[2020-2021]

SUPPLY CHAIN PROCESS

PROJECT WORK: GENERAL MOTORS
TEAM NO: 10
AKSHAY CHINTHA (940493)
APARNA PURUSHOTHAMAN (952700 )
DHANUNJAYARAO LUKALAPU(943910)
MANOSRI.M.BHAVANI SABBELLA(939393)
SIVAGURU MURUGANANTHAM(927161)

UNDER THE GUIDANCE: PROFESSOR. NIZAR ABDELKAFI

 INDEX
DESCRIPTION PAGE NO:
1. Introduction 4
2. Evolution of Supply Chain Strategies at GM 4
1980-2000 Lean Supply Chains 4
1992- Single Purchasing Organisation 5
Early 2000's-Responsive Supply chains 5
2009-Bankruptcy 6
Restructuring-(Ongoing) 7
a) Postponement 7
b) Modular Architecture 8
GM Current Strategy-Agile Supply Chains 8
a)Supplier Parks 8
b)Risk Hedging Strategies 9
GM Order Fulfilling Strategies 9
3. Performance Measures Of GM 10
Service Measures 10
Quality Measures 10
4. Sustainability Strategy Of GM 11
Purchasing And Supplier Management 11
a) Supplier Development Programs 11
b) GM Supplier Code Of Conduct 11
Operations 11
a) Reduce the Impact Of CO2 Emission 11
b) Transition To Renewable Energy 12
c) Labour Safety Rules 12
Distribution And Transportation 12
New Product Development 12
 INDEX
DESCRIPTION PAGE NO:
5.Technology Used In Gm 13
Plan 13
Source 13
Make 13
Deliver 13
Enable 14
a) Geographic Information System(GIS) 14
b) Big Data Analytics In Value Chain 14
6. Risk Management Strategies At GM 14
7. Conclusion 15
8. References 15

FIGURES PAGE NO:

1. Full Global Supply Chain Model 4
2. Car Market Segments 6
3. Supply Chain Strategies 9
4. Number of Risk Events Occured At GM 14
 PAGE NUMBER 4

INTRODUCTION
General Motors (GM), one of the world's largest auto
manufacturers, makes and sells cars and trucks worldwide
under well-known brands such as Buick, Cadillac, Chevrolet,
and GMC. Business divisions GM North America and GM
International handle the business's automotive end, while
General Motors Financial Co. provides financing services. It
manufactures a range of vehicles globally, sources more than
100,000 unique parts from 5,500 supplier sites worldwide, and
sells its cars in more than 100 countries.

Figure 1:Full global supply chain model

EVOLUTION OF SUPPLYCHAIN STRATEGIES AT GM:

In this section, we will walk you through the bumpy ride of GM and
elucidate how meticulously redesigned the supplychain from time to
time to sustain the choice of operational strategies and competition.
1980 -2000: LEAN SUPPLYCHAINS:
Mid 90'S GM business strategy was to be the "world leader in
transportation and automotive services." which means having the most
market share. In the then automotive industry characterized by stable
processes and predictable demand, one way to achieve this objective is
to attain the highest operational efficiency in assembly time, the
supply of parts, and the delivery of finished vehicles. In those times,
the Just-In-Time operating model is widely used to complement this
 PAGE NUMBER 5

strategy; hence GM implemented lean practices in manufacturing and

supply chain.
Lean supply chains are characterized at GM by value stream mapping
of the Request for quotations, use of electronic Kanbans enabling the
suppliers to deliver components" just-in-time" for assembly, and some
lean implementation workshops called Purchased Input Concept
Optimization with Suppliers (PICOS). As part of PICOS, small GM
engineers' small teams visit GM suppliers for several days to conduct
lean methods and lead a focused kaizen-type rapid improvement event.
Follow-up is performed with the suppliers at intervals of 3 or 6 months
to determine if productivity improvements are maintained and assist
with other processes fine-tuning.

