Gm - Importance of Information Systems

Importance of information systems:

Information systems are becoming increasingly crucial for firms in the context of today's globalized economy. It serves as an essential tool for optimization of operations throughout the global supply chain, which is comprised of primary and support activities. GM's primary activities are logistics, operations, sales and marketing, and services; while its support activities are the HR, administrative management and technology.

The company operates in 50 countries with 160 manufacturing plants. With its 386'000 employees around the world, GM holds a leading position in the US automotive industry

Challenges:

One of the main challenges for the industry in general is the rising awareness for climate change issues, which have been imposing increasing pressure on the market. This resulted in a new orientation towards the alternative energy resources which are replacing the traditional fossil fuel resources.

Another challenge is the bureaucratic nature of the company which are resulting in inefficient processes throughout the supply chain . This has to be changed given that the company is losing competitive advantage in the global market.

GM's global strategy:

The main focus of the company's strategy has been the creation of common global processes for design, engineering, purchasing and product development . One instance is its Epsilon2 architecture program. GM has also adopted a global purchasing strategy in order to achieve cost-efficiencies.

In response to current market trend, GM is strengthening investment in fuel-efficient technologies, as well as ensuring all regulatory requirements regarding environmental issues are satisfactorily addressed Both activities involve huge costs, therefore it is vital that systems are in place to accommodate these outlays in the most efficient manner possible .

In pursuit of developing its production system, GM has entered into a partnership with Toyota, who is known for its lean manufacturing idea. In order to take advantage of this advanced methodology, GM established the Californian NUMMI plant as an exercise in collaborative learning. This provided the company with insight into how Toyota excel in manufacturing process efficiency. Consequently, GM introduced its technical liaison office (TLO) network, which is an in-house unit aimed at inculcating standards of excellence on all issues relating to knowledge management. TLO is a centralized body that is responsible for the retrieval, storage and systematic dissemination of actionable knowledge throughout the corporate network. Through the work of its TLO network, GM‟s NUMMI plant was responsible for spearheading the firm's Global Manufacturing System (GMS), which was largely the product of learning from how Toyota operated its multinational