What Ford Motors Co has given to Indian Manufacturing?

Ford was one of the first MNCs to make India its base way back in 1995. It set up full-scale manufacturing operations in India, which included two vehicle production plants, a state-of-the-art engine factory, and developed a deep supplier base to give its models a high level of local content, it even made India an important export base. Now Ford Motor Company is exiting the Indian Passenger Car Market and a lot has already been written about it.

Ford Motors Co being the developer of Mass Manufacturing concept for the World, it is most appropriate to evaluate the big impacts of Ford Motors Co on Indian Manufacturing, over its 27 years of presence (& still counting).

 A) Most effective Product Development system

I had the good fortune to associate with Ford Motors in India, right since 1996. My first experience with them was for the development of Dashboard’s Pointers during 1996-98 and again for the development of a special Digital Clock for Ford Mondeo during 2001-02. Ford used their methodology of “Ford Product Development System (FPDS)” for these developments. This methodology was way better than anything else done during those times.

The degree & intensity of involvement of different stakeholders from Ford during the entire process of development was overwhelming and assuring. Companies who followed the prescribed new processes had mindboggling results for development time, quality & reliability of the products. The outcome of this new development approach ensured Ford products were well-engineered and, set a benchmark, Ford Ikon was the shining example.

In 2005, in order to reduce parts design rework, Ford modified its FPDS to GPDS (Global Product Development System). GPDS was developed from two AIAG standards (Production Part Approval Process and Advanced Product Quality Planning) and covered everything from quality processes, change management processes, and revision control. By 2009, Ford made GPDS compulsory for all its suppliers. I again had an opportunity to experience the GPDS for the development of Automotive Glazing for Ford Figo, Ford Aspire, and Ford Ka+ (EU Market) for the Ford Sanand Plant.

GPDS process was much more efficient & effective. One of the most important contributions of the GPDS manufacturing philosophy has been the synchronization of parts development and testing early on in the vehicle design process. Typically, GPDS was at least 25% faster than Ford Product Development System (FPDS) and it led to a reduction in the cost of prototype development.

Ford's system for Cost reduction due to Development Time: FPDS vs GPDS

 “Ford Product Development System (FPDS)” was not fully integrated and Suppliers were pursued by different functions of Product Development (STA, PD, Purchasing MP & L, Planning) in fragmented ways. It used to be a big challenge for the Suppliers to manage these different stakeholders.

 In the Global Product Development System (GPDS), Supplier has been a part of Ford´s team and PD, STA, Buyers & MP&L are core team members. Ford cross-functional teams work proactively with the Suppliers on a program.

Supplier engagement used to begin early in a program & Ford cross-functional teams used to visit the supplier manufacturing facility a minimum of four times. The teams provided the supplier with a single Ford voice on key launch matters & processes. Team engagement continued until the supplier had successfully completed all PPAP requirements and fully met all program ramp-up volumes.

The GPDS’s Supplier Engagement Process begins once the suppliers are sourced. Prior to the On-Site Evaluations, the cross-functional Ford team members meet with their supplier team to review program expectations and prepare for the site visits.

• In the first “On-Site Evaluation”, the cross-functional team from Ford verifies Supplier Failure Mode Avoidance Strategy & Manufacturing Plan.
• In the second “On-Site Evaluation”, the cross-functional team from Ford verifies Supplier Launch Preparation.
• In the third “On-Site Evaluation”, the cross-functional team verifies Supplier Capability. This visit occurs prior to the supplier’s shipment of parts for production Tool Tryout  (TT) builds. 
• In the fourth “On-Site Evaluation”, the cross-functional team verifies Supplier Capacity. This visit always occurs prior to the supplier’s shipment of parts for Mass Production (MP1) builds.

 B) Quality & Delivery consistency Certification: Q1

Another pathbreaking approach Ford Motors introduced for its Tier-1 Suppliers is Q1 Certification. It is for those of Ford’s suppliers who demonstrate excellence beyond the ISO/TS certification requirements in five critical areas: Capable systems, continuous improvement, ongoing performance, superior manufacturing process, and customer satisfaction.

Q1 puts the discipline in place to achieve consistent excellence and guides cooperation between Ford and its suppliers for superior quality execution. In order not to dilute the importance of this certification, Q1 quality rating is awarded to the Tier-1 manufacturing locations, not to a supplier as a business entity. More importantly, Q1 is no longer a one-time reading of a supplier’s performance. Suppliers must maintain their rating each month, as measured by a complex set of data. Ford raised the certification standards each year.

Plagued With Vehicle Defects and a string of marred product launches, in 2001, Ford Motor Co. imposed higher quality standards on its Tier-1 suppliers. Suppliers worldwide were required to comply or give up the opportunity for new business with Ford. Only Q1 facilities were considered in new product development and source selection.

I had the experience of leading one of our Manufacturing locations for winning a Q1 certificate after hard work of over two years. This certification did wonders not only for the Unit but it impacted positively entire business.  

 To qualify for Q1, companies must simultaneously achieve the following:

• Third-party Certification – ISO TS 16949, ISO 14001, Compliance to MS 9000, MMOG, or Odette.
• 100% on-time delivery and service: No field actions, No stop shipments. Minimum delivery rating of 81 points for both production and service.
• Zero customer quality complaints/notifications and no open corrective actions
• Best in class PPM measures: PPM less than 150% of Commodity Average for both production and service
• Q1 “score” must exceed 800 points:  Maintain monthly score, achieve higher score each year,
• Written endorsements from Ford Manufacturing (each ship-to location), Ford Customer Service Division, Ford Supplier Technical Assistance, Ford Material Planning & Logistics.
• Perform in tune with competitors - Suppliers are measured against other companies supplying the same component or system to Ford. There was a provision to revoke a supplier’s Q1 status if a supplier produces more defective parts than competitors.
• Ford shifted more responsibility to suppliers and invoked greater penalties when a supplier marred a vehicle launch or build. For example, if Ford recorded two instances when it had to stop a shipment of a completed vehicle, Ford could revoke Q1 status. Q1 could be revoked even if the supplier was partially at fault.