Overhauling its IT processes has enabled General Motors to cut the time to production by more than half
Eighteen months. 78 weeks. 547 days, give or take a few hours. That's how long it takes General Motors Corp. to go from concept to production on a new model car. Given where GM was six years ago, when it took the automaker as long as four years to complete that cycle, it's an astounding transformation.
And a vital one. Car-making is now a fashion business. A steady rollout of flashy street iron is vital to GM in a youth-driven market in which designer cars are a personal statement. GM executives believe a year and a half gives the company's designers enough time to play with a wide range of ideas, select a handful, build them digitally, and test-market the proposals to help pick the winners, all without having to shape a single piece of steel or build a single clay-and-wood prototype. That also leaves time to build in quality, a critical lesson learned by U.S. automakers in the late 1970s, when shoddy products drove buyers to imports such as Toyota and Honda. "If a product looks good and doesn't perform, it doesn't sell," says Kirk Gutmann, GM's global product development information officer.
The change is part of GM's surprising shift from a lumbering builder of also-ran cars to a market force--and an unlikely economic bellwether in a slow economy. It's produced some of the most advanced designs in the automotive world re-cently, such as Chevy's Avalanche, a combo SUV-pickup, and the souped-up 1940s-retro SSR two-seater roadster-pickup truck that's making the transition from eye-popping concept car at January's North American International Auto Show in Detroit into a production model due to hit showrooms late this year. And it's improved quality at the same time, jumping to No. 3 behind Toyota Motor Corp. and Honda Motor Co. last week on the influential J.D. Power & Associates quality ranking. That's the highest-ever ranking for a U.S. automaker.
Since his arrival in 1996, CIO Szygenda has overseen GM's consolidation of IT systems that has whittled the automaker's time to market for new models.
How did GM do it? First, there's the automaker's use of advanced 3-D virtual-reality design systems, among the most sophisticated in the industry. Then there's an integrated design architecture that flows from pencil sketch to manufacturing floor. And, finally, there's the targeted IT spending, punctuated by the junking of 3,500 disconnected IT systems and the integration of the rest. Together, the changes helped whittle the time required to bring new models to market. Other automakers have faced the same legacy-system problem, but GM has done the most to consolidate and defragment the systems it has, and has done so "by sheer brute force, just shutting down systems and transitioning to new ones," AMR Research analyst Kevin Prouty says. The leader of that effort, group VP and CIO Ralph Szygenda, arrived at GM in 1996 with a mission to clean up the mess. Mission accomplished, Szygenda says, with more than a hint of understatement:
"I don't think IT is inhibiting product development today."
Toyota has the best track record for quick designs, having brought out some redesigned models, such as the new Corolla, in as little as 12 months. But analysts say Toyota is closer to 24 months in its major redesigns and new-model production. DaimlerChrysler has produced models in 18 months or less, the company says, but new designs generally take longer--24 to 36 months, AMR's Prouty estimates. Ford also comes in at 24 to 36 months, Prouty says.
GM hopes that its speed advantage will help it overcome a plunge in earnings last year. The company posted a profit of $601 million on revenue of $177.3 billion last year, compared with $4.5 billion in profit on revenue of $183.3 billion in 2000. But it could have been worse had GM not relied on 0%-interest incentives to keep selling cars and trucks last fall and winter. With fewer discounts this year, the company predicts it will produce more than 5.4 million vehicles in the United States, up from 5.1 million last year, and take one-third of the U.S. car market. Worldwide, GM says it will produce nearly 8 million vehicles. The company predicts a $4.60 earnings-per-share profit this year. That's nothing to shout about, but it's a profit nonetheless in an economy that had competitors Ford and DaimlerChrysler posting red ink last year. The key to GM's hitting its numbers is getting new models in development onto showroom floors where buyers can see them.
That's why GM has been overhauling its vehicle-development process to give designers a greater say. Many of the sharpest designers and engineers in the auto business have landed at GM, including Bryan Nesbitt, the DaimlerChrysler designer credited with creating the hot-selling PT Cruiser before GM spirited him away in April 2001. With the appointment in November of Robert Lutz, design guru and Detroit hero for his work at Chrysler, as vice chairman for product development, that trend will grow stronger. But GM's Gutmann says it might not have been possible to turn the company into a haven for design without the software tools put in place during the past four years and the integration of those tools in the past two. "We needed a seamless highway of information from design and engineering into the production plant," Gutmann says. "What we had were islands of information, and it was impossible to create a highway to connect them without a major IT initiative."
