Seizing a growth opportunity

Chery Automobile Co., Ltd. is China’s fourth-largest automaker. The company employs approximately 20,000 people and produces twelve vehicle platforms, ranging from passenger cars to SUVs to busses. Chery’s position in the Chinese auto market has been marked by impressive growth. In 2004, the company sold 86,000 units and was the ninthlargest automaker. In just two years, sales had grown to 305,000 units, which brought the company to its current ranking of fourth place.

In its mission to capture an ever-greater share of the rapidly growing Chinese automobile market, Chery faces several critical business challenges. First, the company must accelerate both new product development and the manufacturing process so that it can bring new models to market more quickly. Second, it plans to move from a “build to stock” approach to “build to order,” which will permit more vehicle customization and increase customer satisfaction. Third, Chery wants to develop additional vehicle platforms to better meet market demands.

PLM as platform for the enterprise

Since 2003, Chery has been using product lifecycle management (PLM) technology from UGS? PLM Software, a global division of Siemens Automation and Drives, to address these challenges. According to Liu Ying of the company’s Information Technology Division, “UGS PLM Software technology was chosen because of the company’s strong background in the automotive industry as well as for the breadth of its UGS Teamcenter? digital lifecycle management solution.” Teamcenter? software provides the fundamental technology Chery needs at this point in its evolution: a product management platform for collaboration and knowledge re-use; support for collaborative design teams; product configuration management and accurate data flow (which supports “build to order”); engineering change management, project management and PDM-ERP integration.

The Teamcenter implementation team consisted of personnel from both Chery and UGS PLM Software. Full implementation was preceded by a three-month pilot project in which CAD (UGS NX? software), document management, product structure and configuration management and workflow management were implemented in the R&D department.

Market share is the measure of success

The ultimate measure of the success of Chery’s PLM solution is increased market share and customer satisfaction, both of which have been occurring since the PLM implementation began. In addition, the company notes a number of other internal improvements attributed to the PLM system. In terms of design collaboration, there is more information sharing now that information is managed by Teamcenter, and documents are 95 percent consistent versus 65 percent previously. Data re-use has increased from five percent to between 20 and 30 percent.

Earlier problem detection has reduced the number of engineering changes. Changes that are still required are completed in only three to five days instead of the 10 to 20 days needed previously. It was difficult to even track changes in the past but this is now done in only five minutes. Other PLM-related benefits include a 90 percent reduction in time to find and retrieve data, and streamlined data flow from design to manufacturing due to PDM integration with manufacturing and ERP systems.

While many of these benefits were expected, there have been some unexpected benefits from PLM as well. These include a refinement of the product development process, greater modularity in designs permitting increased part re-use, and acceptance and leveraging of PLM by other departments within the enterprise.

Overall UGS PLM Software technology improves Chery’s ability to effectively innovate, which enhances the company’s image in the worldwide automotive industry.

Challenges:

Accelerate product development and manufacturing

Implement “build to order”

Increase vehicle production

Keys to Success:

Comprehensive PLM approach

Knowledge re-use

Product configuration management

Digitally managed workflows

PDM-ERP integration

Results:

Engineering changes in three to five days vs. 10 to 20

Data re-use increased from five percent to 20 to 30 percent

90 percent reduction in time to find and retrieve data

Earlier problem detection reduces engineering changes

Improved product quality; slashed costs

Faster time-to-market

Industry:

Automotive & Transportation

The ultimate measure of the success of Chery’s PLM solution is increased market share and customer satisfaction, both of which have been occurring since the PLM implementation began.