• Ford and Six Sigma

Consume Driven Six Sigma • What it means at Ford

Communication and Training

• People and how they matter

Design for Six Sigma @ Ford

• What it means • Tools and Training • How they achieved reduction in stocks • Problems they faced • How they went around

Case Application at Ford Otosan


‘I am willing to offer any color (for my car) as long as it is black’

1898- Started as Detroit Automobile Company

1905 – Reached 18000 cars in an year

1911 – Ford Motor Company went overseas

1920 – million vehicles an year

1925 – Factories in many countries

2008- 5.532 million vehicles

Fact Sheet
• • • Introduced the world to assembly lines and mass production Elaborate management of industrial workforce Grew serious about customer centric six sigma after customer satisfaction began to fade in 2000s Changed vision of the company to incorporate the Consumer Driven Approach Adopted six sigma across departments in 2000 Savings of $ 2.19 billion globally • Ford India alone has saved $1.5 million in four years

• •

Consumer Driven Six Sigma
Six sigma is not a stand alone initiative but a part of a 3 part quality management

Projects on which Six Sigma will be applied are chosen based on three criteria

Must relate to customer satisfaction Results must reduce defects by 70% Each project should achieve average cost savings of $250,000

Communication Plan
Three staged communication plan was developed
• Stage 1: 350 people were trained in groups of
• Top management • Officers • Leadership • The three groups were given extensive training on the application and how it can save capital • Stage 2: Identified people within the organization that will serve as the "backbone of the six sigma process“ • Stage 3: The employees were split into four categories • Project Champion - A member of upper management who supports the project and removes any roadblocks for the Black Belt • Master Black Belts - Train Black Belts and mentor them in their projects. They also show progress and successes to upper management. • Black Belts- Implement Six Sigma projects and lead individuals on the improvement team in the right direction • Green Belts - Learn some of the tools, help Black Belts with projects and do small projects of their own. Green Belts with expertise in different areas often participate on the same team.

CEO also communicated the need for Six Sigma frequently
• highlighting its importance for Ford • led to better commitment from top management

Case Application
• Define
– – – – – – – – Tape wasn’t in contact with car body Holes were located too high Pressure being applied to the molding was low Body wasn’t clean, so tape couldn’t stick How flat was the surface Measure the pressure Measure size of the holes, pitch of holes Percentage of area being cleaned

Mega Project: Ford Focus’ body side moldings were lifting at the edges

• Measure

• Analyze
– Analysis with senior personnel and maintenance

• Improve
– – – – – – – – Moved the holes down by 2mm Changed the molds to make the surface more flat to get tape contact Using DoE, optimum pressure was found out Cleaning head was replaced to have better cleaning of surface Hole is being continuously monitored Molding being flat is a QC for the supplier now QC for the pressure QC for surface cleanliness

• Control

Challenges faced by Ford
Some of the major problems identified during Design phase were: 1. The tape on the molding wasn't contacting the car body enough 2. Holes located on the body used to line up the molding were too high and were hitting an indent on the body side 3. It turned out the pressure we were using to apply the molding was too low 4. The body side was not sufficiently clean, so the tape wasn't sticking as well as it could

Once the problems were identified, MAIC was applied !!!
Measure : The team measured where the holes on the body side were located, how flat the part was and how we could fix the moulding to make it flat, further the pressure being used was also measured Analyze : Once all the data had been gathered, the team analysed results and found the appropriate solution Improve: • The solution included moving the holes on the body side down about 2 millimetres • On the body-side moulding, moulds were changed to make sure that it was very flat on the back side • Next they figured out optimum application pressure, then they replaced the head on the cleaning fixtures to clean the body side more effectively Control: Changing the hole location on the body side was a permanent fix, regular quality checks to make sure moulds were flat, ensuring that optimum pressure was used to apply moulding

Overcoming scepticism: Another major chief roadblock to implementing 6 σ was employee scepticism. • Team felt that the only way to overcome this challenge was to demonstrate successes over time. • 2 years later, it was found that more and more Ford employees are jumping on the 6 σ bandwagon as they realize results experienced by other departments
Success Story: Since the team's improvements have been implemented, the project has yielded $100,000 in waste elimination savings per year !!!

The implementation strategy assumed people would buy into Six Sigma if results were quickly realized from the company’s short-term DMAIC projects.

DFSS at Ford has emerged as a scientific approach to PD that leverages Six Sigma culture.

There the importance of developing DFSS for the long term was also recognized.

The team held benchmarking discussions with DFSS adopting companies and listened to consultants familiar with those efforts.

The team settled on a fourphase process: define, characterize, optimize and verify (DCOV).

