General Motors (GM), which owns the Hummer H2 brand, has decided to redesign it for model year 2022. Using customer focus groups, GM prepared a Customer Requirements Ranking document for Large Luxury SUVs. The Hummer H2 falls into this product segment. See Exhibit 1.

GM then developed a matrix to relate customer requirements to the major vehicle systems for the H2. See Exhibit 2. More specifically, the matrix shows which vehicle systems are necessary to satisfy each customer requirement. The matrix also illustrates the strength of the relationships between customer requirements and vehicle systems.

Based on its current design, the financial department at GM provided cost information (in percentages) for each of the major systems for the Hummer H2. See Exhibit 3. The exhibit also provides an explanation of the vehicle systems for the H2.

Questions

1. Based on its current design, calculate a value index for each of the Hummer H2s major systems.
2. GM conducted a market analysis and determined that the cost of the current design must be reduced by 10% before the H2 will become profitable. Which vehicle systems should GM focus on to achieve cost reductions?
3. Should GM consider enhancing (spending more) on some vehicle systems? Why?
4. Based on its current design, you may have determined that GM spent too much on the H2s chassis. What may have caused GM designers to make this mistake?
5. You may also find that GM spent too little on the H2s interior and seating. What may have caused GM designers to make this mistake as well?

Exhibit 1 Customer Requirements Ranking Large Luxury SUV 1 Relative Importance % Customer Functional Requirements A. Performance A-1 Speed A-2 Handling A-3 Sound A-4 All Terrain Capability A-5 Towing Capability Sub-Total 5% 10% 0% 5% 8% 28% B. Cost Efficiency B-1 Fuel Economy B-2 Operating Costs B-3 Reliability Sub-Total 5% 5% 10% 20% C. Appearance D. Comfort E. Safety F. Cargo Space 14% 12% 12% 14% Grand Total 100% Exhibit 2 Relatonship Matix for Hummer H2 -Major Systems Engine Drivetrain Interior Seating Body Chassis Electronics Total 9 9 3 3 1 1 9 3 9 1 3 1 9 9 9 1 9 9 3 3 1 1 Speed Handling Sound All Terrain Capability Towing Capability Fuel Economy Operating Costs Reliability Appearance Comfort Safety Cargo Space 3 1 ------Customer Requirements 3 3 1 3 3 9 9 9 3 3 3 3 3 9 1 1 Strong Relationship = 9 Moderate Relationship = 3 Weak Relationship = 1 Exhibit 3 Hummer H2 System Costs Current Design Systems Engine Drive train Interior Seating Body Chassis Electronics Sum Costs 15% 15 11 6 21 25 7 100% Description of Major Vehicle Systems* EngineThe system that provides power for the vehicle. Includes the engine block, pistons, cylinders, spark plugs, crankshaft, camshaft, valves, and the cooling system. Drive trainThe system that delivers power to the wheels. Includes the transmission, clutch, shaft, axles, differential, fuel system, and the exhaust system. InteriorIncludes the climate control system, the door module systems, the instrument cluster, interior trim, panels, molding, and insulation Seating - Includes the seating systems, restraints, air bags, and related safety features. Body-The body system includes the frame, panels, glass, lights, bumpers, exterior trim, paint, and body hardware. ChassisThe chassis system include the suspension, which connects the vehicle to its wheels through linkages, springs, and shock absorbers. The steering system, braking system, wheels and tires are also part of the chassis. ElectronicsIncludes the electrical system, the engine management system, the infotainment system, and other computer systems. *Each vehicle system represents a group of parts and components that serves a function for the vehicle. Exhibit 1 Customer Requirements Ranking Large Luxury SUV 1 Relative Importance % Customer Functional Requirements A. Performance A-1 Speed A-2 Handling A-3 Sound A-4 All Terrain Capability A-5 Towing Capability Sub-Total 5% 10% 0% 5% 8% 28% B. Cost Efficiency B-1 Fuel Economy B-2 Operating Costs B-3 Reliability Sub-Total 5% 5% 10% 20% C. Appearance D. Comfort E. Safety F. Cargo Space 14% 12% 12% 14% Grand Total 100% Exhibit 2 Relatonship Matix for Hummer H2 -Major Systems Engine Drivetrain Interior Seating Body Chassis Electronics Total 9 9 3 3 1 1 9 3 9 1 3 1 9 9 9 1 9 9 3 3 1 1 Speed Handling Sound All Terrain Capability Towing Capability Fuel Economy Operating Costs Reliability Appearance Comfort Safety Cargo Space 3 1 ------Customer Requirements 3 3 1 3 3 9 9 9 3 3 3 3 3 9 1 1 Strong Relationship = 9 Moderate Relationship = 3 Weak Relationship = 1 Exhibit 3 Hummer H2 System Costs Current Design Systems Engine Drive train Interior Seating Body Chassis Electronics Sum Costs 15% 15 11 6 21 25 7 100% Description of Major Vehicle Systems* EngineThe system that provides power for the vehicle. Includes the engine block, pistons, cylinders, spark plugs, crankshaft, camshaft, valves, and the cooling system. Drive trainThe system that delivers power to the wheels. Includes the transmission, clutch, shaft, axles, differential, fuel system, and the exhaust system. InteriorIncludes the climate control system, the door module systems, the instrument cluster, interior trim, panels, molding, and insulation Seating - Includes the seating systems, restraints, air bags, and related safety features. Body-The body system includes the frame, panels, glass, lights, bumpers, exterior trim, paint, and body hardware. ChassisThe chassis system include the suspension, which connects the vehicle to its wheels through linkages, springs, and shock absorbers. The steering system, braking system, wheels and tires are also part of the chassis. ElectronicsIncludes the electrical system, the engine management system, the infotainment system, and other computer systems. *Each vehicle system represents a group of parts and components that serves a function for the vehicle