At the annual meeting of PSA Peugeot Citroën stockholders last month in Paris, chairman Christian Streiff presented the initial action plans developed by the CAP 2010 cross-functional working groups and announced that they are now being implemented across the group.
Launched on February 6, the CAP 2010 programme was initiated by ten working groups involving several hundred executives from all of the key business processes, who identified 150 projects to improve practices in every aspect of the organisation. One hundred days after launch, CAP 2010 has now entered the deployment stage.
The four priorities announced last February have been translated into action plans to revitalise the group's growth and restore its competitiveness.
• product and service quality must be upgraded to the standard of the best-ranked competitors. Among the action plans being implemented are a new design process, working with suppliers, sharing best practices between Peugeot and Citroën, and reorganising and pooling customer service processes. The objective is to cut incident count and warranty costs in half by 2010.
• costs will be reduced across the organisation:
- overheads will be cut by 30% by 2010. Within this context, the voluntary departure incentive programme will reduce headcount by 4,800 people in France in 2007.
- further procurement savings will be driven by stepping up global sourcing, relaunching technical savings in series production, and re-engineering vehicles, with the gains shared with suppliers. These programmes will improve purchasing productivity by 6% a year.
- supply chain costs will be driven down by streamlining and reorganising inbound and outbound logistics.
• the product plan has been enriched and its implementation stepped up. Six new vehicle projects will be added to the product plan by 2010, in particular by shortening the development cycle and by moving current development projects forward by three to six months.
In addition, innovation programmes have been refocused on what customers want and are willing to pay for, as well as on environmental technologies.
• a new marketing offensive will enable the group to recapture the market share lost in Europe, in particular through an effective action plan for Germany.
Plans to drive faster expansion in China, Brazil, Argentina and other international markets are still being prepared by the newly formed teams in the corresponding business units. They will be presented in September.
To extend and support this action plan, new management practices will be introduced to more effectively encourage initiative, team spirit and results-oriented performance.
Mr Streiff emphasised: "CAP 2010 is the result of real teamwork, based on more cross functionality, which enables us to work together without taboos, more outreach, to learn from our customers, suppliers and competitors, and faster response, with a sharp focus on results."