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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: kemble s. matter who wrote (146522)	11/4/1999 8:19:00 PM
From: LENNY PADRON	Read Replies (1) \| Respond to of 176387

Kemble Hi, is this what you meant by "You can't afford not to do business with Dell" To Be Like Dell, Detroit Looks To The Internet General Motors, Ford see newly forged online networks as key to cutting costs and producing custom vehicles Date: 11/4/99 By Paul A. Eisenstein Investor?s Business Daily Cars and trucks are chock full of chips and other high-tech electronics. So it was just a matter of time before automakers turned to the Web to help them roll out their products. In separate announcements this week, Ford Motor Co. and General Motors Corp. outlined Internet-based partnerships that aim to let the automakers link up suppliers, dealers and eventually consumers. The new ventures could save the automakers billions of dollars in purchasing costs, officials say. They also could see billions more in new fees, commissions and even advertising revenues. What?s more, the online systems should trim the time needed to go from order to delivery, making it easier to customize vehicles to consumer specifications. Ford and GM detailed their new programs during news conferences Tuesday at the annual Specialty Equipment Manufacturers Association convention in Las Vegas. The event brings together thousands of aftermarket parts vendors, dealers and installers. Ford does $80 billion in business with suppliers each year, while General Motors does up to $95 billion. Until now, most of that business was transacted by paper. Ford intends to shift purchasing operations to the Internet through a joint venture with business software maker Oracle Corp. Ford Chief Executive Jac Nasser expects the company?s AutoXchange system to be up and running early next year. "This is really a groundbreaking, leading-edge change in the way this industry will be managed," Nasser said. Cost Savings Ray Lane, Oracle?s president and chief operating officer, estimates that AutoXchange will earn as much as $1 billion in transaction fees and other revenue within 18 months and perhaps $5 billion longer term. GM and Ford officials also hope the move will shave billions off parts-purchasing costs. G. Richard Wagoner Jr., GM?s president and chief operating officer, says it costs an average of $100 to process a purchase order. GM will create an online marketplace called MarketSite under an agreement with Commerce One, a provider of electronic services based in Walnut Creek, Calif. As part of the deal, GM will have the option to buy up to 4.8 million shares of Commerce One once pre-set revenue targets are met. "The e-world is a tough world and a competitive world," said Wagoner. "I think we?ve got the winning hand. Time will tell." Doing business online will save companies worldwide up to $1.25 trillion by 2002, projects an August study by Giga Information Group. The auto industry is already lean, but there?s still room for cost cutting. That?s only one issue the automakers hope to address in their online ventures. Currently, it takes up to 60 days from the time an automaker decides to order parts until they reach the assembly line. The industry operates on a push system with lots of excess inventory. The goal is to switch to a pull system, where parts and cars are produced in line with consumer demand. Parts makers will connect to a common Internet service for "almost immediate" ordering and billing, said Brian Kelly, president of Ford?s e-commerce operations. AutoXchange and MarketSite will provide sales forecasting and other services that should help suppliers better predict and manage their own operations. That should convince parts makers to voluntarily sign on, Kelly says, despite the fees they?ll pay for accessing the system. Like Dell "The real prize is to integrate the whole supply chain," Oracle?s Lane said. "Ford will be able to say, ?We need these kinds of parts on this date to build this, and we will offer suppliers, if they are members of AutoXchange, the advantage of buying over the Internet and of Ford?s economies of scale.?" GM and Ford want to link their new services with other e-commerce operations they have established, such as Ford?s new partnership with Microsoft CarPoint, a car-buying site hosted by Microsoft Corp. Consumers soon will have the ability to configure cars the way they want them online and then search for those vehicles on nearby dealer lots or place a custom order. Nearly 95% of vehicles in the U.S. are purchased out of inventory because customers don?t like to wait six weeks or more to take delivery. But automakers see a competitive advantage in being able to customize their products, much like Dell Computer Corp. and other computer makers do. "Dell is the Holy Grail," Wagoner said. Ford also announced plans Tuesday to create a separate online service for Specialty Equipment Manufacturers Association members. It will offer technical details on Ford models, making it easier to design aftermarket parts and accessories. "Now our guys can build better products early on without flying blind and guessing," said association President Charles Blum. investors.com