Ford and Toyota…

Ford and Toyota A_car_assembly_plant_is_built_around_a_simple_sequence_of_tasks_that_starts_in_the_press_
shop_and_ends_as_a_car_rolls_off_the_final_assembly_line._Figure_6.10_shows_these_basic_
tasks_in_summary_form:

Whilst_these_basic_tasks_are_the_same_for_both_Ford_and_Toyota,_the_way_they_are_managed_by_the_two_firms_is_quite_different._We_compare_policies_and_practices_in_relation_to_
small_cars_such_as_the_Ford_Fiesta_and_the_Toyota_Yaris:

_ Ford_ is_ driven_
by_ a_ long-term_ strategy_ in_ Europe._ It_
has_ invested_ heavily_ in_fixed_ assets,_and_does_not_seek_an_early_return

Ford and Toyota A_car_assembly_plant_is_built_around_a_simple_sequence_of_tasks_that_starts_in_the_press_
shop_and_ends_as_a_car_rolls_off_the_final_assembly_line._Figure_6.10_shows_these_basic_
tasks_in_summary_form:

Whilst_these_basic_tasks_are_the_same_for_both_Ford_and_Toyota,_the_way_they_are_managed_by_the_two_firms_is_quite_different._We_compare_policies_and_practices_in_relation_to_
small_cars_such_as_the_Ford_Fiesta_and_the_Toyota_Yaris:

_ Ford_ is_ driven_
by_ a_ long-term_ strategy_ in_ Europe._ It_
has_ invested_ heavily_ in_fixed_ assets,_and_does_not_seek_an_early_return_on_them._Currently,_it_is_struggling_with_a_
capacity_that_was_designed_for_a_15_per_cent_market_share_when_current_loading_is_
only_9_per_cent._It_seeks_to_make_a_step_change_in_the_production_process_through_
high_capital_investment._Its_investment_policy_therefore_has_been_technically_orientated,_seeking_the_best_technical_solution_for_each_task._For_example,_Fords_body_
shop_is_almost_fully_ automated_with_
robots_ that_are_flexible_across_different_parts._
When_production_is_changed_between_one_part_and_another,_the_robots_must_be_reprogrammed._This_places_high_emphasis_on_technical_support_for_the_software,_and_
makes_Ford_dependent_on_given_equipment_suppliers._The_layout_is_designed_around_
the_robots_and_for_fixed_volumes.

_ Toyota_has_expanded_cautiously_in_Europe._Its_investment_policy_has_been_step-bystep,_and_it_has_sought_to_make_early_returns._Key_to_the_Toyota_Production_System_
(TPS)_are_process_and_quality_disciplines_through_JIT_and_jidoka._Toyotas_philosophy_
is_more_people-orientated:_shop-floor_people_are_heavily_involved_in_improvement_
activities_as_well_as_in_production_work._Toyotas_body_shop_has_maybe_one-third_the_
number_of_press-shop_robots_as_Ford,_and_tends_to_use_simple_multi-welders_at_low_
initial_cost._It_is_ relatively_ easy_ to_
swap_ suppliers._ Tooling_must_be_changed_whenproduction_is_changed_between_one_batch_and_another,_but_people_are_trained_to_
go_for_fast_set-ups_and_to_improve_the_process._The_layout_is_designed_around_people_
and_volume_flexibility. Having_learned_much_from_its_
stake_in_Mazda,_Ford_launched_its_ own_version_
of_ just-in-time_ called_ Ford_ Production_
System_ (FPS)_ a_ few_ years_ ago._ Ford_
has_ done_ much_ to_ reduce_ product_
complexity._ This_ is_measured_ basically_ by_
the_ number_ of_ different_body_styles_that_are_possible_(see_Section_5.1.2)._Both_Ford_and_Toyota_have_
three_ basic_ body_ styles,_ but_ Ford_
limits_variation_to_ left-hand/right-hand_ drive_
and_ sunroof/no_ sunroof_options._ Since_ these_
are_multiplicative,_12_body_ shells_ are_possible._Toyota,_in_
addition,_has_variations_ to_ allow_for_different_
engine_ types_ and_ air_ conditioner_types,_together_with_spoiler/no_spoiler_versions._In_total,_this_means_that_
Toyota_has_over_70_body_shell_variations._When_multiplied_again_by_
the_number_of_ painted_body_colours_ (say_10_for_both_firms),_Toyota_
ends_up_with_hundreds_more_ painted_body_options_than_Ford._This_contributes_to_a_surprising_difference_when_it_
comes_to_building_the_car:

_ Ford_treats_the_painted_body_as_a_commodity._Once_they_have_been_painted,_bodies_
are_kept_in_the_painted_body_store,_which_is_a_buffer_between_the_body_shop_and_final_
assembly._ The_ Ford_ system_ calculates_ the_
number_ of_ each_ painted_ body_ type_ that_
should_be_in_ the_store_ to_meet_forecast_final_assembly_
requirements._The_ trouble_is_ that_the_store_can_be_full_of_the_wrong_bodies,_which_means_that_it_is_impossible_to_
build_the_current_orders._Up_to_this_point_in_the_sequence,_the_emphasis_is_on_numbers,_not_on_the_end-customer._Bodies_are_not_given_a_vehicle_identification_number_
(VIN)__which_allocates_the_body_to_a_particular_customer_order__until_the_painted_
body_is_removed_from_the_store_and_dropped_onto_the_trim_and_final_assembly_line.

_ Toyota_ treats_ the_body_
shell_ as_ a_customers_car_from_ the_
start._The_VIN_is_ added_ as_the_first_process_at_body_in_white_assembly,_when_panels_are_welded_together_to_
make_the_shell._In_turn,_this_drives_discipline_and_focus_in_the_paint_shop,_and_helps_
to_improve_first_ time_ through_ (FTT)_in_
the_paint_process._ The_ sequence_of_bodies_
through_trim_and_final_processes_is_thereby_more_predictable,_allowing_more_precise_
material_control_downstream. The_ parts_ ordering_
process_ for_ auto_ assembly_ is_ particularly_
challenging,_ because_ some_2,000_individual_parts_are_needed_for_each_vehicle._Most_of_these_parts_are_added_
at_ the_ trim_ and_ final_ assembly_ stage._
Whilst_ many_ of_ these_ parts_ are_
common,_ TPS_ already_has_a_number_of_advantages_when_it_comes_to_customising_the_vehicle._First,_the_
more_predictable_sequence_of_painted_bodies_into_trim_and_final_means_that_there_are_
few_last-minute_schedule_changes._Second,_TPS_sets_stable_lead_times_that_are_fixed_at_
certain_times_for_each_part._Third,_supplier_lead_times_are_allowed_for.
Ford,_on_the_other_hand,_leaves_schedules_uncommitted_until_parts_are_collected._The_
Ford_call-off_quantities_are_set_on_the_day_of_collection,_and_dont_allow_for_supplier_lead_
times._Figures_1.8_and_1.9_compare_what_happens_from_a_supplier_point_of_view__there_
are_huge_differences_between_scheduled_and_actual_demand.

Question

1 What_changes_would_you_propose_to_both_TPS_and_to_FPS_in_order_to_cope_with_customer_demands_for_increasing_product_variety_and_more_rapid_model_changes?