In 1996, GM was burdened with more than 7,000 legacy IT systems, the majority of which touched vehicle development in some way. There was no common E-mail system, no common desktop system or engineering workstation, and there were 23 computer-aided design systems that couldn't communicate with one another. Each GM design silo--body sheet metal, suspension, engine and transmission, interior, and even subsets of those design groups--had its version of what Gutmann calls "the truth." Synchronizing designs among those groups was a time-consuming manual process that forced GM to decide early on--years before a vehicle was to hit the market--exactly how a car would look and what features it would have.
That wasn't conducive to designing cars that capitalize on fashion trends. Any change to a design had a major impact on the amount of time it took other GM designers, and suppliers, to adjust. Changes often were faxed or shipped via courier to designers continents away. GM frequently convened design meetings, gathering designers from around the world in a conference room in Detroit where they worked out minute details.
Integration of Unigraphics 3-D CAD data with supercomputers lets designers project a complex 3-D solid-model design on floor-to-ceiling screens viewed by engineers wearing virtual-reality headsets.
The design for every GM model now is in digital form, reduced to a Unigraphics 18 3-D CAD model that's available to people working on the same model wherever they are, thanks to a single product life-cycle-management application deployed across the operation--EDS's Teamcenter Engineer 7. Standardizing the systems has had such an impact on GM's business, Gutmann says, that the company has abandoned the traditional industry practice of introducing new car models at September car shows and is set to roll out 40 new models in less than two years--one every 27 days. Gutmann says that's the kind of production speed GM needs so it can focus on "styling, pizzazz, personality," especially when it comes to cars designed for younger buyers.
More than 18,000 designers and engineers at GM's 14 major design centers worldwide and more than 1,000 engineers who work for 300 top suppliers now use Unigraphics CAD, and 10,000 use Teamcenter Engineer, linked to a 340-terabyte data warehouse that's outsourced to storage provider EMC Corp. GM is so determined to keep all designers on the same version of the software that on two weekends last month, it pulled off the unusual feat of globally upgrading 18,000-plus CAD seats, at its own offices and at its suppliers', from one major release to the next. The company claims it didn't lose a single design hour to the upgrade. Using the system, GM will bring the Hummer H2, an SUV based on the military Humvee, to market in well under 18 months when it hits showroom floors next month.
A design generally starts with an idea sketched on paper by a designer or a design team. "Somebody says, 'Let's design a new roadster-pickup truck,' and designers sketch them out just like they did years ago," says Ronald DeBrabant, the executive in charge of GM's most advanced virtual-reality facility, the Envisioning Center, a 3-D virtual-reality studio at the GM Design Center in Warren, Mich. That's the last time pencil needs to touch paper. Those design sketches, when scanned and digitized, become the basis for all other design and production work on the new model.
The next step is to use Unigraphics to create a 3-D model of the car--what's known as a "body in white." GM is the only carmaker that creates a solid 3-D CAD model of every exterior part of the car, rather than rely solely on a wire-frame model that shows contours as lines but doesn't depict the shapes as panels of steel, Gutmann says. The solid model comes in handy when, at very early stages of design, GM engineers work in the Envisioning Center, where a sophisticated integration of Unigraphics 3-D CAD data with supercomputers lets designers project the complex 3-D solid-model design on a set of three floor-to-ceiling screens that fill the peripheral vision of engineers wearing virtual-reality headsets.
Lutz recently found another advantage to the Envisioning Center: He used it to evaluate whether the carmaker was spending too much money developing new platforms--basic vehicle configurations on which numerous models can be built over several years. Lutz quietly killed a number of platforms, opting to develop new models based on existing platforms and a smaller number of new ones, AMR's Prouty says. Automakers don't like to kill platforms once they've invested millions in development, but Lutz decided to focus on platforms that would make the most money, Prouty says.
