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GM Wireless

Case #5 page: 141


Anthony Pemberton
Daisaku Okada
Bryan Gauthreaux
Kendra Platt
Ryan Platt
Jordan Thompson
Company Background
General Motors Corp. (NYSE: GM), the
world's largest vehicle manufacturer,
employs about 325,000 people globally.
Founded in 1908, GM has been the
global automotive sales leader since
1931. GM today has manufacturing
operations in 32 countries and its
vehicles are sold in 192 countries. In
2003, GM sold nearly 8.6 million cars
and trucks, about 15 percent of the
global vehicle market. GM's global
headquarters are at the GM
Renaissance Center in Detroit.
Products and Services
Chevy
Pontiac
Oldsmobile
Cadillac
Buick
GMC
Saturn
Hummer
SAAB
OPEL
Financial Services
DirectTV
DirectPC
XM Satellite Radio
Administration
CEO-
G. Richard
Wagoner, Jr.
How was it done?
A 30-person task force drawn from
different organizational divisions but
headed by CIO. the task force
worked for 60 days.
Tens of millions of dollars - Nothing
is small at GM! GM is reported to
have invested 1.7 billion on Internet
applications during the past five
years.
GM Market Share (Domestic)
1996 1997 1998 1999 2000 2001 2002
Cars 32.70% 32.40% 30.00% 29.80% 28.60% 26.90% 25.40%
Trucks 29.00% 28.80% 27.60% 27.80% 27.00% 29.20% 31.00%
Market Share
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
1996 1997 1998 1999 2000 2001 2002
Cars
Trucks
GM Sales
Deliveries (Source from GM.com; Sales and Production)
2002 2003
Rate
Change

Car Total 2,069,206 1,960,682 -5.24%

Truck Total 2,789,500 2,795,721 0.22%
Vehicle Total 4,858,706 4,756,403 -2.11%

Sales
0
50,000
100,000
150,000
200,000
1997 1998 1999 2000 2001 2002
GM Net Sales & Net Income
1997 1998 1999 2000 2001 2002
Net Sales $172,580 $155,445 $176,558 $184,632 $177,260 $186,763 (billion)
Net Income $6,002 $2,956 $6,002 $4,452 $601 $1,736 (billion)
Net Income (in billions)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
1997 1998 1999 2000 2001 2002
Net Income
Wireless networking refers to
technology that enables two or more
computers to communicate without
network cabling.
Wireless networks are growing in
popularity due to the emergence of
cross-vendor industry standards such as
802.11b.
Wireless Networking
Wireless Networking Continued
GM has had a wireless
network for years but
it consisted of a
proprietary network of
mixed devices that
could not always
interoperate.
A typical wireless
network consists of a
router, firewall, and
multiple access
points.
Wireless Networking Cont
GM has installed access points throughout its facilities
allowing for communicating between inventory
systems, production systems, workers, and even fork-
lift drivers.
Access Points typically have an indoor range of 150-
300 feet depending on the operating conditions.
GMs 802.11b access points, consisting mostly of Cisco
Aironet devices, communicate at a speed of 11 Mbps
whenever possible. If signal strength or interference is
disrupting data the devices will drop back to lower
speeds. Though it may occasionally slow down, this
keeps the network stable and very reliable.
Future ImplicationsGM 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.
Wireless Lan Benefits
Access to twenty-four hour corporate data
from anywhere within the plant gives business
mangers the ability to make faster decisions
Sales personnel can incorporate new
information to customers which adds value to
the customer and the organization
Communication quality is enhanced with
employees that can relay information
anywhere and everywhere wireless lans
complement traditional wired lans.
Employee satisfaction is improved with
flexibility to wireless abilities which lowers
employee turnover
Work teams can create temporary peer to peer
networks for high collaboration and document
sharing
Additional Benefits
Wireless networks are easy to set up providing
benefits in areas whereas wiring is difficult to
deploy.
Suitable for highly mobile workforces that
require roaming access to network resources
such as warehouse employees in GM factories.
Wireless networks offer high performance and
bandwidth to keep all your applications and
transactions running.
Wireless networks are quickly installed,
provide flexibility, and are easily reconfigured.
Very low incremental cost is required to add
users to an existing WLAN network.
ROI on the wireless project is expected to be
less than one year.
Disadvantages of Wireless LAN
Wireless adapters are more expensive than
Ethernet adapters.
Wi-Fi can be difficult to set up initially. Trying
to find the optimal location, setting
configuration options, choices of devices, and
encryption/security.
Speed can fluctuate significantly. Slower than
wired network.
Using radio waves for data transmission
might interfere with other high-tech
equipment
Proprietary solutions: slow standardization
procedures lead to many proprietary solutions
only working in an homogeneous
environment
3 main security issues:
1: Incorrect or poor configuration. A lot
of routers and access points come with
a default password that is not changed
allowing unauthorized access.

