Delphi CIO Learns New (Economy) Tricks

FRAMINGHAM (07/24/2000) - Delphi Automotive Systems Corp. is the world's largest auto parts marker. The Troy, Mich.-based company operates 176 manufacturing plants in 38 countries, posted revenue of $29 billion last year and has been in the midst of a major technology infusion since its spin-off from Detroit-based General Motors Corp. in May 1999.

Computerworld reporter Lee Copeland spoke with Delphi's CIO, Peter Janak, who says information technology is closing the gap between Old Economy and New Economy firms.

Q: Does the Internet make the gap between Old Economy and New Economy players less relevant?

A: I think so, because us Old Economy guys with a whole lot of money are going to avail ourselves with Internet tools. . . . We are becoming more nimble. To make something out of a piece of steel is still going to take the length of time that it takes to make it out of steel, but the actions that you take, the decisions that you make and the response to the marketplace - that is the part that will become quicker. The ability to move and make decisions will speed up significantly.

Q: What are you learning from new technology companies like Dell Computer Corp. and its build-to-order model or the new breed of Web start-ups?

A: We're picking up a lot of insights. But you have to do it in the context of your real business.

Not to belittle Dell, but it's a lot easier to make a computer than it is to make a car. It's a simpler manufacturing process. There's not as many models or choices. It's easier to do, but you can transfer some of those concepts to our environment. . . . We have learned things to do internally . . . to serve our employees more efficiently and cut down on our internal bureaucracy impediments.

Q: What can some of the start-ups learn from Delphi?

A: People could learn how to run a "pull" operation. In classic mass production, you turn on a machine and produce as many parts as you can, or as many cars or washing machines, so you can get the maximum utilization out of the machine. And then you pump these parts out, and then you try to sell them as quickly as you can so you get them off your books. That type of organization is called a push operation.

A pull system is, you get the order from a customer, then you build according to what the customer wants, so you pull the product out of your system.

It's a different philosophy. In a pull philosophy, you minimize the amount of inventory in the system, and there is a much less wasteful approach.

It fits in really well into the New Economy. . . . We're opening up our supply chain and moving to an electronically supported pull system.

Q: There's lots of talk about build-to-order in the automotive industry, but isn't it still a long way off?

A: It depends on what you call long. There is work being done on it now.

Several [automakers] are coming up with functional requirements.

Will we have effective build-to-order within a year? I would not be surprised if we did.

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