Once a model has been approved for manufacturing, GM design engineers take over the process of building the car digitally, piece by piece and part by part. The first step is selecting a platform on which the new model will be built. Then GM clones an existing car model from the selected platform, complete with its 5,000 parts. Engineers determine which of the parts from the existing model will fit the specifications of the new vehicle. For the new Avalanche, more than 85% of components came from the Chevrolet Suburban, though it's difficult to see the similarity between the two. Engineers shoot for 90% reuse of the basic design and parts for a new model built on an existing platform, but the actual usability can be considerably less, depending on the vehicle, says Denny Mooney, GM's executive director of engineering. One major benefit of reusing basic parts is that GM is able to use its existing suppliers for the new model.
Parts that have to be reengineered can be reworked by GM itself, or suppliers can do the redesign by using the same CAD and product-data-management systems as GM. Suppliers collaborate in real time with GM engineers over a private network the automaker has outsourced to AT&T. That's allowed GM in recent months to move away from the practice of locating suppliers' engineers in its facilities, enabling them to work at their own companies. "It's just like they're sitting in a design studio at GM," Gutmann says.
To expand the number of suppliers that can work with its engineers, GM is testing e-Vis, a new EDS design-collaboration offering based on Microsoft's .Net architecture, at its Process and Systems Integration Center in Warren. Gutmann says e-Vis will let the automaker bring 10,000 more suppliers into the design loop, on top of the 300 already involved with GM. The CAD data format used by e-Vis creates files small enough to exchange over the Internet via dial-up lines, an innovation GM says will help it tap the best outside design talent. GM also plans to advocate use of Microsoft instant-messaging software during design-collaboration sessions between its engineers and its suppliers, keeping phone time and paperwork to a minimum.
GM might not have become a haven of design without the software tools added in the last four years and two years of integration work, letting it avoid what Gutmann calls "islands of information."
GM's metal-fabrication division was the first operation in the company to dump paper and go 100% digital. In 1996, metal fabrication used CAD models to automate the design of 611 of the 1,200 new dies required for that year's models. That was a breakthrough then; now, every stamping die is produced digitally. Designing a die from scratch today takes an average of 100 hours--it used to take eight weeks. A machine reads the CAD design, then cuts Styrofoam sheets into a series of wafers that, when stacked and glued one on top of another, form a model of the die, which is sent to a foundry where the die is produced.
The system and the engineers who use it are so good at getting a die design right that GM no longer has to grind dies into shape to make them work when they come from the foundry, boasts Mark Stevens, general director of the metal fabrication division in Troy, Mich. "We no longer build dies that we don't already know work perfectly," he says.
Metal fabrication engineered another breakthrough that's just now paying dividends by developing software to morph the die design for one car model into a die for another car. Using the software, it took 20 seconds to morph the hood die design from a GM pickup into one for the new Saturn SUV. "It took longer to glue the Styrofoam together and send it to the foundry than it took to create the new die," Stevens says.
The metal-fabrication systems also are used to model the production process for stamping body panels, timing the process to how many body panels can be stamped in a particular plant by a particular machine. Stevens says that capability, one of GM's most advanced production-modeling systems, is behind plans to launch a new small pickup with Isuzu to be simultaneously manufactured in the United States and Germany, where stamping tools differ but the cars must be identical. "There's no way to do that on paper," Stevens says. "It requires both partners to use the same system so they don't have to duplicate the engineering for everything."
GM is taking production modeling to new levels in some of its established plants, as well as in plants under construction in Lansing, Mich., and Russelsheim, Germany. In eight of its existing plants, GM is using a component of EDS's
E-Factory Suite named Jack to test the manufacturability of a car model before a final decision is made about how to build the car. Jack lets GM model every step needed to build a car: what's done at each point on the assembly line, how many people are needed and what they need to do, how long it will take them, and where their tools and parts should be located.
The German plant is being designed so that different car models can be built on the same line at the same time, a capability that AMR's Prouty says will be a manufacturing first. "That's something [where] you absolutely need the technology GM has been building for the last couple of years," Prouty says. "It's not possible to build a flexible production line without it."
GM believes it can't maintain its position as the world's largest automaker without continuing to remake its IT operation and adopt cutting-edge design technology. Its competition is reading the same gospel, so whether GM winds up the winner in the fashion-car market is up to the talents of its designers. But the company has taken off their IT handcuffs and is letting them steer toward the finish line.
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