Chrysler's LaSorda on quality: Fix it now
Source of a warranty woe is tagged, told to solve it quickly
By Mary Connelly
Automotive News / May 09, 2005
DETROIT -- The Chrysler group handles warranty problems on a "fix-it-or-else basis."
What's the "or else"? If the problem isn't fixed in seven business days, it lands on the desk of COO Tom LaSorda. If it persists for 14 business days, it arrives on the desk of CEO Dieter Zetsche.
"Nobody wants it to hit my desk or Dieter's," LaSorda says. The meetings that result "are not like love-ins. These are very tough."
In August, LaSorda adopted a program dubbed Tag. First, Chrysler determines who is responsible for a quality breakdown - the supplier, the assembly plant or the engineers.
The miscreant is given seven business days to solve a quality problem and propose a long-term solution. If that party misses the deadline, it has to deal with LaSorda.
Tag is not an acronym, LaSorda says. Chrysler plays tag when a problem is found - and being "it" is no fun.
"It can only be three groups responsible, right?" LaSorda says. "It is the supplier, the engineer or the plant. So we said, 'Who owns it? Then we tap you on the shoulder and say, 'Tag, you're it.' "
Sending a message
Referring a problem so quickly to top management sends a message, says Richard Gerth, a research scientist at the Center for Automotive Research in Ann Arbor, Mich.
"If it is going up to LaSorda, then clearly it is a priority for them," Gerth says. "It certainly is aggressive. It says to me that Chrysler will be focusing on warranty and that this is an important strategic initiative for them."
If LaSorda or Zetsche get involved, they can make sure Chrysler devotes enough resources to fix a complex problem, Gerth says. The company says it has fixed about 40 warranty problems since the program began. Seven or eight problems have reached LaSorda, he says, and three or four ended up on Zetsche's desk.
Chrysler has assigned 30 people to monitor warranty data daily, says Al Motta, senior manager of the customer advocate group. A so-called advocate is assigned to each vehicle line and also to some components such as engines, transmissions and electrical parts.
One example: In October, the computer program spotted a recurring problem with the Chrysler Pacifica's ashtray. A hinge that holds the ashtray door sometimes broke. As it turned out, a design change had made the hinge thinner. That, along with the supplier's drying process, weakened the hinge.
Within five days, the supplier began a test to weed out units subject to breakage, says Motta, who declines to identify the supplier. As a long-term solution, the supplier designed a stronger hinge.
CDC is model
LaSorda says he borrowed his fix-it-right-now approach from federal Centers for Disease Control and Prevention in Atlanta.
Chrysler monitors dealership warranty claims in the way the CDC monitors hospitals. Any unusual outbreak sparks a rapid response.
Chrysler studied CDC's statistical tools for analyzing outbreaks of disease, which is not all that different from spotting quality breakdowns. "It is the Centers for Disease Control mentality: You solve problems quickly because you lose one customer at a time if you don't," LaSorda says.
LaSorda brought the CDC mind-set to Chrysler from General Motors, where he was a manufacturing executive. He came to Chrysler in 2000.
In 1997, GM instituted a program called the Warranty Concerns Detection Center, which was patterned on the CDC's disease detection system. In 2002 the program evolved into the current 24-hour Concerns Detection Process, says GM spokeswoman Pam Reese. The goal of both GM programs was to detect and resolve warranty problems quickly.
Chrysler's early warning system uses a sophisticated computer program to flag trouble. Warranty data from dealerships are fed into the system daily.
If the computer program spots an unusual spike of quality breakdowns, it flags the problem. Then Chrysler's quality engineers investigate the problem, talk to dealers, get the failed parts and analyze them.
So far, no one group tends to be guilty of causing problems, Motta says. Responsibility for problems has been spread among engineers, suppliers and Chrysler assembly plants.
Says Motta: "The whole goal is to create a high sense of urgency."