Ford and Flexible Manufacturing

Better Essays
The automotive industry is a highly competitive market where brand loyalty is only as strong as the latest gizmo and horsepower upgrade. The automotive assembly process, perfected by Henry Ford, was based on the simple principle that “customers can order a Model T in any color they wanted as long as it was black.” After the 1920’s the market witnessed new entrants with unheard of automobile features that ended Ford’s golden age. New automakers such as Buick, Chrysler, and Oldsmobile offered customers varying colors and styles that propelled sales. The automotive industry has grown in the United States from 4192 automobiles on the road in 1900 to 204 million in 2003. In an effort to regain brand loyalty Ford has embarked on an ambitious automotive development process known as flexible manufacturing.
In the post 9/11 economy Ford has witnessed five billion dollars in losses per quarter. The company is swimming in debt after their partnership with Mazda and Jaguar and can not afford to lose pace with their competitors. Many Ford plants in the United States witnessed production decreases of 30 percent with increases in overtime. This disparity resulted in payroll cuts and closed plants and finally losses of one billion dollars in 2002. The damage to Ford was disastrous bearing witness to a 75-year market share low: 20.7%. Ford CEO Bill Ford was forced to make quick changes to appease the fickle consumer or face severe monetary consequences.
The changes Bill Ford instituted were not a band-aid on the company hemorrhage but long-term solutions. In a two-year effort costing over 400 million dollars Ford completely gutted truck factories in Norfolk, VA and Kansas City, MO. The effort was aimed at redesigning around the concept of flexible manufacturing. This concept allows factories to respond to customer demand and switch manufacturing platforms in record time and to build different platforms in several factories using the same assembly system. The end-state is a reduction in months of factory downtime and millions of dollars in savings.
Monetary savings and increased sales of the Ford F-150 is what will return ford to the black. Flexible manufacturing will be responsible for two billion dollars in savings over a ten-year period by reducing operating costs by 15% and reduci...

... middle of paper ...

...Moraine, Ohio and Oklahoma City, Oklahoma.
Flexible manufacturing has the ability to put Ford back in the forefront of assembly line technology. Henry Ford would be proud of the vision his family has embarked upon. The automotive industry may be based on the fickle nature of the consumer but there is clearly a way to eliminate the waste factor by streamlining manufacturing plants. Flexible manufacturing has already put Ford on the right track. Costs have been decreased by 3.2 billion dollars and have pushed Ford into the black with profits of 1.4 billion in 2003. Ford now has the ability to make nine different vehicles at the same time and can change manufacturing platforms with much less downtime and costs. The Ford line of trucks is poised to take over its foreign competition because they were willing to accept a certain level of risk to achieve a great reward.

Garsten, Ed. “GM Saves On Flexible Assembly.” The Detroit News Auto Insider. 15 December 2002.
06 December 2004.

McMurray, Scott. “Ford’s F-150: Have It Your Way. “ Business 2.0. March 2004, 53.

Number of cars: The Physics Factbook Website. 2003. Hypertextbooks. 3 Dec 2004
Get Access