Q&A: Chrysler Redesigns the Way It Designs

Karenann Terrell's high-tech quest for change

The creative types at Chrysler Group know all too well that great design doesn't guarantee success. Over the past 15 years, they've concocted such head-turners as the original minivan, the Dodge Viper, and the PT Cruiser. Still, despite a bevy of design awards, the U.S. unit of Germany's DaimlerChrysler lost $1.9 billion in 2001--and three points of market share since 1999.

Now Chrysler is trying to add discipline to its pizzazz, using the Internet to improve quality and lower the costs of its new models. Introduced as a pilot two years ago, its FastCar program ties together data scattered across Chrysler's operations to help managers quickly understand the ripple effects of design changes on engineering, purchasing, and production, and on Chrysler's outside suppliers. Chrysler's next generation of full-size sedans, due in 2004, will be the proving grounds for what may be Detroit's biggest collaborative design and engineering project to date.

BusinessWeek's Joann Muller recently sat down with Karenann K. Terrell, director of Chrysler's e-business strategy, to learn more about the FastCar program.

Q: Chrysler's future hinges on developing better-quality cars more efficiently. What role does FastCar play?

A: FastCar is the application of Internet technology and e-business methods to product creation--the core process of any automotive company. The focus of FastCar is really on specific activities that are fundamental to helping us beyond our turnaround. These include financial management, change management, and prototype procurement--things like tooling and parts. Sure, FastCar is also helping to speed up development, but our focus is really on reducing costs and improving quality.

Q: How is this different from digital design?

A: FastCar takes a virtual CAD/CAM design and teams it with all the other information that we already have on hand about the part or vehicle. So, no longer do we change a part and then ask: "How much do those new components cost? How long will it take? What are the quality implications? How much mass did we add?" As we make changes, all that information is integrated into the new designs.

Q: Can you give an example?

A: Think of the side of a sedan where the hood and fender come together. These parts were designed by different engineers. When we brought them together in a digital mock-up, there was a bigger gap than we wanted. So it was clear we needed a design change. But what's the best solution? Change the hood, the fender, or both?

Q: What was the solution?

A: Using FastCar technology, we were able to work out the effects of a proposed design change before it was made. In this case, we notified the engineers of the fender and hood, as well as the supplier of a plastic attachment in the wheel well. That vendor said: "If you make that change, I need to cut a new tool, which will cost you lots of money. Why don't I just move my fastening point? Then you don't have a gap." So we didn't have to make a design change. In the old world, it would have been four or five weeks before we knew about the supplier's tool change. And we'd have just paid for it.

Q: So that's how rethinking a design can help avoid added downstream costs?

A: Yes. We want to allow as much change, as early in the process as possible, because there's an absolute correlation between early design fixes and improved quality. And we know that the more change we allow, the more innovative the design will be.

Q: What software is behind FastCar?

A: CATIA, which is owned by Dassault Systmes, already does our virtual enterprise and design software. i2 Technologies (ITWO ) is the software platform for FastCar. And the systems integrator holding all this together is IBM (IBM ).

Q: How important will collaborative design and engineering be down the road?

A: I think everybody will use the Internet to link business and design. Do I think the tool we're using will become standard for the industry? No. But I do think the concept of FastCar will pervade not only other auto makers but the suppliers, too.

Before it's here, it's on the Bloomberg Terminal.