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General Motors


1930- General Motors Corporation purchases Winton Engine on June 20 and Winton's ... General Motors expands its locomotive manufacturing capacity in North America by ... – PowerPoint PPT presentation

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Title: General Motors

General Motors
Real World Case 5
Chapter 10
Page 376
  • Crystal Crockett
  • Johnny VanHorn
  • Stacy Adkins
  • Reanetta Walker
  • Christian Gasse
  • Thilo Grabo

GM History
  • H.L. Hamilton and Paul Turner incorporate
    Electro-Motive Engineering on August 31, 1922.
    Electro-Motive sets up headquarters in Cleveland,
  • 1923- Hamilton sells the first M300 rail motor
    car to the Chicago Great Western and another
    to the Northern Pacific.
  • 1925- Changed the name to Electro-Motive
    Corporation and during the first full year of
    operation, sold 27 railcars. Horsepower also
    increased to 275 hp and EM opened a new sales
    office in New York City.

Reanetta Walker
GM History cont
  • 1930- General Motors Corporation purchases Winton
    Engine on June 20 and Wintons chief customer,
    Electro-Motive on December 31. These two new GM
    Divisions play a key role in the GM Research and
    Development efforts of Charles F. Kettering's
    two-cycle lightweight diesel engine project.
  • The diesel-electric locomotive era begins on
    April 7, 1934 when GM EMD's first diesel-electric
    streamlined train rolls out of the Budd
    Manufacturing plant in Philadelphia.

Reanetta Walker
More GM History
  • GM EMD breaks ground on a 74 acre site for a
    200,000 sq. ft. locomotive plant in LaGrange,
    Illinois on March 27, 1935.
  • General Motors expands its locomotive
    manufacturing capacity in North America by
    opening the GM Diesel Division plant in London,
    Ontario, Canada.
  • Another historic milestone is reached ---In 1983,
    the production of the 50,000th GM powered
  • In 2000- The largest single order for locomotives
    ever placed with EMD, by the Union Pacific
    Railroad, is also their largest order ever given
    in their history.

Reanetta Walker
Products Services
  • Diesel Engines
  • Marine Equipment
  • Stationary and Industrial
  • Locomotive Maintenance
  • Locomotive Management
  • Leasing
  • Training
  • Welding

Crystal Crockett
GM-Corporate Officers

Crystal Crockett
General Information
  • General Motors Corporate
  • 2002 Financials
  • Net Income1.7 billion
  • Annual Earnings Per Share increased to 3.35 from

Crystal Crockett
GM Locomotive Group had several problems during
the rollout of SAP R/3 and the supply chain
Order backlogs and fulfillment cycle times still
are not at levels that fully meet
customer statisfaction.
Locomotive Group of GM's Electromotive Division
is the world's largest builder of diese-elecric
SAP Software had to be recon- figured, flushed,
and repop- ulated with clean data.
The 2 billion GM subsidiary hired new
consultants to fix the ERP SCM Systems
integrator completed the initial rollout.
Who ?
Thilo Grabo
GM Locomotive installed the SAP R/3 and SCM
system to improve its financial reporting, its
ability to forecast spare parts needs, and to
order entry procurement.
However, the software was not configured well
enough to match internal business processes, and
legacy mainframe data were not properly formatted
for the new system.
There were no problems with R/3 software itself,
but the applications were not properly configured
to meet GM needs.
It was a disappointed experience for GM.
Statements of David Scott, Executive Director of
the GM ElectroMotive Division.
The aftermarket department could not accurately
forecast demand or ensure the right level of
parts inventories.
GM spent a lot of money and expected to get
something for it, and got something else instead.
Thilo Grabo
The materials supply and forecasting modules in
the ERP system were especially troublesome. The
configuration did not reflect the complexity of
the distribution process of supply parts
Statements of Mike Duncan, Director of Worldwide
Sales Development, GM ElectroMotive Division.
The Technology Solutions Co. helped us to
reconfigure the inadequately formatted data which
did not run on SAP R/3.
Most operations have returned to normal.
However, in future the GM Locomotive Group is
also outsourcing SAP-related application support,
end-user training, and follow-on software
implementation for new ERP Systems to Technology
Solutions Co.
Nevertheless, the major start-up problems with
the SAP R/3 Software has nothing to do with the
software itself. GM still plans to install SAPs
ERP Software for other operations and departments.
Thilo Grabo
Question 1
  • GM Locomotive says the problem wasnt with the
    ERP software. Then what did cause the major
    failure of their ERP system?

GM Locomotive
Legacy Mainframe
SAP R/3 ERP System
Consulting Firm
  • Applications were not configured well enough to
    match GMs internal business processes
  • Legacy mainframe data were not properly formatted
    to work with the SAP system
  • Materials supply and forecasting modules in the
    new ERP system were not constructed to reflect
    the complexity of the distribution process

Poor Planning
Consulting Firm Oversights
Stacy Adkins
GM Locomotive
Legacy Mainframe
SAP R/3 ERP System
  • As a result-
  • The aftermarket department couldnt accurately
    forecast demand
  • They could not ensure that it had the right mix
    of inventory parts on hand
  • Production literally came to a halt

Stacy Adkins
Question 2
  • What major shortcomings in systems
    implementation, conversion, or project management
    practices do you recognize in this case?

The major shortcomings occurred in the
pre-implementation phase and might be divided
into technical-related (1) and HRM-related
factors (2) (1) Technical-related Factors
Conversion Process
Data Compatibility
Christian Gasse
(2) HRM-related Factors
Training BPR
Training Applications
Project-Team Building
Briefing of Consultants
Note Interdependencies in between the factors
are possible and might cause some factors to
become redundant.
Christian Gasse
Question 3
  • What would you advise GM Locomotive do
    differently to avoid similar problems in their
    upcoming ERP implementations? Explain the
    reasons for your proposals.

S. Mark Young
Implementing Management Innovations
  • 1). The Importance of Organizational Culture
  • 2). Only Implement those innovations consistent
    with current corporate, divisional, and plant
  • 3). Dont attempt an innovation if an
    organization is simultaneously engaging in
  • 4). Spend as much time and resources on managing
    the human side of change as the technical side 
  • 5). Educate and train employees at all levels of
    the organization regarding the purpose and
    benefits of the innovation 
  • 6). Use medium and long-term performance
    measures to gauge innovation success 
  • 7). Generate useful and understandable reports
    to illustrate the effects of change programs 
  • 8). Make explicit agreements regarding when and
    if existing information systems should be turned
    off once a new system is in place

Johnny VanHorn