Mercedes 1999 Annual Report Download - page 27

FRONTRUNNER
21
“We must meet customer
expectations, then go beyond them.
At the same time, we must be
asking how we can distinguish
ourselves through innovation, and
create a unique selling proposition
that is value for money.”
CHAIN REACTION. Over at Procurement and Supply, where
their primary job is to shape the world’s most effective supply
chain for a company that annually purchases €95 billion
worth of supplies from 30,000 suppliers, Board Member Gary
Valade and his team have shaved almost €4 billion off the
company’s cost base through synergy savings, reductions in
variable costs and a supplier cost reduction effort. The
Internet is also being used here.
This is a major part of the upstream end of the automotive
value chain – the part that terminates with the car, manu-
factured and ready for sale on the showroom floor. Here -
through innovative thinking about the way the Daimler-
Chrysler divisions buy or create demand for the supplies
they build into their products – a 600-strong team at Pro-
curement & Supply, supported by thousands of others
throughout the supply chain, is moving the company toward
a lower cost base. This process is strongly assisted by the
additional leverage with suppliers afforded the company by
its significantly enlarged scale. Valade’s team has united the
best of the two processes that were separately at work on
either side of the Atlantic, and injected new elements that
will strengthen DaimlerChrysler’s capacity to find the
world’s best suppliers, even supporting their own
technology and innovation program where appropriate.
It means presenting one face to the supplier, searching for
and developing new synergies across the business units,
and globalizing information throughout the company and its
supply base.
From start to finish - or in this case, from finish to start –
from the innards of an on-board diagnostic system, to the
model of your dreams, to a safer ride, to a lifetime fuel-
purchasing discount, to the best possible way home – be it
route or mode – DaimlerChrysler is fashioning a tool for
consumer delight of extraordinary scope and power.
It has become the ultimate dream machine – but like Dirk
Walliser’s, its dreams are profoundly real.
It’s an ethic that carried through from manufacture to ser-
vice, as Jim Hebe, president of Freightliner, elaborates. “We
have been successful not only in building the most complete
and modern range of trucks available, but also in building
services around that vehicle. Our involvement in the value
chain is such that we support the customer through the en-
tire life of the truck. We are the only manufacturer in North
America which requires its dealers to provide service 24
hours a day, seven days a week. We have more dealers open
on this basis than all the rest of the industry combined. We
have a 24-hour call centre. If a customer is down and can’t
get service, they call our call centre and it will do anything
that has to be done to get them fixed - get them into a
Freightliner shop, or even a competitor shop. We’ll do any-
thing – get parts off the plant floor, ship them, whatever it
takes. We’ve also developed the only total vehicle computer
diagnostic system. From our call centre we can diagnose a
vehicle anywhere in North America, and instruct the
mechanic on how to repair the problem.”
All this wealth of customer service experience is now part
of DaimlerChrysler’s developing value-chain product and
service template. Meanwhile, the company is busy lever-
aging its technological capacity from the passenger car side
of the house, over to commercial vehicles. “Beyond mere
scale,” says Dieter Zetsche, “we have the advantage of being
part of a big automotive group, with all the technological
leadership which is provided by this group. Funded by the
big car revenues we are getting, and the profits we are
making, we can be at the forefront of technology on the car
side, and apply that to the commercial vehicle side - which
sets us even more apart from any competitor.”
So what’s to come? Beginning this year, DaimlerChrysler will
be introducing its S-class electronic stability wizardry into its
Mercedes-Benz and Freightliner trucks, and extending that ca-
pability into the even more complex task of controlling truck-
trailers. Also on the menu are lane-sensor devices and distance
control (distronics).
And what’s the next big thing for commercial vehicles?
Very simply, e-commerce.
This is one division where e-commerce makes its way
directly to the bottom line via the product. Growth in the
long haul business will continue to track GDP growth, says
Zetsche, which makes the future pretty bright. But it’s the
growth in e-commerce, which market pundits expect to be
exponential, that is really lighting up the house. Shopping
on the Internet depends on delivery by van. So with
e-business booming for a company like Federal Express…
Fedex, says Zetsche, has already made the Mercedes-Benz
Sprinter its standard vehicle worldwide except North America
and a few Asian countries and is currently testing 80 Sprint-
ers within the US. And Freightliner’s Hebe has a US matcher -
the Internet grocery store, Homegrocer.com, has ordered a
thousand light vans from Freightliner since it opened up shop
two years ago. This sector is going to catch fire.