Assignment 2- Group Tasks division.

Group meeting
10th February 2009
330pm

Tasks division
Our group sector : Automobile


Pyan
i. Problems faced by the organisations within the subsector you choose;
ii. If no problems exist, identify the opportunites (eg. Business process enhancements, IT application, etc) those organisation can take;

Midi
iii. Historical background of the sub-sector
-Midi was assign to collect and edit all the task from the group member.

Zar Juned
iv. Current scenario of those sub-sector
v. Major players/ organisation in the sub-sector

Padil
vi. Market size, demands of the sub-sector (please provide statistics)
vii. Current ICT/ IS adoption within the selected sub-sector

Remember the format:
-English
-at least 20 pages
-Times New Roman font, size of 11 and single spacing.

Submitted date and deliver method: Week of 7 (13 Feb 2009) in UTM Academic Calendar.
Please submit full paper in a softcopy through e-learning system.

Good luck to evrybody!

POST BY SUFFIAN, PADIL, MIDI, ZAR JUNED

Disintermediation And Reintermediation

In the traditional distribution channel, intermediating layers exist between the manufacturer and consumer, such as wholesalers, distributers and retailers. In some countries such as Japan, one may find inefficient distribution networks with as many as 10 layers of intermediaries. These extra layers can add as much as a 500 percent markup to a manufacturer’s prices.

Intermediaries traditionally have provided trading infrastructure (such as sale network), and they manage the complexity of matching buyers’ and sellers need. However, the introduction of EC has resulted in the automation of many task provided by intermediaries. Does this mean that travel agents , real estate agents, job agency employees, insurance agents, and other such jobs and business will disappear?

Manufacturers can use the Internet to sell directly to customers and provide customer support online. In this sense, the traditional intermediaries are eliminated, or disintermediated. Disintermediation refers to the removal of organizations or business process layers responsible for certain intermediaries. In such cases, the traditional intermediaries fill new roles, providing added value and assistance. This process is referred to as reintermediation. Thus, for the intermediary, the Internet new ways to reach new customers, new ways to bring value to customers, and perhaps new ways to generate revenues.

This chapter has already featured many examples of reintermediation, where comparison shopping sites, and the like, all provide additional services to the consumer to try to build trust, confidence, and facilitate online transaction.

The intermediary,s role in shifting to one that emphasizes value-added services, such as assisting customers in comparison shopping from multiple source, providing total solutions by combining services from several vendors, and providing certifications and trusted third-party control and evaluation systems. For instances, in the world of online new and used car sales, electronic intermediaries assist buyers and/or sellers. These are new reintermediaries, intermediaries that have restructured their role in the purchase process.

An example of the new roles of intermediaries are Edmunds (edmunds.com), which gives consumers a vast amount of information about cars, including price comparisons , ratings, location of cars for sale, and the dealer’s true cost; CARFAX (carfx.com), which can research a specific used car and tell the consumer if it has ever been in an accident or had an odometer rollback; and iMotors (imotors.com), which offers members discounts on insurance, gas, and repairs. Additionally, “lead services” direct buyers to member dealers and, in some cases, also offer direct sales of new cars. The leading site in this category is autobytel.com. Others include Amazon.com’s partner CarsDirect (carsdirect.com), Autoweb (autoweb.com), and Cars.com (cars.com).

Some reintermediaries are newcomers, rivaling the traditional retail scores (e.g., Blue Nile), whereas others are additional operations established by the traditional retailers or intermediaries, such as Edmunds, that use both the old and the new intermediation methods (like click-and-mortar). Some reintermediaries cooperate with manufacturers or retailers to provide a needed service to the seller or distributor in the online environment. Other reintermediaries are virtual e-tailers that fill the unique niche. Intermediaries such as online retailers and shopping portals can also act as reintermediaries. The evolution and operation of these companies is critical to the success of e-commerce.

UPLOADED by PADIL and ZARJUNED

Selling cars online:Build to order.

