THE DYER CASE
« HOW CHRYSLER CREATED AN AMERICAN KEIRETSU »
by Jeffrey H. Dyer
RESUME:
During the 1980’s, Chrysler, an American car manufacturer, was in a delicate economic situation, experimenting losses both in profit and market share. Conscious of the lack of competitiveness they decided to conduct and extensive benchmarking study of product development and manufacturing at Honda Motor Company – a Japanese company – to find some solutions to improve their functioning. In a few years, not only they managed to analyse with a lot of perspicacity the problems, but they also managed to set up a solution plan entirely adapted to their needs. They worked both on the improvement of the process and of the relationship with suppliers and it turned out very well, even more successful than they hoped at first and their solution plan is now a model in the industry.
ANALYSIS OF THE PROBLEMS:
Considering the situation of Chrysler in the 1980’s, there are obviously a lot of problems but what is important and so difficult to deal with is that there were different kinds of problems, they had to identify the sources before trying to implement solutions. Not only Chrylser was facing costs and profitability serious problems but they also had a lot of relational difficulties with their suppliers. Two distinct categories of problems car be recognized when reading the difficulties of the situation.
The first category of problems gathers those regarding costs and economic efficiency. At that time, Chrylser had to face very high production costs and components costs meaning that they were loosing market share and profitability at the same time because of very weak economic and price comp ...