Manufacturing Flexibility Expected to Save DaimlerChrysler Corporation Over $3 Billion
8 June 2000
Manufacturing Flexibility Expected to Save DaimlerChrysler Corporation More Than $3 Billion in Product Launches Through 2004
* 'Rolling launch' of new minivan at Windsor Assembly Plant will decrease
downtime by 80 percent and significantly reduce product loss, estimated
at $500 million in savings.
* Sterling Heights Assembly Plant launches new sedan and adds new
convertible with no volume loss, and without having to build a new
production line thanks to synergies with Germany, estimated at $100
million in savings.
* Virtual manufacturing helps improve quality, speed and cost throughout
the supply chain.
AUBURN HILLS, Mich. - DaimlerChrysler Corporation's ability to increase
the flexibility of its manufacturing facilities will enable the company to
minimize production losses and reduce downtime through "rolling launches." It
is estimated that the value of avoiding this potential loss of downtime and
production will favorably impact the company by more than $3 billion through the
2004 product launches. In a rolling launch, pre-production vehicles are built,
tested and launched on the same assembly line where current vehicles are
manufactured, steadily ramping up so that down-time and volume loss are
minimized during the new product changeover.
Typically a manufacturer "loses" several weeks of production because it
has to stop production to install new tooling and equipment, and begin slowly
ramping up production to test its equipment and processes.
"By applying flexible systems and concepts to upcoming launches, we
estimate over $3 billion of improvement over the next four years," said Gary
Henson, DaimlerChrysler Executive Vice President - Manufacturing. "Because of
the increasing flexibility of our facilities, we're able to build pre-
production vehicles in the plants, on our assembly lines much earlier. The
benefits are tremendous: Flexibility enables us to produce a higher quality
product, much sooner, for lower cost, less downtime and with minimal
production loss. This represents huge productivity and efficiency
improvements."
Not only does a more flexible facility allow a manufacturer to improve its
launches, it also enables the company to adjust production volumes of
different products in order to react quickly to customer demand.
CHRYSLER PT CRUISER AND TOLUCA
In the case of the Chrysler PT Cruiser launch at DaimlerChrysler
Corporation's Toluca, Mexico, Assembly Plant, the company was able to ramp up
Chrysler PT Cruiser production as it began shifting production of the Chrysler
Sebring Convertible to its Sterling Heights Assembly plant in Detroit, MI.
Because of the flexibility of the Toluca facility, it can build three
different vehicles on the same line. As a result, the company was able to
launch a new product without losing any production. As Chrysler PT Cruiser
production ramps up next year in Graz, Austria, the Eurostar plant there will
be able to adjust volume between the PT Cruiser and the minivan, based on
demand.
DODGE CARAVAN, CHRYSLER TOWN AND COUNTRY AND CHRYSLER VOYAGER AT THE
WINDSOR ASSEMBLY PLANT -- $500 MILLION IN SAVINGS
A new level of flexible manufacturing at the Windsor Assembly Plant in
Ontario, Canada -- home of the minivan -- will enable the company to avoid
more than $500 million of production launch costs for the all new 2001 Dodge
Caravan, Chrysler Town and Country and Chrysler Voyager at current planned
volumes.
Because of its ability to accomplish a rolling production launch, downtime
will be reduced by more than 80 percent during the new minivan launch, cutting
lost production dramatically.
"With the new minivan launch, we are setting a new benchmark in terms of
rolling launches," said Henson. "Because of the amount of flexibility we've
installed, we are going to hit the ground running in Windsor. We will
dramatically reduce downtime and lost production through our ability to pilot-
build vehicles there at a much earlier time in the process. The lead-time
also helps us improve quality and speed throughout the supply chain."
At full production this fall, the Windsor Assembly Plant will be able to
produce 370,000 vehicles annually. Approximately 6,100 team members operate
on three, seven-and-a-half hour shifts.
