While other automakers make big media splashes with Internet tie-ups, DaimlerChrysler says it is laying the groundwork for a seamless launch of its own Internet strategy.
'No (car company) can afford to ignore the Web. They need to understand it and use it as a partner,' said Susan Unger, DaimlerChrys-ler's chief information officer.
Unger acknowledged that DaimlerChrysler is conspicuously absent from the high-profile Internet tie-ups sweeping the industry. Speaking at the Automotive News World Congress, Unger said she is betting that a successful Internet strategy is based on the so-called 'mortar portion' of the business.
Roughly 85 percent of total investment in an Internet strategy is put into the behind-the-scenes infrastructure: arranging delivery systems and building in-house connections and company communications, Unger said.
The remaining 15 percent is in the front end, the screens a computer user sees when logging on to a company site, she said. So far, she said, DaimlerChrysler is addressing the mortar.
This might not be a bad idea, said David Andrea, chief economist at CSM Worldwide, an automotive research and forecasting firm in Northville, Mich.
'The traditional marketing message is if you are second or third in, you're at a disadvantage,' Andrea said. 'But if the reason they are on the sidelines is because they are working on the back-office aspects of their strategy, I think they will be OK.'
DaimlerChrysler's three-pronged strategy for Internet success includes designing products, paving the way for volume production and supporting the sales and service arm of the company.
Take the 2001 version of DaimlerChrysler's mid-sized Dodge Stratus. It was designed digitally with a clay model built only after the vehicle's look was nearly finished in a computer. The new vehicle, along with its siblings, the Chrysler Sebring sedan, coupe and convertible, took just 26 months to go from design approval to production, compared with nearly 35 months for the current version.
In volume production, DaimlerChrysler has, like most other automakers, linked with all of its Tier 1 suppliers. Now, Unger said in an interview after her speech, the goal is to push the Internet connections down to Tier 2 and Tier 3 suppliers.
DaimlerChrysler's Tier 1 suppliers also have access to corporate information such as warranty costs. Communication between the suppliers and the company have helped eliminate 25 percent of the waste in the manufacturing chain, Unger said, saving up to $80 million per year.
In the distribution chain, DaimlerChrysler's dealers take part in what are called Market Centers. Through the system, now being tested in Indianapolis, dealers key in their supply needs and the company negotiates purchases, taking advantage of economies of scale.
For items such as floor wax, dealers from a particular area might all buy from the same local source; for health care, DaimlerChrysler develops broad plans for both corporate employees and the dealer body.
So is DaimlerChrysler behind the eight ball when it comes to announcing a high-profile Internet tie-up?
'We won't get into a glitzy relationship just to make a splash,' Unger said.