APICS CEO Abe Eshkenazi, CSCP, CPA, CAE -
October 25, 2013
Ford’s purchasing chief admitted earlier this week that the number-two US automaker is facing quality questions as its suppliers work around the clock to meet the surge in demand. Reuters
reported the story October 21. Experts predict auto sales to go up 3 percent and exceed 16 million vehicles in 2014.
“Everyone is running flat out and it’s contributing to some of the quality challenges that we’ve seen,” said Hau Thai-Tang, Ford’s group vice president of global purchasing. He cites suppliers’ lack of time to do preventive maintenance on production equipment as a major contributor to the quality problem.
“In the past, when we weren’t running at full capacity, when we weren’t running at three shifts, when we weren’t running seven days a week—you actually had more cushion,” Thai-Tang said. “Now, we’ve removed that cushion. We’re a lot more exposed in terms of any production issues because you just can’t recover.”
Deepa Seetharaman writes that between 2004 and 2012, Ford and the two other top US automakers cut their collective production by 29 percent. During this time, Ford has relied on the “One Ford” initiative, which implemented lean tactics into a global manufacturing strategy. Now, Thai-Tang says, the company might make design changes so that parts can be shared more easily with other models built in the same regions.
For example, in South America, in order to cut supplier costs, Ford might slightly adjust the design of the Focus so that it has more in common with the Ranger, Thai-Tang says. The two sides of quality
The definition of quality from the APICS Operations Management Body of Knowledge Framework
has two components. First, there’s the “quality of conformance, or the quality defined by the absence of defects.” In addition, there’s also the “quality of design, or the quality measured by the degree of customer satisfaction with a product’s characteristics and features.”
When Ford pressed its facilities and suppliers to keep up with customer demand, its leaders addressed only the quality of design, leaving themselves more susceptible to quality errors related to conformance. The plan Thai-Tang outlines enables the company to better account for both components of quality.
As you move ahead in your supply chain or operations management career, are you prepared to address the subtle nuances and various components of business strategy? APICS has resources that can help you improve your company’s bottom line. For example, the APICS Certified in Production and Inventory Management (CPIM) program provides you with the ability to understand and evaluate production and inventory activities within a company’s global operations. Visit apics.org to see what APICS can do for you. QUESTIONS FOR DISCUSSION
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