2007:176 CIV MASTER'S THESIS International Product Development in Automotive...

2007:176 CIV

M A S T E R ' S T H E S I S

International Product Developmentin Automotive Industry

Mapping and improvement suggestions from acustomer satisfaction perspective

Johan Jönsson

Luleå University of Technology

MSc Programmes in Engineering Industrial Business Administration

Department of Business Administration and Social SciencesDivision of Quality & Environmental Management

2007:176 CIV - ISSN: 1402-1617 - ISRN: LTU-EX--07/176--SE

International product development in automotive industry Mapping and improvement suggestions from a customer satisfaction

perspective

Internationell produktutveckling inom bilindustrin Kartläggning och förbättringsförslag från ett

kundtillfredsställelseperspektiv

This Master Thesis was carried out at GETRAG All Wheel Drive AB in collaboration with Quality management and engineering at Luleå University of Technology. By Johan Jönsson Luleå 2007-02-22 Supervisors Gunnar Ek, Getrag All Wheel Drive AB Karin Schön, Luleå University of Technology

Preface This Master Thesis is the final receipt of me finishing off my scientific studies at Luleå University of Technology. It has been a, sometimes very hard but at the same time instructive, four and a half year journey jointly with my fellow students. Together we have had many pleasant times never to be forgotten in life. When it comes to this thesis again, I am far from alone in contributing to its final result. My co-workers at Getrag All Wheel Drive, and especially the respondents, quality & environmental department and supervisor Gunnar Ek needs to be mentioned. The colleagues of mine and respondents in North Carolina are not forgotten for letting me ask you tricky questions. I am grateful to all people mentioned above in taking your time with me during both calm and hectic periods, it would never been possible without your support. Nothing less can be said of my supervisor at Luleå University of Technology either, Karin Schön, who has pushed me and served as considerable sounding board along the voyage. My exceptional Köping originated friends, I feel as have disregarded you all during this frantic time in life, though living very close to you. You are however not forgotten, and will so never be. I appreciate all your invitations, but have at the same time been sadly obliged to refuse most of them. I see my time is now to come. Last but not least I would like to raise the never ending support from my family, I can not thank you enough. Köping, February 2007

Johan Jönsson

Abstract Getrag All Wheel Drive AB (GAWD) in Köping, Sweden today develops, manufactures and sells All Wheel Drive (AWD) systems to the private car industry. However it has not always been like this. Before 2004, the very same plant was a subsidiary company of Volvo Car Corporation, sourcing its need of manual transmissions and AWD systems. Since now having all car manufacturers as potential customers GAWD at the same time is affected by the free market competition from other AWD systems manufacturers. It is now even more important to be efficient and make operations right the first time, to keep present customers and also gain new ones. About the same time as GAWD was formed, it became a member of an international GETRAG product development process, with a North American car manufacturer as external customer. It is important to learn from this project since the manners and customs of the customer are not previously known to GAWD. The purpose of this master thesis has been to identify structural problem areas as well as making improvement suggestions regarding quality assurance of GAWD’s product development. This has been achieved by focusing on findings at GAWD and the expectations of its in-house customer in the United States, GETRAG Axle Plant (GAP). After making interviews, observations and a focus group workshop, the problem areas communication with customer and supplier, involvement in supplier choice and insufficiently preset prerequisites were identified. The effect has been time consuming misunderstandings, role ambiguity, lack of motivation and misinterpretation of some customer expectations. GAWD is recommended to standardize work within its GETRAG supply chain members to set target and define scope together, toward optimal GETRAG customer satisfaction at the lowest use of resources. This can be achieved if day to day work is based upon strong leadership committed to quality, collaboration, communication and evaluations among the supply chain companies. The study shows a need for an early project team kick-off meeting, attended by a cultural agent teaching ways towards effective collaboration and communication. GAWD should focus on improving the commitment of the steering team and coordination of communication among purchasing and project organisations. The later is directly proportional to the quality of communication with the customer and affects the potential dissatisfaction the most. GAWD should further assume that the customer does not know about Swedish culture or operations until proven otherwise. Organisational changes in line with thesis result have been made at GAWD during this research process, which is evidence of continuous improvement activities.

Summary in Swedish Getrag All Wheel Drive AB (GAWD) i Köping, Sverige utvecklar, tillverkar och säljer fyrhjuldriftssystem (AWD) till personbilsindustrin. Före år 2004 var dock samma fabrik ett helägt dotterbolag till Volvo Personvagnar och tillverkade manuella växellådor och AWD system. Sedan år 2004 har fabriken samtliga personbilstillverkare som potentiella kunder, men är också tvungna att bemöta den ökade konkurrensen från andra AWD tillverkare på den fria marknaden. Det skapar ett ökat behov av effektivitet och att göra saker rätt första gången för att behålla nuvarande kunder men framför allt för att kontraktera nya. I samband med bildandet av GAWD, blev de snart även medlem i ett internationellt produktutvecklingsprojekt inom GETRAG, där den externa kunden är från Nordamerika. Det är viktigt att analysera detta projekt eftersom kundens affärskultur inte är tidigare känd av GAWD. Syftet med examensarbetet har därför vart att identifiera strukturella problemområden och även att föreslå förbättringar av GAWD:s produktutvecklingsprocess mot effektiv kvalitetssäkring. Studien har fokuserat på att samla data vid GAWD samt förväntningar från dess interna kund i USA, GETRAG Axle Plant (GAP). Efter intervjuer, observationer samt en fokusgrupp övning, identifierades problemområden vid GAWD till att inte vart delaktig i val av underleverantör, kommunikation med kund och underleverantör samt bristfälliga förutsättningar från start. Effekten av dessa problem har medfört tidskrävande missförstånd, roll tvetydighet, bristande motivation samt feltolkning av vissa av kundens förväntningar. GAWD är rekommenderade att standardisera arbetet mellan dess GETRAG medlemmar. Tillsammans bör de bestämma mål, omfattning och ansvarsområden inom projekt, som leder till optimal kundtillfredsställelse till lägst resursanvändning för hela GETRAG. För att uppnå det bör det dagliga arbetet genomsyras av starkt ledarskap för kvalitet, samarbete, kommunikation och utvärderingar. Studien visar även ett behov av tidig projekt kick-off, där en kulturell agent lär ut arbetssätt mot effektivt samarbete och kommunikation. GAWD bör fokusera på att förbättra styrgruppens engagemang samt koordinering av kommunikationen mellan inköp och projektorganisationerna. Det senare är direkt proportionellt mot kvaliteten av kommunikationen till kunden vilket påverkar dess potentiella otillfredsställelse mest. GAWD bör anta att kunden inte vet något om svensk kultur eller om egna processer tills motsatsen är bevisad. Organisatoriska förändringar i linje med examensarbetets resultat har utförts av GAWD under detta arbetes gång, vilket visar på att ständiga förbättringar bedrivs inom företaget.

List of Abbreviations

AIAG Automotive Industry Action Group

AWD All Wheel Drive

AOC Active On-demand Coupling

FMC FORD Motor Company

GAWD Getrag All Wheel Drive

GAP Getrag Axle Plant

GEC Getrag Engineering Center

KMV Köpings Mekaniska Verkstad

PPAP Product Part Approval Process

PTU Power Take-off Unit

RDU Rear Drive Unit

SOP Start of Production

SUV Sport Utility Vehicle

VCC Volvo Car Corporation

List of Figures Figure 1-1: Principal outline of Theta AWD project supply chain ................................................................ 2 Figure 2-1: GETRAG All Wheel Drive legal structure .................................................................................... 5 Figure 2-2: GETRAG Group world sites ........................................................................................................... 6 Figure 2-3: Principal outline of an AWD-system............................................................................................. 7 Figure 2-4: Example of a Rear Drive Unit with AOC (left) and a Power Take-off Unit (right). ................ 7 Figure 3-1: Three topics to consider when choosing research strategy ........................................................ 9 Figure 3-2: Classifying method of study......................................................................................................... 11 Figure 3-3: The thesis process interpreted as components in the PDSA cycle by Deming W.E (1986). . 12 Figure 3-4: Activities in the Planning process ................................................................................................ 12 Figure 3-5: The Seven Management Tools...................................................................................................... 13 Figure 3-6: Breaking down thesis purpose using Tree Diagram ................................................................. 14 Figure 3-7: Activities in the Do process........................................................................................................... 15 Figure 3-8: Activities in the Study process ..................................................................................................... 17 Figure 3-9: Thesis process in relation to GAWD product development quality improvements............. 18 Figure 3-10: The author’s role as resident engineer in summer of 2006 ..................................................... 19 Figure 4-1: Relation between higher quality and improved profitability .................................................. 21 Figure 4-2: The basic values (cornerstones) of Total Quality Management ............................................... 22 Figure 4-3: Vicious and good circle related to delegation of authority and responsibility...................... 22 Figure 4-4: The Gap model as presented by Zeithaml et al. (1990, p 46).................................................... 24 Figure 4-5: The communication process (Robbins, 2003, p. 285) ................................................................. 29 Figure 4-6: Examples of cultures classified from low- to high context cultures. (Robbins, 2003 p. 304) 29 Figure 4-7: Relative cost of design change in product development (Bergman & Klefsjö, 2003, p. 58) . 30 Figure 4-8: Number of changes conducted in a Japanese and an American company (Sullivan, 1986) 30 Figure 5-1: Core processes at Getrag All Wheel Drive AB in Köping, Sweden......................................... 33 Figure 5-2: Getrag gate system, the process of projects (Business Management System, 2006).............. 33 Figure 5-3: Theta PTU Supply chain................................................................................................................ 34 Figure 5-4: Theta PTU with indicated GAWD machined parts ................................................................... 34 Figure 5-5: Process of product development as seen in Business Management System (2006). ............. 35 Figure 5-6: PPAP main problem areas ............................................................................................................ 37 Figure 5-7: Main problem areas related to communication ......................................................................... 38 Figure 5-8: Problem areas related to culture................................................................................................... 39 Figure 5-9: Problem areas related to transition from Volvo to GETRAG................................................... 40 Figure 5-10: Project organisation, as issued 2006-04-11.. .............................................................................. 41 Figure 5-11: Main problems related to organisation ..................................................................................... 42 Figure 5-12: Main problems related to supplier............................................................................................. 43 Figure 5-13: Main problems related to collaboration among GETRAG companies.................................. 43 Figure 6-1: Cultural differences........................................................................................................................ 47 Figure 6-2: Result from voting process in affinity diagram 2006-11-24 by respondent team .................. 52 Figure 6-3: Analysis of communication and problems ................................................................................. 53 Figure 6-4: Communication problems in the data flow of PPAP ................................................................ 54 Figure 6-5: Connection between higher project priority and improved profitability............................... 56 Figure 6-6: Example of GATE 0 activities (GAWD Gate review, 2006) ...................................................... 55 Figure 7-1: All GETRAG parties focusing on customer satisfaction ........................................................... 57 Figure 7-2: Recommendations improving customer satisfaction ................................................................ 58 Figure 7-3: Project management process change recommendation ............................................................ 59

List of Tables Table 4-1: Dimensions of quality service and its relative importance to satisfaction ............................... 24 Table 4-2: The 18 steps of Product Part Approval Process (AIAG PPAP Manual, 4th Ed. 2006) ............. 31 Table 5-1: Goods and improvements regarding GAWD in Theta project.................................................. 45

Table 6-1: GAWD fulfilment of customer satisfaction dimensions ............................................................. 49 Table 6-2: Previous PPAP experience.............................................................................................................. 49

Table of Contents 1 Introduction..................................................................................................................... 1 1.1 Background .............................................................................................................. 1 1.2 Problem..................................................................................................................... 2 1.3 Purpose ..................................................................................................................... 3 1.4 Delimitations............................................................................................................ 3 1.5 Definitions ................................................................................................................ 3

2 Company Description.................................................................................................... 5 2.1 History ...................................................................................................................... 5 2.2 Products .................................................................................................................... 6

3 Method ............................................................................................................................. 9 3.1 Research strategy..................................................................................................... 9 3.2 Data collection........................................................................................................ 10 3.3 Process of work...................................................................................................... 11 3.4 Validity & Reliability ............................................................................................ 18

4 Theoretical Frame of Reference................................................................................. 21 4.1 Total Quality Management .................................................................................. 21 4.2 Customer satisfaction ........................................................................................... 23 4.3 International business obstacles to quality........................................................ 26 4.4 Quality and product development ..................................................................... 30 4.5 Pareto diagram....................................................................................................... 32 4.6 Affinity diagram.................................................................................................... 32

5 Empirical result............................................................................................................. 33 5.1 Product development at GAWD......................................................................... 33 5.2 Theta........................................................................................................................ 34 5.3 Problems ................................................................................................................. 36 5.4 Customer view....................................................................................................... 44 5.5 General goods and improvements...................................................................... 44 5.6 Improvement suggestions.................................................................................... 45

6 Analysis.......................................................................................................................... 47 6.1 Cultural differences............................................................................................... 47 6.2 Customer satisfaction ........................................................................................... 48 6.3 Gravity of problems .............................................................................................. 51

7 Conclusions & Recommendations............................................................................ 57 7.1 Macro level ............................................................................................................. 57 7.2 Micro level .............................................................................................................. 58

8 Discussion...................................................................................................................... 61 9 References...................................................................................................................... 63

Appendices Appendix 1 - Table of respondents Appendix 2 - Interview guides Appendix 3 - GAWD Gate system checklist Appendix 4 - Affinity diagram of problem areas Appendix 5 - Tree diagram of actions improving customer satisfaction Appendix 6 - Evaluation Sheet

Johan Jönsson - International product development in automotive industry - 2007-02-22

1

1 Introduction This chapter contains background information of why the project is of interest to this study and begins with a description of the problem in focus and is finalized by its purpose, limitations and definitions.

1.1 Background

Today most countries in the world have in some way been affected by the never ending global location of production/distribution facilities (referred hereafter as globalization) and time-based competition. (Bhatnagar & Viswanathan, 2000) As an example, a driving force of globalization is technological innovation within the transporting industry (Wild et al. 2003, p. 19), leaving it as less of an argument in keeping or building production sites at certain places. Instead, other aspects like labour cost, access to new markets and economies of scale, become more important in this selection process (Bhatnagar & Viswanathan, 2000). Apart from the widening perspective of businesses that globalization contributes to, outsourcing and focusing on core competence has been dominant orders from chief executive officers in the past decade. This has led to the emergence of borderless organizations with globally located suppliers and production/distribution facilities, in order to stay effective and competitive in the free market. Perhaps the phenomenon has been especially obvious in the manufacturing business, where Asia, and China in particular, has risen becoming a large supplier of goods and services. Strongest contributors to this emerge is the continents low cost of labor and raw material. With globalization comes an increased need of cultural knowledge of people in general and of the international business environment in particular. This information is crucial in order to understand and interpret messages from customers and suppliers correctly (Robbins, 2003), who might geographically be located hours - or even days - of flying away. The end consumers have in the past years changed its demand pattern towards wanting a wider variety of products to minimal lead time. According to Bhatnagar & Viswanathan (2000) this trend is likely to intensify in the future as companies adopt mass customization, leading to greater choice for customers. The automotive industry has in the latest years been forced to cut its time of developing new models by more than half, hence the even higher obligation today of making it right the first time. GETRAG All Wheel Drive AB (GAWD) in Köping, Sweden was created as a partnership among the German/American companies GETRAG/DANA and Swedish Volvo Cars Corporation (VCC), in January of 2004. Before this, the Köping plant was a wholly owned subsidiary of VCC, and manufactured manual transmissions since 1927. Since the start of GAWD in 2004, the manufacturing and assembly of manual transmissions has moved to Cologne, Germany where FORD Motor Company wants to coordinate gearbox manufacturing in order to maximize


2

synergy effects. GAWD is instead focusing on becoming a centre of excellence in All Wheel Drive (AWD) systems. (External press material GAWD, 2004) All car manufacturers in the world are now becoming potential customers. Competition is a consequence since it now operates in a free market compared to former in-house VCC component supplier. The owner parties have since the birth of GAWD, enforced a claim of further extended process effectiveness in order to move towards a globally competitive AWD Center of Excellence. According to Norestig (2006) it is an absolute condition to enter the Asian market in order to get lower supplier costs and thereby have the ability to submit competitive quotations.

