Update... this was written by someone anonymously. I will be integrating it soon.
Creating a new car at Chrysler (or any car company)
There are two major different “new vehicles” created by a car company.
1.) The Next Big Thing (NBT). These things come along rarely. Examples include the minivan, Pontiac GTO, Ford Mustang, Chevy VOLT, Saturn, Dodge Viper, Saturn Sky/Pontiac Solstice, Chrysler/Maserati TC, etc.. Typically, because these are “revolutionary” and not “evolutionary”, they need to be driven by a strong leader who is willing to take risks. Because these vehicles are “all new”, there is usually no infrastructure nor data inside the company to provide guidance to the product development. This requires the leader to provide his vision for the product. If the products are successful, the leader becomes legendary. If the products are unsuccessful, the leader is at the minimum tarnished, at the maximum fired. The stakes are high!
2.)Successors to current vehicles. By far, this is the most common case, and there are always several of these programs going on inside all auto companies all the time. Typically they are timed out so that the resources (people, faciliites, capital) can accommodate them which means that the intended launch for these new products is cadenced. No company can afford to renew everything at one time.
For the second case above, there is a lot of research done inside the company and outside the company to document the strengths and weaknesses of the current product being replaced. This data could include customer likes / dislikes, quality scores, warranty, manufacturing issues that make the current product difficult to build, pending regulatory issues (safety, fuel economy, etc.), and of course design (styling). All of these are controlled by cost!
1.)Marketing always wants to provide as many new unique features to the product they can, which makes the product easier to move off the showroom floor.
2.)Warranty can always be improved by increased testing and development time.
3.)Manufacturing always has issues regarding aspects of the current product that are difficult to build, and cost them time in the process to achieve good quality.
4.)Complexity. If a product is too complex with too many options and build combinations, manufacturing cannot be sure they will build it right and, although marketing wants to give the customer the features he wants on the car, if the product is too complex the dealer will not be able to stock all the combinations.
5.)Regulatory issues regarding safety, fuel economy, even recycle ability, etc., are always changing driving changes. Often, the current product can become unsaleable in future years due to regulatory changes making the development of a new product not an option but a necessity.
6.)The Design Office always wants to create rolling works of art.
All of these aspects, must be contained in a business case. In addition, the intended launch timing is established and must be held!
Marketing states the price target they feel they can sell the proposed car for based on competitor’s similar offerings. The part costs for the current product are well known, so comparisons of new proposals and estimates of their associated costs are compared. Besides the cost of the part, the tooling to create the part must always be considered. These figures can run into many hundreds of millions of dollars.
A very simple equation can explain it all:
(Price) - (cost of the parts) – (cost to assemble the car) – (overhead i.e. engineers, testing, lights and heat in buildings) – (tooling required to make the parts/projected volume of cars to be sold) = a positive number as high as possible!!
A small cross-functional team of individuals is established usually 5 -6 years before the intended product launch. This small team gathers the information from the various parts of the company and pulls it all together. This information starts out at a high, very general level, and then is refined to more and more detail. This refinement is driven by a cadenced series of management reviews. At any of these reviews, the team can be given the order to proceed or at the extreme, sent back to start all over. As the product definition gets more detailed, more and more people are added to the team to support the workload.
This process then proceeds with improved product definition, then with part designs, then with prototype parts, then with prototype vehicles, then with testing results and any fixes required, then with pilot cars built on the intended production line until the day comes to begin production of saleable cars. Usually, this starts at a rate less than the intended final production rate, but escalates as rapidly as possible while still maintaining quality.
By the time these final steps happen, a new team has already been formed to start the process all over again.
