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World Class Vehicle Launch Timing: Chrysler Corporation (Part 4 of 6)

The World Class Vehicle Launch series investigates the launch performance of five leading vehicle assembly firms operating in North America, and examines their past and future launch strategies. The companies reviewed in our analysis include Chrysler, Ford, General Motors, Toyota, and Honda. We have collected monthly production data on vehicles (30 launches) launched by these companies in North America between 1992 and 1996. Although there were more than 30 launches during this period, our initial investigation focuses on single product, single plant launches. This article focuses on Chrysler and is the fourth in the series. It is important to note that there are many measures of a successful launch. This series analyzes a launch event in only the most basic form: the time it takes a facility to return to capacity in terms of production. This series is not meant to be an exhaustive study on launch performance, but instead it is meant to further the understanding of the vehicle launch process.

PART 4 of 6

We identified a total of 10 vehicle launches by Chrysler during the period investigated. Six of those launches met the single product, single plant requirement for this investigation. Our discussion focuses on the performance of these six launches.

The data for this article was gathered fromWard's Automotive Reports. For each launch, a production start date was determined. Monthly production data was collected for the 12-month period prior to the start date, and the 12 months subsequent to the start. We compared this data to Harbour & Associates (Troy, MI) capacity estimates to facilitate direct comparison between plants of differing capacities. Annual capacities for each plant were gathered from The Harbour Report, and similar tables published in Automotive News. These estimates were divided by 12 to give a monthly capacity estimate for each plant. They were then divided by actual production to give a monthly performance to capacity measure. Figure 1 compares Chrysler's performance to the North American industry average and to World Class, the company with the quickest vehicle launch. The chart shows that, on average, Chrysler facilities demonstrate a decline in production at changeover more severe than the industry average, and they take somewhat more time to return to a normal operating range. Chrysler facilities return, on average, to a higher capacity utilization rate post launch than the industry average.

Table 1 shows the six Chrysler plants and launch events that met the single plant, single product criteria. (Author's note: Warren Truck was treated as a single plant, single product plant even though the Dodge Dakota is also produced at the facility.) Of all North American participants, Chrysler may have had the most significant amount of change—both in terms of products and location. From the amount of change in its light vehicle line-up, it is apparent that the organization was not the only thing completely re-engineered in the early 90s. This change is indicative of both the distance between Chrysler and its competitors at the start of the decade, and a newly established goal to be the industry's style leader.

 

Figure 2 graphically shows the launches reviewed for this article. All facilities produced no vehicles during the initial month of the launch. Belvidere, Bramlea and Sterling Heights experienced several months of downtime between the end of production for the previous vehicle and the beginning of significant production of the new vehicle. Each of these facilities required significant change in equipment and tooling during the changeover. Since the authors choose to measure the new vehicles launch from the time the facility stopped producing the old vehicle, the extended downtime of these plants made the launch curve somewhat flatter than if we measured it from the month of when the first vehicle was produced. However, given the performance of world class launch companies, we felt that the clock would start running the moment the previous model production ends.

Last fall, Chrysler launched two key products, the replacement to the LH and the Dodge Durango. These launches allow for a comparison to earlier launches—at least in terms of the one measure examined in this series—that of `ramp-up' time. The company's recent launches appear to follow the same pattern as those of recent years, taking six months to return to capacity. The launch of the Intrepid and Concorde was reportedly slowed due to a supplier's inability to meet the launch schedule.

As has been pointed out many times in this series, we have investigated only one aspect of the vehicle launch process. Does Chrysler's apparent lack of progress in decreasing the time to return to full production indicate a differing philosophy?