1992-SINGLE PURCHASING ORGANISATION:

Though GM tried to adopt lean principles and practices for years,
adoption was not soon enough to stop the decline. While Toyota was
unified and centralized, GM was diffuse and decentralized. The then
CEO Smith realized that 70% of costs were to logistics and inefficient
purchasing; he then implemented several cost-saving measures and
integrated the system with the Single Purchasing organization.

Early 2000's-RESPONSIVE SUPPLYCHAINS:

By the 20th century end, the automobile markets became matured, and
consumers have been showing increased demand for more variety in
vehicles. They are interested in having more unique cars with many
options for both the car's look and the functional aspects such as
power locks, steering, etc., along with fragmentation of the market has
driven lower volume sales per model. Economies of scope are starting
to become more critical, while economies of scale are declining. GM
realized that it needs reactivity and flexibility to cope with
customers' desiring variety and variability.GM made a transition to a
web-based company opening a Supply Power portal where all
requests and orders go through before being shipped to the factories
and plants. With so many different suppliers and orders processed
every day, GM uses this program to manage their supply chain more
effectively to decrease wait times. Buy Power portal; Customers can
go to this site, configure their GM cars/trucks/SUV, get price quotes,
apply for a loan, and get directed to the nearest GM dealer.
 PAGE NUMBER 6

GM Streamlined various suppliers, integrated both tier2, tier 3

suppliers and is given access to the supply power portal for better
visibility across the supply chains for successful, responsive supply
chains.

2009-BANKRUPTCY:
In 2009 bankruptcy has become inevitable for GM. Though there were
many reasons like legacy costs, bureaucratic administrative systems,
economic recession, bad financial policies, low-quality issues, etc., this
section deals only with one prominent reason most relevant to supply
chain context that is a failure of market focus.
The cars market of 2000-2010 can be segmented as follows:

Figure 2: Car Market Segments

More successful car companies (Toyota and Honda) have positioned

themselves to compete with highly market-focused cars in segments
where they can create and sustain high and growing net cash flow from
a market-focus perspective. For example, Ferrari competes only in
segment six and Rolls-Royce only in segments 1 and 2. Mercedes-Benz
competes in segments 1, 2,5,6,7,8,10, and 12. It is evident from Fig.2
that any company with a product portfolio that has two cars in every
segment would have 36 cars in their portfolio; three cars in each
segment would result in 54 cars. GM has over 95 cars in its product
portfolio! Quite clearly, the company's car portfolio has grown out of
control.
 PAGE NUMBER 7

Even within a particular brand and model, GM often offers many

variations and options, mechanical and cosmetic. Toyota offers two
basic engine choices for most of its cars, a V6 or an inline four-cylinder
engineTherere are many more different engine choices in some GM
divisions, some manufactured in GM and others from different
outsource suppliers. There are also many more mechanical options and
model variations.
GM's fragmentation of car market segments ultimately led to a loss of
market focus extending new GM car design, redesign, manufacturing,
and market entry cycle times. With too many new-vehicle market
entries (19 new cars planned by 2010) and car upgrades and redesigns,
the number of corporate resources allocated per vehicle became very
limited, with potentially severe impacts on car quality.
Proliferation dramatically increased the number of car parts, which
raised the number of plants and suppliers' elements, which led to
severe quality control problems. It also reduced the car volume per
plant, driving costs up, making plant capacity utilization challenging to
manage.
Proliferation also increased the need for greater supplier capacity and
variety and increased the cost and complexity of managing suppliers.
It also created a huge task and role redundancies in the overall
corporate and divisional management, facility, equipment, and staff
support infrastructure, which all lead to huge inefficiencies and
increases in fixed costs
Thus, poor portfolio management due to excess variety and many other
factors had enormous effects on GM's capacity to generate positive net
cash flow, finally leading the company to file for bankruptcy.

