Alfred. P. Sloan was the MD,
chairman and CEO of the General Motors. An electrical engineer by education, he
started his journey in the American automobile industry as an entrepreneur
manufacturing rollers and ball bearings which were used by the automobile
manufacturing companies. This company later merged with the General Motors.
Sloan is remembered for the vociferous expansion of the company in the inter
war period. He ran the company as a system that primarily focused on the
customers, suppliers and distributors. Sloan is credited for introducing
concepts like the annual model change, brand architecture, industrial design,
planned obsolescence and the paradoxical if not subversive practice of carrying
excess inventory. His perspective of viewing the organization as a system
comprising of operations, design and packaging and sales divisions is widely
criticized for over looking the employee and the society. While conventional
inventory management states that excess inventory leads to the blockage of
working capital, Sloan believed in and did just the opposite.
His logic for
doing so was based on the comparative assessment of carrying costs and the
costs of sales lost in the absence of inventory. By using the concept of brand
architecture he made sure that the various segments of customers were still a
part of the same GM family. Pricing was done accordingly for the various brands
such as Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac so that intra brand
competition could be averted. In his tenure as the CEO he was cold blooded,
objective and target oriented to the point of being alleged of plutocracy. In
his later years he established the Sloan Foundation as a part of his PSR
(personal social responsibility).
