DaimlerChrysler Corporation is implementing a new product development system that is reducing costs, improving quality, and getting new products to market faster, while strengthening the corporation's reputation as developer of affordable innovative automobiles.

Elements of the system, known as the Chrysler Development System (CDS), are being phased in during the launch of the new Dodge Caravan and Chrysler Town & Country and Voyager minivans at the Windsor (Ontario) Assembly Plant. The first products to be fully developed under CDS, from concept to production, will be launched beginning in 2003.

When fully implemented, the new product development and launch process is expected to save the company between $1 billion and $1.5 billion per year.

DaimlerChrysler Corporation is the industry's lowest cost developer of new products. "Our engineering and development costs are about half of the industry average," says Roger Lundberg, Director of Chrysler's Development System and Vehicle Engineering Operations, "but we are not the fastest to market."

"Everyone in the industry is trying to cut costs and time to market. This system will enable us to do that and improve quality -- at the same time we continue the kind of product innovation that customers have come to expect from DaimlerChrysler."

CDS emphasizes systems engineering and up-front planning and design to reduce or totally avoid the need for costly changes during the later phases of the product development cycle. With CDS, all product and process planning will be completed and fully integrated before the expensive and time consuming tooling phase is begun. CDS redefines the product creation process while leveraging the integration of technology, organization, and people. CDS was developed as part of the UAW-DaimlerChrysler Joint Activities Operating Principles.

"The opportunities for controlling costs and saving money are greater in the early part of planning and design. Once you get closer to launch, the cost of making changes and the coordination effort increases by orders of magnitude," said Robert Dupuis, Senior Manager, Chrysler Development System.

Since the implementation of platform teams in the early 1990s, the Chrysler group has reduced product development time by 25 percent. The goal of CDS is to reduce the overall time to market by an additional 25 percent. "The key result is that we can make our final product decisions closer to the time we deliver products to the market. That keeps the 'design window' open longer and increases the opportunities for introducing innovations while reducing costs," said Dupuis.

Once fully implemented, CDS will reduce product changeover time at assembly plants by 80 percent, and downtime would be completely eliminated. Already, DaimlerChrysler is realizing significant savings from the rolling launch of the new minivan production at the Windsor (Canada) Assembly Plant. Down time will be reduced by more than 80 percent, and total savings for the new product launch will total more than $500 million.

CDS fully integrates DaimlerChrysler's product development system into the platform team organization and culture.

"The platform team structure gives us a competitive advantage," said Lundberg. "Platform teams bring people together from all functions, including suppliers, into a collaborative environment -- everyone works together to achieve a common goal to create the vehicles our customers want."

CDS also creates an environment and process for continuous learning - working through the platform team Tech Clubs, the teams share lessons learned on current programs. And CDS meshes well with DaimlerChrysler's extended enterprise that incorporates the supplier base as key partners in the design, engineering and production processes. Continued development of electronic business-to-business communications through the Internet will further help to shorten lead times by speeding up communications among designers, engineers and suppliers. "The links with our suppliers are critical," said Lundberg.

All phases of the product development process are being re-engineered, following CDS principles. For example, the prototype build process has been redesigned, dramatically increasing the number of prototypes that can be built and tested -- from four per week to 25 per week. This significantly reduces the time and resources to build the prototype vehicles -- making them available for the verification testing much sooner, increasing the consistency of the vehicle builds, and reducing development costs.

DaimlerChrysler's computer-aided design system, called the CATIA Pipeline, serves as a critical enabler to CDS implementation. It links all design engineers with process engineers and suppliers and helps to shorten lead times by enabling designers to analyze concepts and fine tune designs much faster.

"The economic benefits to the corporation are significant. While it is difficult to measure, the greatest benefit comes from being first to market with innovative products, such as the PT Cruiser," said Lundberg. "In addition, we estimate the CDS operating benefits will exceed $300 million a year, from savings such as fewer prototypes, reduced change costs, deferred tooling and facility spending, and reduced warranty due to fewer late changes. That's in addition to the $500 million in savings per launch from the rolling launch strategy."

"Through CDS, we are applying the principles of lean manufacturing to the process of creating new product."