DaimlerChrysler has a new strategy for getting vehicles to market faster: The company and its suppliers will do more work on the front end of projects in order to have fewer things to change at the end.
The automaker believes its new approach, dubbed the Chrysler Development System, will save as much as $1.5 billion annually by shortening car and truck development times.
It unveiled the program to reporters Thursday, August 3. One day earlier, executives met with some of the nation's largest pension and mutual fund managers to give a detailed report of the potential cost savings in hopes of encouraging a jump in D/C shares.
As evidence of how the program will benefit, D/C points to its new minivans. The rapid product changeover for 2001 minivans at its Windsor, Ontario, Canada, assembly plant saved more than $500 million, according to D/C.
Chrysler's platform teams of the early 1990s cut product development time by 25 percent. The new system's goal is to cut another 25 percent. It will be fully implemented for the launch of vehicles in 2003. The new minivans and the PT Cruiser were the first to benefit as the new program is phased in.
The PT Cruiser took 30 months from concept to the start of production; D/C executives say the system will allow for a 25-month launch for the 2004-06 programs.
The new program is something Jeff Timar, a Textron Automotive Co. Inc. vice president, can live with. 'We now have better control of the development process,' he said.
DaimlerChrysler will rely more heavily on suppliers such as Textron during the earliest stages of design and development, Timar said.
In order to trim the schedule at the execution and launch phase of new vehicles, D/C project participants will spend more time and effort during the early concept development and design stages.
Computer-aided design allows the company to make sure things fit before tooling is ordered. All product and process planning is then completed before the expensive and time consuming tooling phase begins.
'The opportunities for controlling costs and saving money are greater in the early part of planning and design,' said Robert Dupuis, senior manager of the Chrysler Development System. 'Once you get closer to launch, the cost of making changes and coordination effort increases by orders of magnitude.'
The program also speeds up the building and testing of prototypes. They now can be designed digitally through computer-aided design.
Improvements to the program will come from additional development of electronic business-to-business communications through the Internet.
The effort to create the Chrysler Development System began more than two years ago, Dupuis said.
Elements of the system were part of the 'rolling launch' of the new Dodge Caravan and Chrysler Town & Country and Voyager minivans. The Windsor plant's down time was cut by 80 percent by launching pre-production vehicles built and tested on the same assembly line on which current vehicles were being built.
Roger Lundberg, director for Chrysler Development Systems, said while the program's economic benefits are great, the most important benefit comes 'from being the first to market.'
