As an illustration of how a firm can move successfully into level 3 and beyond,
consider what happened at a venerable organization called General Motors, after
chief information officer Ralph Szygenda was brought in to help GM regain
some of its preeminence in engineering and car styling by �better applying and
integrating information technology.� As reported in Supply Chain Management
Review, the first phase of the effort was launched in 1997, to improve the
vehicle development process. There were two subparts to the initiative: reengineer
design processes and implement time- and effort-saving IT. As progress was
made, GM further realized that it really needed to embark on a supply-chain
wide effort, extending much of the effort to suppliers willing to collaborate
electronically. The results have been dramatic: a 70% reduction in product
development cycle time and more than $1 billion in savings. As Szygenda
reported, �Broadening the vehicle development initiative to include our external
partners was always in the back of our minds� (Gutmann, 2003, p. 35).
When GM began its work on the vehicle development process, it formed
teams to look at key design processes, to find how it could make them better
and leaner. Concurrently, the teams looked at what IT could do to enable the
improvements. This is a very typical step in the maturity process, as collaboration
and technology are used to reach the higher levels of progress. The
company started by asking tier one and further upstream suppliers to identify
the problems with the existing design process. When this step is taken, most
firms find there is a lot more that could be accomplished with existing processes
than normally believed. GM used these conversations to identify three main
areas of concern: batch processes that needed to be more interactive, a balance
between security and accessibility, and improvements to the integration of suppliers
and the transmission of data in a way that would not disrupt business
processes.
Design files were synchronized with suppliers, ensuring that all parties were
working from the same information. Instead of exchanging design tapes back
and forth, an electronic solution was introduced to do direct computer-aided.
design (CAD) and computer-aided-manufacturing (CAM) exchanges. A common
technology backbone was used to integrate disparate technology solutions
and systems, �while providing one common source of up-to-date information
related to a product� (Gutmann, 2003, p. 38). This move led to the adoption
of one common CAD/CAM system at all GM locations and joint ventures
across the world. A product data management system was also installed at that
time.
In 1999, GM began connecting its suppliers to the common technology
backbone through its virtual private network and its supplier portal, Supply
Power. Through this technique, GM increased its suppliers� �access to business
and technical systems such as project schedules, engineering change requests,
technical specifications, test requirements, and quality controls. Tier one suppliers
focused on keeping the design changes lean, passing on needed process
improvements to their suppliers. Today, GM is able to integrate and update [its]
bigger suppliers� CAD creations on a daily basis. For smaller suppliers, that
information is updated weekly.� Security and access to information are balanced
by providing �different layers of visibility to different suppliers� (Gutmann,
2003, p. 36). At the end of 2002, GM had 1,000 suppliers in North America
and 1,000 suppliers in Europe integrated into this new system.
In 2001, the scope was expanded to include external suppliers for such
downstream processes as tooling, manufacturing engineering, and manufacturing.
A tooling supplier can now download design files right after the design/
styling phase, allowing it to begin its work earlier in the process. This assistance
is offered through GM�s product development portal, eliminating a previously
heavily manually intensive set of processes. This feature allows GM to share
facility and process design with its �most trusted suppliers,� which in turn
�accelerates the assembly design process� (Gutmann, 2003, p. 38). The result
has been a reduction in product development process time from 60 months in
1996 to 18 months in 2003, a dramatic example of how collaboration will work,
especially when enabled with the correct technology.
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