Speaker: Richard Radecki
Title: Corporate director
e-Business Program Office, Delphi Automotive Systems
Richard Radecki of Delphi Automotive Systems Corp. fondly remembers five years ago when, as marketing director, a co-worker asked him for $1 million to get Delphi on the Internet.
'I thought she was crazy,' said Radecki, now corporate director of Delphi's e-Business Program Office. 'I could just imagine getting thousands of individual requests for 1974 Chevette radiators.'
But Delphi did build a website shortly thereafter and never got a single request for a Chevette radiator.
Delphi's website will soon become transactional with an aftermarket Internet catalog, Radecki told conference-goers.
'Now we will actually want our aftermarket distributors to make those very requests,' Radecki said. Delphi's aftermarket group will go live in early 2001 with its interactive product catalog, he said.
It will provide Delphi aftermarket customers with a real-time product library, including products, services and technical information, at any time of the day.
'The catalog is important to Delphi,' Radecki said. 'It truly puts Delphi up in the forefront in this particular area.'
Delphi has moved fast in one particular area with new technologies - electronic auctions to reduce cost and improve efficiency of purchasing.
Delphi partnered with Free-Markets of Pittsburgh in 1997 to conduct the auctions and has seen significant results, Radecki said. Since then, Delphi has held 77 online auctions, for transactions totaling more than $800 million, and has identified $114 million in savings.
Delphi was one of the first Tier 1 suppliers to join and use the Covisint electronic exchange developed by Ford Motor Co., General Motors, DaimlerChrysler, Renault and Nissan.
Delphi conducted a pilot auction on Covisint in late November and bought gray metal castings. It is scheduled to do a pilot auction on Covisint in Europe in mid-December. Delphi is buying mostly commodity products online, such as plastic injection parts, he said.
'But we're keeping our options open relative to the kinds of tools we use on these auctions,' he said.
Delphi has found that auctions cost more with FreeMarkets, but its model includes more handholding and assistance, Radecki said. Covisint tends to be more of a self-service model at a lower cost.
'Although a lot of the Covisint fee structure is not yet known,' Radecki said. 'We don't think Covisint is the answer to everything. Fully we intend to do business on whatever exchanges our customers direct us toward. We think that it is going to be important to use several different auction models just to make sure that the models remain competitive.'
Delphi engineers are now starting to use Internet conferencing for 24-hour engineering, first through the company's Intranet and now on the public Internet, so that it can tie in strategic partners and joint-venture partners, he said.
'That means engineers from all over the world can be online to discuss projects and solve issues without having to leave their offices,' Radecki said. 'Information is shared in real time, and questions get answered on the spot without holding up the project. We save time and money and our engineers reduce travel.'
For example, if Delphi could eliminate just one trip a year for every engineer, the company would actually save $15 million, he said.
Nevertheless, he said, Delphi is not trying to supplant face-to-face relationships.
Said Radecki: 'There's a human element and human familiarity that has to take place.'