DETROIT -- Chrysler Group used to drive suppliers nuts by falling far short of its production forecasts. But that was then.
Under Fiat management, the new normal is accurate forecasts, Dan Knott, senior vice president of purchasing and supplier quality, said today.
In 2010, Chrysler improved the accuracy of its forecast significantly, Knott told the 2011 Automotive News World Congress. At the beginning of the year, Chrysler's actual production volumes were 8 percent off from the company's targets. By the end of the year, the company had narrowed the gap between target and reality to 2 percent.
“In the past, you could have added a zero to that” 2 percent, said Knott. In fact, the company sometimes missed by 30 to 40 percent, he admitted. “That drove suppliers crazy.”
In fact, the integrity of the production forecast has been the No. 1 issue among suppliers, he said. Missing forecasts so badly cost the company the trust of suppliers, an issue the company is working to remedy, he said.
“We deliver on our forecasts,” said Knott. At the beginning of the year, the company aimed at a global volume of 1.6 million units -- and it hit that target.
In order to improve its forecasting, Chrysler now is open to sharing details of its thinking on new models with suppliers earlier in the conception and design process, he said. The company also wants to give suppliers more warning of changes in its production volumes.
Part of the improvement comes from identifying the processes that are broken and fixing them, Knott said. Chrysler has identified “265 processes that were broken. So far we've fixed 197 of them.”
Knott said he suspects the company will identify many more.
For the 2011 model year, Chrysler revamped 75 percent of its product portfolio, with 16 new or refreshed vehicles. The product onslaught will continue. In 2012 and 2013, Chrysler is going to be introducing a fleet of new compact and mid-size vehicles based on Fiat architectures.