Hi guys!! I found new interesting articles to post. ts about the marketing plan that been applied in some automotive companies. It also shows the transformation from the traditional to electronic system in the marketing. so, please read and leave ur comments. Thanks to En Iskandar for the explaination and materials.

The world’s automobile manufacturers are complex enterprises with thousands of suppliers and millions of customers. Their traditional channel for distributing cars has been the automobile dealer , who orders car and then sells them from the lot. When a customer want a particular feature or color (“options”), the customer may have to wait weeks or months until the “pipeline” of vehicles has that particular car on the production line.

In the traditional system, the manufacturers conduct market research in order to estimate which features and options will sell well, and then they make the cars they wish to sell. In some cases, certain cars are ultimately sold from stock at a loss when the market exhibits insufficient demand for a particular vehicle. The car makers have long operated under this “build-to-stock” environment, building cars that are carried as inventory during the outbound logistics process (ships, trucks, trains, and dealer’ lots). General Motors (GM) estimates that it holds as much as $40-bilions worth of unsold vehicles in its distribution channels. Other automakers hold large amounts as well.

Ford and GM, along with other automakers along the world, have announced plans to implement a build-to-order program, much like Dell approach to building computers. These auto giants intend to transform themselves from build-to-stock companies to build-to-order companies, thereby cutting inventory requirement in half, while at the same time giving customers the vehicle they want in a short period (e.g. one to two weeks). However, according to Weiner (2006) this transformation has so far been “doomed to failure by rigid production processes, inflexible product structures, the lack of integrated logistics processes, and inadequate networking of manufacturers, suppliers and customers. “Only when a network of suppliers producing standard modules for cars using standardized processes and IT systems will the dream of a truly agile and responsive supply chain delivering build-to-customer-order capability order be realized.

As an example of this trend toward build-to-order mass customization in the new car market, Jaguar car buyers can build a dream car online. On Jaguar’s Web site (jaguar.com), consumers are able to custom configure their car’s features and components, see it online, price it, and have it delivered to a nearby dealer. Using a virtual car on the Web Site, customer can view in real time more than 1250 possible exterior combinations out of several million, rotate the image 360 degrees , and see the price updated automatically with each selection of trim or accessories. After storing the car in the virtual garage, the customer can decide on the purchase and select a dealer at which to pick up the completed car. (thus, conflicts with the established dealer network channel are avoided). The Web site helps primarily with the research process –it is not fully transactional site. The configuration, however can be transmitted to the production floor, thereby reducing delivery time and contributing to increased customer satisfaction. Similar configuration system are available from all the major car manufacturers. Customer can electronically track the progress of the car, including visualization of the production process in the factory. Another similarly impressive Web site with similar functionality is hummr.com.

Sources: Compiled from agrawal et al. (2001), Gapper(2004), jaguar.com(accessed September 2006), Voigt t al. (2006), Weiner (2006), and Knowledge@Wharton(2005).

Can ERM solve the auto crisis?

Enterprise risk management does not have to be complicated. It does have to be useful. Can it help with the crisis at General Motors Corp., Ford Motor Co. and Chrysler L.L.C.?

Risk identification

The Big Three have the following risks:

Lagging sales. GM alone once had half of the U.S. auto market. Now GM, Ford and Chrysler combined have less than half the market. While GM remains No. 1, Toyota Motor Corp. is a close No. 2 in U.S. market share.

High costs. The companies have bloated salaried staff, probably 25% more than needed. Hourly labor costs are not competitive.

Legacy costs. The companies provide prohibitively costly retirement and health care benefits.

Dealerships. All three have too many dealers. With the same level of U.S. market sales, GM had 7,000 dealers before closings. Toyota had 1,500.

Contractual commitments. Contracts support a Jobs Bank program with 90% of wages and benefits to laid-off employees and revenue bonds for municipalities that financed closed facilities.

Auto company management. The companies have not had the ability or the courage to make desperately needed changes.

