Quality
Doug Betts
Doug Betts
Chrysler Group LLC 2010‐14 Business Plan
Chrysler
Group LLC 2010 14 Business Plan
November 4, 2009
Original Quality Situation
1. Overall quality ll
l
structure & strategy
Old Chrysler not organized ld h l
d
to work effectively
2. Quality for current production
Rate of improvement not adequate
3. Quality at new model Q
y
launch
New models launched with below average quality
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
2
Original Quality Situation
1. Overall quality ll
l
structure & strategy
Old Chrysler not organized ld h l
d
to work effectively
2. Quality for current production
Rate of improvement not adequate
3. Quality at new model Q
y
launch
New models launched with below average quality
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
3
Shoppers
Buy
lty
ya
Lo
Pr
Qu odu
al ct
ity
Ownership
Service
Awareness
1. Original Quality Situation
e
ic
rv
Se
t
duc
Pro lity
Qua
ACTION
• Define quality standardize “language” of quality, metrics, targets, responsibility
targets, responsibility
RESULT
WHEN
• Provide clarity and begin process of engagement with whole company
whole company
Chrysler Group LLC 2010‐14 Business Plan
• Started –
November 2007, substantially substantially
complete
November 4, 2009
4
Definition of Quality
Awareness
Perceived Quality
Shoppers
Shopping Experience
Initial Quality
Buy
Serrvice
Competitive Design Quality
Service Experience
p
Cost To Repair
p
Reliability
Durability
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
5
Shoppers
Buy
lty
ya
Lo
Pr
Qu odu
al ct
ity
Ownership
Service
Awareness
1. Overall Quality Structure & Strategy
e
ic
rv
Se
t
duc
Pro lity
Qua
ACTION
RESULT
• Define Quality standardize • Provide clarity and begin “language” of quality, metrics, process of engagement targets, responsibility
targets responsibility
• Changed corporate quality monthly meetings from thl
ti
f
“Board Room” style to hands on, “Go & See” meetings
WHEN
• Started – Nov, 2007 , now with whole company
with whole company
substantially substantially
complete
• Leadership team can understand situation
d t d it ti
• Complete –
M h 2008
March, 2008
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
6
Shoppers
Buy
lty
ya
Lo
Pr
Qu odu
al ct
ity
Ownership
Service
Awareness
1. Overall Quality Structure & Strategy
e
ic
rv
Se
t
duc
Pro lity
Qua
ACTION
RESULT
WHEN
• Define Quality standardize • Provide clarity and begin “language” of quality, metrics, process of engagement targets, responsibility
targets responsibility
with whole company
with whole company
• Started –
November, 2007 substantially
substantially complete
• Changed corporate quality monthly meetings from thl
ti
f
“Board Room” style to hands on, “Go & See” meetings
• Leadership team can understand situation
d t d it ti
• Complete –
M h 2008
March, 2008
M
d ll
li f
i
• Merged all quality functions Eff i
di i
f
• Effective coordination of Master Plan
C
l
–
• Complete January, 2009
into one organization
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
7
Overall Quality Structure & Strategy
Before : Quality functions were split and difficult to work on ONE PLAN
CORPORATE QUALITY
ENGINEERING
MANUFACTURING
PURCHASING
PARTS & SERVICE
Current Product Quality
Design Engineering
Plant Operations
p
Component Purchasing
Parts Supply
pp y
Project Quality
Project Mgmt
Production Engineering
Project Mgmt
Service Methods
Strategy & Methods
Reliability Engineering
Mfg. Quality
Indirect & Service Purchasing
Parts Quality
200 people working on ONE PLAN
Vehicle and System Testing
System Testing
Supplier Quality
Customer Care
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
8
Overall Quality Structure & Strategy
After: Solid or dotted line reporting – One quality organization – ONE PLAN
CORPORATE QUALITY
ENGINEERING
MANUFACTURING
PURCHASING
PARTS & SERVICE
Current Product Quality
Design Engineering
Plant Operations
Component Purchasing
Parts Supply
Project Quality
Project Mgmt
Production Engineering
Project Mgmt
Service Methods
Strategy & Methods
Reliability Engineering
Mfg. Quality
Indirect & Service Purchasing
Parts Quality
1,500 people working on
working on ONE PLAN
Vehicle and S
System Testing
T i
Supplier Quality
Supplier Quality
Customer Care
Customer Care
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
9
Original Quality Situation
1. Overall quality ll
l
structure & strategy
Chrysler not organized to h l
d
work effectively
2. Quality for current production
Rate of improvement not adequate
Q
y
3. Quality at new model launch
New models launched with below average quality
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
10
Shoppers
Buy
lty
ya
Lo
Pr
Qu odu
al ct
ity
Ownership
Service
Awareness
2. Quality For Current Production
e
ic
rv
Se
t
duc
Pro lity
Qua
ACTION
• Changed internal metrics and targets for reliability
• Implemented cross‐functional teams for warranty reduction
