Article

GM cuts its wires, and its costs

Jim Rendon

In the hyper-competitive automotive industry, where cost cutting is just another day at the office, wireless technology is helping General Motors Corp. turn investments in wireless technology into money in the bank.

Time and time again, GM, the largest vehicle manufacturer in the world, has found that implementing wireless technology throughout the company helps to keep costs down.

"This is a business that is brutal in terms of cost-cutting and efficiency," said Tony Scott, GM's CTO. "Anything that you can leverage to get a competitive advantage, that brings down costs or increase productivity or quality, you've got to jump on it as fast as you can."

Fifteen years ago, the company began using untethered technology with spread spectrum proprietary wireless deployments in its factories. These were expensive, low bandwidth systems that did not interoperate, but nonetheless the company saw the value of losing wires and automating its production processes, Scott said.

For a decade or more, its wireless deployments were limited to its factories. But recently, with the blossoming of 802.11b wireless LANs, the company saw a huge opportunity. The cost of wireless technology had plummeted, available bandwidth was way up and once-disparate systems were suddenly interoperable. Wireless technology had come into its own, and GM took notice.

Scott said that the company developed a wireless task force to look across the global corporation to better

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understand how the technology could be used on a departmental level. Interestingly, the IT staff resisted the urge to set up global criteria for wireless deployments. Instead, it let departments set their own criteria for determining when a wireless deployment made sense.

GM found that in some instances, IT cost savings drove deployment. In others, it was a desire to increase productivity. One department that has 1,600 field representatives traveling between dealerships, decided that a productivity boost would be enough to justify deployment. Its reps now use handheld devices and laptops with a wide area wireless connection to the Internet. While sitting in a dealer's office, they can check e-mail and retrieve important data from the home office. Scott said the program has been a great success.

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.

Its OnStar telematics system, which was intended for customers, has proved useful internally as well. Before OnStar, when GM tested a new car, it drove it for a given amount of time, then brought it back and ran it through tests to determine problems.

Now, using OnStar, GM collects real-time data on how the car is functioning. With one new model, Scott said engineers were able to pinpoint and correct seven of ten malfunctions in the car before it even returned to the shop.

The resulting cost savings are dramatic, he said, especially if the company had released flawed cars into the market, and then had to fix them all in dealerships once they were on the road.

Scott said that one of the biggest lessons he has learned from GM's decade and half of wireless experience is not to fret too much over devices.

"Early on, people always wanted us to focus on picking devices, and we have constantly taken the position that it doesn't matter." Devices change every six months Scott said. It is far more productive to focus on the infrastructure and the middleware, elements of the technology that do not change as often as devices.

Ironically, GM has wireless technology everywhere except for its corporate headquarters, located in the Renaissance Center, a mixed-use skyscraper in downtown Detroit, Mich. The building, Scott explains, is comprised of four towers surrounding a central tower.

GM occupies the four towers, and the central tower serves as a hotel. Given the security issues with wireless LANs and the fact that he never knows who might be renting a room across from CEO Richard Wagoner's office, the headquarters are remaining wired for the time being.

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