GM's Factory IT Faces A Test: Page 2 of 3

CONVENTIONAL APPROACH
The standardization effort requires Gutmann to play it safe to some degree. He decided, for example, to take a pass on Windows Vista and standardize the company's 25,500 plant-floor PCs worldwide on Windows XP, a project undertaken in consultation with Microsoft CEO Steve Ballmer. "You have to go with convention," Gutmann explains.

The automaker must walk a fine line between commonality and squashed inspiration. "Having commonality on a global basis is where GM thinks it's going to win," says Sean McAlinden, an analyst with the Center for Automotive Research. On the IT side alone, that saves money in volume purchasing, training, and the ability to react more quickly to IT crises that could stall plant operations. "There is a trade-off," McAlinden says. "As plants develop common best practices, how can anyone do anything new if they can't learn something and pass it on?"

Gutmann doesn't see things that way. A plant down for just an hour is considered a serious financial problem at GM, so above all, his top job is to keep the plants running. The Lansing Delta plant alone pumps out 900 vehicles a day over two work shifts. GM's infrastructure consists of some 500,000 devices, including the 25,500 plant-floor clients; 3,500 servers; 14,000 network switches, routers, and access points; 11,000 printers; and 373,000 robots. So commonality's key.

GM has replaced or upgraded most of its Cisco-based network worldwide and is in the process of driving voice over IP. Nearly 56 million square feet of plant floor worldwide is now equipped with 22-Mbps wireless networks, enabling, for instance, the use of wireless pendants that let GM get newly delivered parts to the assembly line faster.

The Wherenet pendants, which are about the size of a deck of cards and hang from the ceiling, are correlated in a database to the parts and the location in the plant. When someone presses a button on a pendant, it sends a signal to the database. The database then alerts drivers on tuggers, which are small trucks equipped with wireless PC terminals next to their steering wheels, about what they need to pick up, and the pickup and delivery locations. After retrieving the order, drivers confirm the delivery on their PCs.

Gutmann is willing to try new technologies--slowly. GM is considering new video applications using its new network capabilities, for use among employees and with customers via the Web. It's borrowing from consumers and experimenting with ZigBee, a low-power wireless communication technology, and the Bluetooth personal wireless network technology for some plant tools and machines. But Gutmann is cautious: "We're not going to let Bluetooth go wild. We're going to walk our way into that one."

GM still has some work to do in the transformation, of which EDS plays a large role as part of an IT outsourcing contract worth more than $1.2 billion a year. Ninety-five percent of plants have the standardized technologies, and half are using the standardized business processes, Gutmann says. Now it's measuring results. In 2006 and 2007, the number of vehicles on which production ceased because of IT-related problems decreased about 50% over 2005, GM says. So far this year, the number of vehicles it has had to stop production on because of IT-related issues is less than 5% of the vehicles affected in all of 2005, the company says. Lost minutes on the network were down by more than 90% for both 2006 and 2007 compared with 2005.