1.2 Problem

Theta is a vehicle project name from a worldwide operating car manufacturer. The group parent of GETRAG got the contract to supply AWD-systems to Theta. An in-house supply chain was set up, Figure 1-1, where GAWD is right now supplying three vital parts to its customer GETRAG Axle Plant (GAP) in the US. GAP does the final assembly of the complete AWD system before it is dispatched to the car manufacturer. An Indian based engine and transmission component manufacturer source GAWD with pre-machined shafts, which are the basis component of two of the three vital parts previously mentioned. Within the supply chain is also GETRAG Engineering Center (GEC) in Detroit, who designs the complete AWD system.

GAWD

Sweden

GAP

USA

Major

Supplier

India

Others

Customers Suppliers

AWD Car

manufacturer

GETRAG

companiesGEC

USA

Figure 1-1: Principal outline of Theta AWD project supply chain

Before the birth of GAWD, VCC was the only customer and geographically held within Sweden and Belgium. VCC is still a customer but not in the Theta project, where both a major supplier and the customer are from outside Europe. Both the Theta supplier and customer have different corporate cultures than GAWD, apart from the obvious, speaking a different language. This is a new situation for the project management team at GAWD, but something it needs to adopt, in order to stay competitive in the industry. Alongside new products in this industry comes documentation in order to assure a high product quality level before entering regular production. This process is summarised as the Product Part Approval Process (PPAP). GAWD have used this product quality assurance procedure in previous projects, but in Theta it is more time consuming.


3

1.3 Purpose

The purpose of this master thesis is to identify structural problem areas as well as improvement suggestions in the quality assurance of Theta project at GETRAG All Wheel Drive AB.

1.4 Delimitations

The research study will be limited to potential structural improvements indicated by the three GETRAG companies GAWD, GAP and GEC only. These three companies control the main activities in the manufacturing of Theta PTU and are therefore most interesting to the specific study. The recommended improvements will further not be implemented within the frame of this study, since estimated too time consuming. When analysing problem areas in the Theta project, other aspects of improvement actions will be considered, however quality assurance improvements will be in focus.

1.5 Definitions

Since mentioning the three different GETRAG companies many times in this thesis, they will be called GAWD, GAP and GEC when used. When the author addresses customer in this report, the interpretation should be GAP. The car manufacturer when addressed is called external customer and buyer of an AWD car, end user. A second confusion among the customer name GAP is it being the same as the model developed by Zeithaml et al. (1990) explaining dissatisfaction. The distinction among them is GAP [customer] and Gap [model by Zeithaml et al., 1990]. The word project when used is referring to one execution of the product development process having a specific customer. GAWD has several projects running at the same time.


4


5

2 Company Description This chapter presents overall description of Getrag All Wheel Drive AB as a company, its owner parties and selection of products.

2.1 History

In the year 1826, Köpings Mekaniska Verkstad (KMV) was established in Köping, Sweden. Main activity at this time was manufacturing of various components to surrounding industries, until 1927 when KMV started gearbox production for Volvo. KMV did so for fifteen years before it was bought by Volvo, becoming a subsidiary. Eventually the business expanded to producing gearboxes, rear axles and assembling of spring struts. In the middle of 1990’s, production of AWD systems was added to that list. At the same time as starting this additional production, VCC began examine the possibility of attracting an external partner to the plant. That was in purpose to generate supplementary stimulation of business development. Volvo Cars was bought by Ford Motor Company (FMC) in 1999, and the previous negotiations of finding a strategic partner to the plant in Köping continued. (Guide presentation, 2006) The new company emerged in January of 2004, as VCC finally did outsource its transmission, chassis and AWD operations. A holding company among German GETRAG and American DANA Corporation bought sixty percent of the shares in the new company and became major owner. Volvo now made investment funds available. The rest forty percent is yet to this date owned by Volvo Cars Corporation, see Figure 2-1 for legal structure. (GAWD External Press material, 2006)

DANA

42%

GETRAG/DANA

Holding Company

60%

GETRAG Group

58%

Volvo Cars

Corporation

40%

GETRAG All Wheel Drive AB

Figure 2-1: GETRAG All Wheel Drive legal structure

GETRAG Group is privately owned and based in Untergruppenbach, Germany. The company was founded in 1935 by Mr. Hermann Hagenmayer and has today sixteen factories worldwide manufacturing manual transmissions to regular cars, SUV’s, motorcycles, and light trucks. (Guide presentation, 2006) According to GETRAG website (2006), GETRAG Corporate Group is a systems supplier and integration partner for transmission and drive train systems, delivering an annual volume of more than three million transmissions and one million axles. Further is GETRAG Corporate Group the largest independent manufacturer of transmissions in the world (GETRAG Website, 2006).


6

DANA Corporation is, according to DANA Corporate website (2006), leading supplier of drive train, chassis, structural, and engine technologies. They design and manufacture products for every major vehicle and engine producer in the world. DANA is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers. (DANA Corporate website, 2006) VCC has, according to its corporate website (2006), factories in Gent, Gothenburg, Skövde, Olofström and Floby. VCC is still to this date the largest AWD customer to GAWD. It’s provided car models S40, V50, S60, S80 and XC90 all have the AWD option. At the same time as the creation of GAWD, the factory became member of the GETRAG Corporate Group network of sites, seen in Figure 2-2. This opens new possibilities of economies of scale, and at the same time abilities of reaching new markets.

Figure 2-2: GETRAG Group world sites (GAWD Guide presentation, 2006)

After a major reformation of manual transmissions to GETRAG-FORD Transmission (GFT) in Cologne, GAWD now focuses of becoming an AWD center of excellence (External Press material, 2006). That has included building fully functional sales, purchasing, and product development departments in the last couple of years.

2.2 Products

In this part, the produced products are further explained, but before introducing any specific details, the general function of an AWD-system needs to be further explained.


7

The functional outlines of the AWD-system can be seen in Figure 2-3. According to GAWD Internal Training material (2006), the Power Take-Off Unit (PTU) is mounted on to the gearbox, having the front axle shaft through its center. The PTU increases the rpm from the gearbox, transferring torque, via the drive shaft, to the Active on Demand Coupling (AOC) further back. According to Internal Training material (2006) the AOC manages distribution of torque among rear and front wheels, which is not constant. Finally, the Rear Drive Unit (RDU) decreases the rpm and simultaneously makes the rear axle shaft run (Internal Training material, 2006). In this way all four wheels can be involved in driving the car, hence the name AWD. Normally, the car using this AWD-system is front wheel driven. If any of the front wheels indicate a spinning manner, the rear wheels immediately are distributed torque by the AOC. The same process occurs if the two left wheels are starting to spin, then the right wheels get all engine torque instead. The car is driving as long as at least one wheel has surface grip. (Internal Training material, 2006).

Figure 2-3: Principal outline of an AWD-system (Internal Training material, 2006)

GAWD is part of GETRAG drive train system manufacturing. Its core competence is production of both PTU: s and RDU: s, explained above. Vital parts as input shaft, pinion, ring gear, housings and flanges are manufactured and assembled together with supplier material. The AOC-unit is consequently bought from supplier with no further machining before assembly. At present, GAWD have several different such customer projects, to a total annual volume of about 250,000 systems. The two products are more detailed pictured in Figure 2-4 and Figure 2-5, below.

Figure 2-4: Example of a Rear Drive Unit with AOC (left) and a Power Take-off Unit (right).

RDU

PTU

AOC


8


9

3 Method This chapter presents the method used and its different elements during the study. Research strategy and process of work will be presented in the beginning and finally the chapter is ended with a discussion of validity and reliability.

The choice of method can, according to Lekvall & Wahlbin (2001, p. 209), be divided into two different dimensions, [1] Research Strategy and [2] Data collection. The two method dimensions will first be presented separately and later summarized.

3.1 Research strategy

A distinct research strategy is essential to know how to design the method. According to Yin (2003, p. 3), the research strategy is the way of collecting and analyzing empirical evidence. Lekvall & Wahlbin (2001, p. 209) defines it as the

technique used to make conclusions from a study1. Yin (2003, p. 5) further suggests three topics one should consider in this dimension, see Figure 3-1. According to Yin (2003, p. 5) the different strategic alternatives are Experiment, Survey, Archival analysis, History and Case study.

Figure 3-1: Three topics to consider when choosing research strategy (Yin, 2003)

The general setting of this study has already been set by GETRAG; hence the author has no possibility of controlling all behavioural events ending up showing a specific result. Experiment can then be ruled out as research strategy. A wide mindset has to be in use but to a limited system – GAWD and its customer. Survey can then be ruled out as strategy since it is a cross section study focusing on contrasts among respondents within a specific population (Lekwall & Wahlbin, 2001, p. 204). Yin (2003) proposes both Archival analysis and History strategies to be suitable when studying one or several cases focusing at its development over time. The thesis purpose is to define problems in an ongoing product developing process. Problems might have occurred at different times, but time as a factor is of no interest to this study, hence both of the two research strategies Archival and History can be ruled out. Yin (2003, p. 8) proposes the case study’s unique strength to be its ability to deal with a full variety of evidence - documents, artefacts, interviews, and observations. Further that Case study has a distinct advantage when a “how” or “why” question is being asked about a set of contemporary set of events, over which the investigator

1 Lekvall & Wahlbin (2001) is translated and interpreted from Swedish by the author


10

has little or no control (ibid). These two statements strengthen the suitability of choosing Case study as research strategy, since studying problem areas occurred within GAWD Product development requires identification of how and why they emerged and later how they can be eliminated. This work need to be based on different sources of evidences in order to obtain a holistic examination. The author had in the summer of 2006 opportunity to work as resident engineer located at GAP in the United States. Resident engineer meant in this position being contact person between the two different business cultures and language residents which GAP and GAWD represent. That at the same time implies being member of the Theta project team and as far as research strategy is concerned, regarded as action research. Dick (1991) defines action research as a family of research methodologies which pursue action or change and research at the same time. Participants in action research contribute equally to the inquiry, and the researcher is not an external expert conducting research, but a partner working with and for those affected by the problem, according to Altrichter et al. (2002). This part has in the research strategy played a minor part, but still needs to be considered and has been in the authors mind during the whole study.

3.2 Data collection

The second dimension regards type of data used. Lekvall & Wahlbin (2001) separates among qualitative/quantitative respectively primary/secondary data. The two types of data are further explained below.

3.2.1 Quantitative and Qualitative data

According to Lekvall & Wahlbin (2001, p. 213) the distinction among qualitative and quantitative data is (1) the way of expressing the data to the coming analysis: coded as figures or expressed as words or pictures and (2) if the type of research strategy chosen in dimension one is statistical or based on verbal reasoning and mind maps1. The quantitative collection of data is often statistical and based on figures. An example is figures from a business system, which can be seen as quantitative. Silverman (2001) describes that a qualitative study may be analysed from information collected from interviews, observations, text or documents and sound or picture recordings. GAWD wants the author to describe and analyse the problems facing project team in Theta. This has been mainly obtained through interviewing Theta member personnel at GAP and GAWD, which is qualitative to its nature according to Silverman (2001). Some quantitative data such as figures have also been collected, but to a much less extent, hence an emphasising qualitative approach.

3.2.2 Primary and Secondary data

According to Lekvall & Wahlbin (2001) it is important to separate among primary and secondary data. Primary data is data that you collect by yourself. It could be


11

counting non-conforming parts in a box, or conducting personal interviews. Secondary data has been collected by someone else earlier in a different purpose, according to Lekvall & Wahlbin (2001). Advantages of collecting primary data, has, according to Lekvall & Wahlbin (2001, p. 250), first to be divided into two categories; [1] observations or [2] interviews. If collecting primary data from observations, Lekvall & Wahlbin (2001) proposes that courses of events can close to a complete certainty be registered. A pitfall is primary data being limited to study present courses of events connected to behaviours. If using interviews when collecting primary data, past, present or anticipated pieces of information are possible to collect, yet limited to remembrance, knowledge or the willingness of the respondent to answer (Lekvall & Wahlbin, 2001). Secondary data collection has the advantage as being a time efficient way of obtaining data. A disadvantage may conversely be the difficulty in estimating quality and applicability of the secondary data, according to Lekvall & Wahlbin (2001), since not been suited after your particular problem of interest. This study is made mostly by collecting primary data by interviews and focus groups, and the secondary data used is mainly collected from databases at GAWD. The two dimensions discussed above in sections 3.1 and 3.2 can, if separating among data collection methods, all together be explained by Figure 3-2. The level of darkness of the cubes indicates which specific combination used in this thesis. The darker the cubes are, the more significance to the study. Recall from section 3.1 that case study has a little influence of action research, not indicated in Figure 3-2 however.

Figure 3-2: Classifying method of study

3.3 Process of work

It is of importance to embark upon problems systematically and accurately when looking for assignable causes of variation. One way of achieving this is by using the improvement cycle invented by Deming W.E (1986) under influence by Walter A. Shewhart. It is known as the Plan – Do – Study – Act or simply the PDSA-cycle. The construction of this paper follows the process presented in Figure 3-3. The PDSA-cycle is used to create structure to work and thereby gain of research quality.


12

PlanAct

Study Do

Theoretical

frame of

reference

Introduction

Company

Description

Empirical resultAnalysis

Conclusions &

Recommendations

Method

Figure 3-3: The thesis process interpreted as components in the PDSA cycle by Deming W.E (1986).

The PDSA cycle is, as seen above, separated into four different parts. Plan, do, study and act. The different parts are explained in more detail in the following sections.

3.3.1 Plan

When problems are detected, first thing to do is to establish the principal causes of the problem (Bergman & Klefsjö, 2003 p. 212). Further proposed by Bergman & Klefsjö (2003), large problems need to be broken down into smaller manageable ones and systematically advance towards root cause. Since the righteousness of the thesis results is depending on the preparations made, it is critical that this process is not rushed through. See a detailed mapping of the planning process in Figure 3-4.

Figure 3-4: Activities in the Planning process

Determination of problem background and deciding of thesis purpose, is at first developed together with quality and projects department at GAWD. Title and purpose was set after useful consulting of my supervisor, Karin Schön at Luleå University of Technology. The chapter Theoretical frame of references is compiled after literature studies in academic quality management books and articles. Influences are taken from course literature in earlier courses, librarians and fellow students. It all began however by examine former master’s theses at the division of quality and environmental management at Luleå University of Technology. Further searching of references was made by the keywords Outsourcing, Globalization,


13

Communication, TQM, Deming, Project management, Asia, Cultural differences and Customer satisfaction. The databases used are in no particular order, LUCIA, LIBRIS, Emerald Insight, and Book-It, see chapter 9 References for internet addresses. A great amount of books and articles were at first collected and the most relevant theories and topics finally chosen to represent the outer frame of the research. This method of gathering a large amount of literature in the beginning was primarily chosen because of far distance to closest university library, serving quality management. The risk of not having a certain source of information at time needed could then be eliminated.

