Mercedes Benz's E-Biz Solution: The Factory Delivery Reservation System

Background: Mbusi and its Business Challenges

MBUSI was a wholly-owned subsidiary of DaimlerChrylser AG.⁵ In 1993, Daimler Benz realized that the 'Benz' brand could be extended to wider market segments. Traditionally, Mercedes Benz⁶ appealed to older and sophisticated customers only. Daimler Benz wanted to attract customers below 40 years of age, who wanted a rugged vehicle with all the safety and luxury features of a Mercedes.

Daimler Benz decided to develop a SUV known as the M-Class. It expected strong demand for the new vehicle and therefore planned to build its first car-manufacturing facility – MBUSI – in the (Tuscaloosa, Alabama) US. The MBUSI facility had many advantages. First, labor costs in the US were almost half that of in Germany. Second, the US was the leading geographic market for SUVs.

Third, as the vehicles were assembled in the US, they could be distributed to Canada and Mexico more efficiently. In January 1997, the factory started production at partial capacity and by the end of the year, it was producing at full capacity.

By 2000, the factory was rolling out around 380 vehicles per day. The new M-Class ‘all-activity'vehicle represented a new concept for the company.

Also, mass customization required that each vehicle be treated as a separate project, with its own Bill of Material. To deal with these challenges, Daimler Benz decided to implement an enterprise wide Information Technology (IT) system, with the help of IBM Global Services⁷.

To further strengthen the image of Mercedes Benz in the US, MBUSI planned to deliver vehicles at the factory, becoming the first international automobile manufacturer in the US to do so. MBUSI also wanted to enrich the customers'experience. Commented William Engelke, “The factory delivery option gives Mercedes-Benz customers something that they do not get from other automobile manufacturers which is why we think the program will resonate with our customers. We think that having the factory delivery program available to Mercedes customers adds to the overall experience of the customer.”

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5] DaimlerChrysler AG was the result of a merger between two leading car manufacturers – Daimler Benz of Germany and Chrysler Corp. of the US in 1998.

6] A luxury brand of passenger cars, Sports Utility Vehicles from DaimlerChrysler.

7] IBM Global Services is the services and consultancy division of IBM Corp. that offers extensive e-business solutions.

Case Details

Case Code : ITSY009
Themes: e-Supply Chain Management
Case Length : 06 Pages
Period : 1990-2001
Organization : SciQuest.com
Pub Date : 2002
Teaching Note : Available
Countries : USA
Industry : Information Technology (Electronic Commerce)

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