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Ford and Lean

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  • #36230

    Thai
    Participant

    I came across an article in today’s Detroit News that talks about the challenges Ford had in designing the new Mustang, but what really caught my attention was at the end of the article where and explaination of Ford’s downturn in the late 90’s and early ’00’s. 
    “The crisis Ford inherited dates back to 1997, when the company earned a record $6.92 billion, says James Womack, president of the Lean Enterprise Institute in Brookline, Mass. Jacques Nasser, then president of Ford’s automotive operations, called in the spring of 1997 to ask how he could adopt Toyota’s production methods in four years, Womack says.Nasser set up five separate North American product development teams that acted as autonomous businesses, Martens says.Nasser allowed the units to develop customized components to increase their appeal to target customers. By 1998, he was using three different platforms, or clusters of sheet metal and chassis components, for his full-size pickups and sport utilities. GM needed one platform.Nasser intended to pass on the cost of this variation to customers, an approach that may have worked in a growing market like China, Martens says.His approach began to fall apart in 1997, when, for the first time in 26 years, prices for new vehicles fell, according to the U.S. Bureau of Labor Statistics. Vehicle prices are 7.4 percent lower today than in 1997. They were driven down by 0-percent loans and other discounts that GM announced eight days after 9/11.”
    New Mustang tested Bill Ford’s mettle as the CEO     Carmaker to report 2Q earnings todayDetroit Free Press   07/20/04 author: John Lippert author: Bill Koenig / Bloomberg (c) Copyright 2004, Detroit Free Press. All Rights Reserved.
    Interesting article considering this goes in the face of Lean principles that I know of….

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    #103906

    Thomas C. Trible
    Member

    Kirk:
    The article you quote states, “The crisis Ford inherited dates back to 1997, when the company earned a record $6.92 billion, says James Womack, president of the Lean Enterprise Institute in Brookline, Mass. Jacques Nasser, then president of Ford’s automotive operations, called in the spring of 1997 to ask how he could adopt Toyota’s production methods in four years [italics added], Womack says.
    One has to wonder if Nasser was joking.  Probably not.  Either Nasser was being either arrogant or naive.  I suspect the former.  After all, by 1997 Toyota had been perfecting lean production for at least 35 years.  And Nasser thought he could do it in just four?
    That reminds of the old joke told about the CEO and his company president who were attending a conference on TQM.  The CEO turns to his president and exclaims, “This corporate quality culture is great stuff.  I want one installed by Monday.”
    TC Trible 

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    #103917

    Not really Buzz A.
    Participant

    And there is an often used quote from Roger Smith, out of Fortune in the late 1980’s.
    “One of the big problems is in our frozen middle management. It is very hard to get those guys to understand. If they don’t want the system to work, I promise you they can screw it up. They will stand there and smile at you, but there goes a red seat in a blue car.”
    Nassar set up his system. Bill Ford’s now in charge running the show, and does he really support or intend to drive serious change into Ford’s culture? I don’t see the commitment in words to the press, so what reason does middle management have to change?
    There goes another red seat in a blue car…..
     

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