World Class Manufacturing

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1 World Class Manufacturing Scott Garberding ChryslerGroup LLC Business Plan November 4, 2009

2 World Class Manufacturing (WCM) headlines From Turin they remark that the essential element in order to have everything working well is the human component, since without full involvement of the workers nothing could be made. In the internal ranking, the Marchionne Code, which is in the company language described as Fiat Group Automobiles Production System (FAPS), finds its best application in Tychy Plant in Poland, and in Melfi Plant in Italy. Now the attempt is to elevate to acceptable standard also Pomigliano Plant 6, December 2007 Chrysler Group LLC Business Plan November 4,

3 Journey to WCM Fiat Group Fiat Group focus Holistic approach World Class Manufacturing 20 Pillars WCM Launch Chrysler Group LLC Chrysler Focus Safety Quality Harbor Report One common manufacturing operating system 2010 WCM Launch Chrysler Group LLC Business Plan November 4,

4 WCM structure & objectives Safety Cost eployment Workplace organization Quality Maintenance Logistic d Method Total industrial Total quality Total productive engineering control maintenance & std. Just in time time Focus Productivity Quality improvement Technical efficiency Service level Target zero waste zero defects zero breakdowns zero inventory Values People involvement, value creation, customer satisfaction Chrysler Group LLC Business Plan November 4,

5 Why implement WCM? Introduction of WCM Fatality Severe Injury Lost Time Injury Recordable Injury / Illness First Aid Cases NearMisses Lost work day inc cident rate 17% 15% 7% 35% improvement Unsafe Conditions Unsafe Acts Teaching us to see new opportunities E ytd 2010E (NAFTA manufacturing) Chrysler Group LLC Business Plan November 4,

6 Why implement WCM? Introduction of WCM Rigorous methodology 24 for improvements ur Hours Pe er Vehicle Harbo % 1.3% 9% ytde 2010E 2011E (Assembly) Chrysler Group LLC Business Plan November 4,

7 New leadership model Previous Structure Plant Manager Current Structure Plant Manager Team Leader Team Leader Team Member Team Member Fully engaged workforce Ownership at Operator Level Quick Decision Making Direct Communication Chrysler Group LLC Business Plan November 4,

8 WCM in action Working together Execution Results Chrysler Group LLC Business Plan November 4,

9 WCM in action Before After Flexion angle of the waist Flexion angle of the waist Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 More than More than 30 than % elimination of ergonomic risks Chrysler Group LLC Business Plan November 4,

10 WCM in action Before After Inventory reduced Material delivered to point of use 57% reduction in operator walk time Chrysler Group LLC Business Plan November 4,

11 WCM in action Before After Maintained o easy for easy inspection Eq quip Equip Equipment co d o s conditions hidden Equipment restored to original state Chrysler Group LLC Business Plan November 4,

12 WCM in action Before After Improved work conditions Chrysler Group LLC Business Plan November 4,

13 Transforming Jefferson People Prepare for 360 degree transformation Place Product Passion Process Chrysler Group LLC Business Plan November 4,

14 WCM implementation Chrysler Group LLC Chapter 11 begins Chapter 11 ends 1 st Plant re opens Bronze Silver Gold Bankruptcy 4th Qtr Management / Union leadership training and commitment Cost opportunities identified World Class Manufacturing teams and training 30 Plants Learning & implementation 1 st audits Methods & results 3rd party audits Every plant Every year Increasing depth and rigor Wide expansion Chrysler Group LLC Business Plan November 4,

15 Expected results for 2010 Injuries Operating cost 30% 8% 2009E 2010E 2009E 2010E Manufacturing first time quality Productivity +15% +10% 2009E 2010E 2009E 2010E Employee involvement +100% Projects +80% 2009E 2010E 2009E 2010E Chrysler Group LLC Business Plan November 4,

16 One Team, One Goal, One Vision World Class Manufacturing World Class Manufacturing Chrysler Group LLC Business Plan November 4,

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