RESULT
WHEN
• Metrics that are accurate, • Complete –
benchmarked, and can show trend judged monthly
• 30% reduction in warranty • Complete –
claim rate during first 9 months after implementation
• Market downturn and financial difficulties prevented further gains
Chrysler Group LLC 2010‐14 Business Plan
January, 2008
January, 2008
November 4, 2009
11
Cross‐Functional Teams – Current Production
Reliability – Situation in 2008 (typical vehicle shown)
• Reliability deteriorated for the 2007
2007 model year
d l
• Recovery has been made since WARR
RANTY REPAIIRS PER 1000
0
that time
3 Year Window
((for Consumer Reports –
p
Fall 2008 Report)
p )
Jan ‘06
Jan ‘07
Jan ‘08
Jan ‘09
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
12
Cross‐Functional Teams – Current Production
Reliability – Situation in 2009 (typical vehicle shown)
• 3 year window still contains past cars cars
Cross‐functional teams deployed
• Progress for cars in production has WAR
RRANTY REPAIRS PER 1000
been made using cross‐functional teams
• Teams were deployed in January 2008
3 Year Window
(for Consumer Reports – Fall 2009 Report)
Jan ‘06
Jan ‘07
Jan ‘08
Jan ‘09
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
13
Shoppers
Buy
lty
ya
Lo
Pr
Qu odu
al ct
ity
Ownership
Service
Awareness
2. Quality For Current Production
e
ic
rv
Se
t
duc
Pro lity
Qua
ACTION
PLANNED RESULT
WHEN
• Changed internal metrics and targets for reliability
• Metrics that are accurate, benchmarked, and can show trend judged monthly
• Implemented cross‐functional teams for warranty reduction
• 30% reduction in warranty • Complete –
claim rate during first 9 January, 2008
months after implementation
• Market downturn and financial difficulties prevented further gains
I l
ti
dit
• Implementing new audit B tt
i d
lit
• Better perceived quality
standards in manufacturing
• Complete –
January, 2008
I l
t
• Implement Oct – Dec, 2009
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
14
New Audit Standards – Current Production
MANUFACTURING QUALITY EXECUTION
Fiat Group audit Fiat
Group audit
standards…similar to Chrysler audit, but…tighter quality standards used for fit and finish
f fi
d fi i h
Changed Chrysler audit to match Fiat Group standards
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
15
Shoppers
Buy
lty
ya
Lo
Pr
Qu odu
al ct
ity
Ownership
Service
Awareness
2. Quality For Current Production
e
ic
rv
Se
t
duc
Pro lity
Qua
ACTION
PLANNED RESULT
WHEN
• Changed internal metrics and targets for reliability
• Metrics that are accurate, • Complete –
benchmarked, and can show January, 2008
trend judged monthly
• Implemented cross‐functional t
teams for warranty reduction
f
t
d ti
• 30% reduction in warranty • Complete –
claim rate during first 9 l i
t d i fi t 9
JJanuary, 2008
2008
months after implementation
• Market downturn and financial difficulties
financial difficulties prevented further gains
• Implementing new audit standards in manufacturing
• Better perceived quality
• Implement Oct – Dec, 2009
• Increase headcount in • Reduce variation in plant • Implement manufacturing plants to support World Class Manufacturing (WCM) and dimensional control strategy (200+ engineers)
quality (Chrysler & supplier manufacturing)
Chrysler Group LLC 2010‐14 Business Plan
Nov – Dec, 2009
November 4, 2009
16
Shoppers
Buy
lty
ya
Lo
Pr
Qu odu
al ct
ity
Ownership
Service
Awareness
2. Quality For Current Production
e
ic
rv
Se
t
duc
Pro lity
Qua
ACTION
RESULT
WHEN
g
• Changed internal metrics and targets for reliability
p
• Metrics that are accurate, ,
• Complete –
benchmarked, and can show January, 2008
trend judged monthly
• Implemented cross‐functional teams for warranty reduction
• 30% reduction in warranty • Complete –
claim rate during first 9 January, 2008
months after implementation
• Implementing new audit standards in manufacturing
t d d i
f t i
• Better perceived quality
• Implement O t Dec, 2009
Oct –
D 2009
• Increase headcount in • Reduced variation in plant manufacturing plants to support quality (Chrysler & supplier World Class Manufacturing
World Class Manufacturing manufacturing)
(WCM) and dimensional control
• Implement Nov – Dec, 2009
• Replace J.D. Power SSI/CSI • Complete –
based survey with Customer based
survey with Customer
Promoter Survey (CPS)
• Understand customer •
opinion clearly
opinion
clearly
Quick resolution
Chrysler Group LLC 2010‐14 Business Plan
January, 2009
January, 2009
November 4, 2009
17
Increase # of Chrysler “Promoters” (3 yrs+ Ownership)
3 Areas For Initiatives
SERVICE PARTS
TECHNICAL IMPROVEMENTS
Goals:
• Improve quality of service parts
• Redesign service parts to fix original technical issues
Service Operational Excellence
•Can repair every car, every time
•Parts available on the shelf
•Tools at the dealership
•Techniques for every problem
Metrics: • Warranty rate for repeat y
p
repairs
