General Motors Value Chain

Topics: Logistics, Supply chain, Value chain Pages: 11 (3812 words) Published: January 9, 2011
According to (2009) General Motors Corp. (NYSE: GM), is one of the world's largest automakers which was founded in 1908, in Detroit USA. It manufactures cars and trucks in 34 countries. GM employs 252,000 people in every major region of the world, and sells and services vehicles in some 140 countries. It sells cars and trucks globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. Its largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services.

To better understand the logistical and value chain through which a firm/company develops a competitive advantage and create shareholders value chain, it is useful to classify the business system into a series of value generating activities known as value-chain. According to his book, (1985), Michael porter introduces a generic value chain model that comprises series steps of activities found to be common to a wide range of firms. Porter identified primary and support activities as shown in the below diagram;

Source; (

INBOUND LOGISTICS- Inbound logistics covers activities associated with the receiving, storing, and transporting of raw materials. Management decisions involve freight consolidation, mode and carrier selection, materials handling, warehousing, and backhaul management. (netmba, 2010). INBOUND LOGISTIC OF GENERAL MOTORS IN UNITED STATE (USA), shipment consolidation increases vehicles efficiency, which is regarded as organization responsibilities. Full vehicle loads of goods save money because the same transport overhead is shared by more units of goods. However, general Motors logistics managers used to consider trade-offs between transport costs and potential freight delays, consolidation savings and information systems investments, and consolidation savings and inventory carrying costs. Although freight consolidation may lead to longer lead times that in some cases are deemed unacceptable, they are often yields big savings. In united state General Motors choose to invest more on information systems and computer models to get benefits from higher shipment consolidation. According to (Blumenfeld), General Motors’ Delco Electronics unit successfully saves at least 26 per cent of logistics costs annually by using a computer model to manage a mix of direct and consolidated shipping routes. The investment in the computer model transport, which takes into account 13,000 different parts in 30 GM plants and many routes and rates combinations, which has proved worthwhile from both cost and efficiency perspectives. Also in (USA) road transportation has impact on environment, in which GM try to avoid Some part by using rail and barge which consume less energy or uses energy more efficiently than other modes like road haulage and air cargo. A typical transport mode decision determines which transport option to use in other to avoid traffic congestion and air pollution both directly and indirectly. Rail is seen as a better alternative to road transport because it makes more efficient use of land, can use renewable energy sources, helps to relieve traffic congestion in urban areas, causes less pollution, and generates less noise.

While if it comes to material handling GENERAL MOTORS and their retailers save money by using less energy, labour, and packaging materials through bulk packaging. This practice is environmentally responsible because they use fewer resources, In addition GM occupying large amounts of land, warehouses which they are generating much of their packaging in their supply chain. Standardized reusable containers help them to reduce operation costs and packaging wastes. INBOUND...
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