Themes: e-Supply Chain Management Case Length: 06 Pages Period: 1990-2001 Organization : SciQuest.com Pub Date : 2002 Teaching Note : Available Countries : USA Industry : Information Technology (Electronic Commerce)
Mercedes Benz's E-Biz Solution: The Factory Delivery Reservation System
"One of our most fundamental goals in developing the system was to strengthen and market the Mercedes-Benz brand in the United States. The fact that we would be one of the first car manufacturers in the United States to have a factory delivery program would be seen as a very positive thing in this regard." - William Engelke, Assistant Manager, IT Systems, Mercedes Benz US International, commenting on the FDRS.
Linking Customers By 2000, Mercedes Benz United States International (MBUSI), builder of the high-quality MClass sports utility vehicle (SUV), established itself as a company that also delivered superior customer services. One such service was the delivery option where by the customer could take delivery of the vehicle at the factory in Alabama, US. The program called the Factory Delivery Reservation System (FDRS), enabled MBUSI to create and validate 1800 orders per hour. FDRS also automatically generated material requirements and Bills of Material1 for 35,000 vehicles per hour. The Customer Relationship Management (CRM) solution that made FDRS possible was based on Lotus Domino2 and IBM Netfinity3 server4. Analysts felt that with its innovative use of the new program, MBUSI not only managed to improve its customer relations by providing the best service, but also demonstrated its commitment to customers by making them an integral part of the process. Customers were, in a way linked directly to the factory floor – which was a powerful sales tool.
Background: Mbusi and its Business Challenges MBUSI was a wholly-owned subsidiary of DaimlerChrylser AG.5 In 1993, Daimler Benz realized that the 'Benz' brand could be extended to wider market segments. Traditionally, Mercedes Benz6 appealed to older and sophisticated customers only. Daimler Benz wanted to attract customers below 40 years of age, who wanted a rugged vehicle with all the safety and luxury features of a Mercedes. Daimler Benz decided to develop a SUV known as the M-Class. It expected strong demand for the new vehicle and therefore planned to build its first car-manufacturing facility – MBUSI – in the (Tuscaloosa, Alabama) US. The MBUSI facility had many advantages. First, labor costs in the US were almost half that of in Germany. Second, the US was the leading geographic market for SUVs.
Third, as the vehicles were assembled in the US, they could be distributed to Canada and Mexico more efficiently. In January 1997, the factory started production at partial capacity and by the end of the year, it was producing at full capacity. By 2000, the factory was rolling out around 380 vehicles per day. The new M-Class „allactivity'vehicle represented a new concept for the company. Also, mass customization required that each vehicle be treated as a separate project, with its own Bill of Material. To deal with these challenges, Daimler Benz decided to implement an enterprise wide Information Technology (IT) system, with the help of IBM Global Services7. To further strengthen the image of Mercedes Benz in the US, MBUSI planned to deliver vehicles at the factory, becoming the first international automobile manufacturer in the US to do so. MBUSI also wanted to enrich the customers'experience. Commented William Engelke, “The factory delivery option gives Mercedes-Benz customers something that they do not get from other automobile manufacturers which is why we think the program will resonate with our customers. We think that having the factory delivery program available to Mercedes customers adds to the overall...