Gm Jit

OVERVIEW

The global automobile industry has become increasingly competitive and the previously dominant “Big Three” manufacturers of Ford, General Motors (GM) and Daimler Chrysler have lost much of their market share to their Japanese competitors. Manufacturers continually have to look toward lowering their costs and GM and Ford largely go about doing this through their purchasing practices, more specifically, their supply chain management.

In this paper, we shall discuss our findings on the different practices of Ford and GM (the carmakers) on how they get the most out of suppliers in terms of price, quality, timeliness and other expectations. We will further discuss the implications of their current strategies, short term future plans and supplier relations before deciding on whether Ford or GM would potentially make a better working partner for suppliers.

CARMAKERS AND SUPPLIERS

The automobile industry has seen a great shift in the way business is conducted over the past few decades. Gone are the days where the manufacture and assembly of parts and the sales functions were all done in-house. Today, Ford and GM are highly dependant on external parties to supply them individual parts and sub-assemblies (suppliers) and take care of their sales functions (dealers). The carmakers’ challenge these days is to coordinate and manage the complex supply chain network where the quality of the partners they work with would determine the carmakers’ ultimate performance.

To manage these vast networks, Ford and GM have turned to the internet as a solution. In 2000, Ford and GM were part of an initiative that set up Covisint , an online portal where OEMs and their suppliers could interact under a common infrastructure and carry out their business transactions. The use of such portals meant that OEMs and registered suppliers could easily have access to each others information in the form of online catalogs, real-time inventory levels, contract bidding auctions and other cooperative applications.

Presently, Ford and GM continue to use such portals in the form of the Ford Supplier Portal and GM SupplyPower . These portals have enhanced information flow and feedback between carmakers and suppliers and allowed the carmakers