•Capable repair technicians
•Vehicles off road &
•Vehicles off‐road & backorders
•Effective repair rate
Chrysler Group LLC 2010‐14 Business Plan
Human Interaction
•Customer Promoter Score system to allow dealer feedback and self correction
•Customer Care standards
•Customer outreach programs to recover to recover
customer relationships
•Service retention
•Service retention
•Loyalty
•Follow‐up with customer problems
November 4, 2009
18
Original Quality Situation
1. Overall quality ll
l
structure & strategy
Chrysler not organized to h l
d
work effectively
2. Quality for current production
Rate of improvement not adequate
3. Quality at new model Q
y
launch
New models launched with below average quality
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
19
Shoppers
Buy
lty
ya
Lo
Pr
Qu odu
al ct
ity
Ownership
Service
Awareness
3. Quality At New Model Launch
e
ic
rv
Se
t
duc
Pro lity
Qua
ACTION
PLANNED RESULT
PLANNED RESULT
WHEN
• Changed reliability and durability • More rigorous testing leading • Complete
test standards
to more reliable/durable vehicles
Chrysler Group LLC 2010‐14 Business Plan
(effective 2009 g
)
Dodge Ram)
November 4, 2009
20
Improve Vehicle Reliability – New Models
• Rigorous digital and physical testing applied to new vehicle projects
• Increase usage of virtual testing –• New techniques from Fiat Group
Testing to prove a Jeep •
combined with…
vehicle can be a Jeep vehicle
Physical testing – New Protocol applied to 2009 Dodge Ram and after
• Rigorous testing to prove capability for the most severe user
for the most severe user
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
21
3. Quality At New Model Launch
Shoppers
pp
Buy
y
l ty
ya
Lo
Pr
Qu odu
al ct
ity
Ownership
Service
Awareness
e
ic
rv
Se
t
duc
Pro lity
Qua
ACTION
PLANNED RESULT
PLANNED RESULT
• Changed reliability and durability test standards
• More rigorous testing leading to more reliable/durable vehicles
• Created standard process to • Competitive objectives leading • Started with 2009 benchmark and set targets for p
g q
y
competitive design quality
WHEN
Dodge Ram j
Project
to competitive vehicles
• Create internal 3rd Party to judge • Eliminate self‐assessment of project quality status
• Complete
(effective 2009 Dodge Ram)
Dodge Ram)
• November, 2009
work by functions
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
22
Improve Competitive Performance In 3rd Party Reviews
New Process
New Process:
• Established 320 functional measurements,
• Benchmark best h
kb
competition • Set targets –
Confirm physical achievement as
achievement as project progresses
Impartial Judgement:
• Result confirmed by new quality function representing the customer
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
23
3. Quality At New Model Launch
Shoppers
Buy
l
ya
Lo
ty
Pr
Qu odu
al ct
ity
Ownership
Service
Awareness
e
ic
rv
Se
t
duc
Pro lity
Qua
ACTION
RESULT
WHEN
• Changed reliability and durability test standards
• More rigorous testing leading to more reliable/durable vehicles
• Complete – July, 2007
(effective 2009 Dodge Ram)
Dodge Ram)
• Created standard process to benchmark and set targets for competitive design quality
• Competitive objectives leading to competitive vehicles
• Started with 2009 Dodge Ram Project
• Created internal 3rd party to judge project quality status
• Eliminate self‐assessment of work by functions
• November, 2009
• Created physical and digital perceived • Design cars with better perceived quality evaluation process
quality • Complete – October, 2008
• Avoid cost of tooling mistakes
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
24
Improve Perceived Quality – Future Vehicles
Higher sco
ore is better
Perceivved Qualityy
Created development evaluation for perceived quality, benchmark best competitors and set targets for each new vehicle project
100
90
80
70
60
50
40
30
20
10
0
New vehicle target
‐41
41
82
‐26
78
70
73
62
Execution issues
Design issues
ssues
57
33
Competitor A
Competitor B
Competitor C
Competitor D
Competitor E
Chrysler Group LLC 2010‐14 Business Plan
Competitor F
Past Vehicle
November 4, 2009
25
Improve Perceived Quality – Future Vehicles
Use Digital Simulation to “Design in” PQ, ahead of physical models
• Ability to simulate real vehicle and lighting
Exposed Hardware
Exposed Hardware
• Identify problems without building a car
Body colored sheet metal visible?
–
Sheet metal looks unfinished, multiple holes.
Exposed brake hardware
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
26
Definition of Quality
OPINION LEADING TO CONQUEST
Competitive Design Quality
Awareness
Perceived Quality
Shoppers
Shopping Experience
Initial Quality
Buy
Serrvice
Improve opinion of Chrysler
f
y
Service Experience
p
Cost To Repair
p
Matching the best mass market competitors by end of 2012!
Reliability
Durability
Chrysler Group LLC 2010‐14 Business Plan
November 4, 2009
27