GM takes next step toward mass customization

GENERAL MOTORS ON Tuesday will come another step closer to fulfilling its build-to-order consumer strategy when it announces a $7.5 million deal with Chrome Data.

Chrome of Portland, Ore., aggregates raw automotive data to create an electronic pricing and configuration engine for dealers and consumers. GM will replace its older configuration and ordering technology for both the dealers and the consumer with Chrome's platform.

The Chrome Carbook configurator will be distributed to GM's 8,400 dealers under the name GM AutoBook. The consumer product, which will displace GMs current configuration engine on its GM BuyPower and GMCanada.com consumer sites, will be based on Chrome's PC Carbook product.

The new system will give dealers the ability to compare makes, models, features, and pricing -- capabilities which were not available previously. The platform also has better Internet integration and more accurate pricing information, according to Bob Navarre, Chrome's CEO.

Using a single platform for both dealers and consumers will increase customer satisfaction while reducing costs for GM as well, according to Chrome officials.

"It provides a standard way to communicate about vehicle specifications and eliminates duplicate information, redundant data repositories, multiple data entry, and the extra costs associated with them," said David Hillis, Chrome's chief operating officer.

Like many older companies building an online shopping site, GM was looking for a system that synchronized its brick-and-mortar inventory and pricing data with online product information.

According to Hillis, up until now there was the danger that a customer might research a vehicle online, only to find out the information was incorrect and inconsistent with the information the dealer had.

"Having the same information throughout the operation eliminates this risk and improves customer satisfaction and increases efficiency and productivity for the dealers and the factory," Hillis said.

By deploying the same platform across dealer and consumer sites, GM is also taking another step in the long-term direction of mass customization.

"The trend is toward mass customization," said Randy Miller, partner in the automotive consulting group at Arthur Andersen in Detroit.

Mass customization is a more or less generic term that cuts across many industries. Theoretically it would allow consumers to pick from a complex list of customization options in order to build any configuration they wanted. In the case of cars, any model with any set of options.

To achieve this, companies are just beginning to integrate customer buying and ordering information with inventory and the value-added supply chain. However, according Daniel McClure, senior manager in the Automotive Practice for SeraNova, in Edison, N.J., it remains an open question whether the auto industry will ever achieve true build-to-order.

"For some, build-to-order will be taking an order online. [But] true build-to-order is when you fundamentally rebuild the [manufacturing and supply chain] workflow," McClure said.

McClure said he believes that true build-to-order is at least 10 years away. However, while the technology remains complex, the goal of mass customization is simple, he said.

"If you can make the customer happy he will come back. And they don't want to wait six months for a custom car," Miller said. "TThe strategy is to give the customer more flexibility and more of what they want versus taking what is available.

"GM has a strong e-business strategy [and] strong executive leadership that goes the length of their value chain. The key for GM is to execute," Miller said.

The order system is the key element in mass customization according to Chrome Data's CEO.

"You have to have a single platform where you can configure, build, and price within the auto dealership network," Navarre said.

Navarre admitted, however, that there is still a long way to go and the current system does not integrate with logistics or the supply-chain hub.

"Integration is absolutely the vision of the people that are driving the long term vision of GM and Chrome," Navarre said. "When you build a house first you put the footings and foundation in. This is what [GM is] doing, and doing it very methodically, and that is where we intend to take the relationship."

This story, "GM takes next step toward mass customization " was originally published by InfoWorld.

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