RESTRUCTURING–(ONGOING):
However, with aid from the US govt, GM went into significant
restructuring to regain the market share and lost its reputation. The
prime focus of restructuring was reducing variety and focusing its
portfolio only on market opportunities to create and grow long term
positive net cash flow. It axed several brands like Daewoo, Saab. The
company mainly opted to reduce and manage its internal variety
through the following:
postponement:
GM looked at software configuration as a different way to use
postponement. From a software view, systems in each vehicle can be
considered a central processing unit (CPU) made up of several
 PAGE NUMBER 8

electronic control units ECUs. These ECUs come to GM in finished form

with all the software pre-loaded. And each of these is assigned to a
specific vehicle, but they all looked the same from the outside.
Suppliers charged GM for custom software installation, which raised
the price and resulted in repair and maintenance problems.
GM decided to assume the responsibility for software configurations
and postpone the installations until the assembly process's latest
possible point. Now the ECUs come from suppliers to GM in a generic
form. After realizing that software also can be postponed, they started
looking for other systems that tend to delay until purchase. Now GM
offers a 99% guarantee to deliver the vehicle within one day of the
projected delivery day to a dealer closer to the customer. In a GM
study to measure postponement benefits, they have projected
inventory cost savings to be 10-15 percent and even maintenance cost
savings.
Modular architecture:
Evident from GM's statement, "From one modular architecture, we can
make vehicles ranging from cars to crossovers to full-size trucks – and
even self-driving vehicles." It even closed several production plants
running under load and opted for flexible manufacturing processes
that allowed the production of different varieties at one plant.

GM CURRENT STRATEGY-AGILE SUPPLY CHAINS:

GM is on its way to an all-electric future, with a commitment to 30 new
global electric vehicles by 2025. Changing conditions of competition and
increasing economic and environmental turbulence levels have raised GM's
interest in the concept of "SUPPLY CHAIN AGILITY." GM focuses on
satisfying market needs combined with "risk hedging" strategies.

Supplier Parks:
GM has been executing a strategy to create supplier parks adjacent to
its US manufacturing sites already accomplished with Northpoint at
GM's Fairfax Assembly Plant in Kansas, Wentzville Assembly Plant in
Missouri, Bowling Green Assembly in Kentucky, and Fort Wayne
Assembly Plant in Indiana. These suppliers consist of having a
colocation of the company's assembly plant and their suppliers. By
having these immediate vicinity companies, GM can have a more
optimal supply chain process. It enables speedy transportation
between suppliers and manufacturers, thus reducing the lead-times.
 PAGE NUMBER 9

Though there is no particular mention, these parks have prime focus

only on electric vehicles, following the company's focus on the shift to
ALL-ELECTRIC VEHICLES we believe this is a move to stay flexible and
competitive in a highly emerging industry.

Risk hedging strategies:

GM's production has been exposed to a broad range of disturbances—
from political uprisings and weather events to labor disruptions and
supply shortages. Thus, to ensure supply reliability, GM invested in risk
hedging technologies like GIS, incorporated IT applications like Resilinc
to provide visibility and more agile supply chains.
Here we tried to summarize using a simple graphical representation.

Figure 3: Supply Chain Strategies

GM ORDER FULFILLING STRATEGIES:

GM's current supply chains are integrated by PUSH -PULL logic with a
decoupling point at Assemble to order. Though GM started the Make to
order concept in 2002 for racing cars (SSR) leveraging web
technologies, the process came to a halt due to SSR's bad design and
low demand for the model. However, after this pandemic, Gm has ideas
to launch new halo cars for 2022.
 PAGE NUMBER 10

PERFORMANCE MEASURES OF GM:

GM believes that to sustain the competitive advantage reaped through
agile supply chains, it is essential to deliver best in class service to
customers.
SERVICE MEASURES:
GM establishes a dedicated Infotainment Call Center with vehicle
simulators to better connect the operators with customers.
General Motors deploys NICE Performance Management to boost
employee engagement-with Advanced Reporting & Coaching Toolset,
which sets customers as a priority.
By Utilizing tools like Oracle Social Relationship Management, GM
draws information on Top 12 global social KPIs and devices
necessary actions from insights to provide best in class service to
its customers even through social media.
Gm ensures complete visibility to the buyers about the production
process, inventories, the number of suppliers notified, etc., through
the buyer power portal. A customer gets time to time updates about
the order, from placing the order to receiving delivery at his
doorstep.

