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BIZPLAN

related topics ~ startups, the industry, e-commerce, general internet, cyberculture

GMSupplypower

People have been talking about convergence, the Holy Grail of Information Technology, for years.

At the point of convergence, the first phase of the IT revolution will be complete. The nation (and the world) will be irrevocably linked, bound-together by the digital metaplasm of the Information Superhighway. Television sets will be as powerful as today's PC's and our computers will be capable of delivering the same sort of programming now available on network television and cable.

In other words, it will all come together.

It will be, to quote a great Englishman, "The best of Times and the worst of Times". It will be the best of times for the people who run Internet companies - who will be able to immediately declare complete world domination and retire to sprawling Northern California plantations. It will be the worst of times for those who do not necessarily relish the prospect of being able to watch CNN on their Microwave ovens or make stock purchases from the dashboards of their minivans

But there is another kind of convergence - one that's talked about a little less these days - a meeting that may happen any day now or that may in fact be some years away. That's the convergence of industries. The meeting of old and new. The synthesis of the new media and Internet culture with the old clunky industries and businesses that got going a hundred and fifty years ago at the start of the Industrial Revolution.

No industry better epitomizes old bricks and old mortar than the American automotive sector, the mainstay of the US economy during the postwar period. And in the American Automotive Industry, no company stands for old and clunky quite as clearly as General Motors. When companies like GM start paying attention to the Information revolution you know the metamorphosis is almost complete.

GM's new program is simple to describe. But for anybody out there who still doubts the ascendance of the Internet it should be a revelation - a serious wake up call.

The announcement was straightforward. General Motors will now deal with suppliers exclusively through it's Internet portal. Vendors will be required to submit bids and run transactions through an auction-like system. For General Motors, the payoff will be immediate. The cost of tracking a vast network of suppliers will be drastically reduced. Distribution of parts will be made much more efficient, allowing orders to be shuttled between different assembly plants and different areas of the country with blitzkreig-like speed. At least that's the way it's supposed to work in principle.

The writing between the lines?

It's pretty clear. The backbone of the old economy is wired to the backbone of the Information Superhighway. Convergence is coming. The little guys who run machine shops and distribution centers in out of the way industrial parks in Los Angeles County and Newark are going to have play catch up or risk being throttled. They're going to have run out and a find kids to plug in their computers and send their e-mail. Because the old days are almost over.

Almost.

 

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