By Joanne Sammer
If General Motors Corp. has its way, consumers will soon be able to place custom orders for cars over the Internet or through other channels. And the success of this initiative has the potential to create a tidal wave of change throughout the entire automotive industry.
After all, if GM begins taking custom orders that promise delivery of the vehicle in days or weeks, that has tremendous implications for consumers and the thousands of companies in GM's supply chain. For GM, it means the elimination of both its parts and finished goods inventory — a move that's expected to save tens of billions of dollars in costs as the Web allows the automaker to fully leverage a build-to-order strategy.
Think of it. Customized orders are fed directly to the mass production line, where the customer's steel-belted radial tires and Blaupunkt radio are ready for installation. Instead of "buying and inventorying" parts, GM now "buys and consumes" parts by leveraging the Web and offloading the inventory burden to Blaupunkt.
"GM will be transformed," says Daron Gifford, the global automotive practice leader for Deloitte Consulting who is working with GM to develop the build-to-order process. "I've never seen such change in the company, with so many different initiatives attempting to create value into this new marketplace."
The good news for consultants is that GM is not alone. Well-established Industrial Age companies of virtually every stripe are looking for ways to weave the Internet and e-business innovations into their core businesses. "It is hard to think of an organization that is not doing this," says Jim McGee, a partner with Diamond Technology Partners in Chicago. "The biggest distinction is that a lot of companies are simply transferring what they do now onto the Web. A much smaller percentage are actually using this as an opportunity to transform their businesses."
