Master of the Supply Chain

He's been well-known in Detroit for years as the most innovative and respected purchasing chief the industry has ever known. But now, thanks to the messy acquisition of Chrysler Corp. by Daimler-Benz - and the most talked-about business book of the year, Thomas T. Stallkamp is reaching a new level of notoriety.

Rising briefly to the position of president of the new DaimlerChrysler AG, Mr. Stallkamp was the high-minded, idealistic guy who actually wanted the melding of the two automotive companies to be a "merger" that would benefit both companies - and their employees - equally. He openly opposed boss Juergen Schrempp's pet projects, asked too many questions and raised an eyebrow over Mr. Schrempp's personal conduct.

He was forced out late last year.

Interviewed at Ward's offices in Southfield, MI, Mr. Stallkamp won't comment much on the book Taken for a Ride: How Daimler-Benz Drove Off with Chrysler (see review, p.65), other than to say it is "superficially accurate."

"There are no (major) inaccuracies in it, but there is a lot that is not in it, and a lot of dynamics that are missing. For a historical record, it's not very good. It's more of a good tale. At some point somebody needs to analyze what happened and (focus) less on the personalities and more on the management issues."

Might he write such a book?

Mr. Stallkamp reveals he indeed is writing a book - but not on DaimlerChrysler. Instead it's on his favorite topic: supply chain management and the extended enterprise, where Mr. Stallkamp did so much pioneering work.

"What we started at Chrysler with the extended enterprise was unique, and I think went fairly far. It could have gone farther, so a lot of people are asking us to write about how that started, the principles behind it, and where I think it ought to go," Mr. Stallkamp says.

"With the Internet coming, that really opens up supply chain management quite a bit. Lots of people use the term now and don't know what it means," Mr. Stallkamp says. He hopes to have the book finished by the end of the year.

But what Mr. Stallkamp really wants to talk about, once reporters relent on the gossipy questions, is his new job as chief executive of MSX International Inc., a diversified supplier of engineering services.

He wants to see automakers waste less money and fewer resources on the small engineering jobs and focus more on the big tasks.

Mr. Stallkamp is proposing that auto companies outsource all but new product development to an outside firm such as MSX. After an automaker develops a new vehicle and gets it on the road, MSX would be responsible for all life-cycle management, making minor design changes for future model years, freshening the sheetmetal and tracking warranty claims and engineering any resulting fixes that are needed.

"In most companies, pretty close to half (of a company's engineering resources) are being sucked up in current-product maintenance, either in analyzing the warranty, fixing things that are going wrong, freshening and releasing trivial stuff like the next color for the next Cadillac," he says.

"There are legions of people still engineering the thing that is on the road, either because they didn't get it right the first time or doing cosmetic changes to keep it alive because it has been amortized on the books longer than the (customer) really wants it. Why do we need to do that?"

He says giving that work to outside suppliers would free up precious engineering resources inside the auto companies that could focus on the more major tasks, such as creating an all-new vehicle or designing other groundbreaking innovations. It also would save time and money, he adds, because MSX has less costly worldwide resources that could be used around the clock.

MSX has broached the subject with automakers, and some are interested, Mr. Stallkamp says. But there are no takers as of yet.

"And we are not quite ready to do it," he adds. "But if you talk way out, and you have got to think way out in this business, you should free up your engineers to really be creative and direct them to where the margins of revenue come - the invention side of it."

Mr. Stallkamp also says MSX, which offers engineering, purchasing and other tech services in 60 locations and 23 countries, is looking to diversifyits customer base going forward, a prelude to an eventual initial public offering (IPO) in the stock market. Currently, MSX has revenues of about $1.3 billion, with 70% to 80% derived from automotive.

It wants to get that mix down to 50%, as quickly as possible, without reducing its automotive income, in part so that MSX will be viewed on Wall Street more as a technology stock than automotive supplier.

"When the time is right and when we are right (MSX will make an IPO)," Mr. Stallkamp says. "(But) now is not the time. If you look at (the market) the last two months, this is not IPO time."