Risk mitigation strategies

The Big Three can mitigate the risks as follows:

Lagging sales. Become smaller. Some brands, such as Chevrolet, Buick, Cadillac, Ford, Chrysler and Jeep have considerable loyalty. Even the quality is acceptable. Focus on them along with hybrids. Reduce U.S. manufacturing plants from 35 to 20 or so. Sales will come into balance with available and desired vehicles.

High costs. Cut them to competitive levels. Streamline salaried positions. Reduce hourly labor costs.

Legacy costs. Face the reality that legacy costs are not affordable. Ask the government for help to reduce economic disruption during a transition.

Dealerships. Close many of them. A horrible action for local communities, but a probable outcome in any case.

Contractual commitments. Break them. Sorry about that. Tough times can be tough.

Management. Ford President and Chief Executive Officer Alan Mullally and Chrysler CEO Robert Nardelli may be crisis managers. GM CEO Rick Wagoner is more problematic. For all three companies, change the managerial cultures.

Risk mitigation options

The companies, in partnership with the U.S. government, have specific options:

Lagging sales. Reduce production. Eliminate brands. Close plants. Whoops. The United Auto Workers and municipal contracts make it cost-prohibitive to close plants. Score one for Chapter 11 bankruptcy reorganization.

High costs. Reduce the number of salaried and hourly employees. Whoops. A UAW hourly worker was quoted as saying, "I think we've given enough." It reflects the union mood and position. Score two for Chapter 11.

Legacy costs. Reduce them big time. There's no chance for success if they continue. The costs are contractual with no sign that workers will give them up easily. Score three for Chapter 11.

Dealerships. State laws make it prohibitively costly to close dealers. Score four for reorganization.

Contractual commitments. Who signed these things? Nevermind. Score five.

Management. We do not need a "car czar," a position proposed by the House of Representatives to oversee the U.S. auto industry. We need functioning boards of directors and executive leadership.

Differing views

A good ERM analysis looks for opposing views. Some are:

Bankruptcy as an option. Mr. Wagoner is quoted as saying, "bankruptcy is not an option." He may be right. The word "option" implies other choices. If there are none, bankruptcy is not an option. It is an eventuality.

Protecting dealers. Michael Jackson is the CEO of AutoNation Inc., the largest U.S. retailer of cars. He says automakers have improved quality, reduced labor costs and rationalized production. Does this mean the companies need all the local dealers included in AutoNation?

Labor costs. The UAW view? "I think we've given enough."

Likelihood of change. Mr. Wagoner said he would not resign.

Effects of bankruptcy. CNW Marketing Research Inc. in Brandon, Ore., said 80% of car buyers would not purchase a car from a bankrupt company. Another survey said 51% would not buy a car from GM in any case.

Choose a strategy

Are we ready to choose? A Chapter 11 bankruptcy reorganization has negative effects offset by the possibility of fixing high costs, legacy costs, excessive number of dealerships and burdensome contractual commitments. A bailout without conditions offers short-term continued operations. Suddenly ERM comes into play.

We are not choosing between bankruptcy and a bailout. Our choice is between bankruptcy alone and a bailout contingent upon filing Chapter 11. This could be a useful insight in the discussions in Washington, Detroit and elsewhere.(John J. Hampton, Business Insurance, issue January 19, 2009)

U.S. Automobile Crisis to Hit Indian Auto Component

Crisis in the global economy started eroding the corporates eventually. To get more detail of the auto companies, the European car salesYour browser may not support display of this image. were down 26 per cent in November compared to the same month in the previous year and one suddenly makes out how deep is the inability to spend on cars is driving home in the developed world.

India's auto component makers are facing one of the biggest crises ever. With the domestic market in the doldrums and the exports to the American market badly hit, many companies are on the verge of shutting down.

The Indian market has also been battered and with no sign yet of an impending bail out of the Yankee Big Three (such a misplaced term to think of them as Big!)

The entire supply chain of auto companies is bearing the brunt of the economic meltdown. From Tier-1 companies to small-scale units, all are facing a huge fall in demand, delayed payments and a stiff liquidity crunch.

Anil Bhardwaj, Secretary General, Federation of Indian Micro, Small and Medium Enterprises (FISME) said,"About 4,000 ancillary units are on the verge of closure and about 200,000 people will be affected by this crisis. Most companies have cut down the number of shifts, working days and are cutting down production. The US crisis has aggravated the problem,"

The commercial vehicle segment is the worst hit by the crisis. Such crises are cyclical, and tend to recur every 5-6 years, but a calamity of this magnitude has put all companies in trouble.

Jayant Davar, vice president, Automotive Component Manufacturers Association (ACMA) said "Auto component makers are hit very badly. The original equipment manufacturers (OEMs) have not been able to sell stocks. Cash flow is getting hugely affected. Payments are getting delayed, affecting a lot of projects. The overall sentiment is negative,"

In this worst economic condition, top three U.S Automakers such as General Motors (GM), Ford Motor and Chrysler are seeking a bailout from the U.S. government. According to analysts, even these companies succeed in getting the bailout; their IT expenditure could drop more than $1.5 billion a year. Moreover, IT companies will be pressurized to cut price for future contacts.

Viju George, IT analyst, Edelweiss Capital opined "In case of a bailout, the U.S. auto companies would cut their discretionary spend to stay afloat. As of now, about a third of their IT spends are of discretionary nature. This portion could get impacted going ahead,"

RapidKL

Pengenalan RapidKL

Salah satu industri pengankutan yang tidak asing lagi bg penduduk Lembah Klang. RAPID KL atau Rangkaian Pengangkutan Integrasi Deras Sdn Bhd ialah sebuah syarikat yang diamanatkan untuk menyediakan sistem pengangkutan awam yang berintegrasi meliputi perkhidmatan rel dan bas di kawasan Lembah Kelang.

Ditubuhkan pada Julai 2004 dan beroperasi pada bulan November tahun yg sama, RAPID KL hari ini telah mengendalikan seramai 4 juta pelanggan seminggu: 2.1 juta melalui Aliran Ampang (sebelumnya dikenali sebagai Aliran STAR) dan Aliran Kelana Jaya (sebelumnya dikenali sebagai Aliran PUTRA) dan seramai 1.9 juta melalui sistem bas, yang dahulunya dikenali sebagai Intrakota dan Cityliner. RAPID KL menyediakan perkhidmatan pengangkutan melalui 48 stesen LRT dan juga 165 laluan basnya.

RAPID KL adalah syarikat yang dimiliki 100% oleh Kerajaan dibawah Kementerian Kewangan dimana perjanjian operasinya adalah bersyarat setelah ianya berupaya mencapai satu set petunjuk prestasi (KPI) yang diawasi secara berasingan oleh syarikat.

Kini, terdapat 3 pengankutan utama yang berada dibawah kendalian Rapid KL.

ALIRAN KELANA JAYA (Dulunya dikenali sebagai Aliran PUTRA)

Aliran Kelana Jaya menggunakan sistem canggih teknologi tanpa pemandu oleh Advances Rapid Transit Mark II dari Kanada. Ianya mempunyai rekod spesifikasi berprestasi tinggi yang terbukti di Amerika Utara, Eropah dan direkabentuk menepati cirri-ciri moden Bandaraya Kuala Lumpur.

Aliran bermula dari depot di Subang dan berakhir di Terminal Putra di Gombak yang berjumlah 29km dengan jumlah stesen sebanyak 24 buah.

Operasi pertamanya bermula pada 1 September 1998 diantara Depot Subang ke Stesen Pasar Seni dan bagi seksyen dua pula, diantara Stesen Pasar Seni ke Terminal Putra pada Jun 1999.

Pada tahun 2002, sistem ini telah membawa penumpangya yang ke 150 juta, dengan kadar purata harian penumpang seramai 160,000 orang sehari. Hari ini, Aliran Kelana Jaya membawa seramai lebih daripada 170,000 penumpang setiap hari dan lebih daripada 350,000 penumpang sehari ketika acara kebangsaan diadakan.

Aliran Ampang / Sri Petaling (Dulunya dikenali sebagai Aliran STAR)

Aliran ini menggunakan tren dan sistem yang diperbuat daripada Adtranz German. Fasa 1 telah dibuka pada September 1998 diantara Stesen Sultan Ismail hingga Stesen Sri Petaling dan Stesen Ampang dan dalam bulan Disember 1998 dari Stesen Sultan Ismail ke Sentul Timur.

Pada hari ini, aliran ini mengendalikan lebih daripada 130,000 hingga 150,000 penumpang sehari pada hari biasa dan purata 120,000 penumpang setiap hari pada hari Sabtu dan Ahad.

Terdapat 25 stesen disepanjang 27km laluannya, membawa penumpang-penumpang dari pinggir bandar di kawasan utara, timur laut dan barat daya Lembah Kelana.

BAS RapidKL

Hari ini, RapidKL mengendalikan sebanyak 165 laluan bas di seluruh Lembah Kelang yang terdiri daripada 10 laluan bandar, 87 laluan tempatan, 65 laluan utama dan 3 laluan ekspres. Kami mempunyai 11 depot bas di seluruh Lembah Kelang dan lebih daripada seribu buah bas beroperasi.

Kami membawa lebih dari 192,000 penumpang setiap hari. Bagi mengalakkan penggunaan pengangkutan awam disamping menyediakan perkhidmatan kepada orang awam, RapidKL akan terus membuat penilaian bagi laluan-laluan bas baru.

Model Pembangunan Industri Automotif Dan Perlindungan Yang Diberi Terhadapnya

Pembangunan industri automotif negara adalah berdasarkan kepada prosedur pembangunan industri automotif (sumber : Dicken 1998) yang digunapakai negara-negara lain di dunia iaitu :-

Langkah 1) Mengimport kenderaan CBU (complete built up) oleh pembekal tempatan

Lnagkah 2) Pemasangan semi atau sepenuhnya kenderaan CKD (complete knocked-down) syarikat franchise tempatan

Langkah 3) Pemasangan kenderaan CKD dengan peningkatan komponen tempatan

Langkah 4) Pembuatan sepenuhnya kenderaan dan dimulakan dengan perlindungan untuk pasaran tempatan, diikuti dengan pasaran eksport dan seterusnya melahirkan syarikat transnational.

Salah satu usaha dan rangka kerja dalam memastikan peningkatan penglibatan bumiputera dalam industri automotif adalah penggunaan komponen tempatan.


Perlindungan sebagai aspek penting dalam industri automotif dunia:

Sepertimana prosedur industri automotif yang digunapakai oleh industri automotif dunia dimana syarikta automotif memerlukan perlindungan (protection), Proton juga menikmati protection dari kerajaan untuk membolehkannya berdiri dan bersaing dengan syarikat-syarikat lain yang telah wujud lebih lama. Perlindungan ini adalah dari segi duti import yang dikenakan kpd kenderaan yang diimport secara CBU ataupun CKD. Perlindungan ini adalah biasa diamalkan oleh mana-mana syarikat automotif di dunia seperti yang dinikmati oleh syarikat Korea seperti Hyundai dan Kia. Hyundai dan Kia yang telah wujud sejak tahun 1967 lagi menikmati perlindungan dari kerajaan mereka malah walaupun perlindungan telah dikurangkan pada tahun 2004, sykt masih lagi dilindungi secara halus di negara korea. Ini boleh dilihat melalui audit cukai yang tegas yang dikenakan keatas pemilik kenderaan import dan berbagai-bagai lagi. Tidak hairanlah, perlindungan yang diberikan oleh kerajaan korea ini menyebabkan pasaran kereta import di Korea adalah dalam lingkungan 10% sahaja, dan selebihnya adalah milik syarikat tempatan korea. Konsep yang sama inilah juga digunapakai di Malaysia.