Process mapping

Most organised activities can be regarded as a process, defined by Bergman & Klefsjö (2003) as “a set of interrelated activities that are repeated over time”. Sandholm (2000) further explains that a way to obtain a clear picture of how the tasks a process involves are performed is to use a flow chart. This illustrates graphically the steps which lead to the goods or services, and provides a better understanding of the process as a whole. This method has been used mainly when identifying Theta project in chapter 5.2 Theta.

The Seven Management Tools

Since verbal and qualitative information is to be collected according to the research method chosen in Figure 3-2, Klefsjö et al. (1999, p. 15) suggest to use one or more of the Seven Management Tools to identify and create a common picture of the problem. The Seven Management Tools are primarily compiled to handle unstructured verbal information (Bergman & Klefsjö, 2003) and can be seen in Figure 3-5.

Figure 3-5: The Seven Management Tools (Bergman, B. & Klefsjö, B. 2003)

The intention of the Seven Management Tools is, according to Klefsjö et al. (1999), to identify and create a comprehensive view of the businesses different problems. Greatest use of the above tools is achieved if they are used in combination or in sequences. By using them in sequence creates a systematic procedure of sorting not previously structured verbal information. It may also be used to identify underlying problems and coming solutions. Out of the members of the Seven Management Tools, one has been particularly useful in creating structure to my work in the planning process of this thesis, seen in Figure 3-4. This is the Tree Diagram and is briefly explained on next page.


14

Tree Diagram

According to Bergman & Klefsjö (2003, p. 518) a tree diagram provides a systematic way of breaking down a problem, an idea or need from customers, into its constituents at different levels. Further is described by Bergman & Klefsjö (2003) that the idea is to be in groups and together write down solutions to a specific question. This work is first made one by one, and later under influences from the other members to find further solutions. Important is that all members are involved and no one is being harassed by other members of its individual opinion. Then gather similar contents of solutions together in groups and formulate headings for each of them. Last part is to put structure to the notes and make sure they are all clearly visible, and go through it to make sure that all are agreed (ibid). Recall the purpose in section 1.3;

… identify structural problem areas as well as improvement suggestions

in the quality assurance of Theta project, at GETRAG All Wheel Drive

AB.

This is something that systematically needs to be broken down into further detailed specific tasks. The two questions I asked my self at this stage were;

o [1] What information do I need to fulfil the purpose?

o [2] How can that information be gathered systematically?

See Figure 3-6 for results which were verified by supervisor at GAWD. A parallel can be drawn from Figure 3-2: Classifying method, where suggested strategy mainly is based on qualitative and primary data. This is verified by question [2] in Figure 3-6 which resulted in secondary data, interviews, focus groups and observations, further explained in 3.3.2 Do.

Figure 3-6: Breaking down thesis purpose using Tree Diagram

Selection of informants

Qualitative data can easily be misleading due to lack of knowledge of the respondents. The respondents have been selected based on recommendations from GAWD Project Leader together with own knowledge of the author, since being resident engineer at GAP. Further, both top managers and subordinated managers have been selected to obtain a holistic view of the research.


15

3.3.2 Do

An improvement team is in this phase, according to Bergman & Klefsjö (2003, p. 213), given the task of carrying through the suitable steps in solving an important cause of a problem. A key significance in this work is making everyone concerned aware of the problem as well as improvement steps. (Bergman & Klefsjö, 2003, p. 213) This corresponds to core empirical data collection in the thesis process, Figure 3-3. The improvement steps can be seen as the actual collection of qualitative and little extent of quantitative data, more detailed as the answers to question [2] in Figure 3-6, now specified in Figure 3-7 below.

Figure 3-7: Activities in the Do process

First step is to collect knowledge of project activities in general. That includes explorative interviewing GAWD Project Leader and collecting data from internal databases. Next step in the Do-phase was to define problem areas arisen in Theta, regarding structure such as organizational and/or communicational topics. Further was the perception of the customer examined.

Interviews

An interview can be described as teamwork among two people with different and non-paired roles. One is asking the other one is answering. This teamwork is based on free will and it is the communication among the two, which is target for analysis. The interview can be separated from talking by; the interview is issued to collect information only, and the interviewer has a purpose by doing the questioning. The interviewer and the respondent have different tasks, where the responsibility of the situation and its accomplishment lies in the hands of the interviewer. The interviewer searches for information about something (not everything) and this delimitation decides what is to be said. (Lantz, A. 1993) There are different types of interviews. The most common difference among them is the level of structure. An interview can be open, meaning that the interviewer is asking a wide, open question which the interviewee freely develops his or her mind about. In the other end of structural level is where the interviewee is asked specific questions with a multiple choice answering type, in a pre set order. (ibid) Lekvall & Wahlbin (2001) classifies the interview methods explained by Lantz (1993) as being personal interview, telephone interview, internet inquiry and inquiry,


16

sorted in order of structural level from low to high. Lantz (1993 p. 21) means that out of these interview methods, only the two first can be used when collecting qualitative data. This is why only those two interview methods will be further explained.

Personal interviews

The advantage of conducting a personal interview is by Lekvall & Wahlbin (2001) the close to unlimited ability of asking different kinds of questions. This includes showing pictures or other illustrations while questioning. The drawbacks on the other hand are that it is time consuming and can be very expensive (ibid). Especially if the interviewer travels to its respondents, who might be situated world wide. All employees at GAWD are situated within the same factory complex in Köping. This circumstance makes personal interviews easy to organise. Together with supervisor at GAWD were decided that the advantage of making personal interviews at GAP outweigh the alternative, telephone interviews. The travel to the US is expensive, but could be combined with other professional purposes, which lowered the specific interview expense. However when being in the US, it is still expensive to travel domestically. That together with the low number of respondents at the GEC facility, left telephone interview as only choice. One and a half hour interviewing time was scheduled with every single respondent. An email containing purpose and other background information was sent in advance to the chosen informants. An interview guide was used at all times making sure not leaving any question behind, see Appendix 2.

Telephone Interviews

The advantages of conducting telephone interviews instead of personal interviews are that it is exceptionally cheaper and relatively fast. The main disadvantage is the restriction in interview time. Lekvall & Wahlbin (2001 p. 266) describes that a telephone interview normally can last for five to thirty minutes depending on the respondents interest in the research field. The respondent at GEC is fully involved in the topics asked and therefore also assumed to be interested in improving current situation.

Observations

Observations mean that the researcher with his or her own eyes records specific courses of events that are of interest to the research. The advantage of using this data collection method is according to Lekvall & Wahlbin (2001 p. 257) that events can be registered at full security and not depend on other peoples knowledge, remembrance or willingness of talking. Observations have been made by the author at both GAP and GAWD, however since at the time being member of Theta project it is at the same time regarded at action research, explained in section 3.1.


17

3.3.3 Study

Bergman & Klefsjö (2003, p. 214) proposes to investigate the results in the Study phase of the PDSA-cycle. This is to see if the implementing of the improvement, earlier conducted, was in fact successful, according to Bergman & Klefsjö (2003, p. 214) The collected empirical data in the Do phase is, in Study, processed compared to reference theories presented in chapter 4. Since both Plan and Do are systematically done, Study also becomes methodical to its nature. After prioritizing among improvement actions, final recommendations are given. A detailed picture of the Study process is seen in Figure 3-8 below.

Figure 3-8: Activities in the Study process

Analysis

According to Patton (1990, pp. 371-372), the challenge is to make sense of large amounts of data, reducing it’s volume, identify patterns and communicate the real meaning of the data. Each qualitative study will be unique; therefore, the analysis approach will also become unique (Patton 1990, p 372). According to Guba (1978) the researcher must deal with the problem of convergence when analysing data. Convergence is the problem of figuring out what data that fit together, according to Patton (1990). Patton (1990) further suggests the human factor to be the strength and at the same time, the fundamental weakness of qualitative analysis. The patterns of the empirical data were organised by putting answers to each question of the interview guide together. This work rendered the affinity diagram seen in appendix 4 and more detailed presented in chapter 5. The reducing of its volume was made by the respondent team when putting votes to the same affinity diagram, which are analysed using chapter 4 as reference.

3.3.4 Act

Bergman & Klefsjö (2003, p. 214) proposes the act phase to correspond to learning and gaining experience from the previous steps taken in order to avoid ending up with the same problem in the future. The act, or realisation phase of this thesis, will have to be up to GAWD to decide. The author however sees this thesis corresponding to the Plan-phase of a larger cycle of PDSA. Next step could be to implement all or parts of the conclusions and


18

recommendations given in chapter 7 which then corresponds to a Do-phase. This relation is illustrated by Figure 3-9, where the Thesis PDSA cycle rotates upward a rising line symbolised by higher customer satisfaction. It pulls product development at GAWD upwards the ladder of higher customer satisfaction. Future analysis and feedback is necessary to verify improvements made.

Figure 3-9: Thesis process in relation to GAWD product development quality improvements

3.4 Validity & Reliability

Reliability is a measure of how reliable the data in study is (Johannessen & Tufte, 2003). By that means the ability of repeating the results of the study. According to Lantz (1993) a way of increasing reliability in qualitative study is to use a guide as support during interviews. Validity is however a measure of how well the data represent the phenomenon that is being studied (Johannessen & Tufte, 2003). A way of strengthen the validity is suggested by Yin (1994) as by using multiple sources of evidence. The difference among validity and reliability is according to Holme & Solvang (1997) that validity can be explained as absence of assignable causes of deviation, reliability means absence of random such. When conducting a qualitative study, validity is less of a problem than in quantitative studies according to Holme & Solvang (1997). The reliability has been strengthened by using an interview guide. This guide had previously been sent out to the respondents, giving them time to think making remembrance less of a deviation factor. Further were several persons at GETRAG asked the questions in advance making sure they were understandable to employees in general. At the actual time of interview, the author did his best to ask the questions similarly and with as little influence as possible. The research validity has been strengthened by thorough planning and reading of reference theories, to ensure data collected meets thesis purpose. The questions have further been validated and discussed with an experienced academic. This person is Karin Schön, my supervisor at Luleå University of Technology. When talking about validity, it is most important that the respondents have needed knowledge to answer the questions asked. This was as previously described, discussed together with GAWD Project Leader at GAWD before deciding respondents. The total number of twelve respondents in a qualitative study, together with both using Top managers and subordinates, supports Yin’s (1994) statement of multiple sources of evidence.


19

With the position as resident engineer at GAP, as mentioned in section 3.1, communication with top management as well as blue collars came naturally. The role of resident engineer working at GAP for GAWD can further be illustrated by Figure 3-10. This strengthens the validity since own observations have occurred during an extensive period of time, forming a holistic view of problems in hand.

Figure 3-10: The author’s role as resident engineer in summer of 2006

To minimize drawbacks connected to certain research methods explained in this chapter, Nachmias et al. (1996, p. 206) suggest using two or more methods of data collection; defined as triangulation. Since findings in both observations and interviews have to some extent yielded consistent empirical results, the validity has been further strengthened. Another source of assignable cause of variation is the author writing this report on his own. Two students could have validated their methods used, in a more satisfying way. The study was however initiated by the author together with Senior Quality Manager and Projects Manager which left me alone as only choice. This was compensated to some extent through support by supervisor, other thesis workers and to the most, employees at GAWD.


20


21

4 Theoretical Frame of Reference

This chapter presents the boundaries of the research area and represents the academic sources

that support the analysis made and the decisions taken.

4.1 Total Quality Management

Before presenting the different theories, it is important to define the word quality. Bergman & Klefsjö (2003 p. 24) defines quality as the ability of a product to satisfy, or preferably exceed, the needs and expectations of the customers. Another, shorter definition by Juran (1954) is “fitness for use”, shared by Sandholm (2000, p. 11). The above definitions can both be explained as regarding quality as something decided by customers. The meaning of Total Quality Management (TQM) can be described as the whole concept of values, methodologies and tools to achieve higher customer satisfaction to a reduced amount of resources (Bergman & Klefsjö, 2003, pp. 34-35). The connection between quality and profitability may be difficult to identify and, according to Sandholm (2000, p. 26), is often ignored by top management in benefit of pushing sales, and lowering costs. The aim of TQM is to increase both external and internal effectiveness. This can be exemplified by having a satisfied customer who keeps coming back, leading to increased profitability (Bergman & Klefsjö, 2003). Another intention is to reduce costs for poor quality, which can be as high as 10-30 % of turnover (Sörqvist, 1998). As to clarify the relation between higher quality and increased profitability, Bergman & Klefsjö (2003, p. 52) developed a model seen in Figure 4-1.

Figure 4-1: Relation between higher quality and improved profitability (Bergman & Klefsjö, 2003)


22

The basis of TQM and at the same time, the values that form the nuts and bolts for achieving higher quality, are by Bergman & Klefsjö (2003, p. 36) called cornerstones and presented in Figure 4-2. Each of the values will briefly be explained below.

Commited leadership

Focus on

processes

Continuous

improvements

Base decision

on facts

Let everybody

participate

Focus on

customers

Figure 4-2: The basic values (cornerstones) of Total Quality Management (Bergman & Klefsjö, 2003, p. 36). The name of the lower right cornerstone is by the author changed from “committed” to “participate”, since perceived a more proper translation from its in Swedish written origin.

Focus on customers

Quality is valued by the customers, in relation to their own expectations. Focusing on customers means finding out what they want and need, trying to fulfil them in the product development process. It may be difficult for customers to state their needs, and it takes considerable empathy to understand what they actually require. Focus on customers does not only apply to external customers, but also internal because having satisfied external customers in the long run, takes employees with opportunities of performing a good job. It is essential for the company that employees feel satisfied in their current situation. (Bergman & Klefsjö, 2003, pp. 35-38)

Let everybody participate

To have a successful quality work, it is fundamental to create incentive for participation in the work towards customer satisfaction. That includes being actively participating in the decision making as well as improvement work. Communication, delegation and training are contributing factors to everybody’s commitment. The ones given chance to do a good job and are recognized for it, will also be committed to their job future wise. (Bergman & Klefsjö, 2003) Participation and commitment are further achieved through delegating responsibility and authority, and the effect from it can be explained by a model presented by Bergman & Klefsjö (2003, p. 46), seen in Figure 4-3.

Figure 4-3: Vicious and good circle related to delegation of authority and responsibility (Bergman & Klefsjö, 2003, p. 46)


23

Base decision on facts

Quality beliefs encourage to base decisions taken from facts rather than letting random factors be of importance in the judgment. This is valid not only regarding systematic collection of customer needs and requirements but also in the work connecting them to the manufacturing business. (Bergman & Klefsjö, 2003) Usable tools could be the Seven Management Tools explained in section 3.3.1 Plan.

