1. Observations from Analyzing GM New Car Delivery Network - 2005 Data
Don Ratliff Executive Director - SCL Regents and UPS Professor of Logistics
Supply Chain & Logistics Institute

2. GM New Car Delivery “Network Map”
GM controls what gets loaded on rail
Switch
Yard
Railroad controls train schedule
TTX controls rail car allocation
Plant
Rail
Ramp
(VDC)
Rail
Dealer
Truck
Hauler controls
truck allocation
truck schedule
what gets loaded

3. GM New Car Delivery “Geographic Map”
Border Points
Demand Areas
Plants
Ports
Rail Ramps

4. Average days in each process
Total = 7.3
Total = 16.4
Arrive at Dealer
Arrive at Dealer
Assemble Car
Transport by Truck
Car Available
1.36 days
Transport by Truck
.44 days
Dispatch D
Dispatch D
Wait at Plant
3.10 days
Wait at Plant D
5.98 days D
Transport by Rail
Arrive at VDC
Wait at VDC
4.15 days
Dispatch
8.76 days

5. GM New Car Delivery Single Plant
Inventory cost is ignored in mode selection
Trips < 1000 miles:
truck = $0.50/mile/car
rail = $0.32/mile/car
Why was new car inventory of little concern?

6. Summary 2005 Plant Rail Wait Times

7. Inventory of cars at plant

8. Lag in Shipments When Plant Restarts
Moraine-(Days )
Lag in Shipments When Plant Restarts

9. Plant “rail” Inventory
Same symptoms at each plant
What causes big inventories at plants
GM’s failure to anticipate production
TTX’s model for minimizing empty movements
Lack of oversight technology
GM attributes problem to rail car shortage
GM had no interest in trying to change the system

10. Summary 2005 VDC Truck Wait Times

11. Truck Synchronization
Load building is primarily manual
One day delay to manually plan truck deliveries
Carriers build their own loads
Fees based on origin, destination and car class
Carriers have a conflict of interest since they can reduce their own costs by accumulating inventory which increases delivery time
Load builders hold cars until they get “good” loads
Load building is complex
Carriers lack technology to automate and optimize load building
GM had no interest in trying to change the system

12. GM Supply Chain Characteristics
Competence
Little supply chain knowledge
Little analytic capability
Heavy reliance on “experience”
Many really dumb policies/strategies
No interest in changing systems
Complexity
Very complex systems have evolved
No appreciation for the implications of complexity
If it is complicated, outsource it (e.g., Vector SCM – Menlo)
Technology
Little modern supply chain technology
Little interest in changing anything
Variability – up to 2 months after car is built
Huge impact on dealer inventory and sales

13. Questions
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