Pages 4 (864 words)
This phase focused on ‘Heavyweight Manager’ where the major component was to appoint independent project leaders who had absolute authorization over the project from its initiation to the start of production. This was inspired from “Susha” system which already existed in Toyota since 1953. The increased dominance of Honda and Toyota in the American market forced the local car makers to make radical changes in their organization in terms of management structures to stay ahead of the game. This is when the concept of ‘Concurrent Engineering’ was developed.
All the traditional groups such as engineering, sales, manufacturing, and design were reorganized into project based groups. Manufacturers started launching new projects at a higher frequency and sold it a lower cost with higher quality performance.
Sales, manufacturing, and marketing were involved at much earlier stages in the program to mitigate feasibility risks. Companies such as Chrysler in USA and Renault in Europe, who were in crisis at the time, started coordinating communication in a horizontal fashion but faced with the challenge to avoid weakening of technical expertise because of its incorporation with management principles.
The new administration aimed towards vehicle development on basis of segments functioning autonomous in their own class. The segments were divided into five classes: Top of the range, Entry level car, Jeep, Truck, and Minivan. The new efficient corporation based on clear leadership created a new feeling of solidarity encouraging calculated risk taking, early resolutions of problems, and reducing the inertia in decision making inherent in the structure of organizations.
The aforementioned changes were five-fold.
- Overhaul of the Project Control Process: This new template accentuated the need to observe an overall vision of the project which was to involve individuals to seek collectively an objective of a general nature. It resulted in a change from encumbered controls that didn’t give any sense of self accountability to an inspiration for individual participation within a framework defined by ‘meta-rules’.
- Development of Concurrent Engineering: This aimed at cooperation instead of competition. The end user was involved as early as possible in the design stage and suppliers were involved to warrant the feasibility of the project. Testing of products with the sales network was another addition to the concept. Previously, the inter-trade interaction happened at the top level but now such dialogues were promoted at the bottom in decentralized work groups. At last spatial arrangements were reorganized and new tools were implemented to enhance communication. Organization such as Chrysler who were bureaucratic and hierarchical in nature, now replaced sequential engineering with concurrent under “platform design teams” to allow for internal and external communication. They even brought all the cross-functional groups under one roof. Functional departments were now inter-dependent rather than self sufficient
- Dynamics of Technical Trades: A challenge faced by companies at this time was the development of key disciplines’ expertise base. Although the efficiency of the process was higher due to integration of project management principles, the new platform obstructed technical learning. Chrysler and Renault responded to this by instituting “expert-clubs” which safeguarded learning of crucial scientific skills on basis of sub-assemblies akin to a function based structure.
- Sub-Contracting to Co-Development: Involving supplier in the design process became part of the strategy. Chrysler and Renault initiated co-location and co-development of projects with their suppliers to reduce the product development cost  . Today, roughly 70 percent of the product cost account for the parts purchased from the suppliers. Following the footsteps of Japanese firms, Americans started to reduce the number of suppliers and mandated their presence in product development process. The chosen supplier is then associated closely with studies and co-located in the office suites. This was to restructure the supplier as and when needed for the success of the project.
- Project Management Professionalism: The human relations are organized by integrating skill and project based to balance the workforce. Is it very difficult to operate the team independent of each other and in the end it is infeasible to make them exclusive. The orientation of program can be directly related to the maturity of management approaches. It’s directly proportional to the effectiveness of various execution of policies. Companies employed specific experts to deal with the technical aspect of the project management in the firm. These new modes resulted in drastic changes in performance via implementing new techniques which enabled western firms to catch up with their Japanese counterparts.
In a study by Clarke and Fujimoto it was clear that American and European firms were able to considerably reduce their lead time and overall engineering hours as their product quality heightened . The highest benefits of these strategies were secured by Chrysler and Renault with their enhanced quality performances, decreased development times, increase in productivity and diminished cost base. However, with time, the proceedings of mergers, market competition, mismatch between consumer expectations and vehicle specifications made the car maker to brake a little. At the same time, Japanese firms encountered rise in lead times and engineering hours, signifying overuse of capabilities to the extreme  . This phase strengthened the state of project management in the American automotive industry and opened doors to success for both American and European firms who were initially failing to compete with their Japanese counterparts