Testing GM’s IT Strategy
July 31, 2008 by Raj Sheelvant
SUV and pickup sales have been plunging in the US due to rising gas price. GM, a major player in the SUV and Trucks market, is planning of changing manufacturing capability from building big gas guzzlers to building small cars. Ability to adapt to changing customer need due to this new reality (high gas price) has forced GM to follow JIT (just in time) manufacturing process. So, GM needs an IT infrastructure to help enable it to execute its new Strategy. GM has about 160 plants situated globally; and over the past few years GM has invested considerably in simplifying and standardizing software and process in every plant according to Information Week article “GM’s Factory IT Faces A Test”
The article also states that ‘The global rollouts of two standardized software applications–a product routing and tracking system, which helps ensure that specific vehicles, down to the paint color, are produced as planned, and an in-plant order management system, which links suppliers into the assembly line–come at the right time. GM is looking at how it can make changes on the production lines at its plants more deftly to react to shifting consumer tastes.’
This is where GM can get to test if its investment in IT is going to pay off. By standardizing the IT infrastructure globally, I think GM will be successful in reducing the IT overhead cost (maintenance, upgrade and support). Enterprise software application for streamlining supply chain and order management will enable GM to be more responsive to the changing customer demand. Obviously, JIT manufacturing is a mind shift and GM needs to change its organizational culture to be like Toyota and incorporate TPS (Toyota Production System). Speed at which GM will radically alter production process will depend on how fast it will change its culture. But a strong IT infrastructure will help GM become competitive again.
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