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There are three aspects to quality. That’s the way that Donald W. Dees sees it. And as he is the vice president of Quality for DaimlerChrysler Corp., it is probably something that he’s thought a lot about. The three dimensions he thinks are critical to a definition of quality in automotive are:
1. “Pizzazz.” “Appeal.” “People want to have it.” In other words, he’s talking about a product that is simply desirable. Clearly, that means a product that looks great. “If you have a really boring looking car that lasts a million miles that won’t break down, you won’t sell any of them. The most important thing about quality—and most people don’t understand this—is that you have to have a vehicle that people want to buy.”
2. Safety. The vehicle must go through all of the tests and prove itself to be something that provides protection.
3. Reliability. The analog that Dees brings up is the Sony television. He talks about “Sony TV reliability.” By which he means that it is something that you plug in and don’t worry about. It simply works. In the terms of a car or truck, he talks about a vehicle that provides zero problems for at least 100,000 miles. “You just change the oil,” he says.
“You’ve got to have all three.”
So. . .where does he think that Chrysler is on these three points—and it should be kept in mind that he joined DCX on September 1, 2000, so he has to be cut some slack for what is (realizing the gestation of programs) and certainly for what has come before. As for the first point, the appeal, he believes that on the whole, Chrysler is doing quite well. In fact, in the post K-car era, Chrysler design has probably been the hallmark among the traditional North American OEMs, and probably kept Chrysler on the consideration and buy lists of a lot of people who wouldn’t otherwise consider something that wasn’t from an overseas marquee.
With regard to providing a highly safe vehicle, he believes that they’re pretty much at 90% for what’s come out recently but 100% there for things that are brand new (e.g., the Pacifica).
Reliability? Well, so far, there’s the rub. He estimates that they’re probably half way there. But he also notes that the diligence and pace that they’re maintaining at Chrysler is going to get them to where they need to be in rather quick order. Why? Because of what’s happening at the top.
That is, Dees shows statistics that when it comes to “Warranty Expense per Unit Sold,” Chrysler was pushing down the cost at a rate of about 5% per year between 1996 and 2001. There was a 21% reduction between ‘01 and ‘02. “We’re running at 12+. We’ll be somewhere between 12 and 20 for the ‘03 model year.” These numbers are more than just numbers so far as Dees is concerned. He recalls that one of the first things he’d done upon joining Chrysler after a stint at Toyota, where we was general manager of Green Field Quality and Manufacturing, was to attend a dealers’ council meeting—and it became exceedingly clear to him that the dealers were not particularly happy with the level of unhappy customers who were filling up the service departments. “I told them we will cut our warranty cost in half within the next five years. And some of the dealers said, ‘We’ve heard that stuff before.’ I went to a dealer council meeting in February, two-and-a-quarter years later. And the guys said, ‘Wow. You guys did it.’”
|WHAT’S KEY TO QUALITY?|
“Culture is more important than anything,” Don Dees says. He says that:
What is primarily behind this? It’s not technology as much as it is culture, Dees says, culture that is formed by top management. Specifically, Dees cites Chrysler CEO Dieter Zetsche’s objective that the company achieve “quality to the level of best-in-class manufacturers by 2007,”with the companies in question being those with which Chrysler directly competes with. According to Dees, Wolfgang Bernhard, Chrysler COO, is “the driver of quality,” and that all of the executive vice presidents in the organization are directly involved in helping realize the goals.
Just as there are three aspects to what quality is, Dees has three “buckets” when it comes to achieving it:
1. Prevention of Problems on Future Models. As new products roll out, they are to have high quality. “Typically speaking, most vehicles go backwards in quality their first year out of the box. If you look at J.D. Power, even Toyota and Honda go backward their first year. We’re really proud that our Liberty and Ram have done really well their first year: they improved 20+% out of the box in J.D. Power and even more than that in warranty numbers. We’re really starting to get it on the prevention side.” Part of the way this is being realized is through the Chrysler Development System (CDS), which has been supplemented by the Quality Gates procedure that has been in place at Mercedes. Essentially, during a development program there are specific gates and specific deliverables required at each of them. “If you don’t meet the deliverables, you don’t go through the gate.” Even if that means delaying launches. In addition, they’ve created “component teams.” They are looking at a variety of things so that they have commonality wherever possible. For example, they’re going to go from 60 different accessory drives to 22. Twenty-six different ball joint designs to nine. From 13 fuel pumps to three. It will save in warranty, sourcing, and other aspects. In the summer of ‘02, they opened a wind tunnel for vehicle development. “From a quality standpoint, wind noise is my number-one issue in J.D. Power IQS. It’s also the industry’s number-one issue. Now we have a tool.” Tests are being run under more rigorous conditions, such as extreme thermal cycling (from –20°F to +160°F and back), which is something that Dees credits Bernhard for bringing in from Mercedes. “If you can pass this process, you’re going to have a bullet-proof car.” Powertrains used to be tested to 100,000. Now they’re testing to 200,000 miles, to engine failure—and they’re doing testing under the thermal cycling.
2. Fixing Existing Models. “If we have a spill, we have to find it very quickly, find the root cause very quickly, and get the countermeasure in place very quickly.” There is a Quality Engineering Center into which a variety of things go, whether it is information from the field, returned parts from warranty claims, or cars driven by people like Dees that are in need of service. “We work there with our suppliers, our engineering people, and our manufacturing people.” If that doesn’t find the problem, they have a “Black Belt Analysis” program. By the end of ‘03, they will have nearly 1,000 people trained for this root cause analysis process. In ‘02, when there were about 400 people trained (most of whom were at the introductory green-belt level), they realized $130-million in hard savings—“and probably many times more than that in soft savings: cost avoidance.”
3. Service on Existing and Older Models. “We have to have a goal of fix-it-right-the first time.” Here he’s speaking mainly about fixing it at the dealerships.
A metaphor about quality is that it is a journey. Talking about that journey, Dees notes, “Chrysler moves faster, I think, than any other car company in the world. We move extremely fast. It’s amazing to me how fast we have moved.”
He adds, “You’re going to see some good things come out of Chrysler.