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Case Studies: Digital Do-Overs
The buzz over B2B has faded but the need for improving business processes using Web technology hasn't. Below are four companies that are profiting from a technology overhaul.COLLABORATION: GM Moves Into the Passing LaneFor anyone under 60, Cadillac has been in the slow lane for decades. Then a year ago it introduced the Escalade, a 345-horsepower SUV that now commands a 40% share of the luxury utility market.The Escalade—and a whole lineup of buzz-worthy new vehicles, like the Chevy Avalanche and the Hummer H2—reflects an ongoing turnaround at Cadillac's parent company, General Motors (nyse: GM - news - people ). Five years ago GM's cars and trucks took as long as four years to get to market, often looking stale on arrival. Now, thanks to aggressive outsourcing—and Web-based collaboration—the time from drawing board to driveway hovers closer to 18 months. In fact, with its technology upgrade, the world's largest automaker will churn out new or redesigned models at a clip of one every three weeks for the next five years. One key to GM's transformation is its ability to collaborate in real time—both across its many internal divisions and with its 9,000-plus outside suppliers. Specifically, says Kevin Prouty of AMR Research, the automaker has excelled "in the turnaround of engineering and design documents." The transformation started in the mid-1990s, when Internet bandwidth was increased. The fatter pipes, crucial for sharing big design files, were also shared with key suppliers. Then GM's 7,000 legacy IT systems were reduced by half. For example, before 1996, it had 23 disparate CAD (computer aided design) systems in use. The engine people couldn't share drawings electronically with the suspension people or the sheet-metal people, making design integration a tortuous affair. So GM technologists chose Electronic Data Systems' Unigraphics as its standard CAD program, allowing 3-D design documents to be shared online by more than 18,000 designers and engineers at GM's 14 different global design labs. More than 1,000 of its key suppliers' engineers were also hooked up with the EDS software. Using Unigraphics and Web conferencing tools like Microsoft's NetMeeting and EDS' eVis, engineering teams have radically transformed the vehicle review process. "In 1990, we had to do frontal crash tests on the Caprice that required us to build 70 cars and crash them," says Maggie Harder, group manager of engineering process and math strategy. "Each of these vehicles, using prototypical parts, costs anywhere from a half-million to a million dollars. Now, using math-based modeling and a real-time online review process, we've got that number down to ten cars. The rest we crash virtually." GM's important suppliers have had to gear up or get out of the way. When GM asks Johnson Controls for a target cost for a seat frame, its benchmarking specifications are fed directly into Johnson's product data system. It uses Unigraphics along with its own collaboration platform, eMatrix. "By searching, designing, tooling and testing that seat frame in real time with our client," says John Waraniak of Johnson, "we have realized savings of up to 10%." While analysts agree that the impact of collaboration on GM's bottom line is hard to measure, there is evidence that GM's production process has been streamlined. For the first six months of 2002, revenues rose 6% to $94.5 billion, while 2nd-quarter earnings rose from $776 million in 2001 to $1.5 billion. — Missy Sullivan CUSTOMER RELATIONSHIP MANAGEMENT: New Piper Gets PersonalA decade ago Piper Aircraft was nearly dead. It was making fewer than 50 planes per year, had just $1,000 in cash and had $15 million in bank debt. But then a former riveter named Chuck Suma took over, overhauled the factory and focused on quality. Last year the Vero Beach, Fla.-based company, now called New Piper, delivered 441 planes and took in $243 million in revenues. One key piece of this turnaround was to tighten customer connections to stave off competitors like Cessna and Raytheon (nyse: RTN - news - people ). Piper's old system was so bad that it used the FAA's data, where customer records were thin or outdated. Up to 40% of the data was useless.Sidebars Case Study: Web Security Case Study: Data Integrity -
TV's Most Successful Products - 11/13/02 12:00:00 PM ET Ten infomercials that have persuaded TV viewers to act now! Military Morsels - 11/13/02 1:00:00 PM ET Defense spending and industrywide consolidations are on the rise. These smaller firms could get gobbled up. The Darwinian World Of The Infomercial - 11/13/02 12:00:00 PM ET Producers know when infomercials work--unlike traditional ads--and ruthlessly kill off those that don't. A Celebration Of Business Innovators And Ideas - 11/4/02 7:00:00 AM ET In honor of Forbes' anniversary, we seek your input as we spotlight significant innovators and ideas. Forbes Largest Private Companies - 11/7/02 6:30:00 PM ET There are 257 companies on this year's list each with at least $1 billion in annual revenue. 
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Market data provided by Reuters. Disclaimer Stock quotes are delayed at least 15 minutes for Nasdaq, at least 20 minutes for NYSE/AMEX. U.S. indexes are delayed at least 15 minutes with the exception of S&P; 500 which is real-time. Forbes 40 Index powered by Telemet. News may include latest headlines from Reuters. |
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