General Motors Supply Chain

1568 Words4 Pages

Introduction

Over the years, the U. S. auto industry's market has been experiencing fluctuations due to many reasons including: price, quality and foreign competition. General Motors Corporation (GM) which had been the leading car and truck manufacturer had been experiencing declining market share and facing stiff competition from both U.S manufacturers and foreign imports such as the Asian auto producers that included Toyota, Honda and Nissan. The main reason for increased foreign competition was that foreign cars were more fuel efficient, smaller, less expensive, and often more reliable than their American counterparts.

In an effort to eliminate waste and maintain competitive advantages, GM introduced lean manufacturing by incorporating elements of the Toyota Total Quality Production System that had been adopted by several Japanese auto manufacturers to increase production efficiency. The lean implementation effort resulted in both operational and an environment improvement but the company still faced challenges inherent with the automotive supply chain including: risk, visibility, inventory management, cost containment, customer demands and globalization.

GM currently expects its suppliers to adopt a lean philosophy to ensure it becomes the low-cost producer of quality products. It employs Just-in-Time (JIT) manufacturing and utilizes distribution strategies including maintenance of regional distribution facilities and third party management of logistics. [1] An efficient supply chain is no longer capable of handling the complexities of changing global trends hence it is therefore necessary to incorporate a smarter supply chain.

Background and Current Situation

In November 18, 2010, GM completed the world’s largest in...

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...February 2014. http://www.gm.com/company/aboutGM/our_company.html

[2] “General Motors Company: 2012 Annual Report.” General Motors Company. December 2013. http://www.gmannualreport.com/downloads.html

[3] “The U.S. Automotive Industry Needs Updated Finished Goods Benchmarks: Automotive supply chain.” Supply Chain matters. January 17, 2014. http://www.theferrarigroup.com/supply-chain-matters/2014/01/17/the-u-s-automotive-industry-needs-updated-finished-goods-benchmarks/

[4] “Interactive chart: General Motors Company.” money.msn.com. February 27, 2014. http://investing.money.msn.com/investments/key-ratios?symbol=US%3aGM&page=ManagementEfficiency

[5] “The Smarter Supply Chain of the Future: IBM Global Chief Supply Chain Officer Study.” IBM Institute for Business Value. January 2009. http://www-07.ibm.com/sg/manufacturing/pdf/manufacturing/Auto-industry.pdf

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