DaimlerChrysler Corporation's St. Louis South (MO) and Eurostar (Graz,
Austria) facilities will launch the minivan family in the fall and winter
respectively. By having representatives on the core launch team, these
manufacturing operations will be able to apply lessons learned from the
Windsor Assembly Plant launch to their respective production launches.
CHRYSLER SEBRING SEDAN, CHRYSLER SEBRING CONVERTIBLE AND DODGE STRATUS AT
STERLING HEIGHTS ASSEMBLY PLANT -- SYNERGIES WITH GERMANY
The flexibility of Sterling Heights Assembly Plant (SHAP) will enable
DaimlerChrysler Corporation to launch the new Dodge Stratus and Chrysler
Sebring Sedans and add an all new Chrysler Sebring convertible there this
summer without interrupting current production, and using the same space and
manpower.
DaimlerChrysler Corporation has been preparing SHAP for the arrival of the
Sebring Convertible from the Toluca Assembly Plant. Rather than assemble the
convertible in a separate area, as it was done there, the company realized
synergies with Mercedes-Benz plants in Germany, and optimized each station and
process in order to accommodate the complexity of both the sedan and the
convertible. This had to be done using the same amount of space and the same
manpower.
The company was able to avoid over $100 million of production launch costs
by adding the Chrysler Sebring Convertible, without having to install a
separate production line.
Prior to the production launch, the overhead vehicle carrier in the
assembly area could not accommodate the convertible, as there was not enough
room for roof installation. Part of the ongoing benchmarking with the
Mercedes-Benz plants yielded a best practice that works particularly well with
convertibles -- the use of a skillet conveyor in final assembly.
Both the flexibility of the manufacturing operations, and the teamwork
between the large car platform and manufacturing disciplines throughout the
product development, are responsible for reducing the total development time
to 26 months (eight months faster than the previous model). Total program
cost to develop and build two sedans and a convertible at SHAP is $985
million, compared to the $940 million it cost to build two previous sedans
(which does not include the convertible).
At full capacity, SHAP will be able to produce about 195,000 annually.
The plant has the ability to adjust model mix produced based on demand.
VIRTUAL MANUFACTURING
DaimlerChrysler Corporation is using manufacturing simulation software to
create a seamless union between product development and manufacturing by using
compatible systems to design the vehicles and to simulate build processes in
the plant. The vision is to allow the integrated system to cover all aspects
of manufacturing, from part design to plant design, helping to get new
products to market faster.
With this system, DaimlerChrysler Corporation was able to simulate the
manufacturing environment at both Windsor and SHAP long before the pilot
vehicles were assembled at the facilities. As the products evolved through
their development, the manufacturing processes evolved with them, enabling
simultaneous engineering to take place.
The system uses a single language database across the entire product
development and manufacturing process -- from product development to plant
design. This increases communication, efficiency and supply-chain
integration. The goal is to use the system to simulate and visualize the
entire manufacturing process and plant before any hardware is produced.
"By simulating manufacturing we can make tooling and equipment updates in
a virtual environment rather than with the actual tooling, which is a
phenomenal savings of cost and manpower throughout the supply chain," said
Frank Ewasyshyn, DaimlerChrysler Senior Vice President of Advance
Manufacturing Engineering and General Manager of Minivan Operations.
"Simulation allows the tooling process within the manufacturing facility to be
much more precise, resulting in assembly operations being brought up to speed
faster with less issues."
This press release contains forward-looking statements based on beliefs of
DaimlerChrysler management. When used in this release, the words
"anticipate," "believe," "estimate," "expect," "intend," "plan," and "project"
are intended to identify forward-looking statements. Such statements reflect
the current views of DaimlerChrysler with respect to future events and are
subject to risks and uncertainties. Many factors could cause the actual
results to be materially different, including, among others, changes in
general economic and business conditions, changes in currency exchange rates
and interest rates, year end accounting adjustments, introduction of competing
products, lack of acceptance of new products or services and changes in
business strategy. Statements are also made assuming demand meets the planned
volumes. Actual results may vary materially from those projected here.
DaimlerChrysler does not intend or assume any obligation to update these
forward looking statements.