Field Report: E-Business Essentials: Job 1 — Some Of The Things We Learned In Las Vegas

Automotive Manufacturing & Production, Dec, 2000

AM&P'S FIRST-EVER CONFERENCE HAS COME AND GONE. NOT ONLY WILL THE PARTY HELD ALONG WITH SUN MICRO-SYSTEMS AND 12 BE LONG REMEMBERED, BUT THE SPEAKERS PROVIDED SOME OUTSTANDING INSIGHTS INTO ISSUES THEY ARE GRAPPLING WITH. SO IF YOU WEREN'T THERE, HERE'S SOME OF WHAT YOU MISSED.--GSV

BUILDING CARS; GETTING CONNECTED

Rick Vanzura, chief strategy officer, GM Information Systems and Services, insisted that GM is and will continue to be an automobile manufacturing company. That's what it is. But how it will do what it does is changing significantly as the organization begins to clearly understand that the processes and products are undergoing a profound series of changes driven both by technological innovation, as well as new customer demands. So what this means, Vanzura suggested, is that the organization needs to be able to accommodate the following factors:

* Build to order

* Vehicle as information node

* Valid customer demand information

* Dealer and manufacturer process integration

* Sufficient supply chain visibility

* Reduced product complexity and design cycle times

* Tighter real-time integrated business processes

In order to handle them, there is what Vanzura called a "New GM," which is, "a network of Internet exchanges." There are six aspects to this:

1. Customer home/office. This takes into account not only GM's BuyPower web site, but also financial services through GMAC, entertainment through DirecTV, and aftermarket parts.

2. Customer Auto. Simply put: OnStar.

3. Supplier. This exchange is Covisint.

4. Dealer. Which means working with dealers from the standpoints of both bricks and mortar as well as the 'Net.

5. Employee. There is the Socrates website that provides the user with information at large as well as employee-related tools.

6. GM Processes. The focus is on order-to-delivery.

While today these aspects are essentially established as an array of satellites with the first five around the sixth, what Vanzura sees in the future is an arrangement wherein the six are morphed into a single element, with the Internet serving as the means through which there is linkage.

BUILDING A BETTER PIPELINE

The "plumbing" that has long served to connect OEMs with key suppliers has been a dedicated EDI arrangement, a costly private network service. Which begins to seem rather cost ineffective in this age of nearly ubiquitous telecom and Internet connections. But whereas it may be one thing to order a book from Amazon.com with one's credit card number, it is an entirely different issue when the issue is advanced shipping notices and the like from the OEM to the supplier. Complicating things a bit is that with the increased responsibility that the Tier One suppliers have with regard to design, engineering and manufacturing, they need to communicate with their suppliers. And as has long been known, some of these lower-tier suppliers are lacking the communications infrastructure that is analogous to the private network between the OEMs and the Tier One supplier.

The public Internet may be a useful tool, but as Doug Buchanan, management consultant with ANXeBusiness Corp., which is part of SAIC, the firm that acquired what was then the Automotive Network Exchange from the Auto Industry Action Group (AIAG) in December, 1999, (it is now, Buchanan pointed out, the "Advanced Network Exchange," because there are non-automotive industries that are interested in this resource), there are some issues when it comes to using the Internet as a business tool. As in iffy performance, unpredictability, decentralized administration and inconsistent support, and inconsistent security. ANX is a business-strength version of the Internet, providing, Buchanan said, guaranteed performance, reliability, centralized admin and support, and standards-based network-level security.

According to Buchanan, companies are building what are described as virtual private network tunnels through ANX, which is allowing secure transfer of things including EDI, e-mail, and CAD files to multiple companies via a single ANX link.

Buchanan believes that a key benefit of the ANX structure is one that will facilitate supply chain development in that it provides a flexible, cost-effective means through which there can be confident, secure communication between trading partners in the supply chain. And whereas ANX was once an expensive proposition, he noted that there is now an offering that provides ANX for a monthly fee of $199, certainly a modest sum by nearly any measure (save that of AOL).

HEAVY-DUTY E-COMMERCE

One could call Hayes Lemmerz International (HLI) a heavy-duty manufacturing company in that this company produces wheels, brakes, suspension components, and powertrain components from aluminum, iron, steel, and plastics in high volumes in 36 plants around the world. One might imagine that such a company is primarily interested in better machinery and equipment to produce these products. There is undoubtedly something to the interest in better casting and faster chip removal. But Kelly Knepley, IS director, Suspension Components Business, HLI, explained that the CEO of HLI stabled an executive steering committee that was committed to e-commerce, which gave rise to a working committee on the topic that was charged with developing a comprehensive e-commerce strategy that took into account the following components: