2003 1.3 Trillion
320 Million12/31/2003
Worldwide e-Commerce Revenues
Global Internet Users
1999 132 Million
1998 39 Billion
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Bottom Line...
Information explosion will put the Customer in
control
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GMs ResponseOrder To Delivery (or
Build-To-Order)
Suppliers
The right vehicle The right time The right
place The right price...
Dealers
Factory
Satisfied Customers
Providing personalized vehicles with zero
customer inconvenience
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GM views Order to Delivery as the integrated
execution of many key functional activities to
meet the customers requirements.
B2B
B2C
Order to Delivery
Customers
Suppliers
Fast Transfer of Information / Visibility
Design Engineer
Purchasing / PCL
Manu- Facturing
Vehicle Logistics
Sell Service
Planning
Dealers
Efficient Process for Building Customized Vehicles
All Business Processes will change for GM and our
suppliers

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Order To Delivery drives massive transformation
Current
Vision
Sales Approach
Primarily Push with Finished Goods Inventory

• Build to customer order
• Real-time delivery commitments
• Information, not inventory

Uncertainty Management
Finished goods inventory buffers
Demand Shaping and strategic part buffers
through superior Information Management
Customization / Personalization
Customer / Dealer managed Minimal GM revenue
More GM personalized offerings Better customer
convenience More revenue
Level stable schedules Fixed Order Lineup
before plant
Production
Customer centric demand responsive process with
Supply Chain flexibility
Logistics
Industry Common - Non Differentiated
Fast, reliable, customized Integrated Network

• Collaborative / Responsive
• Product/Service Innovations
• Lead Time Compression
• Sense and Respond

Suppliers
Arms length / Long lead times
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GM SupplyPower The New Connectionin an Order
to Delivery Environment
GM Supply Chain Operations
Real-Time Information Supply Chain Tools
GM Supplier Portal
Suppliers

• Design
• Engineering
• Manufacturing
• Production Control
• Logistics
• Purchasing
• e-GM
• Sales Marketing
• Etc.

• Real-time inventory status production counts
• Real-time advanced shipping notices
• Online engineering specs
• Quality and warranty data
• Capacity planning
• Supplier communications
• Real-time supplier feedback and corrective action
  process
• Link to GM TradeXchange

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Benefits of the Order To Delivery/SupplyPower
Connection

• Real-time information sharing and visibility
  across the supply chain
• Collaborative planning and execution to improve
  reliability and responsiveness
• Parts and configuration complexity reduction to
  stabilize demand
• Brings improved profitability

MannesmanAutomotive Group
Lucas Varity
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Expectations of the Supply Base

• Ability to Sense Respond to customer
  requirements
• Flexible Engineering policies to drive fast, lean
  and flexible manufacturing processes.
• Capability for electronic transfer of Math Data
  instead of physical drawings
• Capability for decision-making processes
  real-time
• Logistics designed for fast and reliable delivery
• Better management of Tier 2 3 suppliers

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Concluding Thoughts

• E-world is raising customer expectations
• GM is developing a comprehensive e-business
  strategy
• Order To Delivery is a cornerstone of GMs
  e-business strategy
• Order To Delivery will deliver significant
  benefits to all partners/stakeholders
• Suppliers will be a key part of the success or
  failure of a Build-To-Order environment

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SUPPLY CHAIN MANAGEMENT PROJECT REVIEW
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SANDEEP SEHGAL
EDUCATION Bachelor of Eng. (Electrical) MS -
Management
Expected Graduation Date May
01 PREVIOUS WORK EXPERIENCE Thakral
Brothers(pte.) Ltd. Asea Brown Boveri
Ltd. General Electric Co. INTERN
PROJECT Supply Chain Management MENTOR Rich
ard Alagna SUPERVISOR Sue Toth TIME FRAME
MAY 22, 2000 - AUG 11,2000
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SOURCING/SUPPLIER MANAGEMENT

• Business Objective Ensure reliability and
  responsiveness commitments are met throughout the
  Supply Chain at the best value (across
  OEM/Tier1/Tier2/Tier3).
• The Importance of OTD
• A Sample
• 40 Billion in inventory across the supply chain
• Highest schedule variation in the Auto Industry
• (week 2 to week 1 GM 37 compared to Fords 24
  and Toyotas 7)
• OTD lead times of 10-12 weeks

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SUPPLY CHAIN MANAGEMENTPROJECT SCOPE

• Focus on particular Commodity Streams and
  selected suppliers
• Map the current Supply Chain process
• Identify improvement opportunities
• Recommend short and long term solutions
• Define GM - Supplier Information Flow
  Requirements
• Develop NC State Case Study

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SUPPLY CHAIN MAPPING
General Motors DHAM, MI
H-Cars -LeSabre
Lear Auburn Hills, MI
Headliner for Sunroof (GMX220)
Arkay Plastics Ohio
Plastic molded part
Alps Auburn Hills, MI
Switch Module
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SC MAPPING OUTCOME

• Information flow between
• DHAM and Tier 1 - EDI
• Tier 1 and Tier 2 - Fax
• Tier 2 and Tier 3 - Fax
• All the suppliers across the supply chain
  studied, hold at least a days worth of FG
  inventory and 2/3 days worth of parts inventory
• Premium freight shipments due to scheduled
  variations
• Complex material flow across extended supply
  chain
• (Japan - Auburn Hills, MI - Ohio - Port Huron,
  MI)

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GM TO SUPPLIER INFORMATION FLOW

• Objective - Represent Voice of Supplier in
  development of OTD Requirements (Plan for every
  part).
• Information Requirements Matrix - What level of
  information is required and when
• At time of Quote
• During Design/Development
• During Launch/Production
• Suppliers who responded to the questionnaire and
  with whom we had one on one discussions
• Alps, JCI, Denso, Delphi, Lear
• Feedback awaited from Magna, Bosch

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IDEAL SUPPLY CHAIN DESIGN

• Supplier Ideas
• Direct access to GM MGO/ Flex System
• Reduced part variation / option content
• Co-evaluation of manufacturing feasibility versus
  cost.
• Information shared electronically across the
  supply chain - common methods, common locations
  for data extraction (GMSupplyPower) for upstream
  inventory visibility
• Stable orders that would improve production
  planning and inventory levels

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RECOMMENDATIONS

• Short Term
• Make visible to all tier 1 suppliers daily
  volumes for two weeks, weekly volume for two
  months and monthly volumes thereafter by
  platform, model, and powertrain for better demand
  sensing
• Give suppliers access to real time inventory
  position at plants they supply
• Long Term
• CPFR (Collaborative planning, forecasting and
  replenishment)
• Reduce the no. of Suppliers eg. Have only one
  seat supplier supplying to a particular
  manufacturing facility

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• Special thanks to Mr. Dick Alagna and Ms Sue
  Toth for their encouragement and support.
• Thank you

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