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Ford's new slogan: The Customer is Job One
 Anne Stevens was recently named Ford Vice President of North America Assembly Operations. |
When it comes to customer satisfaction, the math is as simple as 1+1=2, but much more dramatic. According to Anne Stevens, Ford Motor Co.'s Vice President of North America Assembly Operations, a 1% increase in customer satisfaction means a $2 billion increase in revenue—$100 million in earnings.
That's why "what we're about today is 'The Customer is Job One,'" said Stevens in explaining the company's new thinking with respect to the bottom line. The tagline Quality is Job One no longer does the job.
The new slogan conveys the message that Ford is transforming itself from a "leading vehicle manufacturer" to a "leading consumer company for automotive products and services," she said. The Firestone tire recall debacle—"a very sobering time for all of us"—drove home the message that quality improvements are imperative at Ford, but not at the expense of innovation. When asked about increasingly tough-sell consumers, she said, "We got them right where they want us."
Ford has recovered nicely from the recall controversy, posting record Explorer sales of 445,000 in 2000, according to Stevens.
Increasing shareholder value and customer satisfaction are the top priorities at Ford, Stevens said. Though often thought of in a strict quality-control sense, Six Sigma is a tool that also delivers on the pledge of increased shareholder value, Stevens explained. She said initial vehicle quality, reliability, and the sales/service experience comprise the main elements that shape customer satisfaction. The product itself, she noted, accounts for 75% of the customer satisfaction equation, sales/service 25%.
A Six-Sigma level of quality is 3.4 defects per million "opportunities," according to Stevens. "That's pretty much as close as we can get to providing prod-uct in our world with the technical limitations that we have," she said. "In other words, Six Sigma is just short of what I call the Holy Grail." The "beauty" of Six Sigma is that it identifies and reduces sources of variation, which is what creates quality problems, Stevens added.
 Ford is spending $2 billion on renovation of the Rouge manufacturing complex. |
At Ford, quality improvement is being carried out under the banner of "consumer-driven Six Sigma." Under that program, the company develops certain individuals as black belts who aim for a 70% improvement in customer satisfaction for any of the four projects to which they are assigned. A 70% improvement translates into a $250,000 savings.
Many corporations—many of Ford's operations included—are producing at Three- and Four-Sigma levels, according to Stevens. That means accuracy levels vary from 93.3 to 99.4%. "You might think that's good, but the Sigma capability of airline baggage handling capabilities is at about the Three- Sigma level," she said. "The good news is that airports' records for delivering passengers is at a significantly higher Sigma level. What this means is that you as a passenger are 2000 times more likely to reach your destination than is your baggage."
Ford began to roll out its Six-Sigma program in the fourth quarter of 1999. The program has been implemented across all Ford functions globally in what Stevens called a holistic approach. She said it is interwoven with other initiatives such as the Ford Production System. As of March, there were 1900 black belts—individuals on a dedicated two-year assignment to lead the Six-Sigma effort. Each black belt is responsible for four major projects. Black belts also serve on "megateams" that address issues crossing multiple product lines.
Six Sigma is not Ford's only major manufacturing initiative. The company is building a new vehicle assembly plant at the Ford Rouge Center in Dearborn "as the centerpiece of the nation's largest industrial redevelopment project and flagship of Ford's vision of sustainable manufacturing for the future." The plant will be capable of interchanging three vehicle platforms and producing up to nine different models. Flexible tooling will incorporate state-of-the-art lean manufacturing principles, including synchronous material flow and advanced in-station process controls. The plant will reduce by nearly 40% the number of workstations normally needed to move a vehicle through the assembly process. Also, individual operators will have greater responsibility to complete and verify operations within the workstations.
The new plant will dramatically reduce the space normally needed for both component and finished vehicle storage. Finished vehicle storage space will be reduced by 50% inside and outside the plant. No more than two hours of line-side parts inventory and 10 hours of off-line component inventory will be required. The normal inventory supply for most assembly plants is one to two days or more.
The cost of renovations at the Rouge is about $2 billion, factoring in work already completed, the new assembly plant, and related improvements for the site.
In another manufacturing-related development, Ford in September announced plans to create a $400 million European-style manufacturing campus near the Chicago Assembly Plant. It is slated for completion in 2003.
