DaimlerChrysler Consolidates e-Business Activities And Founds New DCX NET Holding
9 October 2000
DaimlerChrysler Consolidates e-Business Activities And Founds New DCX NET Holding
* Start-up capital of $500 million
* Extensive activities in the B2B, B2C, B2E and telematics sector
* Eckhard Cordes: "Transformation into a fully networked automotive
company"
AUBURN HILLS, Mich. and STUTTGART, Germany, Oct. 9 The
Internet has revolutionized all internal and external processes in the
automotive industry. DaimlerChrysler views this development as a unique
opportunity for the company to improve its competitive position on the
international market and is undertaking decisive measures in this direction.
In order to advance the group's transformation into a comprehensively
networked company, and to make transparent the results, DaimlerChrysler has
consolidated all its existing and future e-business investments and holdings
in the newly founded subsidiary DCX NET Holding. The holding, which has been
launched with start-up capital of $500 million (euro 550 million), forms the
nucleus of the corporate-wide "DCX NET Initiative." This initiative is
intended to make the company faster, more efficient and therefore more
competitive throughout all areas, from purchasing to sales.
The name DCX NET is derived from the DaimlerChrysler stock symbol and has
been selected in order to emphasize the group-wide performance of fully
networking every aspect of its activities.
"DaimlerChrysler fully intends to seize and rapidly exploit the enormous
competitive advantages of its professionally run e-business," says
DaimlerChrysler CEO Juergen E. Schrempp.
"DCX NET Holding is a product of the company's overall e-business
strategy," says Eckhard Cordes, DaimlerChrysler board of management member
with responsibility for Corporate Development and IT Management. "The new
holding will forge alliances, enter into joint ventures and invest to promote
the company's e-business activities." With holdings now acquired in Internet
firms that cater to the group's specific needs, DaimlerChrysler has already
secured critical know-how intelligence and crucial, innovative technologies in
this field. The primary aim of this strategy is to ensure sustained
implementation of new e-business solutions.
DaimlerChrysler has already invested more than $290 million
(euro 330 million) in the acquisition of shares in companies such as Powerway
Inc. (B2B) and The Cobalt Group (B2C). The performance of such investments
has been highly impressive, with their value rising substantially over the
last six months.
DCX NET Holding will maintain offices in New York, Detroit, Tokyo,
Palo Alto and Stuttgart. The wide range of locations is intended to
facilitate collaboration with e-business development partners.
The holding company will also oversee DaimlerChrysler's interest in
Venturepark, a pan-European e-business "incubator," in which Bertelsmann and
Goldman Sachs are also investors. DCX NET Holding is to be headed by John
Stellman, (Vice President, Mergers & Acquisitions) and Olaf Koch (Vice
President, Corporate e-Business).
DaimlerChrysler Research -- with labs in Berlin, Palo Alto and Bangalore
(India) already one of the most important "e-innovation" centers -- will
provide the new holding company with support and advice on questions relating
to scientific and research issues. "The 'DCX NET research team' can call upon
a powerful fund of IT expertise unparalleled in the auto industry and will
therefore be a key pillar in the development of new e-business strategies at
DaimlerChrysler," says Cordes. DaimlerChrysler is now very well prepared to
exploit whatever new technological opportunities this fast-moving sector will
generate.
The DCX NET Initiative
The primary goal of the company-wide DCX NET Initiative (in the Internet:
http://www.dcx.net ) is the transformation of DaimlerChrysler into a fully networked
company. Responsible for the operative e-business integration at the Chrysler
Group is Gary Dilts (Senior Vice President, eConnect Platform Team). He is
also responsible for coordination of all e-business activities in the NAFTA
region. Harald Schuff (Senior Vice President, Development Sales Organization)
is responsible for all such activities outside the NAFTA region and for
Mercedes-Benz passenger cars and commercial vehicles. Both are also in charge
of the development of marketing strategies for their respective areas of
responsibility. Olaf Koch is head of strategy on the corporate level as well
as e-business development.
DaimlerChrysler Venture Capital Funds -- in consultation with the DCX NET
Initiative -- will invest in start-up ventures relevant to the interests of
DaimlerChrysler. Investment capital in the fund was increased by $100 million
a few months ago.
The DCX NET Initiative covers B2B (business-to-business), B2C
(business-to-customer), B2E (business-to-employee) activities and telematics.