Focus on processes

A process can be seen as activities repeated over time. It aims to describe a flow from input of information or materials to an output with purpose to satisfy its customers. To focus on processes further means to put concentration to what the system is producing and the results it generates, rather than giving attention to individual products or employees. It also highlights employee’s personal contribution to the end output, which may be conducive to motivation. (Bergman & Klefsjö, 2003)

Improve continuously

Customers constantly demand new technologies and products to higher quality, making continuous commodity quality improvements, of the essence to companies. A company which stops improve its processes will soon prevent itself from performing well. Cost of poor quality can, as earlier described, may be as much as 10-30 % of sales (Sörqvist, 1998) which is one factor alone motivating continuous quality improvements. (Bergman & Klefsjö, 2003)

4.2 Customer satisfaction

When talking about customer satisfaction it is important to put it in relation to quality. Customers require experience with a product to be able to determine how satisfied they are with it. Quality, however, can be perceived without actual consumption experience (Oliver, 1993). Research studies shows customer satisfaction to be dependent relative value (Zeithaml, 1988), hence also makes it dependent relative price, which quality of a product or service not in general need to depend relative to (Anderson et al., 1994). Further according to Anderson et al. (1994), quality is customer’s currently perception of a good or service, when customer satisfaction is based on customer’s past, current as well as anticipated experiences of goods or services.

4.2.1 Quality dimensions and relative importance

SERVQUAL is a method used for measuring service quality developed by Zeithaml et al. (1990), and was at first based on ten dimensions. These ten dimensions were later reduced to five since several of the original had correlation among themselves according to Zeithaml et al. (1990). The SERVQUAL questionnaire consists of 22 statements covering the five dimensions seen in left column of Table 4-1. The instrument can by a company be used to calculate its overall quality of service as perceived by customers, according to Zeithaml (1990, p. 177). The relative importance amongst the dimensions was studied and regardless of service, reliability was proven most important to customer satisfaction, according to Zeithaml et al.


24

(1990). Tangibles were left as least important in the assessment of service quality. See Table 4-1 for complete information.

Table 4-1: Dimensions of quality service and its relative importance to satisfaction, as perceived by customers in SERVQUAL study (Zeithaml et al. 1990 p. 28)

Dimension Weight Definition:

Reliability 32% Doing what promised

Responsiveness 22% Willingness to help customers and provide prompt help

Assurance 19% Conveying trust and confidence

Empathy 16% Caring, individualized attention the firm provides its customers

Tangibles 11% Appearance of physical facilities, equipment etc.

4.2.2 Gap model

There may be several different reasons for a customer to be dissatisfied with the quality of a product or service, resulting in poor customer satisfaction. A model of explaining causes of customer dissatisfaction has been developed by Zeithaml et al. (1990). Zeithaml et al. (1990) focuses on analysing the gap in the service expected by the customer and the actual perceived service. The possible negative difference between service expected and actual service provided is further explained by four more detailed gaps, see Figure 4-4. The Gap model was originally presented to explain service quality, but according to Bergman & Klefsjö (2003) the Gap model can also be used to explain dissatisfaction in quality of products. The complete model and its different gaps as presented by Zeithaml et al. (1990) are briefly described below.

Word-of-

MouthPersonal Needs

Past

Experience

Expected Service

Perceived

Service

Service

Delivery

Service Quality

Specifications

Management Perceptions

of Customer Expectations

External

Communications to

Customers

Customer

Company

GAP 1

GAP 2

GAP 3

GAP 4

GAP 5

Figure 4-4: The Gap model as presented by Zeithaml et al. (1990, p 46)

Gap 1

The difference between what customers expect and what management perceives they expect. This gap arises when management does not understand what the customer considers to be critical to quality. According to Zeithaml et al. (1990 p. 52) a difference can on the provider’s side be caused by; (1) lack of marketing research orientation, for example


25

inadequate use of market research findings, and lack of interaction between management team and customers; (2) insufficient upward communication, from contact personnel to management, and (3) too many levels of management separating contact personnel from top management. Gap 1 is normally considerably larger in service companies than in manufacturing firms, according to Bergman & Klefsjö (2003, p. 324). One way of closing Gap 1 is, according to Zeithaml et al. (1990, pp. 56-57), to research intermediate customers and their needs and expectations, which can be very useful in obtaining information about end users.

Gap 2

The difference between the company’s perception of customer expectations and the service quality specifications. According to Bergman & Klefsjö (2003, p. 325) it is sometimes difficult to make the customer’s voice heard in the design process. Gap 2 is a wide gap in many companies (Zeithaml et al. 1990). Main reasons for a difference in Gap 2 are (1) insufficient commitment to service quality, (2) lack of perception of feasibility, (3) inadequate task standardization, and (4) absence of goal setting. If the company is lacking management commitment to service quality, a wide Gap 2 is guaranteed. Example of such can be, management focusing on cost reduction and short-term profit, since it is easier to measure and follow. (Zeithaml et al. 1990 p. 72) An action to close Gap 2 is to obtain strong management leadership, where the commitment to quality constantly and visibly is expressed to middle management.

Gap 3

The difference between the specified service and the service delivered. This third Gap occurs according to Zeithaml et al. (1990, pp. 89-107) if employees are unwilling or unable to perform a service according to specifications. Reasons for this can be differences in theory and real life, and if the specifications are too complex or not aligned with company culture. Reasons causing Gap 3 can according to Zeithaml et al. (1990) be, (1) the personnel delivering the service have not been part of the service design, (2) role conflict, (3) poor employee job fit, (4) lack of teamwork, (5) role ambiguity, and (6) poor technology job fit. The most important actions to close Gap 3 is building teamwork, allowing team members to participate in decisions and success of the whole group (Zeithaml et al. 1990, p. 108). Building teamwork is not only regarding internal customers and groups, but also towards external customers. (Zeithaml et al. 1990, p. 109)

Gap 4

Difference between the service delivered and the promised service. Zeithaml et al. (1990) consider the difference in delivered and promised quality arise when a company is not accurate and appropriate in its communication, leading to high potential of over promising. Partly, a difference in this gap can occur from not informing customers of quality efforts made, which are not visible to them. Some reason for this gap is (1) insufficient communication within the company, and (2) propensity for over promising. An action to close problem (1) is by opening channels of communications among operations and sales/HR/customer contact personnel according to Zeithaml et al. (1990, pp. 118-120). This can be made by frequent team meetings or workshops where team members allow each other to understand goals and constraints of one


26

another. As key actions in closing propensity for over promising, Zeithaml et al. (1990, pp. 123-127) suggest emphasizing primary quality determinants, managing of customer expectations and help customers understand their role in creating prerequisites for quality service.

Gap 5

Difference between customers expectations and perceived service. The fifth gap is the result of the earlier four. The judgment of good or poor service quality lies in the hands of customer’s perception of the actual service delivered, in relation to expectations, according to Zeithaml et al. (1990).

4.2.3 The Mushroom effect

Bergman & Klefsjö (2003, p. 314) presents a model explaining customer complaints, also supported by Zeithaml (1990, p. 54), where out of one hundred dissatisfied customers only five actually bother to make their complaint known to the company. Nevertheless, the one hundred customers who are dissatisfied feel no objection in telling neighbours, friends and acquaintances about their disappointment, according to Bergman & Klefsjö (2003). In total, as much as one thousand people may be informed by one hundred customers not satisfied, whilst only five of them actually reach company notice. Measuring only complaints is an inadequate source of information to customer satisfaction, according to Zeithaml (1990).

4.3 International business obstacles to quality

In this section common theories and values from different studies regarding international business will be presented. This is interesting since GAWD project team are members of an international product development process, thus affected by other manners & customs. Culture has according to Robbins (2003, p. 529) a strong potential dysfunctional influence on organizational effectiveness.

4.3.1 Cultural differences

Richard Pooley (2005) conducted a study of a joint venture among the two automotive companies Renault and Nissan. Japanese design engineers was sent to work alongside a German team of similar size and expertise. Already within days several arguments arose, being very costly and inefficient to both companies. According to Pooley (2005), the major problem can be explained as cross-cultural difference, yet it is extremely rare for organizations today to deal with ways new project teams run meetings, make decisions, manage staff and communicate. The trouble is, according to Pooley (2005) that each culture interprets other cultures in view of its own, and may make people loose faith of others who act deviant or strange compared to oneself. Further according to Pooley (2005), it is risky to imaging applying common sense as avoidance to cross-cultural problems. According to Robbins (2003, p. 530) the same problems as mentioned above by Pooley (2005) have occurred in a number of failed international acquisitions, where the primary cause has been conflicting organizational cultures, according to Carey et al. (1998).


27

Solutions to cross-cultural problems

Solutions to cross-cultural problems in organizations may be, according to Pooley (2005), [1] providing a combination of key personnel cross-cultural- and intensive language training, or [2] having a consultant joining the kick-off meeting helping team members learn about cultural differences. For the training to be successful (ibid); 1. You need to know your self and the behaviours normal to you. 2. Understand the facts that resolve your counterparts normal behaviour most importantly regarding;

o Time - importance of punctuality and sticking to deadlines o Truth – attitude towards honesty, right and wrong o Relationships – attitude towards senior people in the organization o Human condition – attitude towards risk and free choice o Communication – frankness and directness appreciated?

3. Knowledge of how others see you, especially any negative perceptions 4. Learn to adapt

4.3.2 Explaining cultural differences

From studying over 110.000 IBM workers in more than 50 different countries in 1968 and 1972, Geert Hofstede (2001) developed four dimensions (later becoming five) for examine cultural differences. The four different dimensions will briefly be presented below and can be said to explain cultural differences.

Power distance

Power distance concerns the sharing of power in general, and between manager and subordinates in particular (Hofstede, 2001). Further according to Hofstede (2001, p. 83), power distance is a measure of the perception of interpersonal influence between manager and subordinate, in the eye of the subordinate. The dimension expresses to which degree a culture accepts social inequality among its people. A culture with large power distance tends to be more hierarchical and have much inequality between superiors and subordinates, according to Wild et al. (2003, p. 67).

Uncertainty avoidance

This dimension identifies to which extent a culture is willing to avoid uncertainty. According to Hofstede (2001, p. 145), a culture with large uncertainty avoidance likes being surrounded by a feeling of security. In organizations, further according to Hofstede (2001), this may be symbolised with strong system of rules and rituals, making low employee turnover-ratios common. Example of rituals included in uncertainty avoidance are the way of writing and filing emails, accounting and planning. A negative effect indicated by large uncertainty avoidance according to Wild et al. (2003) is the difficult in implementing various changes within an organization. Cultures with low index of uncertainty avoidance are according to Wild et al. (2003, p. 68) more open to new ideas, and as an effect, have tendency to be entrepreneurial. Since people from low index of uncertainty avoidance cultures are


28

more open to change, the staff turnover in organizations can be expected to be higher. (Wild et al. 2003)

Individualism and collectivism

National cultures can be divided into being either individualistic or collectivistic, according to Hofstede (2001, p. 209). A culture scoring high on this dimension (individualist), value, according to Wild et al. (2003, p. 66), hard work and encourage entrepreneurial risk taking. People may focus on their personal goals in high individual scoring cultures, but are held responsible for their own actions. (Wild et al., 2003, p. 67) Therefore individualist cultures can be expected to have higher employee turnover rates. Individuals in cultures scoring low in this dimension (collectivist) feel strong alliance to groups, and work toward collective in front of personal goals in life. (Wild et al. 2003, p. 67) Success or failure in collective cultures tends to be shared among the work group.

Masculinity and femininity

A feminine culture attach higher value to social goals like for instance relationship, the physical environment and cooperation, according to Hofstede (2001, p. 279). Masculine cultures are rather attached to ego goals in life such as career, earnings and training. (Hofstede 2001, p. 281) Masculinity and femininity should not be confused and considered similar to individualism and collectivism according to Hofstede (2001, p. 293). The difference can be explained as “I” versus “we” distinction among individualism and collectivism when masculine and feminine cultures are distinguished by ego or relationship enhancement, regardless of group ties. (ibid)

4.3.3 Communication

Robbins (2003, p. 285) has outlined the steps between a source and a receiver resulting in transferring and understanding of meaning. The steps, all together, are by Robbins (2003) defined as the communication process and is presented in Figure 4-5 next page. Before communication can take place, a purpose is needed. The sender (source) initiates a message by encoding an idea from his or her mind according to Robbins (2003). A message is created, for instance when we speak, write or make a gestures. The channel is the medium through which the message travels, and is selected by the source. The receiver is the object to whom the message is addressed. Before receiving the message, the receiver has to decode and translated to something that is understandable to the receiver. Last part in the process is feedback to the source by the receiver. It is not until feedback has been given, any check can be made on how successful the communication process has been in transferring meaning. (ibid)


29

Figure 4-5: The communication process (Robbins, 2003, p. 285)

Communication and culture

Communicating within the culture of your own may be difficult to keep effective under the best of conditions. When communicating with other cultures, additional elements make it even more difficult to maintain a successful communication level. Munter (1993) has identified four specific problems related to cross-cultural language difficulties in management environmental communication.

o Semantics o Word connotations o Tone differences o Differences among perceptions

To keep misperceptions and misinterpretations at a minimum level, Stephen P. Robbins (2003, pp. 302-305) proposes to asses the cultural context of the counterpart. The cultural context influences the meaning individuals take from what actually is said or written. Robbins (2003, p. 304) further describes high context cultures, such as China, Korea or Japan, to rely heavily on non verbal cues when communicating with others. It might even be what is not said that is more important than what actually is said. The official status, reputation and place in society weigh considerably much in high context cultures according to Robbins (2003). In difference to high context cultures, people from European or North American culture’s rely essentially on words, and belongs to low-context cultures, for details see Figure 4-6 below. Communicating in high context cultures implies considerably more trust by both parties. Insignificant and casual conversation is important in reflecting the desire to build a relationship and trust in high context cultures, according to Robbins (2003).

Figure 4-6: Examples of cultures classified from low- to high context cultures. (Robbins, 2003 p. 304)


30

4.4 Quality and product development

As described in 1.1 Background, it is even more important today to conduct efficient product development processes, both relative time and total amount of money spent. Bergman & Klefsjö (2003, p. 58) presents a model explaining the relative cost of design changes in product development, seen in Figure 4-7. The cost of making a design change increases to the power of ten, when sequentially moving from one step to another in the development of a product.

Figure 4-7: Relative cost of design change in product development (Bergman & Klefsjö, 2003, p. 58)

Sullivan (1986) conducted a study of number of changes made in product development in a company from Japan respective one from America. The result can be seen in Figure 4-8.

20-24

MONTHS

14-17

MONTHS

3 MONTHS

MASS

PRODUCTION

3 MONTHS

Figure 4-8: Number of changes conducted in a Japanese and an American company (Sullivan, 1986)

According to Ulrich & Eppinger (2004), organizational difficulties in product development, mainly lie in level of power to the project manager. If a project manager attributed limited power, or in other words lack of authority with respect to function managers, it is either not sustained by top management. Ulrich & Eppinger (2004) defines this as lightweight project manager. The opposite is when a project


31

leader has a degree of independence and authority in relation to the budget at his or her disposal and has authority to allocate resources (called heavyweight). (ibid)

4.4.1 Product Part Approval Process (PPAP)

According to Automotive Industry Action Group (AIAG), the purpose of PPAP is to provide evidence that all customer engineering design records and specification requirements are properly understood by the organization. Further is also the purpose to ensure that the manufacturing process has the potential to produce products consistently meeting these requirements during an actual production run, at the quoted production rate. (PPAP Manual, 2006) According to the iSix Sigma website (2006), the Production Part Approval process outlines the method used to approve service and production commodities in the automotive industry. The process of completing PPAP, can be explained as a structured procedure of documenting records from sample to set production part, divided into 18 steps, see Table 4-2. The process of PPAP is based on QS9000 and adapted to TS16949:2002 quality management system (PPAP Manual, 2006), and the Part Submission Warrant (PSW) shall be signed by customer upon completion of all required documentation. The signing of PSW is at the same time a final sign-off that the PPAP process has been followed. Customer and supplier agree upon if all steps need to be accounted for in the PPAP documentation. Agreed submission level sets the evidence required for completed PPAP process. In level one, only the PSW is required whilst in the highest –five-, the PSW with product samples and complete supporting data seen in Table 4-2, are reviewed by customer at its manufacturing location.

