What would Michael Do?
The Auto Insider section of the Detroit News ran a piece by John McCormick the other day titled “What would Carlos do?”
Read it here.
McCormick writes about the issues that GM and Ford currently face: among them legacy labor issues and pension costs – read the article – it’s a great snapshot on the current condition faced by both companies.
McCormick tosses out the thought exercise of what would Carlos Ghosn, CEO of Renault, do if at the helm of either GM or Ford. He recounts Carlos’s now famous position that good product can save any automaker.
Coming from a different perspective – I guess I’d ask what would Michael do?
Michael as in Michael Dell.
My guess is that Dell would stream-line the system. He’d make the system as real-time integrated as possible.
He’d aggressively connect his supply system to his demand system. And then analyze the heck out of it.
Right now, the degree of integration between auto supplier (Visteon and Delphi) and most automakers and then on to and into the point of sale – the dealership's management systems would bring John Wayne’s Rooster Cogburn to tears.
This isn’t all the automakers’ fault. The dominant providers of dealer management accounting systems, ADP and Reynolds and Reynolds, are selling seriously dated non integrated technology. These systems are so old they make Phyllis Diller look young.
But back to Dell. Dell – the company – right now has about 11 days of inventory in carry. Dell’s competition has about 80 days worth. Want to bring a new product out? Dell does it 69 days faster. Dell shares with suppliers daily production requirements who stock product within 20 minutes of the Dell production line. Dell real-time analyzes their business looking for what ever edge that analysis can offer.
How long do you think it takes Dell to spot an issue that impacts their warranty coverage? How long does it take an Automaker today?
How much does Ford save if they can fix - in production - the next 5 big recall efforts - 30% faster?
How much less would DaimlerChrysler pay for interiors from Lear if DCX transparently shared production demand with Lear - to help Lear produce more in line with demand?
Ask Steve Miller, CEO of Delphi, if this would make a difference in how he runs his business?
