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Chrysler Needs to Redesign Its Business Process.

Posted by: Bruce Nussbaum on May 15, 2007

Pete Mortensen at Jump sent in this comment that deserves our attention. He points out that Chrysler has been designing great looking cars. The real problem is designing better supply chain and other other business processes. It’s a good argument. Here it is:

“The thing is, great design at Chrysler never stopped. The awards went away, but the company has continued to come out with hot vehicles in the years since the Daimler take-over, including the Crossfire, the PT Cruiser, the 300, the Avenger…

Chrysler is working at the leading edge of design and innovation. We have had the privilege work with them at Jump, and they are very clued in to the cutting edge of this stuff. The problem here is not necessarily lack of interest or commitment to design or innovation. Many, many people in the company were ruthlessly committed to such notions.

But there are many parts to a business, and great, attractive products aren’t everything. In all likelihood, they really do need to get leaner in their operations and innovate some processes of the business that I’m frankly not privy to. This isn’t irrelevant in terms of turning the business around. Cliche as it might sound, it is critical that Cerberus tighten up the bottom line. The supply chain might be the problem. Design as you’ve talked about it above isn’t going to fix that.

On the other hand, it is also extremely important for Cerberus to make sure that the company continues to move the top line as well as the bottom line. And this speaks to the role of designers to make connections between disparate groups and build consensus and move ahead on the vision-oriented strategic side of things. It’s the toughest skill a designer or design manager can occupy, but it’s significantly more important than great-looking products.

Any time new leadership comes, there will be a re-evaluation of priorities. We’ll soon see if Cerberus is there to just pump Chrysler up and resell, or whether they’re committed to making the company great again. And that greatness will surely involve design, but it will likely be the designs the public never sees — organizational structures, supply chains, strategy sessions — that will hold the biggest impacts.”

Reader Comments

Dave Livingston

May 17, 2007 9:07 PM

Re-designing the functional operations along with product innovation and design sound like good ideas but aren't as simple as put nor as missing. In fact up until the merger Chrysler was a poster-child for frontier thinking in several key areas:inbound supply chain operations, supplier partnering and procurement management, and - especially - adopting new CAD/CAM technologies to change the design and product engineering processes. They, along with Boeing, were early adopters of the Dassault/IBM engineering solution that lies behind much of the B777 for example.

At the same time product quality was low, manufacturing had & has a long way to go, outbound distribution wasn't touched and push-to-sell thru a giant dealer network needs to be completely re-engineered.

In other words they need to come up with superb and appealing designs but translate those thruout the rest of the execution operations while simultaenously making profound changes in the way those operations work. Consider this a checklist for whether or not the deal will fly.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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