By David Michael and David Lucke
Due to a shift in consumer behavior, automobile purchases in the U.S. market have become driven by fashion trends. As a result, new models are launched at a higher rate than in the past. Just a few years ago, one would expect to see approximately five new models launched in one year. Now it is not unusual to see 10. Consumers expect new cars immediately, with a variety of colors and features, as well as options to customize. While this is a significant change for the auto industry, it also creates a unique challenge for global automotive logistics providers.
Regardless of the business, preparing for a new product launch is time consuming and complex. Here we'll discuss the design and logistics planning process based on Ryder System Inc.'s experience working with DaimlerChrysler, while sharing strategies for success that are relevant across industries.
The key to a flawlessly executed product launch is planning. Ryder's engagement in the pre-launch planning process begins in the decision period between concept and production. This can be two to three years before volume production. Key decisions concerning the new vehicle have already been determined — target market, customer profile, platform and concept design. Moving from concept to production involves many product cost studies to determine the total landed logistics cost to the program.
Different functions within a manufacturer, such as procurement, logistics and material handling, must come together to work on a new vehicle launch. For example, in addition to sound program management practices, DaimlerChrysler has automated the collaborative process between the functional groups. An internal system, iPass, serves to provide and link key informational elements necessary to the making of good procurement, material handling and logistics decisions. This system centralizes the data and decision elements for timely access across the organization.
Ryder's overarching role in the launch process is to provide decision-support analysis for DaimlerChrysler. DaimlerChrysler's Plan for Every Part (PFEP) is the culmination of the entire pre-launch planning effort. From point of use, every part is analyzed for its ergonomic and line-side presentation. Internal and external material flow impacts are considered and coordinated to optimize inventory levels, material handling efforts and transportation requirements throughout the supply channel. Best practices are leveraged across platforms and programs in promoting launch standardization in methods and procedures.
Development of the PFEP is a work and rework process. This may involve numerous iterations as decision data are analyzed for program impact on cost and quality. Ryder's launch support involves the informational exchanges between tier-one parts suppliers, material-handling equipment (MHE), packaging and logistics suppliers in the creation and implementation of a logistics plan for every part to support the manufacturing effort.
There are a number of things that manufacturers can learn in order to best work with outside parties like Ryder. From the perspective of network design and logistics planning, a lesson learned in the pre-launch planning process comes in the area of change management.
Bringing a vehicle from concept to launch involves multiple groups within the organization. Each has a defined and distinct responsibility for the launch of the program. The decision of one group impacts the decisions of another group. Analyses of decisions made throughout the launch process need to be shared and communicated quickly and accurately across the product team members. Both internal and external team members should be included. A disciplined project management approach is critical to a successful launch. Deadline adherence and accountability for milestone attainment from every participant are paramount.