Table 4-2: The 18 steps of Product Part Approval Process (AIAG PPAP Manual, 4th Ed. 2006)

No. Data No. Data

1 Design Record 10 Performance/Material Test Results

2 Engineering Change Documents 11 Capability Study

3 Customer Engineering Approval 12 Lab Documents

4 Design FMEA 13 Appearance Approval

5 Process Flow Diagrams 14 Sample Parts

6 Process FMEA 15 Master Sample

7 Control Plan 16 Checking Aids

8 MSA 17 Customer Specific Requirements

9 Dimension Sheet 18 Part Submission Warrant (PSW)

Special Characteristics

According to AIAG, a Special Product Characteristic is a product characteristic for which reasonably anticipated variation could significantly affect the product’s safety, or is likely to significantly affect customer satisfaction. The special characteristic is indicated on drawing by a <M> sign if Major risk, <C> if critical risk and <A> if liability risk (Internal training material, 2006). All special characteristics are obligated to be controlled by Statistical Process Control (SPC), and showing capability of Cpk>1.33. All special characteristics are presented in the no. 11 data sheet, seen in Table 4-2. Special characteristics are the output of D-FMEA and P-FMEA processes.


32

4.5 Pareto diagram

After making a study of wealth in Europe in the eighteenth-century, Italian economist Vilfredo Pareto found that 80 percent of the wealth was held by 20 percent of the population, according to Harry et al. (2000, p. 141). Vilfredo Pareto went on finding that same 80/20 principle in numerous of other applications, among them was found that 80 percent of defects are traceable to 20 percent of the different defects that can occur (Harry et al. 2000). The 20 percent of the defects can be referred to as the “vital few” and the rest 80 percent as “trivial many”. To produce maximum result, companies should focus on the “vital few” since they generate the highest costs, hence generate greatest saving potential.

4.6 Affinity diagram

Affinity diagram is member of the seven management tools presented in section 3.3.1 Plan. However a more detailed description is necessary. The affinity diagram is powerful in creating structure to a large amount of data, and collecting them according to affinity (Klefsjö et al. 1999). The work of creating an affinity diagram is as many other management tools, preferably made in group, where everyone brainstorms their thoughts and beliefs to a problem in focus. No criticism aloud. According to Klefsjö et al. (1999) the aim of the Affinity diagram is to get enhanced comprehension of what the root cause, thus the most important problem, may be.


33

5 Empirical result In this chapter the data collected is presented, starting with introducing the Product development at GAWD, followed by more specific information of the Theta project, ending up with interview, focus group and observation data.

In the process of gathering information of problem areas to base improvement suggestion on, the focus has been to investigate both the experience of such at GAWD and the perception of ditto by its customer. How this mindset has evolved is described in chapter 3 Method. Information presented in this chapter is based upon interviews, focus groups and observations. To understand the different phases of product development and its part of the business, it is important to understand the general process of product development at GAWD. This is why this section begins with an overall introduction to the process of developing new products at GAWD.

5.1 Product development at GAWD

According to main process map at GAWD (Business Management System, 2006), three core processes are identified, Quotation to Order, Product Development and Order to Delivery. In time they are ordered as seen in Figure 5-1 below. Out of the three, Product Development contains the initiation of new projects.

Figure 5-1: Core processes at Getrag All Wheel Drive AB in Köping, Sweden

5.1.1 GAWD Gate system

The model of managing projects, are at GAWD divided into ten different gates, see Figure 5-2, called Gate system. It can be explained as a conceptual and operational road map of cross-functional tasks moving from idea to launch of product. This effort is divided into distinct separate stages (gates) detached by management decisions. Members in the cross-functional project team must describe and show evidence of completed set of tasks before getting management approval to proceed to next gate, i.e. next step of product development. The individual requirements in each gate are specified in a comprehensive checklist, stored in Business Management System and can be seen in Appendix 3.

Figure 5-2: Getrag gate system, the process of projects (Business Management System, 2006)


34

Design Reviews

Checklists of tasks are connected to Design Review meetings as to the Gate reviews, seen in Figure 5-2. Design Review meetings differ from Gate reviews as being held at a considerably additionally detailed level, and as indicated by the name, focusing on design issues. A further difference is the non compulsory presence of GAWD management team.

5.2 Theta

The first external customer contact persons and concept designers are situated in Detroit. They were rewarded the contract of supplying AWD-systems, when GAWD in Sweden not yet was born, see section 2.1 History. The question GETRAG asked itself was where to manufacture and assemble the final product, i.e. setting up the supply chain. In November of 2004 the final plan was set, see Figure 5-3, letting the newly acquisitioned plant in Sweden do the final machining of intermediate- and input -shaft, along with complete pinion shaft and ring gear to the final Power Take Off unit, see Figure 5-4. The ring gear is welded to the intermediate shaft, making it three parts in total to dispatching from GAWD to GAP, seen in Figure 5-3. Delivering PTU components to a customer is a new situation for GAWD, from previously complete units. For the same reason it is predicted by the project team to be a project of less magnitude than previously experienced.

Figure 5-3: Theta PTU Supply chain

Figure 5-4: Theta PTU with indicated GAWD machined parts

Ring gear

Pinion shaft

Input shaft

Intermediate shaft


35

5.2.1 Organisation

The product development process at GAWD has eight main processes, called modules, running along the ten previously explained gates in Figure 5-2. The modules form the basis of the cross-functional project organisation and can be seen in Figure 5-5. Since GAWD entered Theta when the conceptual design was already set by GEC, only seven of the eight standard GAWD modules are applicable to GAWD in the Theta project. That is why the author has shaded parts of the product development process shown in Figure 5-5, to clarify GAWD responsibility in Theta. GEC are responsible for the design of all PTU parts in the unit, as well as all testing activities. Prototyping is not shaded since GAWD still need to send prototype parts to GEC for testing. The individual modules have a team leader with underlying part project leaders.

Figure 5-5: Process of product development as seen in Business Management System (2006). The inclined lines and the “Not responsible” label are added by the author, indicating processes not applicable to GAWD in Theta project. (RRT=Request and Response process)

GAWD entered the project in gate two, skipping the first two gates, zero and one, since being asked by GEC to send production samples right away. The missing gates were to be caught up later. GAWD, GAP and GEC are all within GETRAG, hence no general contract is written among them before they all are engaged in Theta. GAWD is at the time, at many places within the organization, still busy in its change management from former being a Volvo company. A sales department is under construction, making project leader responsible for requests processing from customer. This process typically involves cost calculations and feasibility agreements of incoming change requests. The product development process, Figure 5-5 above, is something that has been developed during the time of Theta project running, and was not developed prior start of Theta. This thesis is composed subsequent the end of project Theta, which present is controlled by regular production organization at GAWD. One employee has been appointed overall leader of the continuous interactions within Theta supply chain.


36

Below is the process of number one module “Project management, planning and closing” in Figure 5-5 seen in Figure 5-6. After every project, the project leader writes a “white book”, which is a summarizing document of conclusions from the recent project. It is intended to be read at start of new projects.

Figure 5-6: Process of module no. 1 Project management, planning, control and closing (Business Management System, 2006)

5.3 Problems

The personal interviews conducted, bring from an operational level, fourth a general picture of perceptions of problem areas. As well as historical, also present issues have been in focus during interviews. Areas are mapped by type, not connected to any specific function and gathered in an affinity diagram (Appendix 4). Further, the problems indicated are not presented in any reciprocal order.

5.3.1 PPAP documentation

As perceived by GAWD, no clear expectations and requests were by the customer given from the start regarding layout and information in the PPAP documentation. No regular meetings were either held. After a second person got responsible at customer site, communication came along better. GAWD Senior Quality Manager and Project Quality Engineer went to GAP in April of 2005. Together with customer the general layout and information issues regarding PPAP were sorted out. The forms used were mostly in Swedish, with English headers at the time. This was something not brought much attention by GAP, at least not something understood by GAWD. An interim Part Submission Warrant was signed by customer in end of year 2005, and everything was running ok. Later a third, fourth and in April of 2006 also a fifth person in order, got responsible for coordinating incoming GAWD PPAP documentation at customer. By time, higher and higher level of adoption to fully English forms was requested by customer, not satisfied with previously accepted information layout. Customer requests were, especially by fifth responsible, communicated very clearly and followed up in weekly meetings, very much appreciated by GAWD. The flow of design drawings has to some extent been sent to GAWD via email to Project Leader, who has distributed them to project quality responsible for updating PPAP documentation. Project quality responsible then sends updated information to GAP. Awareness, of which drawing revision is the latest, has been confusing in the


37

project both for GAP and GAWD. The lead time of implementing changes and distributing updates has by this gotten prolonged. Further source of confusion to GAWD was and still is to some extent caused by the usage of $ -signs in prints. No standard, to GAWD awareness, mentions anything about the sign in this application, or how to interpret it. If it is a special characteristic it will have to be kept under statistical process control. A third, issue of concern has been to get data from the Indian supplier, managed by GAWD Supplier Quality. The incoming quality level has been poor, making it difficult assuring outgoing quality, since incoming is not meeting requirements. PPAP process can not be closed towards customer if supplier is not meeting set specifications. The two main problem areas, according to GAWD has been [1] getting data from India and [2] not knowing what the customer expects. See Figure 5-7 for summary as presented in affinity diagram.

Figure 5-7: PPAP main problem areas

5.3.2 Communication

First, as stated in section 5.3.1, project team at GAWD did not get in contact with customer supplier quality function until fall of 2005. This made it hard to obtain information of expectations from customer at an early stage. Information sent between GAWD and GEC such as prints and new revisions of ditto are sent by email to manufacturing engineer and/or project leader and not always reaching the correct function on this side of the Atlantic. As new revisions are released, all parties are not always updated, which caused quality documentation not always based on correct revision reaching customer. Second, purchasing at GAWD was to manage the Indian supplier without getting information from GEC, but a price to pay. It is believed by GAWD that further information was in GETRAG possession, but no information or statistics from earlier projects or investigations of the supplier ever reached GAWD. GAWD are responsible for its supplier’s actions, and need to have pre-knowledge of its performance. Any data available giving information obtained in the work of


38

choosing the Indian supplier would help purchasing department in the upcoming work. As well as a poor communication of information back and forth to the US, starting up communicating with supplier in India was very difficult for a long period of time. It came along better in mid 2005 after having at least two Swedish engineers stationed in India since middle of 2004, to GAWD expense. After conducting first supplier evaluation, alerts were communicated to GAWD management without any actions taken. A possibility of changing supplier was never an opportunity since a contract already had been signed by GEC. Time difference is no element possible to change in it self; nevertheless all parties have been influenced by it and, to communication, it has had a negative effect. Compared to Sweden, the United States is minus six hours and India, plus five and a half. Telephone meetings have mainly been held in the afternoon Swedish time. In general, the time difference has increased the use of email as means of communication. The different parties have attended meetings writing their own meeting minutes, which have differed from each other afterwards, since interpreting things differently. Members of project team also mention uncertainty and unawareness of who to send information to at customer. Several key employees from purchasing department as well as manufacturing engineering had to go to the supplier in India, setting up machinery and teaching manufacturing skills. Home operation has by that suffered from shortage of resources. Many key personnel not being present at GAWD in Sweden rendered difficulties in communicating among project team and purchasing at GAWD. Another confusing factor negative to communication is having different people travelling to India over time. They have to some extent been employees having ability to go but also adequate skill. It has not been clear to rest of GAWD organisation who is in charge or who to make contact with in specific issues at purchasing department. See Figure 5-8 for problem summary as presented in affinity diagram.

Project team

manufacturing and

purchasing having

few meetings

Several different

people involved at

different times at

purchasing

Big time differance

among US/Sweden/

India

Setting up

communication with

India

No contact with GAP

SQA in beginning of

project

Getting no

information

regarding the Indian

supplier

Knowledge of who to

send information to

at customer

Problems in

communicating

among companies

Problems in

communicating

within GAWD

Communication

Figure 5-8: Main problem areas related to communication


39

5.3.3 Cultural inequalities

GAWD faces in Theta several new business cultures, a new German owner of majority, an American customer and a new Indian supplier. Differences in behaviours related to cultural inequalities were after a short while obvious, but nothing more than common sense has been applied to solve inequalities. GAP and GEC has no specific knowledge about Swedish culture, as well as GAWD not knowing the culture of its American colleagues nor the external customer, prior Theta project start. Among the most obvious inequalities between America and Sweden indicated by GAWD respondents, is the manner of sending all managers involved a copy of email conversations, not common at GAWD. Swedes are in general being quiet and restrained compared to Americans who speak broadly and need a lot of information in presentations, as an example. Ability of understand and interpret customer requests later transforming them into tangible actions, has not been clarified to people in direct contact with customer. Several of the respondents mention it useful to their own holistic view and understanding, to physically be at the customer plant. Then expectations have been better understood, but converting the new cognizance to other project members at GAWD has still been problematical. The biggest cultural inequality involves Indian culture. Purchasing department had previously managed suppliers from Asia, but not India in particular. The task of develop a new production line together was new to them. Other people with no direct contact with India does not understand how it is to deal with them, blaming the organization for inability of manage the Indian supplier. Time apprehension has been problematic, where Indian culture allows non punctuality and leaving from meetings too much larger extent than Swedish. Language difference has also made it very difficult in keeping regular conversations. No one of the respondents has gotten any cultural training in particular. One respondent recalls taking part of a one day India business culture-class in Stockholm, Sweden, during time of Theta project.

Figure 5-9: Problem areas related to culture


40

5.3.4 Transition management

Something that can not be ignored is the reality of GAWD parallel to Theta face a transition from a Volvo to a GETRAG company. Managers are to large extent, at the start of Theta, busy in forming new processes and methods of working. Having no previous experience with GAP or the external customer also contributes to a larger distance in terms of comprehension from the start. A mental fear of a new situation, has to some extent kept GAWD from satisfying customer requirements. See Figure 5-10 for problem summary as presented in affinity diagram.

Figure 5-10: Problem areas related to transition from Volvo to GETRAG

5.3.5 Organisation

As mentioned in section 5.2.1 Organisation, a sales department is under construction during most of Theta project. This has made project leader responsible for the Sales, Manufacturing Planning, Project Management as well as Project Controlling modules, seen in Figure 5-5 section 5.2.1. In Figure 5-11 the organisation chart as well as relationship to the product development process is presented. In general there has been too much work on project leader’s shoulder, especially when large parts of GAWD organisation is busy adapting to GETRAG from Volvo (section 5.3.4), not giving Theta priority.

In beginning of Theta, GAWD had a project organization adapted to one customer (FORD/Volvo) and one specific type of assignment. This means the organisation is being guinea pig of a new way of operate. New for project leader is further being responsible of purchasing and logistics towards customer, from before only manufacturing planning.


41

Figure 5-11: Project organisation, as issued 2006-04-11. Dashed labels added by author to make connection to GAWD product development process in Figure 5-5.