Creating a fully networked automotive company
In a move to exploit the full potential of B2B, DaimlerChrysler is
reviewing the full range of processes, all the way from purchasing and
development to production and sales. This process reengineering will optimize
operations and thereby reduce costs. According to Cordes, B2B brings the
following advantages: reduced stockpiling, accelerated availability of goods,
improved planning certainty and greater flexibility. "We're not only talking
about 'Web-enabling' -- i.e. converting our processes over to Internet
technology," says Cordes. "The other major aspect here is that we are
replacing old processes and using comprehensive networking between processes
to save time and money."
Initial projects in this area are already under way: "FastCar," for
example, a project being launched in August in the U.S., involves the use of a
revolutionary Internet-based development and production system that enables
all partners to collaborate in real time. The project marks the first time
ever in the automotive industry that departments for design, development,
production, finance, procurement and logistics have been linked in real time.
FastCar's integrated and rapid provision of information will greatly
shorten the product development process. In another pilot project, which also
involves orders, use of "eCAPs" -- an intranet tool developed by
DaimlerChrysler -- has led to reductions of up to 70 percent in throughput
times.
Business-to-Business (B2B): Covisint commences operations
Following approval by antitrust authorities in Germany and the U.S.,
DaimlerChrysler, Ford, GM and Renault/Nissan have now launched one of the most
important B2B platforms ever. Covisint, the largest Internet marketplace in
the world, is designed to create a universal and unified network with
suppliers to the automotive industry. Procurement departments in Stuttgart
and Auburn Hills have completed the necessary internal preparations and have
already conducted comprehensive test transactions. This work allows the
company to begin benefiting from Covisint's great savings potential as soon as
possible. The organizational structure and management team for Covisint will
be announced over the next few weeks.
Business-to-Customer (B2C): Boosting sales and marketing efficiency
In the realm of B2C, DaimlerChrysler has made the first moves to harness
the Internet as a sales channel and make better use of it to gain new
customers and boost customer loyalty. Just a few days ago, DaimlerChrysler
began online sales of new Mercedes-Benz vehicles in Europe. The German
company Westfalia Van Conversion also just recently launched an online program
for sales of Mercedes-Benz camper vans.
In the future, DaimlerChrysler will be looking to exploit Web-based
technology to improve the efficiency of its entire sales and marketing
operation.
Company web sites are to be upgraded with a range of innovative features,
thereby providing customers with much more rapid access to products, services
and information. DaimlerChrysler will be announcing further important
developments in this area in the near future.
Together with its branch offices and dealerships, DaimlerChrysler has been
playing a pioneering role in the field of B2C for some time now. Back in
December 1999, the "Smart" car became the first vehicle that customers could
configure and order online. And in Europe, the Mercedes-Benz used vehicle
exchange features a total of 50,000 vehicles from seven countries, all of
which can be called up and ordered online.
In the U.S., the Chrysler Group has established a network of its best
dealers -- the so-called Five Star Dealers -- which provides both customers
and dealers with direct access to relevant information on products and
services.
Business to Employee (B2E): Providing the company workforce with Internet
access to a range of services
When it comes to competitiveness, networking within the company itself
also plays a vital role. With this in mind, DaimlerChrysler has widened the
scope of its B2E activities. Today, almost every company employee can be
contacted via the Internet. At the same time, employees can use the
DaimlerChrysler intranet to access over a million pages of services and
information in the company's "Knowledge Base." Services featured include
insurance plans, vehicle reservations and travel packages.
Telematics: Providing Innovative Services for Customers
Telematics, the use of computer and telecommunications technology to
provide intelligent transportation management systems, will generate a whole
new range of services for passenger cars as well as significantly improving
those already on offer. Networking also has immense potential in the
commercial vehicle sector -- in areas such as fleet management, remote
maintenance and intelligent logistics. Fleetboard, a fleet-management system
already available in Mercedes-Benz commercial vehicles, is enjoying a high
level of customer acceptance and is helping the company take on a leading role
in this sector.
DaimlerChrysler has been setting the technological standards in the field
of telematics for quite a number of years now. Examples of company milestones
in this sector include the creation of the world's first ever comprehensive
transport management system -- ITGS (Intelligent Traffic Guidance System) in
Tokyo -- and DynAPS (Dynamic Autopilot System) for the German autobahn
network. And back in 1997, DaimlerChrysler Research unveiled its "Internet-
on-Wheels" project -- the first vehicle in the world with Internet access.
At DaimlerChrysler, Internet access in the vehicle is a reality. In the
U.S., for example, every new Mercedes-Benz passenger car will be provided with
access to selected information from the Internet as a standard feature next
year. The vehicles will also be equipped with services such as roadside
assistance, the "e-Call" emergency response system, concierge services, stolen
vehicle theft tracking and web based information services.