Chrysler Corp. Slashes $1 Billion a Year in Operating Costs Using Online TechnologyReport on CMP's CommunicationsWeek Interactive at http://www.commweek.comPRNewswire Chrysler Corp. (NYSE: C) is cutting operating costs by more than a billion dollars a year using Lotus Notes, some dial-up links and a few simple applications, according to an exclusive CommunicationsWeek (http://www.commweek.com/) report. By extending its electronic commerce efforts over an industrywide network, the automaker hopes to double that savings over the next three years. "Our goal is to cut $2 billion a year by the year 2000," Bernie Bernard, Manager of the company's Supplier Continuous Improvement Team told CommunicationsWeek. Known as SCORE, for Supplier Cost Reduction Effort, the cost-cutting program began in 1989 when a financially strapped Chrysler made the unprecedented move of offering its suppliers a cut of whatever cost savings they could achieve. Seeing moderate success from the program in the early 1990s, the company revved up its efforts three years ago by extending it online. Almost overnight it helped Chrysler slash billions from its manufacturing and business operations. In the three years SCORE has been online, Chrysler has gone from a net loss of $2.6 billion in 1993 to becoming the most profitable of the nation's Big Three automakers, posting a 1996 net gain of $3.5 billion. And now, with the second phase of this simple electronic- commerce application, due to begin pilot testing May 15, the automotive giant is confident electronic commerce over an industrywide intranet will let it cut costs by $2 billion annually by the year 2000. "That's unbelievable. That's huge. You don't typically have a return on investment like that, it's off the scales," Ray Ozzie, who created Lotus Notes, the software that runs SCORE, told CommunicationsWeek. "It's a phenomenal savings," added Jack Shaw, president of Electronic Commerce Strategies, a Marietta, Ga.-based consultancy. "This program is a forerunner for the use of electronic commerce. In the future; this is what companies will have to do to survive." With over 70 percent of the parts found in Chrysler cars purchased from outside suppliers, SCORE was originally implemented as a way to improve relations between the then struggling Chrysler and the vendors who provide it with everything from sub-assemblies to mops. CMP's CommunicationsWeek, the Networking Newspaper, delivers news and analysis that helps Network IT Management translate evolving advances in communications and computing technology directly into business advantage. In addition, the newspaper features Web Commerce, a biweekly section that provides in-depth features and analysis of electronic commerce products, technologies and case studies. Telepath, a monthly supplement to CommunicationsWeek, is directed to the innovators behind converging networks. CMP Media Inc. provides publishing, marketing and information services to the broad high-technology spectrum -- the builders, sellers and users of technology -- through print and electronic media. All of CMP's publications and online products can be accessed through the company's TechWeb® site on the World Wide Web (http://www.techweb.com/). Print titles include EE Times, Computer Reseller News, InformationWeek and WINDOWS MAGAZINE. -0- 04/25/97 SOURCE: CMP Media, Inc. CONTACT: Steve Rubel, 516-562-7434, or srubel@cmp.com, or, Catherine |