After purchasing completed a supplier evaluation process turning red, i.e. not being approved, at the Indian supplier, it was obvious to them that GAWD faced two alternatives; [1] need of extra managing resources to help the supplier onsite and/or [2] alternative sourcing. This message was given to management team without immediate response. Purchasing manager admits he could have been more distinct in his leadership, and emphasised the urgent situation better and earlier to management. The contract had been signed by GEC making alternative [1] the only possibility, sending people to India. Purchasers, preproduction engineers and material planners relieved each other in India, teaching supplier in day to day operations. More or less two-three people have been at supplier since beginning of 2005. This has made it impossible for the rest of GAWD organization to know who to contact in certain matters as well as purchasing department lacked resources towards other projects. In end of 2005, purchasing was given further resources, but then it was too late. The steering team, seen in Figure 5-11, is the supporting and managing function to projects. It is represented by GAWD management team including managing director. Together, Steering team and project team are to meet regularly. In Theta, steering team meetings were held in late 2004 and beginning of 2005, then they stopped since the number of persons present in meetings was insufficient. This is indicated by some respondents to be when strong leadership was needed the most. See Figure 5-12 for problem summary as presented in affinity diagram.


42

Figure 5-12: Main problems related to organisation

5.3.6 Supplier

First, the supplier in India was chosen by GETRAG in the US. This was before GAWD entered Theta, hence had no chance in taking part of supplier evaluation preceding the decision. The production had to be built up from scratch, and against the clock. Local engineers and operators at the Indian supplier are desirable and head hunted to other industries in India, after gotten special training by GAWD engineers, leading to high staff turnover. Parts were received at GAWD as from beginning of year 2005. The incoming quality level was poor, and made 100% receiving inspection compulsory. The low incoming quality level of parts as well as low volumes, made it, as previously described in 5.3.1, impossible to approve quality from supplier. A negative spiral has spread it self internally according to some of the respondents, due to severe supplier problems from hearing the name of the Indian supplier, or simply India. A consequence is low motivation among employees and a domino effect, GAWD making own mistakes due to time pressure since forced to work overtime and do extra operations. See Figure 5-13 for problem summary as presented in affinity diagram.


43

Indian supplier

already chosen when

GAWD enters project

Delivering lower

volumes than

according to plan

Delivering high

levels of scrap

material

Having very high

staff turnover

Having low

engineering skills

Indian supplier

Inadequate skill

performance

Inadequate product

quality level

Choice of supplier

has not passed

through GAWD

supplier process

Figure 5-13: Main problems related to supplier

5.3.7 Collaboration

GAWD has had a customer with a customer-supplier relationship within the GETRAG umbrella, without any written contracts. Several of the respondents mention confusion and role ambiguity when asked upon the GETRAG overall project organisational structure. Roles within GAWD has to some extent been confusing, but general process awareness and relation to GAP and GEC operations is yet today missing, though getting better. The GAWD impression from GEC and GAP is that it should not question anything about customer operations, only deliver three parts within specifications, nothing more nothing less, though all being GETRAG companies. See Figure 5-14 for problem summary as presented in affinity diagram.

Figure 5-14: Main problems related to collaboration among GETRAG companies


44

5.4 Customer view

A general customer view of GAWD has been obtained through personal interviews at GAP and a telephone interview with GEC as described in section 3.3.2 Do. General expectation of GAWD by its customer GAP is to deliver on time, have good quality followed by correctly filled in documentation.

5.4.1 GAWD Potential improvements

A general improvement factor to GAWD in Theta indicated by both GAP and GEC is meeting and respecting deadlines with correct documentation. This is to the most connected to quality documentation, and interpretation of communicated expectations. Both GAP and GEC believe they have communicated expectations clearly, but see the problem to be GAWD not always understanding the meaning of the expectations. It is by that believed that GAWD do not have the cultural knowledge required. Brought up by respondents is also the GAWD’s ability of managing the Indian supplier, as well as question the authority level of its project leader. Internal GAWD communication among project team and purchasing department is seen by GAP as lacking. It is admitted that since GAWD appointed an overall project leader responsible for both incoming and outgoing management at GAWD, described in section 5.2.1, internal communication has become very much improved. Further potential improvements regarding PPAP documentation is the level of attitude towards customer requests from GAP. PPAP coordinator at customer perceives GAWD to defend or explain their own methods as correct, when it is GAP who has most experience with the external customer and its specific requirements. GAP further indicate a “over promise – under deliver” manner connected to documentation sent to them from GAWD. That regards incoming documents both to supplier quality as well as project department. Further confusion regarding documentation is new print revisions connected to PPAP reaching GAP. Whether GAWD have not understood the expectations communicated to them or not is nothing apprehended by GAP. Main problem with PPAP documentation and its long taking time is connected to having a forced supplier. One respondent put it like this: The Indian supplier know for sure that GAWD is going to buy from them, hence not doing their best. This problem is estimated by a respondent at GAP as corresponding to 60% of the problem connected to PPAP.

5.5 General goods and improvements

During personal interviews, key performance indicators were asked. Not everyone had anything to say, but the general impression can be seen from data in Table 5-1. The topics mentioned are presented in overall order of frequency, with most frequent in top of each column.


45

Table 5-1: Goods and improvements regarding GAWD in Theta project

GETRAG All Wheel Drive are in Theta:

According to GAWD: According to GAP:

Good at Good at

Solving urgent problems Quick to react

Conducting Run@Rate2 Participating in telephone meetings

Fulfilling demands Good in teamwork skills

Internal Collaboration Having the desire to succeed

Being honest (sometimes too honest)

Detailed and thorough in execution of work

Less good at Less good at

Interpret customer requests Meeting deadlines

Know about American culture Understanding how to fill in quality documentation

Understanding the customer Managing the Indian supplier Internal communication among purchasing and production Cultural knowledge

Expectation interpretation

Communicating among its purchasing and production

Vacation period planning

5.6 Improvement suggestions

Data from sections 0 (Appendix 4), 5.4 and 5.5 were presented to respondent team in a workshop named “Improvements in focus”. Suggestions of improvements were then generated by respondent team by using a Tree Diagram; results are presented in Appendix 5. The question asked was “How shall GAWD improve problem areas identified in Theta to reach higher customer satisfaction?”

2 Run@rate = Test if the production process has the ability to produce at quoted requirement and rate


46


47

6 Analysis The analysis chapter focuses at finding equalities or inequalities among theory and empirical results. This is made through determination of cultural differences, reasons for dissatisfaction, deciding gravity of problems, ending up finding major improvement areas.

Since quality is viewed from the eyes of the customer, this chapter will, after differentiating among culture, focus on the customer assessment which via own indicated problems gradually are broken down into actions providing higher quality. The results will later be analysed according to cultural differences, why the chapter begins with differentiating among traditions and customs.

6.1 Cultural differences

In Figure 6-1, the four dimensions of culture developed by Hofstede (2001) are shown in two different diagrams, explaining two each. Instead of presenting all different cultures originally examined by Hofstede (2001), four has been chosen by the author to be most interesting to this study. Sweden, India, the United States and Germany, since the first three affects GAWD directly in the supply chain, and the last indirectly, since being the GETRAG culture of origin.

Figure 6-1: Cultural differences along Hofstede’s (2001) four dimensions differentiating among cultures. (Which cultures to present have been adjusted by the author).

Looking at the left hand side diagram of Figure 6-1, Swedish culture is far more feminine than the other three cultures (Masculinity). Hofstede (2001) proposes feminine cultures to be characterised by putting relationship and cooperation in front of a more ego oriented mindset. Swedes can by this be said to be much more cooperation minded in general, than its three reference cultures. German culture is in Hofstede (2001) study, the most ego oriented culture, putting career and earnings in first room relatively speaking. Focusing on Individualism, which is not to be


48

regarded equal to masculinity, gives an indication of the United States culture as being most individualistic, i.e. value hard work and risk taking but are in organizations responsible for their own actions. Sweden and Germany are in this dimension some what less equally individualistic while Indian culture is the most collectivistic; hence feel the strongest alliance to groups. If instead looking at the right hand side diagram of Figure 6-1, Swedish culture is least expected to be avoiding uncertainty, according to Hofstede (2001). That, in organizations, can be symbolised with weak level of set rules and rituals, exemplified by the way of writing emails according to Hofstede (2001). India, United States and Germany are in that order defined as cultures more expected to seek feeling of security. When it comes to Power Distance, India is the culture scoring highest, making further distances among manager and subordinates common. United States, Germany and Sweden have closer distance among chief and employer with Sweden scoring the lowest. Robbins (2003) proposes to asses the context of a culture when mapping differences among such. India is the one culture of the four mentioned that can be identified as high context and value body language and what is not said to be more important than what is actually communicated by words. The other three mainly rely on what is verbally communicating.

6.2 Customer satisfaction

According to Table 5-1, the issue causing most customer dissatisfaction is not meeting deadlines and understanding how to fill in the PPAP documentation. An over promise – under deliver situation is being mentioned. Meeting deadline with documentation after made agreement can be connected to reliability, seen in Table 4-1 now modified and seen in Table 6-1. Reliability has the greatest influence (32%) of a customer’s total impression of delivered service/product (Zeithaml, 1990) and Bergman & Klefsjö, 2003). The effect is that there is great propensity of the customer speaking negatively in general of the company delivering the service, if not being fulfilled. A risk is this negative influence being spread to people even not involved, as the Mushroom model (section 4.2.3) explains (Bergman & Klefsjö, 2003), perhaps giving an even worse reputation than deserved. Delivering documents or other information on time does not mean the customer will turn delighted. It will just become satisfied. The same goes for receiving documents long in advance. A customer does not become further satisfied if receiving peaces of documents two or three days in advance rather than when agreed. Any delay or potential misinterpretation from provider’s side has to be communicated in advance. This is an important improvement factor for GAWD, and influences the general impression of GAWD the most – reliability according to Zeithaml et al. (1990). A tendency of concentrating communication to times when quality issues have already happened has been observed. Exchanging skills and experience within GETRAG


49

value chain continuously over time, and listening and trusting its competence world wide, is a future step towards a further efficient transmission manufacturer. On the other hand, GAWD show evidence of performing well in solving urgent problems. This is verified by customer, who believe GAWD to be quick to react (Table 5-1), when facing an urgent problem. If comparing this factor to Table 6-1 of relative importance to customer satisfaction, it shows to be the second most important factor, according to Zeithaml et al. (1990). The three remaining dimensions of quality service by Zeithaml et al. (1990) can not, out from the empirical study, be distinguished whether perceived as fulfilled or not by the customer, therefore are they not mentioned.

Table 6-1: GAWD fulfilment of customer satisfaction dimensions

Dimension Weight Definition: Customer satisfied?

Reliability 32% Doing what promised No

Responsiveness 22% Willingness to help customers and provide prompt help Yes

6.2.1 Reasons for dissatisfaction

If using the Gap model developed by Zeithaml et al. (1990) to distinguish among reasons for customer dissatisfaction, it can first be determined that no past experience or word-of-mouth influences the customer’s expected service. Only the customer’s need does. The five gaps found in the Gap model will be analysed below. More detailed information of the Gap model can be found in chapter 4. The analysis is presented in order of number, not importance.

Management perception of customer expectation (Gap 1)

The PPAP will be in focus, since mentioned by customer as where most expectations interpretation was lacking. The management can be interpreted as project management team. Their experience from PPAP prior Theta is located to three projects, presented in Table 6-2 below. In the three previous projects using PPAP, all headers and layout has been according to GAWD own developed sheets, fulfilling QS 9000 standard. All information has previously been in Swedish, apart from little information in English to an earlier project labelled FIAT.

GAWD’s ability to interpret and manage customer demands, together with insufficient top management leadership and indistinct messages from customer has contributed to a wide difference among the perceived customer expectation and the actual expected PPAP. Actions diminishing this gap in future projects are:

o Further training of project members in PPAP

Table 6-2: Previous PPAP experience

Projects with PPAP Customer Language Notes

P24 Volvo Swedish

D219 Ford Swedish

FIAT Fiat Swedish/English

In all three first projects, GAWD have used their own routines and sheets, filled in required data and sent it for customer examination.

Theta GAP English

GAWD thought everything should be as before, except changing headlines to English. This was later changed to all English and according to customer used layout.


50

o Further customer expectation research in project

o Higher degree of interaction among customer and project management

Quality specification (Gap 2)

The absence of regular Steering Team meetings is evidence of lacking management commitment to Theta project team. Their commitment to quality can also be questioned, since cost reduction and deliveries are communicated in front of quality. Maximising the internal service quality will have effect of increasing motivation among employees. The potential improved support delivered from other departments as well as management in the organization will make it easier for individuals to fulfil their roles in the value chain and provide better service quality to supply chain customers. Indicating trouble in organising latest drawing revisions among the GETRAG companies raises a need of a common information database, making sure everyone uses the latest revision. The drawing and their new revisions in case of change are managed by GEC since having design responsibility. Setting objectives, trust of other party’s knowledge, as well as writing agreements/contract among the parties is as important as in any other customer supplier relation. The absence of strong leadership and goal setting has increased Gap 2. Actions closing this gap are;

o Strong management leadership and Steering team presence

o Top Management communicating quality commitment to middle management

o Defining scope of project together with GAP o Standardization of work through agreements o Standardization of information flow

Delivered quality (Gap 3)

Role clarity within GAWD purchasing, and also what role GAWD plays in the overall GETRAG project team is confusing to some respondents. Respondents also mention that they are clear on GAP in the US, being their customer, but others see them as partner and the external buyer as customer. Both of them can be seen as customer but important is to have the same apprehension. This is something not clear to all, and needs to be sorted out making everyone work towards the same overall goal and have total process awareness. In future projects, the supplying units would benefit from taking earlier part in the product development process and share their expertise. This interaction optimizes product and process design towards customer satisfaction. It will also make the manufacturing plant further involved and motivated (Bergman & Klefsjö, 2003), as far as feeling part of the project and valuable to it, not to mention enlarging profitability and competitiveness to the whole company (Figure 4-1). The indicated role conflict contributes to a wide Gap 3 (Zeithaml et al., 1990). The same is created by lack of teamwork and role ambiguity, which can be found both between GAP and GAWD as well as GAWD purchasing


51

and project department. The best way in closing this Gap according to Zeithaml et al (1990) applied to GAWD is by;

o Build further relationship and teamwork among purchasing and project department

o Build further teamwork with customer project team

Service delivered and promised service (Gap 4)

Perhaps Gap 4 is the most important gap to keep small since affecting reliability. This gap is in Theta widened by difficulties in getting products from the Indian supplier making it hard to keep promises. But what is not caused by the supplier is the lack of information why deadline will not be met and when will, by GAWD project team. Realistic dates must be set and communicated in advance if it will not be met. As Zeithaml et al. (1990) proposes part of the reason may have been caused by GAWD not informing the customer of quality efforts made. Even though Swedish culture is based on a reserved manner compared to the United States, it has to learn to inform the customer about its efforts to a larger extent. The author sees a lack of internal communication among purchasing and project team. Purchasing was short on resources, and many of them travelled to India, making it difficult for everyone within GAWD to be aware of who was in charge of purchasing. Face to face meetings were not either possible. Actions closing this gap are;

o Informing the customer of its important role in creating prerequisites for high delivered quality

o One person responsible for purchasing over time, not travelling too much

o Informing customer of quality efforts made

Customer expectation and perceived service (Gap 5)

No data can be found at GAWD of the customer perceptions of services/ products delivered. Such data is something useful in both getting to know yourself from a customer perspective as well as you about the customer.

