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GM Order to Delivery


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GENERAL MOTOR’S ORDER-TO-DELIVERY INITIATIVE A CASE STUDY Questions: 1. What actions can Dick take immediately to help the Mountainview situation? 2. What is needed from GM’s suppliers to enable the OTD initiative to become a reality? 3. Do you think the Mountainview situation is representative of GM’s supply chain, and other automotive supply chains in general? Is it also representative of supply chains in other industries as well? What are the implications for B2B E-commerce and supply chain management practices in general? 4. What must GM be able to do in general across all of its internal functional to enable OTD to become a reality (i.e. in sales, order entry, dealer offerings, production, logistics, and supply?) 5. Define the properties of a possible software solution that may enable GM to implement OTD. How would GM implement such a system? Two years after taking on a challenging job as Director of Business Processes in Advance purchasing, Dick Alagna lay back on his chair thinking about what had transpired between him and Harold Kutner –Group Vice-President of WWP. Dick had been nominated to lead the cluster called “Sourcing and Supplier Management” in one of the biggest initiatives of GM “Order to Delivery (OTD)”. This new initiative would radically re-define the business processes at GM. In a presentation, Kutner had challenged Alagna to develop a supply base that “can transform end customers’ clicks on GM’s Buyer Power website into technology and demand requirements that are ‘sensed’ by suppliers throughout GM’s supply chain via Supplier Power and TradeXchange.” The cross-functional OTD team consisting of some 50 people representing seven clusters had been put together to take the automotive giant’s OTD initiative forward. OTD as defined by GM as: “The engine that will deliver the promise of e-business to our customers and shareholders by: - Helping to transform GM from a traditional make and sell company (push) to a dynamic sense and respond company (pull) - Integrating and streamlining the entire supply chain (supply, manufacturing and distribution) - Enabling GM to meet dealer and customer requirements rapidly and reliably” The biggest challenge of the OTD initiative was to be able to deliver customized vehicles to customers within five days of ordering them from the GM Buyer Power website. This was going to prove to be a daunting task, as GM’s order delivery leadtimes have historically been in the 12 to 16 week timeframe. Dick had been assigned responsibility
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for the supply part of the initiative. Although this was an exciting project, Dick also realized he had a tough job ahead of him. The problem was complex, he thought. “How do I get 12000 suppliers together to share their ideas?” Dick realized that the first step involved establishing a dialogue with suppliers, find out the problems they faced with the OTD initiative, and then recommend solutions so as to improve the supply chain reliability and responsiveness and align it with OTD’s vision of “sense and respond”.
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