Principles that shape product development systems: A Toyota-Chrysler comparison.

Abstract

This thesis contains in-depth case studies of product development organizations in two world-class companies: Toyota Motor Corporation and Chrysler Corporation. Despite having similar strategic goals and competing in the same markets with similar products, the two firms' product development practices are quite different. What explains these differences? Through qualitative research methods, this research identifies the core principles that seem to shape the two respective systems. Together, the sets of principles characterize the systems, providing insight as to why the systems look and work as they do. In some cases Chrysler's and Toyota's methods are quite similar, as are the principles behind them. In others, similar principles lead to quite different practices. However, many of the differences observed in practice seem to reflect differences in beliefs about effective product development. The principles fall into five categories: (1) organization and leadership, which describes major differences in philosophy and practice between Toyota's chief engineer system and Chrysler's platform team approach; (2) development planning, which discusses how Toyota and Chrysler use a similar cascade approach to target-setting and project planning; (3) communication and decision-making, which exposes some major differences in effective use of written communication media and in pull vs. immersion communication strategies; (4) process engineering, which describes some major differences in how the two firms bring manufacturing influence into product design, Toyota using a functional organization approach and Chrysler using a co-located team approach; and finally, (5) design processes, which distinguishes two models of design, set-based and point-based, and discusses how the two companies fit the models. The principles reveal fundamental differences and similarities in how the two firms think about product development, many of which run counter to conventional wisdom. These challenges to current trends point the way toward new, more effective development systems--systems that will be based on fundamental principles rather than on prescriptive sets of practices.