Tuesday, February 19, 2013

Lean Manufacture and Ford

When reading this week's articles, I was really inspired by Toyota's Lean concept. The idea of reducing waste and keep pursuing of perfection become a powerful tool to help companies improving their manufacturing flow. But I also noticed that, mentioned in The Evolution of the Toyota Production System, the original idea of Lean actually came from Henry Ford, the founder of the Ford Motor Company. So if Lean is such a great thing, why didn't Ford apply it first?

Ford was one of the leading car manufacturer in the 20th century. They brought out one of the greatest invention in the manufacture industry - assembly line. The concept of mass production allowed Ford to produce a large amount of goods in a really short time. This lead Ford to a huge boom in their business and made them the model for every other companies in the industry. Below is a brief introduction video about Ford and their production system:

From the video we learned that assembly lines specified every single step of the manufacturing process in a standardised way, even a new employee without any knowledge about cars can easily become a part of the manufacturing line.

But this brought out new questions: Although the massive production method can achieve a high manufacturing efficiency, it will lead to a really high inventory. Besides, the flexibility of the whole supply chain is reducing. It might be working for 50 years ago, when there wasn't too high demand of cars. But nowadays, since customers cares more about quality and time, the mass production is no longer a good way to help modern companies. For example, if demand increases for a unpopular model, this mass production model won't be able to quickly respond to these changes, and Ford will thus miss this business opportunity.


So if you were Ford, what would you do? Keep using mass production, or change to use Lean Production? Well, the choice is clear: "How can Ford become Toyota in four years?" asked by Jac Nasser, the former CEO of Ford.[1]


However, the process wasn't always easy. Changing the production system sometimes means changing everything - supplier management, product development, manufacture procedure...What Jac decided to do was "...So he (Jac) changed the management metrics, purged the poorest managers according to the metrics, and experimented with selling cars on the web..."[2] This didn't end up working out.


But luckily, Ford didn't give up trying. Below is the video about Ford's successful lean plant in Brazil:

video
Note that not only Ford, other big companies in the industry, for example GM and Chrysler, are also striving to apply lean concept to their manufacturing process. My question is: Although almost every company in the automotive industry desperately wants to apply lean to their production process, does it mean that lean is the one and only best solution for the automotive companies? For Ford, they put a lot of effort and spent a lot of money in order to change to lean production model. I was wondering if there's any way they could have adapted their original model instead of having to make drastic and costly changes?



[1][2] http://www.icms.net/lean_at_ford.htm

2 comments:

  1. Most of the basic goals of Lean Manufacturers systems are common sense, and documented examples can be seen as early as Benjamin Franklin. Poor Richard's Almanacsays of wasted time, "He that idly loses 5s. worth of time, loses 5s., and might as prudently throw 5s. into the river." He added that avoiding unnecessary costs could be more profitable than increasing sales: "A penny saved is two pence clear. A pin a-day is a groat a-year. Save and have."

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