General Motors Corporation: The Business Value of Wireless LANs


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General Motors Corporation: The Business Value of Wireless LANs

  1. 1. GM Wireless Case #5 page: 141 <ul><li>Anthony Pemberton </li></ul><ul><li>Daisaku Okada </li></ul><ul><li>Bryan Gauthreaux </li></ul><ul><li>Kendra Platt </li></ul><ul><li>Ryan Platt </li></ul><ul><li>Jordan Thompson </li></ul>
  2. 2. Company Background <ul><li>General Motors Corp. (NYSE: GM), the world's largest vehicle manufacturer, employs about 325,000 people globally. Founded in 1908, GM has been the global automotive sales leader since 1931. GM today has manufacturing operations in 32 countries and its vehicles are sold in 192 countries. In 2003, GM sold nearly 8.6 million cars and trucks, about 15 percent of the global vehicle market. GM's global headquarters are at the GM Renaissance Center in Detroit. </li></ul>
  3. 3. Products and Services <ul><li>Chevy </li></ul><ul><li>Pontiac </li></ul><ul><li>Oldsmobile </li></ul><ul><li>Cadillac </li></ul><ul><li>Buick </li></ul><ul><li>GMC </li></ul><ul><li>Saturn </li></ul><ul><li>Hummer </li></ul><ul><li>SAAB </li></ul><ul><li>OPEL </li></ul><ul><li>Financial Services </li></ul><ul><li>DirectTV </li></ul><ul><li>DirectPC </li></ul><ul><li>XM Satellite Radio </li></ul>
  4. 4. Administration <ul><li>CEO- G. Richard Wagoner, Jr. </li></ul>
  5. 5. How was it done? <ul><li>A 30-person task force drawn from different organizational divisions but headed by CIO. the task force worked for 60 days. </li></ul><ul><li>Tens of millions of dollars - Nothing is small at GM! GM is reported to have invested 1.7 billion on Internet applications during the past five years. </li></ul>
  6. 6. 31.00% 29.20% 27.00% 27.80% 27.60% 28.80% 29.00% Trucks 25.40% 26.90% 28.60% 29.80% 30.00% 32.40% 32.70% Cars 2002 2001 2000 1999 1998 1997 1996 GM Market Share (Domestic)
  7. 7.   -2.11% 4,756,403 4,858,706   Vehicle Total 0.22% 2,795,721 2,789,500   Truck Total   -5.24% 1,960,682 2,069,206   Car Total   Rate Change 2003 2002 (Source from; Sales and Production) GM Sales Deliveries
  8. 8. (billion) $1,736 $601 $4,452 $6,002 $2,956 $6,002 Net Income (billion) $186,763 $177,260 $184,632 $176,558 $155,445 $172,580 Net Sales 2002 2001 2000 1999 1998 1997 GM Net Sales & Net Income
  9. 9. <ul><li>Wireless networking refers to technology that enables two or more computers to communicate without network cabling. </li></ul><ul><li>Wireless networks are growing in popularity due to the emergence of cross-vendor industry standards such as 802.11b. </li></ul>Wireless Networking
  10. 10. Wireless Networking Continued <ul><li>GM has had a wireless network for years but it consisted of a proprietary network of mixed devices that could not always interoperate. </li></ul><ul><li>A typical wireless network consists of a router, firewall, and multiple access points. </li></ul>
  11. 11. Wireless Networking Cont… <ul><li>GM has installed access points throughout its facilities allowing for communicating between inventory systems, production systems, workers, and even fork-lift drivers. </li></ul><ul><li>Access Points typically have an indoor range of 150-300 feet depending on the operating conditions. </li></ul><ul><li>GM’s 802.11b access points, consisting mostly of Cisco Aironet devices, communicate at a speed of 11 Mbps whenever possible. If signal strength or interference is disrupting data the devices will drop back to lower speeds. Though it may occasionally slow down, this keeps the network stable and very reliable. </li></ul><ul><li>Future Implications  GM is dabbling in a wide range of wireless projects. In offices in China, it has deployed wireless LANs and uses wireless voice over Internet protocol (VoIP) phones to cut costs. Its factory floors and some of its logistics operations use radio frequency identification (RFID) systems to track the movement of pallets and bins. </li></ul>
  12. 12. Wireless Lan Benefits <ul><li>Access to twenty-four hour corporate data from anywhere within the plant gives business mangers the ability to make faster decisions </li></ul><ul><li>Sales personnel can incorporate new information to customers which adds value to the customer and the organization </li></ul><ul><li>Communication quality is enhanced with employees that can relay information anywhere and everywhere – wireless lans complement traditional wired lans. </li></ul><ul><li>Employee satisfaction is improved with flexibility to wireless abilities which lowers employee turnover </li></ul><ul><li>Work teams can create temporary peer to peer networks for high collaboration and document sharing </li></ul>
  13. 13. Additional Benefits <ul><li>Wireless networks are easy to set up providing benefits in areas whereas wiring is difficult to deploy. </li></ul><ul><li>Suitable for highly mobile workforces that require roaming access to network resources such as warehouse employees in GM factories. </li></ul><ul><li>Wireless networks offer high performance and bandwidth to keep all your applications and transactions running. </li></ul><ul><li>Wireless networks are quickly installed, provide flexibility, and are easily reconfigured. </li></ul><ul><li>Very low incremental cost is required to add users to an existing WLAN network. </li></ul><ul><li>ROI on the wireless project is expected to be less than one year. </li></ul>
