Inside a pristine, brightly lit warehouse in Auburn Hills, MI, rests a grim reminder of the cost of negligence.
Several metal carts sit in a row, covered with greasy engine components. This is where dead engines come for their autopsies, where engineers play medical examiner to figure out the cause of death.
A price tag taped to each cart reveals the cost to repair or replace each engine. A Jeep Wrangler I-6 came in after only 5,000 miles and cost the company $3,891. A Dodge Stratus V-6 had only 280 miles when it had to be replaced — at a cost of $4,269.
Welcome to DaimlerChrysler Corp.'s Quality Engineering Center (QEC), which opened in January 2000. Select dealers ship to QEC, at corporate expense, every part they replace on warranty. The parts are given to the center's problem-solving teams, who call in the supplier to help crack the case.
The part also is the hard evidence that feeds the company's database every time a dealer's service department inputs a customer's warranty claim. The center receives an average of 1,000 parts a day.
It is all forensic evidence in the pursuit of a fix and preventive measures to ensure it doesn't happen again. And 14 different parts makers visit each day to monitor their products.
“It's surprising how many problems our suppliers help us identify,” says J. Michael Burke, senior manager-Parts Return Group Service Engineering. “It's not their problem, but a failure elsewhere affects their part.”
The program has resulted in a 50% reduction in warranty costs in the last six years, says Don Dees,Group vice president-quality. He declines to put a dollar figure on it, but says the auto maker is “moving significantly faster than the rest of the industry” and says Chrysler saw double-digit improvement from the '01 to '02 model years.
Group first piloted its Parts Return Program with 160 dealers in metro Detroit in April. If the pilot goes well, the program will be expanded to all 4,500 dealers in the U.S. beginning July 1.
Dealers will be expected to send in defective parts within 15 days, down from 60 allowable days today. Failure to meet the deadline results in the dealership being charged the amount of the warranty claim.
QEC also is planning to take inparts in less than a year, and add Mercedes-Benz components within two years, says Burke. Mercedes and Mitsubishi are considering building their own QEC facilities in Stuttgart and Tokyo, respectively.
The Chrysler Group andMotors Corp. are working on shared platforms for the next generation of small- and medium-sized cars in a bid to share expertise and cut costs. DaimlerChrysler AG owns 37.3% of MMC.
Parts sharing could save big money for Chrysler, Mercedes and Mitsubishi because there is great potential to standardize, Dees says. For instance, Chrysler has 10 “families” of fuel pumps; he says the company needs only three. Likewise, Chrysler uses 28 different seat belt systems and only needs 10. “We have 27 steering columns —has three,” Dees says.
The $32 million center, which saw its 145 employees drop to 123 as part of the Chrysler Group restructuring plan, could grow to 175 overnight, if need be, Burke says. Staffing will depend on whether the center only will take in parts from Mitsubishi vehicles built in the U.S., from all Mitsubishi products, or just from Chrysler-badged Mitsubishi products. And it depends on whether the program is expanded to include powertrains.
QEC also has a full-service garage for its 18,000-unit corporate lease fleet that provides feedback on vehicle durability. The ability to audit a vehicle when it comes in for an oil change or when an executive detects a problem allows engineers to spot defects before they become warranty claims.
In April, a Jeep Liberty with a faulty transmission was on a hoist. What makes it most notable is it is the first problem detected in the 3-year-old 45RFE transmission also found in the Grand Cherokee, says Lionel L. Chestnut, manager-Service Engineering Center. The problem was traced back to an error at the plant — the ring that holds the planetary hub was not snapped in properly, and a process check is being implemented at the Indiana transmission plant.
It demonstrates that Chrysler is getting faster at finding defects, ferreting out root causes and implementing counter measures, says Dees.
Among the goals: to have all Chrysler Group vehicles in the top 25% of their segment in the J.D. Power initial quality survey. Currently 38% of Chrysler vehicles are in that top quartile, says Dees. That number should increase to 50% by May 2003 with strong quality launches for the Jeep Liberty and Dodge Ram pickup. BenchmarkMotor Corp. has 85% of its vehicles in the top layer.