Daimlerchrysler

DaimlerChrysler

1. Why is the ROI of the cost management system "unbelievable," according to the CIO?

The ROI of the cost management system "unbelievable" because the system implemented helped DaimlerChrysler cut the number of fog lamps used in the different vehicles where that idea alone saved the company $7 million. Other than that. The reduction of the number of seat steucture components which leads to another $40 million in savings during the next two years and also the reduction of the number of powertrain controllers used over the product lines which saves $20 million per year.

2. Why, in your opinion, is the system so popular and generates so many ideas?

The system is so popular and generates so many ideas because the system represents an automotive corporation which owns or has shares in a number of car, bus, truck and motorcycle brands including Mercedes-Benz, Mercedes-AMG, Smart Automobile, Freightliner, Western Star, Thomas Built Buses, Setra, BharatBenz, Mitsubishi Fuso, MV Agusta as well as shares in Denza, KAMAZ, Beijing Automotive Group, Tata Motors, and Renault-Nissan Alliance. This clearly explains the popularity of this system. This system generates more than 50 weekly ideas beacuse the accuracy and brilliant mechanism built which the system has in it to. Most importantly, the system was built on Lotus Notes which took less than one momth to develop and roll out. Plus, it cost less than $1 million and the results shows success.

3. What additional information would you need on this system to calculate the TCO?

When the system is calculating the TCO, managers need to be aware of vendors' hidden agendas. All managers need to have some system of TCO in place when making decisions on choosing solutions. Vendors will try to manipulate and obfuscate the true TCO of their solution and it will be different for each installation. Customers must be sure that they own the definition and calculation of TCO and don't allow the vendor to drive the agenda.

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