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Global Supply Chain Management DaimlerChrysler/Nummi Case#4

Daimler-Benz considered one of the first manufacturing companies dedicated to the automobile industry in late 1920's, its line of production was luxury brands like Mercedes Benz, Smart & Daimler Trucks among others. Unfortunately the company was not having the acceptance expected in Europe; need of an evolution the way it did, business to be able to position itself in other markets like Asia and the United States. Chrysler Corporation is a vehicle manufacturer company with a base in the United States and is considered the third distributor of vehicles behind GM and Ford. Prior to the merge of General Motor, the company had many internal problems that wouldn't let it move forward in the industry; actually manufacture the following brands Chrysler, Dodge & Jeep among others.
Prior to the merger both companies differentiate from each other specially the different management and operation styles. In 1995 Chrysler had many labor problems due to the reduction in quality, re-calls and consumers dissatisfaction over 220,000 employees were lay-off. On the other hand the Daimler-Benz had a highly skilled workforce, job satisfaction, good relationships with German labor unions and managers getting involved on daily problem solving.
The strategy of the Daimler-Chrysler merger would create the fifth company in the world, in the industry by volume compared with GM, Ford, Toyota and Volkswagen. The company would take the name of Daimler-Chrysler and would be owned by a German financial group with 53% and U.S. group with 47%, with major shareholders such as Deutsche Bank, State of Kuwait, and Emirate of Dubai among others. The idea of the merger was described for the investors at the time a great idea because each would bring different segments to the process the manufacture, such as small cars, trucks, military and aeronautical products without almost becoming competition of each other. But at the same time many doubts were generated because the merger would require further negotiations with different sectors of the automobile industry that could generate problems in the chain of Supplement.
Company Culture was another factor in the Daimler-Chrysler merger, the company would have two bosses in two different countries (US & Germany) creating frustration in both companies by not agreeing on many aspects of the business. Another cultural aspect was that Chrysler had developed the ability to decrease the overhead cost in half their competitors, in contrast, Daimler shows a bureaucratic practice.
Comparing these two companies I can deduct that culture and management styles play an important role in the integration of the two companies. It was clear that Daimler-Benz needs Chrysler needed to strengthen its research process and obtaining the international focus needed. Chrysler needs Daimler-Benz needed to develop a chip automobile brand with Mercedes-Benz qualities for US especially.
NUMMI is another example of MFM, where two large automotive companies General Motors (GM) and Toyota joined in challenging venture at the end of the 20th century. GM needed to learn about the manufacture of small cars from Toyota and the same time Toyota was looking for an American partner that would help them to manufacture trucks, but they were facing a lot of restriction by the United States government.
General Motors recently had closed the plant in Freemont, California because the plant honored itself the worst plant in the industry and this due to frequent strikes, bad quality, high absenteeism, drugs, alcohol & prostitution. Toyota reopened the plant with a large percentage of same GM employees gaining access to the secrets of the process of production of Toyotas. Process or techniques "Kaizan" or search for perfection, the "jikoda" or human development based on the overcoming of the quality. Other technique taught to employees of GM was the development of teams, cross training and empowerment each of the employees. Using these methods and others not mentioned here Toyota opened its first factory in cars outside Japan, at the same time; Toyota tried to understand more of its labor system implemented in another culture. NUMMI could dramatically improve performance of short term of the labor force by the interaction and performance. While simultaneously doing all of the previously mentioned methods to create flexibility through the participation of the people involved in production deriving great cultures in the company also profits, unfortunately this joint adventure term 25 years later in 2010

| DAIMLER | CHRYSLER | NUMMI | Customer Demand | Trend-Up | Trend Down | Horizontal Speed | Compete | Quality | Make to Stock | Make to Stock | Product Strategy | Assembly to order | Production line | Production line | Process Strategy | Batch | Batch | Batch | Distribution | P>D/C>C | P>W/H>D/C/C | P>W/H>D>C>C |

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