2: Wireless encryption protocol
standards are undergoing constant
change and are subject to attacks.

3: Trojan software. Execution of
programs, generally distributed by
email that appears to be a useful or
humorous file but is in fact a virus.
Authorization/Privacy
Networked computers should be maintained by a
network administrator to prevent ordinary users
from changing the system in ways that might leave
the computers open to an attack. The problem of
authorization can already be seen by a number of
companies that have installed wireless systems in
their companies but left them open due to
practices by uneducated users.
Due to the nature of wireless networking it is very
easy for other people to access the flow of
information along the network. Some current
wireless network implementations, like 802.11b
include a form of encryption called Wireless
Encryption Protocol but this has been shown to be
insecure. Current VPN (virtual private network)
technologies like IPSec could be used to encrypt
traffic between hosts on the network.
Key Competitors
(ranked by sales)
1. General Motors
2. Ford
3. DaimlerChrysler
4. Toyota
5. Volkswagen
6. Nissan
7. Honda
Fortune 500 Rankings
Largest U.S. Companies
#2 - General Motors
#4 - Ford

Profits
#46 - General Motors
#458 - Ford

Market Value
#85 - General Motors
#126 -Ford
GMs Competitors
Network Systems
Ford Motor Company uses wireless technology along its
assembly line and for its forklift drivers, especially in its
Kentucky plant. Ford opted for wireless technology and it
has paid huge dividends. Average forklift mileage has
been reduced by more than 10 percent. Some drivers
report cutting their mileage by almost one half.
Nissan not only uses wireless technology in manufacturing
but it has wireless access installed at Infinity dealerships
that salespersons can use to access Nissan's customer
resource management information directly from the show
floor over two-way pagers.
Daimler, prior to 2001, used a paper docket and barcode
scanning system to maintain a central record of the
whereabouts of vehicles and drivers throughout their
plants. Daimler had such complex plants that wiring them
would be nearly impossible and very expensive. Avaya
was contracted to install wireless capability for Daimler in
late 2001.
#1. What is the business value
of wireless LANs to GM?
Wireless networks bring GM the
following advantages:
Unification of the processes involved in
manufacturing vehicles, lower costs,
more efficient workers, effective
communication, flexible work
environment, easy reconfiguration of
plant/assembly line, ROI on the
wireless project is expected to be less
than one year.
#2. What are the security vulnerabilities of
wireless LANs? Is GM taking appropriate
security measures? What or why not?
Wireless LANs are susceptible to
eavesdropping, hackers, disgruntled
employees, internet trojans/viruses, and
wireless encryption standards that are not
always fool proof.
GM is taking necessary steps to protect their
network by taking part in setting new
wireless encryption standards, using
directional antennas ($1000 each), VPNs,
and Firewalls. GM is also using detailed site
surveys that look at all radio transmissions.
#3. What are some other possible business
applications of wireless LANs? Evaluate the
benefits and challenges of one of them to a
large or small business.
Inventory wireless connection to distributor or
directly to manufacturer. Dealerships could easily
reorder vehicles.
Realtors could use wireless laptops to access listings
while showing houses to clients. Benefits would
include flexibility, enhanced customer service, fewer
miles to travel. Challengessecurity, coverage,
interference, viruses
Movies other entertainment venues could have
Wireless capable chairs that allow customers to order
concessions directly to their seats.
Advantagescustomer loyalty, convenience,
satisfaction. Disadvantagesvulnerable to
attacks/interference, careless customers (spills,
damage), and cost.