Leveraging The Supply Chain at Ford Motor
Company
Track 4 Session 8
Paul Nye
Title: Manager, In Line Vehicle Sequencing
Company: Ford Motor Company
Email: pnye@ford.com
Phone: 313-390-9845
2
Abstract
Domestic manufacturing is clearly on the
rebound and few examples shine like Ford Motor
Company. This session explains how Ford uses
material handling technologies as a strategic
component of their flexible manufacturing
operations. Market demand for lower production
volumes with increased option content was
accommodated quickly and less expensively than
traditional labor and brick and mortar solutions
by using the supply chain as an extension of the
manufacturing process. The lessons learned are
many and extend well beyond the factory floor.
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
3
Agenda
• Order to Delivery
• Flexible Manufacturing
• Lean Manufacturing / Work Station Density
• Modules vs. Components
• Replacing inventory with information
• One goal, multiple strategies
• Stable & Synchronous: In Line Vehicle
Sequencing
• Build or pick-to-sequence
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
4
•
WWW. MHC 2 0 11 . COM
Order to Delivery
Why are talking about Order to Delivery? Total cost competency…
Dealer Finished Vehicles – All value add content complete
Quick Delivery + More Turns + Lower Inventory =$$$ Saved
Waste Factors to manage:
• Dealer Inventory (30 60 90 120)
• Customer choice: A little of everything, is a lot of inventory
• Customer satisfaction: Aging inventory issues, predicting demand
• Providing what customers want, not what you have
• Responding to changes in market demand
• Excess assembly plant inventory
• Supply Chain instability
• Supply base performance
5
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
Flexible Manufacturing
Customer demand and market
in transition:
- Increased vehicle content
- Increased trim level choices
- Hybrid, Battery Electric, improved
conventional powertrain options
- Reduced market volumes
- 1900’s - One plant one product
 One product per plant
 250,000+ units per annum
 Very efficient
- This century
 Multiple car lines per plant
 Volume range as low as 7K
up to 250K
 Maintained efficiency
6
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
Lean Manufacturing
Work Station Density
1900’s One plant one product
HIGHI
HIGH
LOW
HIGH
LOW
LOW
HIGH
HIGH
LOW
Flexible Manufacturing Requires
A
HIGHI
B
HIGH
Com
LOW
LOW
C
A
LOW
LOW
C
B
HIGH
HIGH
Com
LOW
7
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
Modules vs. Components
Distance & Density
Supplier Parks and open regional capacity
Engineering changes, pipeline management
Decision Factors:
• Labor cost
• Transportation
• Module value
• Manufacturing / Engineering expertise
8
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
Replacing inventory
with information
Enablers
• Monitor market, forecast supplier releases using actual & pseudo trends
• Maintain 3 week dealer order bank for efficient scheduling
• Lock in @ 3 weeks supplier weekly release requirements
• Lock in @ 2 weeks supplier daily release requirements
• Lock in @ 5 days exact sequential VIN production build order
Benefits
• Anticipate and react to Customer trends quicker
• Level scheduling/labor stability throughout entire week at assembly plants
• Suppliers lock in tier 2 material deliveries
• Suppliers lock in plant labor requirements
• Minimal tier 2 supplier inventories / supplier stability, higher efficiencies
Risk / Concerns
• Lean supply chain, disruptions can result in quick down time
• Supplier production issues result in late changes & schedule instability
• Weather factors impact dependability
• JIT reduces inventory but reduces train & intermodal freight options
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
9
One Goal, Multiple Strategies
 Supplier Parks (When, where &
why)
 Supplier regional facilities (open
capacity)
 Low cost supplier locations
 Assembly plant floor space, labor
considerations
 Point of installation material
requirements (1st POI harder than
last POI)
 Warehouse sequencing
10
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
Stable & Synchronous:
In Line Vehicle Sequencing
Assembly
AssemblyPlant
Plant
General
General
Office
Office
Body
Shop
Paint
Shop
A
S
/
R
S
VIN
Schedule
5 days
(Blend
Sequence)
Repair Bay Discipline,
AVS/AVI & Substitution
> 98% In Sequence
Compared to Blend
Trim
Line
Final
Line
Supplier
SupplierPlant
Plant
Supplier Manufactures/Assembles
in Sequence
Sequenced
Shipments
Schedule
830 - 26 weeks
862 - 14 days
866 - 5 days
(Blend)
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
Build or Pick to Sequence
Batch manufacture
Pick to sequence @ supplier
Pick to sequence @ warehouse
Pick to sequence @ Assembly Plt
Build to sequence @ supplier
Batch
Finished Goods
1
1
1
2
2
2
3
3
3
Raw Materials
1
2
2
2
1
3
1
3
3
Manufacturing
1
2
2
2
1
3
1
3
3
1
2
2
2
1
3
1
3
3
1
1
1
2
2
2
3
3
3
1
1
1
2
2
2
1
2
2
3
3
3
1
2
3
1
2
2
1
2
2
1
2
3
1
1
1
1
2
2
2
2
2
3
3
3
C
D
PRESS
A
Assembly
E
F
G
H
B
12
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
13
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
14
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
15
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
16
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
17
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
Key Takeaways
 Order To Delivery optimization
- Total enterprise cost – one team, no chimney
 Don’t lock into “one size fits all” solutions
- Remain flexible for strongest business case
 What works in one industry may not pertain to yours
- Understand trend, rational behind strategies
 Stabile and synchronous
- Requires sticking to discipline
 Not always perfect
- Periodic factors outside your control will influence
performance
- Stay the course
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM
18
Questions?
19
2 0 1 1 M AT E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
•
WWW. MHC 2 0 11 . COM