Throughout history, GM faced huge quality issues and suffered severe

losses due to recalls. Hence to build strong, agile chains, quality is
given paramount importance at GM.
QUALITY MEASURES:
Two methods to manage their supplier's quality: metrics and
Advanced Quality Planning Process (APQP). These metrics include
quality performance, and the APQP states the terms of the
relationship with the supplier.
Keeps performance records of their suppliers by Problem Report
and Resolution (PRR) system. This system is then used to decide on
future business with suppliers.
Problem Resolution Tracking System - used organization-wide to
document all issues during a vehicle's life cycle.
REDEX certification made compulsory for quality officials. Where
REDX TOOL is a quality assurance software designed by REDX
Company after studying quality problems of GM for 20 years.
 PAGE NUMBER 11

SUSTAINABILITY STRATEGY OF GM:

The sustainability Office oversees innovating and advocating for the
acceleration of zero crashes, zero emissions, and zero congestion
vision.
To manage and measure the progress GM has recently announced
sustainability goals,
Ensuring at least 50 percent of sustainable material content in GM
vehicles by 2030.
Achieving a 31 percent reduction in CO2 emissions by 2030.
Ensure 100 percent of targeted GM suppliers are reporting data to
CDP Supply Chain by 2022.
To source 100 percent renewable electricity globally by 2050.

PURCHASING AND SUPPLIER MANAGEMENT:

GM is responsible for Collaborating with suppliers to accelerate
innovation on sustainability initiatives and deliver more excellent value
to customers by following.
Supplier development programs:
CDP – Carbon disclosure project, to have one-on-one strategic
discussions with suppliers about their emissions results and
initiatives to decrease emissions, energy, and water usage.
Supplier Business council, Supplier safety council program,
Webinars to provide training to improve supplier operations.
GM Supplier Code of conduct:
zero-tolerance policy "No use of child labor."
Prohibition against forced or involuntary labor, abusive treatment of
employees
Anti-Corruption
it is responsible for sourcing sustainable Raw Materials. Example:
sourcing of sustainable natural rubber for tires.

OPERATIONS:
Reduce the impact of CO2 emission:
GM has made a progression towards zero-emission by transitioning to
an electric vehicle future. Towards the zero-emission journey, they
committed to develop and deploy advanced technologies and enhance
the traditional ones to ensure that the business follows the carbon
emission regulation markets.
 PAGE NUMBER 12

Simultaneously, to improve the efficiency of a vehicle that relies on the

Internal Combustion engine.
Transition to renewable energy:
The largest solar project of 300 MW is implemented in Michigan
through a green tariff agreement, making all GM sites in Southeast
Michigan served by renewable power.
Labor safety Rules:
To use fall hazard/prevention controls when working at heights.
compulsory Wearing seat belts GMs Vehicle manufacturing process
has the lowest environmental footprint in history.
For Economic sustainability, GM has ventured into new business
models that work on car sharing like Relay rides, Zipcar, car2go, etc.

DISTRIBUTION AND TRANSPORTATION:

GM has enhanced the long-term sustainability in logistics by increasing
shipping container packing density, Complex monitoring of route
efficiencies, and using alternative fuels like bioethanol and biodiesel
for road transportation.

NEW PRODUCT DEVELOPMENT:

All the Research and Development spending of GM aligns with the
environmental goals.
Their primary focus is on the hybrid and electric vehicle portfolio
that can create value and provide a positive net cash flow.
GM has made a success story in sustainable packaging, where
packaging boxes are made out of 33 to 95 % sustainable material by
using sustainable materials such as recycled, bio-based, or
renewable content as inputs into their products.
Interior components made from a synthetic suede material
containing recycled content.
Managing supply chain impacts through LCA – Life cycle Analysis
that helps to show the clear connection between the materials used
in products and environmental impact.
 PAGE NUMBER 13

TECHNOLOGIES USED IN GM:

PLAN:
GM uses highly advanced information systems to plan its production
processes efficiently. This stage involves three critical information
systems. The VOMS System -customer side to place order, POMS-plant
side IT resource to schedule production according to placed orders,
and the MGO- automatically place replenishment orders with selected
suppliers.

