Chrysler aims to speak to suppliers with 'One Voice'
Photo credit: GLENN TRIEST
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DETROIT -- Chrysler Group will overhaul the way it communicates with its suppliers beginning in the second quarter to ensure that the automaker delivers a consistent message to its suppliers, the company's purchasing boss said today.
Dan Knott, 51, Chrysler's senior vice president of purchasing and supplier quality, said that the automaker's new initiative, dubbed "One Voice," will ensure that suppliers receive one set of expectations from Chrysler, instead of several, perhaps contradictory ones.
Knott spoke during the Automotive News World Congress as part of a purchasing panel.
In years past, Knott said, "We had engineering saying one thing, and purchasing saying another." Under the One Voice program, leaders from engineering, purchasing, and supplier quality will meet together with suppliers to lay out expectations and deliverables.
'On the same page'
The teams, which will be different for each commodity, will have the job of getting all of Chrysler's factions "on the same page" in terms of what they will expect from the supplier, he said.
"By creating that formal board of directors, even if they have a one-on-one dialogue, they're singing from the same song sheet because we're forcing them to have alignment," Knott said.
Chrysler will continue the rollout of One Voice through the end of the year, he said.
Chrysler's relationship with its supply base has continued to improve since the company emerged from bankruptcy in 2009, Knott said. But there are still challenges, including suppliers not trusting the production numbers the automaker laid out in 2009.
"Trust us for that future. We'll deliver 2.4 million vehicles" in 2012, he said, "So I need the supply base to deliver that."
Production bottlenecks
Knott said that despite Chrysler's sales gain in 2011, it could have sold more vehicles had it not suffered from production bottlenecks. He said the company had demand for 600,000 units in the fourth quarter of 2011 but only built 540,000 because of parts shortages.
He later declined to identify which suppliers or parts may have caused the shortfall, other than the well-documented shortage of Pentastar V-6 engines that it experienced in 2011.
On Monday, Jan. 9, Sergio Marchionne, CEO of Chrysler Group and Fiat S.p.A., said supplier issues were keeping the automaker from boosting production of the hot-selling Jeep Grand Cherokee and adding 1,100 new jobs in Detroit.
In an exclusive interview with Automotive News, Marchionne said he would increase production at Chrysler's Jefferson North Assembly plant in Detroit "yesterday" if he could.
Third shift, in 2013
The automaker said last week that it would add a third shift at the plant -- which also builds the Dodge Durango and will build portions of a new SUV for Maserati -- but not until 2013.
"I phased in the third shift at Jefferson. I would have turned it on yesterday morning, but I can't because of the supply base," said Marchionne, 59. "We run trap lines (studies) on every capacity increase, and we always end up identifying a string of… suppliers who can't play.
"So we work our ass off to try and bring that number down to a manageable number, but the problem is that if you have one supplier who can't play, you'll block the chain."
Last year, the Jeep Grand Cherokee was the automaker's second-best selling vehicle with 127,744 units sold, up 51 percent over 2010, and behind only the Ram pickup. On Dec. 31, however, the automaker had only a 33-day supply of its flagship SUV, with many Chrysler dealers asking for additional allotments.
You can reach Larry P. Vellequette at lvellequette@crain.com.
