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Thursday, June 23, 2005

The Automobile Sector & DDSN!!

Concrete Covina points to key highlights of the Auto Manufacturing conference in Birmingham, Alabama last week & points to raising customer expectations:
- BMW says, their production process enables buyers to "change" an order as little as 4 days before their car starts production...
- Gaudiano says 71% of vehicles produced at the BMW Spartenburg, S.C. plant are for a specific buyer...
- That only luxury car buyers care about "built-to-order" and are willing to pay for it...
- Obstacles in the way before build-to-order hits nonluxury nameplates were 1) the US Supplier make-a-car-system is not structured that way 2) theoretically consumers are more interested in price and firm delivery dates than custom ordering and 3) US Dealerships want inventory on the lot and ready to sell at the point of sale.
- Honda's Odyssey minivan takes 14 days from order to delivery.
My Take: The demand driven - Build-to-order customer expectation is the result of the personal computer industry's ability to give the customer exactly what they want, quickly.As can be seen, this is coming to the auto industry and coming fast , not just for the obvious benefits but also this brings in a new cost structure in the industry – more beneficial and can become another key competitive differentiator.The dell model or the model followed by pioneers in the consumer electronics sector sets the trend. The demand driven supply chain will become the defacto model. As in every other major supply chain related the successful product delivery within DDSN requires orchestration across demand, product, and supply management.This means completely turning the entire design of systems inside out and looking at aligning & binding all the processes and technologies from the customer’s point of view, cascading backwards from the customer interface where actual purchase happens. From a technology perspective an entirely new enteprise architecture with service oriented architecture solutions may become a preferred option for scalability and being seen as fail safe for future. .
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