Presentation on theme: "Problems faced by GM in 1970 1- GM’s auto sales have declined from about 60% to 28.3% today. 2- The company has been facing stiff competition from other."— Presentation transcript:
Problems faced by GM in 1970 1- GM’s auto sales have declined from about 60% to 28.3% today. 2- The company has been facing stiff competition from other companies.
1-Selling Cars Online Gmbuypower.com 1- visitors can browse for GM cars,search by color,options and availability 2- find a dealer in their local area which have the car they want to purchase 3- the site indicates the cars that dealers currently have in their inventory
Selling cars online: Dealers must be trained to work with customers who done online car research. GMBuyPower has generated thousands of leads to dealers per day and more than 20% of those leads convert into auto purchase
2- Building vehicles to Order - Building to order means : making cars that customers really want to buy - Reducing finished vehicle inventory costs, generate other production cost savings saving GM $20 billion per year. - Heavy reliance on information technology and organizational change
The company would have to : The company would have to : Take orders online link its factories and suppliers online change vehicle designs so they can be built more easily using modules cut shipping times. This new system requires a reversal of the traditional just-in-time trend.
Continued: Using the internet and systems from vendors such as i2 & oracle and seebeyond has increased efficiency in supply chain management and product delivery. Order fulfillment lead time has been cut in half. Inventory costs have dropped 20% Delivery date reliability has increased by 22%
3- Online Services OnStar : Subsidiary that provides a telematics system with onboard navigation,internet, safety and communications capabilities accessed through 3 buttons on vehicle dashboards. - GPS keeps the system constantly informed as to the location of the vehicle on the road. - Onstar provides: emergency roadside assistance, stolen vehicle tracking ….etc
OnStar System - users must pay annual subscription fees ($17:70 per month) - This system is supposed to be very profitable to GM and generate great cash flows but this is not the case as most users don't renew their subscription after the first year
4- Product Development - GM has now mandated a single process and set of information system tools for product development that must be used widely. - Every GM engineer and key GM subsystem supplier working collaboratively with GM’s engineers must use this system through a web-based interface to share so everyone can coordinate their work on the same design.
GM’s standardized tools enabled to cut time to develop & produce a car from 48 months to only 18 months and to slash $ 1 billion in annual engineering costs and reducing assembling time from 32 hours on 1998 to 24.4 hours in 2003. This system enabled GM to compete in both the price and generating new designs.
Despite of all that GM still have burden with very high fixed cost for pensions & health care benefits.