e-Business at DaimlerChrysler is paying off: savings exceed present investment

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News of February 06, 2002

e-Business at DaimlerChrysler is paying off: savings exceed present investment

Web-based procurement volume of €10 billion
e-Business investment already covered by savings in online procurement via Covisint

Stuttgart/Auburn Hills - In the 512 online bidding events processed through Covisint in the last twelve months, DaimlerChrysler AG grossed a purchasing volume of approximately €10 billion. That is a third of the total procurement volume assigned in newly closed deals in 2001.The figure surpassed planned estimates. In May 2001, DaimlerChrysler staged the largest online bidding event ever, with an order volume of €3.5 billion in just four days. In totaI, 43 percent of the total value of the parts for a future Chrysler model series was negotiated online with over 50 online bidding events in the third quarter of 2001 alone.

Above savings in material purchasing prices, DaimlerChrysler succeeded in reducing throughput times in Purchasing by app. 80 percent, thus saving on process costs. According to Dr. Rüdiger Grube, Deputy Member of the Board of Management responsible for corporate development, "the economic effects achieved with e-Procurement in the first year of implementation have already covered the costs of previous investment in e-Business and hold great potential for the future, too. Therefore, we will continue to pursue our e-Business activities to the fullest extent in 2002 as well."

With the online catalog system "eShop" DaimlerChrysler will be able to reduce process costs by 50% after the completion of the blanket rollout, which will give approximately 15,000 users the possibility of ordering several millions of articles. By the end of 2002 about 1,500 business partners will be connected to the electronic document exchange system "eDocs," which will enable them to process approximately 500,000 document transmissions per year. Initital results using the "FastCar" program for networking change management in automotive development at Chrysler show cuts in communication processes by 60-90%. In 2001, over 600 managers connected to the system developed over 300 product improvement suggestions online with the "New Product Change Management" used in the development department of Mercedes-Benz.

In the meantime the Internet website of the Mercedes-Benz brand is almost fully standardized (www.mercedes-benz.com) in 50 countries with over 20 million page impressions per month worldwide. The German web site alone (www.mercedes-benz.de) registers approximately 800,000 visitors and 40,000 new vehicles configurations per month. The number of monthly visitors of the Chrysler, Jeep and Dodge web sites rose from 1.5 million in December 2000 to 2.5 million. Chrysler, Jeep and Dodge dealers receive on average of 60,000 qualified online customer inquiries per month through the "Get-a-quote" configurator.

"e-Business activities are already closely intertwined from development through procurement, logistics, sales and marketing. To a great extent, they are already a part of everyday business," says Olaf Koch, Vice President of Corporate e-Business. Dr. Grube: "We're a good deal closer to our goal of making DaimlerChrysler the first automotive company to be networked throughout the entire value chain."

Further progress in the context of the DCXNET initiative: BusinessConnect - standardized processes with suppliers

For the quality assurance of parts and components on vehicles, DaimlerChrysler is currently implementing a new web-enabled advanced quality planning tool that was created by the software vendor Powerway. This new quality management system offers real-time tracking of specific party quality measurements, making the information visible to both DaimlerChrysler and its suppliers. The solution accelerates the quality process right through to the release of parts and increases efficiency levels in quality assurance by 50 %. Covisint is developing a worldwide industrial portal for DaimlerChrysler on the basis of industry standards to ensure an Internet-aided standard method of binding suppliers to all areas of the company - from development through logistics. External suppliers will profit just as well as DaimlerChrysler: the supplier portal will do away with the current time-consuming and costly parallel operation of different interfaces and applications.

CustomerConnect - standard online support in sales and marketing

In the B-to-C class DaimlerChrysler will continue to pursue its strategy of integrating e-Business projects into the existing sales and marketing network. The distribution companies and dealers of all brands and countries will be provided with standard solutions and infrastructures to help build and operate their websites. Based on the content management system and standard design these solutions can be adapted to fit country-specific requirements thus eliminating the need for expensive individual market solutions.

VehicleConnect: Mobility services as the basis for vehicle networking

The Mercedes-Benz portal, which was launched in cooperation with T-Online in August 2001, forms the infrastructure and contents for vehicle networking. Selected mobility services from the Mercedes-Benz portal are being linked to the navigation systems to enable their use within the vehicle and are to be gradually integrated into the vehicles, commencing with the A-Class this spring. In future, the portal's infrastructure will also be used for additional markets and other brands within the Group.

WorkforceConnect: Employee portal in the global rollout

In July 2001 DaimlerChrysler launched the Employee Portal for selected locations. The portal was originally part of the Group's Intranet. It is a core component of the initiative to further qualify and network all staff ("DC eLife"). The Employee Portal aggregates all information, applications and web-based processes such as business travel management and management of job applications. Employees are able to personalize the portal site according to their individual work-related needs and can access all services that are relevant to them, e.g. company car sales and time account management, via a "single sign-on" (i.e. once only log-in) function. The rollout of the employee portal in Europe is currently in progress. Global integration will take place later.

(Feb 04, 2002)

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