SOURCE:
All the purchasing did through GM's Global Purchasing Organization. To
reduce errors in data entry and shorten lead times of processing, GM
uses Electronic data interchange with suppliers.

MAKE:
Robotic process automation:
Industrial robots are connected through the cloud to gather real-time
equipment performance data to ensure operations are made more
efficient, productive, and avoid unexpected downtime.
Additive manufacturing:
GM deploys additive manufacturing processes such as 3-D printing to
create on-demand parts, such as tools used in production, spare parts
in their manufacturing.
Internet of Things (IoT):
They use RFID to track and trace
systems to ensure accuracy and consistency during the manufacturing
process and identify defective parts in the post-production process.

DELIVER:
GM maintains comprehensive electronic field inventories for many
vehicle lines. If a particular dealership does not have a specific stock
model, a search of the database can reveal the closest available
matching unit. A simple dealer-to-dealer vehicle transfer can then
deliver the car to the customer in a matter of days.
 PAGE NUMBER 14

ENABLE:
Geographic information system (GIS):
To avoid any SC disruption, they incorporated a GIS tool to Map the
geographic Location of the tired supply base, plants, and logistics
nodes to ensure visibility in their SC. Through the supply chain
visualization tool, they can achieve: Real-time tracking of any disruptive
event, Visualize the event in the global picture, Trace all network
connections, and impact it. With this technology, they can proactively
search for alternatives to reduce the service gaps in times of
disruptions.
Big Data Analytics in Value Chain:
They combine the data from the Geographic Information systems tools
and data analytics to plan the sales based on local demographics,
regional differences, and location characteristics to better understand
the customer.These spatial analytics are shared with the dealers to
improve their performance and better understand their customers.

RISK MANAGEMENT STRATEGIES AT GM:

GM identifies the following as the main risks for the company
represented in the following “GRAPH”

Figure 4: Number of risk events occurred at GM

Risk mitigation strategies:
Gm uses IBM OPEN PAGES to support its audit, control, risk activities
on one single platform. This provides a granular, enterprise-wide real-
time view of potential threats to the business.
 PAGE NUMBER 15

It is Using Arc GIS software GM maps the interconnections among

GM’s thousands of tier 1, tier 2, and tier 3 suppliers. When an event
such as a factory fire occurs, the system enables the team to focus on
a specific part and trace it from its source to its destination plant and
vehicle program. The crisis management team can immediately devise a
strategy to connect with other available suppliers.
During this pandemic, it closed some of its production units
temporarily and shifted the launch of new models to 2021. It has
started producing ventilators in collaboration with a medical company
using 3D technology in the workshops.

CONCLUSION:
This report describes GM’S challenges in its supply chain around time
and its change from lean to the agile supply chain while focusing on
securing its suppliers and satisfying customer’s needs. At the same
time, GM is trying to provide a sustainable lifestyle by transition to all
electric-vehicle portfolios and to engage both internal and external
stakeholders to realize a zero-emissions future, While showing its
responsibility towards Nation, during the pandemic it started working
with the healthcare system.

REFERENCES:-
https://www.gm.com/our-stories/sustainability.html
https://www.gmsustainability.com/
https://www.gm.com/our-stories/technology.html
https://www.researchgate.net/
https://www.gm.com/
https://www.gm.com/coronavirus.html
https://www.spglobal.com/marketintelligence/en/news-insights/latest-
news-headlines/general-motors-suspends-2020-guidance-over-
coronavirus-pandemic-57737347
https://hbr.org/2020/03/coronavirus-is-proving-that-we-need-more-
resilient-supply-chains
https://iveybusinessjournal.com/publication/how-general-motors-lost-
its-focus-and-its-way/
https://www.esri.com/en-us/arcgis/products/spatial-analytics-data-
science/gm
https://www.ibm.com/case-studies/general-motors