How should firms think about designing factories when they have several in their network? Should they let local managers make idiosyncratic choices or should they try to standardize as much as possible? Ford apparently is going the latter route by, among other things, trying to eliminate forklifts from its factories (Going ‘fork free’, 3D scans part of Ford’s gold standard, Reuters, Aug 31).
At its just-opened $450-million factory in Thailand, Ford Motor Co (F.N) prides itself on being “fork-free.”
Eliminating forklifts, which can have big blind spots, from the floor improves worker safety, the U.S. automaker says. Ford instead uses trolleys to bring parts to workers on the line here.
This shift is just one example of the new manufacturing standard that Ford is rolling out at its plants worldwide. Such changes are key to helping Ford cut costs and boost quality as it moves toward building more cars on shared global platforms.
Many of these practices are being tested at Ford Thailand Manufacturing, Ford’s newest factory, where the automaker now builds its Focus compact for the local market here and other countries in southeast Asia.
Over time, Ford expects to export such practices to other plants worldwide, including some in the United States.
“Thailand is the first of a number of facilities that are going to look and feel exactly the same,” said John Fleming, Ford’s head of global manufacturing and labor affairs, in an interview Friday.
The article reports that they have already seen benefits from this “One Ford” strategy. That is not to say that everything is the same at all plants. As the article notes, labor is a lot cheaper in Thailand than in North America. Hence you don’t necessarily have the same investment in automation across plants.
This is an interesting approach to process design. There is a really nice quote in the article that articulates the logic behind it:
“When there are no standards, it’s very difficult to replicate good ideas,” Fleming said. Now, however, “we can really use them as best practices.”
Now Ford is certainly not the only firm to have ever aimed for standardization across facilities. Intel follows a “Copy Exactly!” as it moves new products from a development fab to a production fab. Any fab that is making the same product will then be set up in the same way. Semiconductors are arguably more complex than cars, but auto assembly still has a lot going on.
This is also related to lean operations. Lean implementations focus on standardizing processes because you cannot verify that you are improving a process if you don’t understand what current performance is. This is similar but occurring across multiple locations and continents.
“you cannot verify that you are improving a process if you don’t understand what current performance is.” True but you can know what current performance is without standardizing a process. Also, at Factory Physics Inc. we see time and time again that companies focus on improvements without knowing what best possible is under current or contemplated conditions. The Lean focus on one-piece flow as a goal is a good example. Or as a manager said, “well it’s an ideal goal but one always to be targeted.” No, the goal is to make a profit now and in the future. We have worked with Intel and while the standardization of Copy Exactly is very powerful and useful, it is not the goal either. With out an objective, scientific way to evaluate best possible performance, companies waffle back and forth between initiatives. While these initiatives can provide benefit, they more often confound management efforts to determine how well the company could be doing in meeting it’s marketing and financial goals and how to close the gaps if the company is not performing at best possible levels.
-Ed