Doing the MathBy Sean Gallagher | Posted 2002-11-01 Email Print
Know the Risk: Digital Transformation's Impact on Your Business-Critical Applications REGISTER >
The $177-billion company has long been losing ground to domestic and foreign rivals. Now it's pinning hopes for a revival on becoming the first all-digital automaker.
Doing the Math
Digitization of design and manufacturing is no small challenge for GM and its integrator, EDS. The design of a single medium-duty truck can incorporate 86,000 data files, according to product development engineers Steve Powell and Rosemary Hamill.
But there's a big payoff in overcoming that obstaclethe digital route to vehicle design dramatically reduces the cost of developing each new vehicle, Gutmann says. In the mid-'90s, it took GM 48 months to move from "style freeze" to first product. By 1999, the digitization effort cut that to 18 months.
"The same engineering team that did one product can [now] do five in the same time," says David Cole, president of the Center for Automotive Research in Ann Arbor, Mich.
The reduced cost also means GM can sell fewer cars and still make a profit on a product line. "It lets you drop the volume of products, so you're much better able to change directions if a product doesn't work out," says Gutmann. That means GM can design bolder vehicles like the SSR. "Risk aversion drives you toward mediocrity," Cole says.
Now this plan is being rolled out worldwide across GM's 14 engineering centers, and incorporated into the design process for GM brands such as Saab, Vauxhall and Opel in Europe, Holden in Australia, and localized versions of GM products built and sold in Asia and South America. The company's goal now is to become "the number-one benchmark company in engineering," says Gutmann.
Turning the Corner
In the 1950s, General Motors sold nearly 60% of all automobiles in North America. Now, after decades of attack from Asian and European rivals, stodgy designs and slow reactions to changing demands of customers, GM's share is down to 28%, little more than one in four vehicles sold.
But the company in 2001 reversed its market-share decline for the first time in decades. And it's beginning to lick its chops. "Every indicator we trackmarket share, profitability, quality, customer satisfaction, etc.says we're headed in right direction for the first time in years," says CTO Scott.
Scott claims that GM is now number three in quality, behind Toyota and Honda, and ahead of DaimlerChrysler, Nissan and Volkswagen. With its "common-math model,'' as Scott terms it, the big automaker uses video and data technology to deliver desirable vehicles faster than rivals.
But there may not be a payoff. Japanese carmakers have succeeded without a big high-tech push. "When you look at Honda or Toyota, they don't have anywhere near the technical sophistication of GM," says Dennis Virag, president of the Automotive Consulting Group in Ann Arbor, Mich. "But they are masters at product development."
"Toyota and Honda don't have 50 people sign off on a design,'' Cole says.
As a result, Honda's development cycles now average around 14 months. At an auto industry conference this August, Honda President and CEO Hiroyuko Yoshino said the company now planned to reduce that to an average of 12 months.
"At GM, in the past, they could have a lot of stuff languish for years waiting for approval," says Cole. "And a lot of concepts, by the time they got to the approval process, were too expensive to do and wouldn't work."
To change that, GM now insists on a single way of doing design. Five years ago, every business unit within GM did things differently. There were four different design packages and more than 560 different engineering and simulation applications across the company. Engineering knowledge was scattered across 150 internal Web sites. Every business unit tracked its product data and project planning differently. Globally, only Opel's engineering center in Germany was linked in any way to engineering operations in the U.S.
Since 1997, GM has consolidated its engineering operations, reducing the number of servers by 80%. Four design systems have been replaced by one mandated standard for every GM engineer and first-tier supplierEDS' Unigraphics. The 150 Web sites have collapsed to a single engineer- ing portal.
Every new GM vehicle now is managed like a software project, with its essential fileseverything from the initial styling through crash-test simulationstracked from the earliest requirements to final field modifications. This product "source code" is managed by Team Center Engineering Edition, a product-data-management applica- tion developed by EDS (with heavy input from GM). TeamCenter puts the components of every car that GM makesand all of the tools that go into making theminto a 150-million terabyte storehouse of product information that all of GM's divisions and business partners can draw on with a click of a mouse.