The framework aligned with Ford’s existing product development system & built on the disciplines of systems, robust & simultaneous engineering

Introductory training was available through the Ford technical education program (FTEP)

Work was divided into subprojects with a BB assigned to each. Growth in the number of projects was driven by a senior vice president

DFSS Master Black Belt was placed as manager of the department responsible for the computer modeling of new engine designs.

This manager teamed up with an engine program manager to act as working level champions for DFSS

Identifying customer desires

Developing validated transfer functions (mathematical models).

Correlating these objective measures to customer desires

Effectively assessing the capability to meet those desires

Applying transfer function knowledge to optimize designs

Satisfy customer desires and avoid failure modes.

Project Integration Within Existing Processes
Senior management made it clear DFSS would not replace, but would augment, the existing PD process in specifically designated areas PD entails at least three different categories of scope, The rhythm & timing of DFSS projects associated with these efforts vary depending on the category

In a division whose senior leader actively drove DFSS from the start, project numbers grew exponentially over the first three years of implementation. In a similar sized division, in which DFSS deployment leaders solicited projects from midlevel management, project numbers remained in the low teens for the same time period.

In DMAIC, BBs identify and reduce the frequency of defects generated. In DFSS, teams must not only anticipate & prevent defects, they must anticipate and meet latent customer needs. DFSS requires a balance of analysis and synthesis—the synthesis of new designs and design standards from a combination of reasoning based on experience, observation and theory Compounding the challenge of DFSS is the added uncertainty about future customer desires and future sources and levels of production and usage variability that will affect product performance DFSS teams must also have knowledge about non-statistical methods for obtaining consumer insight, cascading customer desires down to component specifications and verifying designs with small sample sizes for testing etc.

The Ford team initially devoted time to devising a single DFSS flowchart but was abandoned. The team, therefore, decided to produce two documents: 1. A tool matrix to outline which tools might be applied at each project phase 2. 2. A project checklist to delineate intended outcomes at each phase. It is used with the understanding some items may not apply to a particular project as determined by the MBB and executive Champion.

Training to support DFSS

Automotive company – Facilities for production, service & spareparts distribution Trying to increase production volume (for domestic market & export) due to increased demand and increase variety

Finished vehicle stocks increased, especially for export vehicles

Six Sigma Project Objective: Reduce finished vehicle stock levels of export vehicles, initiated! while ensuring on-time shipping of orders
Step 1: Identified CTQs • Stocks of export vehicles cannot exceed 2.5 days of production, about 888 vehicles • The time between a vehicle’s production & its shipment cannot exceed 8 days • All shipments must be made as planned

Step 2: Identified Sub-processes that might affect stock levels: Order receiving, production, supply, scheduling, shipment

Step 3: Data Analysis • Two types of finished-vehicle stocks: before-gate-release stocks & compound stocks • Found that average daily stock level(1100 vehicles) far exceeds USL of 888

Step 4: Process Improvement • At Ford-Otosan, order-to-delivery times are not determined solely by production lead times • By scheduling shipment of vehicles on only certain days of the week, the firm restricts the distribution activities • Also, atleast one extra day is needed by staff members to create customs documents & bills

Step 5: Identified constraints in developing schedules • Market-priority constraints • Shipment constraints • Supplier constraints • Production constraints

Step 6: Integer Programming Model To generate daily production schedule, taking into account the fixed shipment days and the Operating Plans (developed using demand, production capacity & constraints) developed by Ford Europe Identified 2 more constraints: • Part constraint – parts with lowest availability in terms of supplier’s daily production capacity • Color Constraint – to reduce changeover times between colors Step 7: Daily schedule obtained for one week using Microsoft Excel’s Solver • Modifying current process to accommodate fixed shipment days was too costly • The new schedule decreased compound stocks considerably, but not before-gate-release stocks

Step 8: A new Shop Floor Control System • Earlier, in order to fill the line, the team would start production of some other order without considering shipment days & routes, which led to inefficient use of vehicles • The new system showed the no. of vehicles that would become available by the shipment day so that it could be matched with the planned shipment amount • In placing extra orders to fill the line, priority was given to orders that would be ready to ship on the next specified shipment date • This control was done every day or even twice a day
Step 9: Analysis of Improvements • Levels of export vehicle stocks reduced significantly • Reduction in order-to-delivery times, resulting in increased customer satisfaction

Savings of about $1.2 million in 2003 and $2.6 million in 2004!!
Improved process mean is almost half of that of the previous process, variance is also smaller

Thank You

• • • • • • Meltem Denizel et al. Ford Otosan optimizes its stock using Six Sigma. Interfaces. March April 2007. pg 97-107 “Design For Six Sigma at Ford” – Nathan R. Soderborg, Ford Motor Co

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