  14. 14. Disadvantages of Wireless LAN <ul><li>Wireless adapters are more expensive than Ethernet adapters. </li></ul><ul><li>Wi-Fi can be difficult to set up initially. Trying to find the optimal location, setting configuration options, choices of devices, and encryption/security. </li></ul><ul><li>Speed can fluctuate significantly. Slower than wired network. </li></ul><ul><li>Using radio waves for data transmission might interfere with other high-tech equipment </li></ul><ul><li>Proprietary solutions: slow standardization procedures lead to many proprietary solutions only working in an homogeneous environment </li></ul>
  15. 15. 3 main security issues: <ul><li>1: Incorrect or poor configuration. A lot of routers and access points come with a default password that is not changed allowing unauthorized access. </li></ul><ul><li>2: Wireless encryption protocol standards are undergoing constant change and are subject to attacks. </li></ul><ul><li>3: Trojan software. Execution of programs, generally distributed by email that appears to be a useful or humorous file but is in fact a virus. </li></ul>
  16. 16. Authorization/Privacy <ul><li>Networked computers should be maintained by a network administrator to prevent ordinary users from changing the system in ways that might leave the computers open to an attack. The problem of authorization can already be seen by a number of companies that have installed wireless systems in their companies but left them open due to practices by uneducated users. </li></ul><ul><li>Due to the nature of wireless networking it is very easy for other people to access the flow of information along the network. Some current wireless network implementations, like 802.11b include a form of encryption called Wireless Encryption Protocol but this has been shown to be insecure. Current VPN (virtual private network) technologies like IPSec could be used to encrypt traffic between hosts on the network. </li></ul>
  17. 17. Key Competitors (ranked by sales) <ul><li>General Motors </li></ul><ul><li>Ford </li></ul><ul><li>DaimlerChrysler </li></ul><ul><li>Toyota </li></ul><ul><li>Volkswagen </li></ul><ul><li>Nissan </li></ul><ul><li>Honda </li></ul>
  18. 18. Fortune 500 Rankings <ul><li>Largest U.S. Companies </li></ul><ul><ul><li>#2 - General Motors </li></ul></ul><ul><ul><li>#4 - Ford </li></ul></ul><ul><ul><li>Profits </li></ul></ul><ul><ul><li>#46 - General Motors </li></ul></ul><ul><ul><li>#458 - Ford </li></ul></ul><ul><ul><li>Market Value </li></ul></ul><ul><ul><li>#85 - General Motors </li></ul></ul><ul><ul><li>#126 -Ford </li></ul></ul>
  19. 19. GM’s Competitors’ Network Systems <ul><li>Ford Motor Company uses wireless technology along its assembly line and for its forklift drivers, especially in its Kentucky plant. Ford opted for wireless technology and it has paid huge dividends. Average forklift mileage has been reduced by more than 10 percent. Some drivers report cutting their mileage by almost one half. </li></ul><ul><li>Nissan not only uses wireless technology in manufacturing but it has wireless access installed at Infinity dealerships that salespersons can use to access Nissan's customer resource management information directly from the show floor over two-way pagers. </li></ul><ul><li>Daimler, prior to 2001, used a paper docket and barcode scanning system to maintain a central record of the whereabouts of vehicles and drivers throughout their plants. Daimler had such complex plants that wiring them would be nearly impossible and very expensive. Avaya was contracted to install wireless capability for Daimler in late 2001. </li></ul>
  20. 20. #1. What is the business value of wireless LANs to GM? <ul><li>Wireless networks bring GM the following advantages: </li></ul><ul><li>Unification of the processes involved in manufacturing vehicles, lower costs, more efficient workers, effective communication, flexible work environment, easy reconfiguration of plant/assembly line, ROI on the wireless project is expected to be less than one year. </li></ul>
  21. 21. #2. What are the security vulnerabilities of wireless LANs? Is GM taking appropriate security measures? What or why not? <ul><li>Wireless LANs are susceptible to eavesdropping, hackers, disgruntled employees, internet trojans/viruses, and wireless encryption standards that are not always fool proof. </li></ul><ul><li>GM is taking necessary steps to protect their network by taking part in setting new wireless encryption standards, using directional antennas ($1000 each), VPNs, and Firewalls. GM is also using detailed site surveys that look at all radio transmissions. </li></ul>
  22. 22. #3. What are some other possible business applications of wireless LANs? Evaluate the benefits and challenges of one of them to a large or small business. <ul><li>Inventory – wireless connection to distributor or directly to manufacturer. Dealerships could easily reorder vehicles. </li></ul><ul><li>Realtors could use wireless laptops to access listings while showing houses to clients. Benefits would include flexibility, enhanced customer service, fewer miles to travel. Challenges  security, coverage, interference, viruses… </li></ul><ul><li>Movies other entertainment venues could have Wireless capable chairs that allow customers to order concessions directly to their seats. Advantages  customer loyalty, convenience, satisfaction. Disadvantages  vulnerable to attacks/interference, careless customers (spills, damage), and cost. </li></ul>