May 15, 2002

Chrysler Group to use web-based solution for vehicle production planning

Las Vegas, Nevada; Auburn Hills, Michigan – The Chrysler Group announced a sweeping re-design of its volume production planning process. The new web-based system, called “Integrated Volume Planning” or IVP, will take into consideration information gathered from the company’s five regional field offices much earlier in the decision making process to more accurately determine Chrysler Group’s production plan.

The announcement was made at the i2 Planet 2002 Conference in Las Vegas. Chrysler Group is working with the technology vendors i2 Technologies and IBM on the development and implementation of IVP.

“The new Integrated Volume Planning process is a part of our ongoing effort to drive the discipline in our ‘Disciplined Pizzazz’ approach to vehicle development,” said Wolfgang Bernhard, Chief Operating Officer, Chrysler Group. “More accurate production plans should lead to lower costs and reduced inventory not only for the Chrysler Group, but throughout the supply base, as well.”

In the current planning system, plant production capacity, fleet production orders and sales forecast estimates are sequentially analyzed to determine plant production. Under the new IVP system, Chrysler Group will now utilize a web-enabled process that will unite all planning steps into a network, from sales forecasting by market to the development of a final corporate production program. IVP combines information from the sales field with supply and manufacturing requirements much earlier in the planning process, which then creates a production schedule that better reflects expected market demand.

“More favourable production schedules can now be developed by matching supplier material release forecasts with actual dealer orders, and then determining capacity within the supply chain,” said David Hodgson, Vice President of Worldwide Supply, Chrysler Group. “The improved accuracy and timing with this new web-based infrastructure will significantly reduce order-to-delivery times, inventory banks and buffers, and tooling costs in the supply chain.”

Karenann Terrell, Director of the e-Connect team at the Chrysler Group, stated that Integrated Volume Planning joins a suite of web tools that are transforming the company’s business processes in order to design, produce and deliver great products to its customers. “We are committed to the use of e-tools at the Chrysler Group, because they are critical to the dual objective of enhancing revenue while reducing costs. IVP contributes to realizing that objective in the areas of Sales and Marketing, Manufacturing and Supply.”

The expected benefits of IVP include:

  • Reduced manual processing of data in a sequential manner with expanded analytical capabilities;

  • More flexibility in reacting to market demand;
  • Increased sales forecast accuracy, with more stability in the production plan;
  • Creation of common, web-driven forecasting tools and processes for all Chrysler Group markets globally;
  • Increased manufacturing efficiency;
  • Lower levels of unused parts inventory in the supply chain; and
  • Increased consistency in fulfilling vehicle orders from dealers.

i2 Supply Chain Planner is being used to optimize the data required for sales forecasting. IBM is the system integrator for the project, tying together Chrysler’s own systems with i2 Supply Chain Planner.

Chrysler Group launched the first pilot for IVP this month and expects to have full implementation by mid-2003.

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