6.3 Gravity of problems

The respondent team put votes to the collection of problems gathered in the empirical study (Appendix 4), leaving the result shown in Figure 6-2 on next page. All five members disposed 9-3-1 valued votes, giving 9 to what they perceived the prevalent problem affecting GAWD in Theta. The diagram agrees with the 80/20 rule developed by Vilfredo Pareto and described by Harry et al. (2000), where “no supplier choice conducted by GAWD” and “communication problems among companies” are the “vital few” (88%) and the rest are the “trivial many”. Focus should lie in solving the vital few problems.


52

Pareto analysis of number of votes in affinity diagram

Voting scale 9-3-1

69%

88%

95%98% 100%

0

10

20

30

40

50

60

70

No supplier choice

conducted by GAWD

Problems in

communicating among

companies

Project organisation Purchasing department Mental change from

being Volvo

Problem

To

tal

nu

mb

er

of

vo

tes

0%

20%

40%

60%

80%

100%

Co

ntr

ibu

tio

n

Figure 6-2: Result from voting process in affinity diagram 2006-11-24 by respondent team, answering the question: What has been the biggest problem affecting GAWD in Theta project?

6.3.1 Supplier Choice

As Hofstede (2000) proposes, Swedish culture can be described as feminine and used to low power distance, giving authority as well as responsibility to subordinates. American culture and to some extent also Germany not to mention India, further accepts distance between managers and subordinates. With that comes another culture of communicating. GAWD were not involved in the decision of contracting a specific supplier. This decision was taken above their head and prior GAWD involvement in Theta, given in their lap to take care of. Delegating responsibility should be accompanied with authority (Bergman & Klefsjö, 2003). Bergman & Klefsjö (2003) suggests an approach of improving profitability through internal and external quality (Figure 4-1) built upon everybody’s participation and basing decisions on facts (Figure 4-2). Since the sub supplier contract was signed, no possibility of changing supplier was available. The people taking care of the problem had not been part of the process design. No particular information was given from the people involved in the supplier choice process that actually took place. Altogether in view of a Swedish culture, based upon collaboration and relationship, this is a source of low motivation. No one in the respondent team believes they are better in conducting supplier choice processes than anyone else, but they want to participate. A parallel can be drawn to Figure 4-3, indicating lower employee motivation and inferior result if not delegating both responsibility as well as authority. Further it may cause lack of management confidence among staff who then can find motive in speaking negatively about the supplier and even about own top management, according to the Mushroom model (Bergman & Klefsjö, 2003; Zeithaml et al., 1990). Perhaps this problem has been magnified in proportion since Swedish culture is “feminine” to its nature (Hofstede, 2001), and value cooperation to further extent than if it would have been in a United States or in a German culture.


53

6.3.2 Communication

The second highest total vote was by the respondent team given to “communication among companies” in the product development process. If recalling the communication process (Robbins, 2003) in Figure 4-5, now seen in Figure 6-3, problems can be identified to the encoding, decoding and feedback processes. A higher level usage of email conversations, as time and language difference has contributed to, at the same time increases misunderstandings among value chain companies. As well as a need of expressing messages interpretable to receiver party, the receiver needs decoding skills. Since none of the project members have received any cultural education, the process of adapting and learning other parties every day natural routines, has taken a long time. According to Pooley (2005) it can be explained as cross-cultural problems, where knowing your self and normalities to you and the source are necessary conditions in order to understand and interpret your customer properly. Receiver party play an important role in informing and giving the source feedback of its way of expressing messages, letting him or her know about possible improvements.

Figure 6-3: Analysis of communication and problems indicated in Theta

An early Kick-off meeting accompanied with further face to face meetings within GETRAG is of most importance in building a relation and process awareness among project members. The inviting plant should be the one last in GETRAG supply chain, closest to customer. Early personal relationship diminishes misinterpretation and stimulates communication and cultural knowledge. The money spent on travel will be won in a holistic view and minimization of Gap 1 and 4 in the Gap model (Zeithaml et al., 1990). At the time for the Kick-off, Pooley (2006) suggest using an expert in the cultures in hand, teaching cultural differences and help team members communicating efficiently. GETRAG has during 2006 developed a cultural training program (Vision3 Aug, 2006) which all GAWD project members should attend in the beginning of a project. External communication is affected by internal communication, which has been deficient especially between purchasing and project department. Seen in Figure 6-4 is a schematic illustration of problem areas in communication identified to PPAP. The purchasing department is indicated by SQA (Supplier Quality Assurance) who has been low on resources during long period of Theta. Many members of purchasing department have been forced to more or less be stationed at the supplier in India and 3 GETRAG World wide company magazine

Source Encoding Channel Decoding Reciever

Feedback

Message Message Message Message


54

support them in setting up production to assure capacity and quality level. It has rendered role ambiguity and loss of communication to project department. The inadequate level of product and process quality at supplier in India has had the effect of a postponed approval of incoming PPAP to GAWD. If project department not know who is in charge at purchasing at a given time, the risk of information loss is great. Customer contributed confusion is also indicated in Figure 6-4 where communicated expectations have changed over time.

Figure 6-4: Communication problems in PPAP

If both parties agree upon using everything according to the latest PPAP Manual, in English it will in the future generate less confusion and misunderstandings among the parties. The need of preset statement of work and agreements valid over time is evident. PPAP agreements that would help in this problem and must be stated before the start of a project and kept during time running is;

o PPAP Part Submission level o Layout o Language o Interpretation of special characteristics

An agreement such as Quality Agreement developed at GAWD, has the purpose of solving the above stated problems. The document contains a contact list of all project members as well as standardizing responsibility in quality issues and everything concerning PPAP among the customer and GAWD. In Gate 0 (Figure 6-5) of the GAWD Gate System (Figure 5-2), the activity of negotiating Quality Agreement with customer can be seen. This activity has in Theta however never been signed, though efforts of communicating its purpose to the customer GAP. Among the activities in Gate 0, the author has marked five in rectangles in Figure 6-5. These have not been signed in Theta. Probably this is because both GAWD and GAP are members of GETRAG Group and the activities may have seemed manageable from applying common sense which this thesis show cause role ambiguity miscommunication and misinterpretations. The above mentioned problems could have been settled if the agreements in Gate 0 had been prioritized from the start. Gate 0 activities are at the same time as connected to communication also directly connected to closing of problems identified in the analysis of Gap 2 of the Gap-model in section 6.2.1.


55

Figure 6-5: Extraction of activities in Gate 0, with indicated missing agreements in Theta (GAWD Gate review, 2006)

Project organisation

The project organisation belongs, according to Figure 6-2, to the trivial many of problems affecting GAWD in Theta. Two changes regarding project organisation have however been made at GAWD during the time of this study that affects [1] strong leadership indicated in section 6.2.1 (Gap 2) and [2] internal communication which is identified as a problem both in sections 6.2.1 (Gap 4) and 6.3.2, which is why the project organisation is further analysed. First change is adding a position called “project management” to GAWD management team and is supported by the author. This would hopefully give the project team higher priority, which can be referred as supporting the heavyweight project leader described by Ulrich & Eppinger (2004). If project activities are given higher priority within GAWD production, the higher potential of project department designing an even better production process to future production. It would lead to a more efficient product development process, rendering higher customer value to lower use of resources, i.e. higher quality as defined by Bergman & Klefsjö (2003). A connection between having a committed steering team and strong leadership giving project high priority and authority (heavyweight project leader, Ulrich & Eppinger, 2004) and improved profitability can be seen in Figure 6-6. The customer and its needs should always be in focus, symbolised in Figure 6-6 by having a central role.


56

Figure 6-6: Connection between higher project priority and improved profitability

The role of the project management position should according to the author not be as main responsible for a specific project in hand, but developing the project organisation and allocating resources adapted to each new project. Focus should lie in creating prerequisites to each and every new project organisation to be as efficient as possible in satisfying the customer. Examples of actions coordinated by this position could be, project leader and cultural training offsite events. The second change in process within project organisation is having a program manager in each project, according to the model seen in Figure 6-7. Compared to Figure 5-11 in section 5.3.5, two project leaders labelled E (Development) and W (Manufacturing) will in large project have responsibility of five of the eight modules og GAWD Gate System and report to the Program Manager. The project leader seen in Figure 5-11, corresponds to the W project leader in Figure 6-7. Coordinating all modules was too much work on current project leader’s shoulder, which supports the change. Since previously describing a need of improving internal communication, especially among purchasing and project management, this new product development organisation is very much supported by the author. The program manager coordinates both incoming and outgoing flow of goods and service which adds a holistic view and higher potential of realistic and correct customer communication, important in closing Gap 4 of the Gap-model.

Figure 6-7: New project organisation setup


57

7 Conclusions & Recommendations The chapter focuses in summarizing the most important issues dealt with in analysis. This chapter is divided into presenting improvements recommendations at international level (Macro) and later specific to GAWD (Micro).

GETRAG product development would in the longer run probably financially benefit from increasing testing of materials and products together with the processes design in beginning of project. It will be costly in the beginning, but turn out more efficient in the end (Bergman & Klefsjö, 2003), see Figure 4-7 and Figure 4-8.

7.1 Macro level

GETRAG need a Program Manager equipped with strong leadership skills located closest to the external customer. This person is recommended to host a kick-off meeting for 2-3 days and inviting all Getrag project members. During this Kick-off, general objective, roles and responsibility as well as time planning agreements must be set in collaboration with all GETRAG companies. A recommendation is having an agent joining the kick-off, hosting a cultural training class, where learning each others manners and customs and especially how to adapt to them. Common sense will not be effective; it will cause misunderstandings and confusion which even obstructs communication throughout the whole project. The Kick-off will create an early incentive of common communication and understanding within the international product development team, decreasing confusion and winning valuable time. From the start to enhance process awareness, it is recommended to visit the customer at often pace, face to face. Figure 7-1 below illustrates the effect of the recommendations, where all three plants have agreed upon individual outer set perimeters (the agreements of Gate 0 in Figure 6-5) leading GETRAG Group to highest possible customer satisfaction to lowest total cost and shortest time. This is based upon the values customer satisfaction, committed strong leadership, collaboration, effective communication and the outer frame symbolizes process standardization. Delegating responsibility as well as authority is a motivating factor in reaching the overall objective, customer satisfaction.

Figure 7-1: All GETRAG parties focusing on customer satisfaction in same direction


58

7.2 Micro level

A Steering team committed to quality, communicating and supporting project team in their work is the first step to make at GAWD towards customer satisfaction. Steering team meetings must be held consistently and have the responsible people attending. Further prerequisite for high delivered customer satisfaction, is GAWD conducting a supplier choice process based upon deliverability, product quality as well as price paid. The project organisation at GAWD needs a program manager coordinating both incoming and outgoing activities at GAWD in projects, ensuring communication among purchasing and customer contact persons. The propensity of over promising may, by adding a Program Manager, be diminished and is important to so also do, since affecting customer satisfaction most negatively. This reorganisation has already started at GAWD and is supported by this study. What is further recommended is adding a Project Management function within GAWD management team, who does not manage any specific project, but organising and continuously improve the product development process. This adds authority to the project organisation as well as strong leadership. Project leader- and cultural training events could be activities managed by this position. Anyone in contact with customer from a foreign culture is recommended to presume receiving party not knows about Swedish culture or the process behaviour at GAWD, and has a responsibility of communicating any misunderstandings or quality actions made in home operations. Swedish culture is built upon collaboration, to some extent yielding unwillingness of bragging in general. GAWD is recommended to develop further extrovert ability since this is something further normal to the culture in the US. Figure 7-2 below indicates the important recommendations in improving customer satisfaction connected to the timeline of GAWD Gate System. Highlighted are activities of planning and training before the start of a new project as well as the importance of a Kick-off face to face, together with GAP.

Figure 7-2: Recommendations improving customer satisfaction and increasing long term profitability


59

The existing project management module of product development at GAWD is seen in Figure 7-3. The competence and resource assurance circled in the figure must include any training such as, culture, language or specific technical skills, beside number of man hours needed in the project. The newly added Program Manager should be responsible for this document in collaboration with Project Management in GAWD Management team. Theta shows the need of training regarding culture, language and technical skills needed in order to understand the customer correctly and above all, translate it into correct actions actually fulfilling customer demands. A simple but highlighting recommendation is to add “competence” to “resources” in the project management process seen in Figure 7-3. This puts focus on planning not only man-hours but also training activities adapted to a specific project and customer in hand.

Figure 7-3: Project management process change recommendation. Competence in the circle is added by the author to the existing process.

7.2.1 Frequent evaluation

The customer evaluation activity, indicated in bottom of Figure 7-2, is a recommended way of getting information of how the customer perceives GAWD, what its strengths and weaknesses are. Today GAWD collect their own conclusions from projects in a “white book” document in the very end of each project, seen far right of Figure 7-3. No customer feedback or expectations is collected in the “white book”. GAWD gain from actively be searching for activities increasing customer satisfaction, and finding them as quick as possible during projects. Measuring a general impression by a customer can be said to assess the decisive factor for how the customer will act in the future. The same is valid for the way the customer will speak about GAWD with others, recommending it and its AWD parts and products to others. This does not only concern external customers but also internal within GETRAG.

An evaluation sheet, useful in collecting a general customer satisfaction index (CSI) is presented in Appendix 6. By asking the customer of its perception of GAWD, gives feedback of what GAWD does either well or can improve. It will in the longer run make it easier to understand the external and end users. People responsible in engaging the CSI study should be Project Leader/Program Manager in each project, giving the customer project team a chance of filling it in. After collecting the qualitative and quantitative data, it should be summarized and generate an action


60

list. Within a short period of days or a week, this action list should be presented to the customer giving feedback from the recent made evaluation and explaining actions taken and expected date finished. If this feedback is not given, the customer may loose confidence in any improvements actually made and will not either fill in any future evaluations. The frequency of evaluation should in different projects be individually decided, since differing widely from each other both in time and scope. At least two times during a running project is recommended. Differences in data collected between made evaluations are information subject to analysis. Using a simple diagram of the average value of CSI and number of respondents gives feedback of any improvements made. The evaluations also physically show the customer of continuous improvement efforts made by GAWD, which is identified as an improvement factor affecting reliability. The source of information gathered from customer evaluations could even be interesting to show presumptive customers since it is an unbiased assessment of GAWD strengths and improvement possibilities. The evaluation sheet (Appendix 6) is at its simplest form. This is no coincidence. First, to measure the total impression gathers all aspects of the product development. Second, it will measure the perception of GAWD as partner in product development processes and the likelihood of the respondent to talk positively or negatively about GAWD, since based on total impression, according to Bergman & Klefsjö (2003). Third, any issue written as either good or as a potential improvement, will be the most significant one, since only having three choices and limited time in filling them in. Fourth, the GAWD administration time will be kept to a minimum, when having one quantitative- and at most six (if no comments) quantitative -data to handle by each respondent. All together, there is a high probability of catching twenty percent of the issues causing eighty percent of the problem, according to Paretos 80/20-rule (Harry et al. 2000), and that to lowest possible use of resources. According to Claesson (2006) this type of frequent evaluation would be very useful for continuous improvements of projects. Cleasson (2006) emphasises the need of follow up recorded issues together with customer in soon connection to conducted evaluation. All the data generated by the evaluation, or summarized, should be added to the “White book” of each project. It will make the “white book” contain even more valuable data than today, and may also to further extent actually be used. New projects then have the ability to read of old lessons learned and customer expectations, in the beginning of new projects.


61

8 Discussion This chapter discusses limitations and reflections of the study.

As to all research, the result is always influenced by the researcher. Some circumstances affecting the output of this study will be mentioned below. Since most empirical data come from interviews, the respondents and their actual information given, has a major effect of the outcome of this study. Any information given by a potential respondent not aware of the Theta project in detail, will add to a biased result. The choice of who to interview was taken by Project Manager and Theta Project Leader. This ensures every respondent are aware of the project and enriches the study toward its correct result rather than not. The interviews conducted at GAP and GEC were at first planned to be larger in numbers. This was however not possible, caused by unpredictable conditions and time limitation. A greater number of respondents at GEC and GAP could have validated the customer opinion and expectation, in a further satisfying manner. All interviews have been conducted individually and in conference rooms, making influence from other colleagues less of a disturbance factor. Since the author is a GAWD employee, influences from knowledge based upon long term relation and personal interest may to some extent form a certain unaware interviewer effect in interviews. The intention has been to ask the questions from the interview guide, without bringing in outside thoughts. A source of deviation is the author creating the headings and layout of the affinity diagram oneself. It is suggested as being a team exercise by Klefsjö et al. (1999). The respondents got a chance of presenting contradictions or other opinions to the affinity diagram, before putting votes to it. However since affinity diagram in detail was a new tool to all participants, there could be a possibility of them not knowing exactly what to look for, even though explained to. Further source of deviation is not all people interviewed did participate in the voting process of the affinity diagram, hence some people’s opinion creating input to the diagram was not heard. To separate among national cultures is difficult. Deviations among both occupations and geographical belonging within a culture can be assumed and bring some deviation to the Hofstede (2001) study. However it is interesting to differentiate among cultures in general and distinct among the rough similarities as well as non similarities effecting cooperation among them. The study was conducted in late 60’s early 70’s, and the prospect of the values to have changed since then should be seen as granted rather than as a possibility. It is however the largest study yet made and as Hofstede (2001, p. 145) self expresses it regarding one of the dimensions “Although uncertainty avoidance levels do fluctuate over time, the difference among countries on which the index was based are robust”.


62

It is appropriate to once again mention the Gap model measuring reasons for dissatisfaction. Obtaining a delighted customer from applying Gap model should not be expected, contrary disregarded, since the customer can not even tell what delight’s him or her. The theory was originally developed in explaining service dissatisfaction; however Bergman & Klefsjö (2003) deem its suitability to products as well. Some external affect of the design and choices of the report may lie in minor contradiction in satisfying two customers, Luleå University of Technology and the commissioner GAWD. Several different businesses should face similar problems like the ones dealt with in this thesis, as globalisation occurs in far more businesses than only automotive. The cultural aspect of the thesis discusses Swedish cultural and normalities to it. A firm engaged in Sweden – American activities would probably benefit from the results, but if outside Scandinavia or even Europe, some specific cultural aspects may most likely need to be applied before making any conclusions.


63

9 References The reference chapter is divided into the four sections books, papers, GETRAG and .

Books

Andersson, R. (1991) QFD- Ett system för effektivare produktframtagning. Studentlitteratur, Lund. (Swedish) Bergman, B. & Klefsjö, B. (2003) Quality from customer needs to customer satisfaction Studentlitteratur, Lund DaimlerChrysler Corporation, Ford Motor Company & General Motors (2006) Product Part Approval Process (PPAP) Fourth Edition, March 2006, Automotive Industrial Action Group (AIAG). www.aiag.org Deming, W.E. (1986) Out of the crisis. Cambridge University Press, Cambridge, Massachusetts Guba, E.G. (1978) Toward a Methodology of naturalistic inquiry in educational evaluation. University of California, Los Angeles Harry, M. & Schroeder, R. (2000) Six Sigma – The Breakthrough Management strategy revolutionizing the world’s top corporations. Doubleday, New York, USA. Hofstede, G. (2000) Cultural Consequences: Comparing values, behaviours, institutions, and organizations across nations 2nd. Edition, Sage Publications USA Holme, I.M & Solvang, B.K (1997) Forskningsmetodik: om kvalitativa och kvantitativa metoder Studentlitteratur, Lund (Swedish) Johannessen, A. & Tufte, P.A (2003) Introduktion till samhällsvetenskaplig metod Liber, Malmö (Swedish) Klefsjö, B. (1999) De sju ledningsverktygen Studentlitteratur, Lund (Swedish) Lantz, A. (1993) Intervjumetodik Studentlitteratur, Lund (Swedish) Lekvall, P. & Wahlbin, C. (2001) Information för marknadsföringsbeslut IHM Publishing, Gothenburg, Sweden (In Swedish) Nachmias C.F & Nachmias D. (1996) Research methods in the social sciences fifth ed. St Martin’s Press, Inc.

http://www.aiag.org


64

Patton, M.Q, (1990) Qualitative evaluation and research methods 2nd edition. Sage Publications, Inc. Robbins, S.P, (2003) Organizational Behaviour 10th edition. Upper Saddle River, NJ: Pearson Prentice Hall Sandholm, L. (2000) Total Quality Management Studentlitteratur, Lund Silverman, D. (2001) Interpreting qualitative data: methods for analysing talk, text and interaction. Sage Publications, London. Ulrich, K.T & Eppinger, S.D. (2004) Product design and development McGraw-Hill, Boston Zeithaml, V., Parasuraman, A., & Berry, L.L (1990) Delivering quality service: Balancing customer perceptions and expectations. USA. The Free Press Wild, J.J, Wild K.L & Han, J.C.Y (2003), International Business 2nd edition, Prentice Hall Yin, R.K. (2003) Case study research. Sage publications, London

Papers

Abdou, K. & Kliche, S. (2004) The strategic alliances between the American and German companies – A cultural perspective European Business Review Vol. 16 No. 1, 2004 Emerald Group Publishing Limited Altrichter, H., Kemmins, S., McTaggart, R. & Zuber-Skerritt, O. (2002) The concept of action research The Learning Organization Vol 9. No. 3 2002 pp. 125-131 MCB UP Limited Anderson, E.W., Fornell, C., & Lehmann, D.R. (1994) Customer Satisfaction, Market Share, and Profitability: Findings from Sweden Journal of Marketing, Vol. 58, No. 3 (Jul., 1994), pp. 53-56. Berawi, M.A. (2003) Quality revolution: leading the innovation and competitive advantages International journal of Quality & Reliability Management, Vol. 21 No. 4, 2004 pp. 425-438, Emerald Group Publishing Limited Bhatnagar, R. & Viswanathan, S. (1999) Re-Engineering global supply chains International Journal of Physical Distribution & Logistics Management, Vol 30 No. 1, 200. pp. 13-34 MCB University Press Dick, B. (1991) Action Research and Evaluation, Interchange, Brisbane


65

Carey, D. & Ogden, D. (1998) A Match Made in Heaven? Find Out Before You Merge, Wall Street Journal Nov. 30 1998 p.A22. Laszlo P. George (1999) Project management: a quality management approach The TQM Magazine, Vol. 11 No. 3, 1999 pp. 157-160, MCB University Press Oliver et Al. (1993) A Conceptual model of service quality and service satisfaction Advances in service marketing and management, pp. 65-86, JAI Press Greenwich Pooley, R. (2005) The model alliance of Renault and Nissan – How to work successfully with overseas partners, Human Resource Management International Digest, vol 13 No. 2 2005 pp. 29-32, Emerald Group Publishing Limited Sullivan, L.P (1986) The seven stages in company-wide quality control, Quality Progress May pp. 77-83 Sörqvist, L (1998) Poor Quality Costing Doctoral Thesis, Royal Institute of Technology, Stockholm Sweden.

GETRAG

Interviews are conducted within the period 2006-09-04—2006-12-21 BMS, Business Management System at GETRAG AWD 2006-09-04—2006-11-30 External Press material at GETRAG All Wheel Drive AB (2006) GETRAG All Wheel Drive Business Strategy 2006 (Internal material) Internal Training Material Produktkännedom AWD (In Swedish) 2006-09-04—2006-11-15 Internal Guide presentation, 2006-09-18—2006-10-30 Norestig A. (2006) Business with Asia - a GAWD absolute condition (in Swedish) Purchasing & Procurement Manager, GETRAG Magazine September 2006 p. 4

Internet

Book-IT, http://btj.bib.mdh.se/pls/bookit visited 2006-09-04 - 2006-11-27 DANA Corporate website, http://www.dana.com visited 2006-11-08 Emerald Insight, http://www.emeraldinsight.com visited 2006-09-04 – 2006-11-27 GETRAG Corporate Website, http://www.getrag.de visited 2006-11-06

http://btj.bib.mdh.se/pls/bookit

http://www.dana.com

http://www.emeraldinsight.com

http://www.getrag.de


66

iSix Sigma Website http://www.isixsigma.com visited 2006-11-27 Journal Storage, http://www.jstor.org visited 2006-09-04 – 2006-11-27 LIBRIS, http://www.libris.kb.se/index.jsp visited 2006-09-04 -- 2006-11-27 LUCIA, http://lucia.lib.ltu.se visited 2006-09-04 –2007-01-27 Volvo Cars Corporation, http://www.volvocars.se visited 2006-11-08

http://www.isixsigma.com

http://www.jstor.org

http://www.libris.kb.se/index.jsp

http://lucia.lib.ltu.se

http://www.volvocars.se

Appendix 1 – Table of Respondents

Site GAP Newton, USA GAWD Köping, Sweden GEC Detroit, USA

Respondent Project Leader Project Leader Purchasing Manager

Part Project Leader Part Project Leader

Supplier Quality Assurance Senior Quality Manager

PPAP coordinator No. 5 Project Quality engineer

Purchasing Manager

Sales representative

Quality Assurance

Appendix 2 - Interview guides

Interview guide GAP regarding project Theta Used Nov 14 – Nov 17 2006

Purpose The purpose of this master thesis is to identify structural problem areas arisen in the quality assurance of Theta at GETRAG All Wheel Drive AB in Köping, Sweden, and to suggest improvements.

General 1. What is your part in the Theta project? Member since? 2. Nationality? Getrag employee since? 3. Who is your main contact person at GAWD? 4. Have you had the chance to learn anything about Swedish culture? Expectations 5. What are your general expectations of GAWD? 6. Have GAWD asked you about your expectations? 7. Do you believe you have communicated your expectations clearly? Communication 8. How often would you say you participate in project meetings with GAWD? 9. How do you communicate on a frequent basis? 10. Have misunderstandings occurred? If yes, when? How often? What type? 11. Have you got the chance to visit GAWD? When? What purpose? 12. Have you seen your contact person by face? Has he or she been here in the States visiting you? 13. Have you experienced any communicational problems? When? How? 14. Do you have any ideas of how the communication level among you and GAWD could get better? Customer Needs 15. If you have complaints regarding GAWD, do you know who to contact? Who do you contact? 16. Do you believe you get the support expected? In time? 17. Have you ever been asked (or otherwise) about your needs and expectations? What? When? How? By whom? GAWD Key Performance Indicators 18. What is your general impression of the quality level of GAWD? Number 1-10 19. Can you state at most three things you believe GAWD are good at? 20. State at most three things they need to improve to better meet with your expectations?

Interview guide GAWD regarding project Theta Used Nov 1 – Nov 10

General What is your part in the Theta project? Member since? Who is you main contact person at GAP/GEC? What does the Theta project organizational chart within Getrag look like? Prerequisites Have you had any specific training before or meanwhile joining your current position? What? Have you got the chance to learn anything about other corporate cultures before entering this international project? When? How? Leadership Do you feel you get the support needed from your manager? In what way? Do you believe you get support from your colleagues? Communication How often would you say you participate in project meetings with GAP/GEC? Who at GAP/GEC are then involved? How do you communicate on a regular basis? Do you have a primary contact person? Have misunderstandings occurred? How? When? How often? Have you got the chance to visit GAP/GEC? When? What purpose? Have you seen your contact person by face? Has he or she been here in the Sweden visiting you? How often does that happen? Have you experienced any communicational problems? When? How? Customer Needs What is your idea of GAP and/or GEC? What do you believe the customer wants? Have you or any of your colleagues asked what the customer wants? Who? When? How? Frequently? Customer Service What happens if a customer has a complaint? Who is contacted? How are they documented and followed-up? GAWD Theta Key Performance Indicators Mention at most three things GAWD are good at Mention at most three things GAWD needs to improve

Interview guide GEC regarding project Theta Thesis Purpose The purpose of this master thesis is to identify structural problem areas arisen in the quality assurance of Theta at GETRAG All Wheel Drive AB in Köping, Sweden, and to suggest improvements.

General 1. Who is/have been your main contact person at GAWD? 2. How do you feel that collaboration has been like? 3. What are your general expectations of GAWD? 4. Have GAWD asked you about your expectations? 5. Do you believe you have communicated your expectations clearly? 6. Have you had the chance to learn anything about Swedish culture? Communication 7. How often would you say you participate in project meetings with GAWD? 8. How do you communicate on a frequent basis? 9. Have misunderstandings occurred? If yes, when? How often? What type? 10. Have you got the chance to visit GAWD? When? 11. Have you seen your contact person by face? Has he or she been here in the States visiting you? 12. Have you experienced any communicational problems? When? How? 13. Do you have any ideas of how the communication level among you and GAWD could get better? Customer Needs 14. If you have complaints regarding GAWD, do you know who to contact? Who do you contact? 15. Do you believe you get the support expected? In time? 16. Have you ever been asked (or otherwise) about your needs and expectations? What? When? How? By whom? GAWD Key Performance Indicators 17. What is your general impression of the quality level of GAWD? Number 1-10 18. Can you state at most three things you believe GAWD are good at? 19. State the biggest issues they need to improve to better meet with your expectations? Thank you!

Appendix 3 – GAWD Gate System checklist

Appendix 4 – Affinity diagram of problem areas

Appendix 5 – Tree diagram of actions improving customer satisfaction

How should GAWD improve problem areas identified

in Theta to reach higher customer satisfaction?

PPAP

Better adoption to

customer requirements

Take greater care in

listening to the customer

Order larger amount of

test material to our

processes

Start project with kick-

off face to face within

GETRAG project

members

Make individual tasks/

responsibilities clear to

everyone involved in

project before start

Organisation

Have more face to face

meetings within

GETRAG

Before project start,

create and communicate

project organization to

everyone involved

One overall GAWD

project leader

Having two project

leaders 1 Purchasing 1

other modules.

Consistent purchasing

responsible

GAWD Management

Team

Supplier choice process

must be be followed

Give distinct messages

valid over time

Rely on and listen

carefully to staff

resource requests

Create incentive for

better communication

and holistic

understanding within

GETRAG supply chain

Have a common time

plan within GETRAG,

which all can access

Develop a joint system

for information and

drawings within

GETRAG

Joint GETRAG system

for handeling of

customer requirements

Project leader to send

weekly information to

management team

Make agreements in

Product Development

process within Getrag

companies

Set GETRAG target

agreementsStatement of work Quality Agreement

Conduct Training in

other GETRAG

companies culture

Conduct training for

personal development

Further training of

Sales

Further training of

Project organisation

Commitment to steering

team meetings

Manufacture Engineer

meetings among PD

US/Germany

Improvements generated by

GAWD Respondent Team

2006-11-24 in Improvement in

focus -class

Documenting all

decisions made and

actions taken jointly

Appendix 6 – Evaluation sheet

2007:176 CIV MASTER'S THESIS International Product Development in Automotive...

Documents

Transcript of 2007:176 CIV MASTER'S THESIS International Product Development in Automotive...