Ford has pioneered several innovative automobile manufacturing techniques since its inception.

In the mid 1990s, Ford restructured its manufacturing operations in its efforts to induce more flexibility and enhance the efficiency of its automobile production systems. The restructuring effort was known as Ford Production System (FPS). The case discusses the keys elements of FPS and how it was implemented by Ford. The case also discusses how Ford implemented the principles of lean manufacturing through FPS at its manufacturing operations. Finally, the case discusses the benefits reaped by the company after the implementation of FPS.

"The crux of the change is the way people work and the way machinery is organized. Lean manufacturing is all about people and the way they use technology to eliminate waste."1
- Anne Stevens, Vice-president, North America Vehicle Operations, Ford Motor Company.

"With increasing market segmentation, Ford's new flexible assembly system means the company can react more quickly to shifting customer demand. The company will be able to produce a wider variety of vehicles, change the mix of products and options, and change volumes - all with minimal investment and changeover loss."2
- Al Ver, Vice-president, Ford Advanced and Manufacturing Engineering In 2002, 17 manufacturing plants across the world received the Shingo Price for Excellence in Manufacturing3, termed by BusinessWeek as the 'Nobel Prize of Manufacturing.' Three plants of Ford Motor Company (Ford) found a place in the list. The plants included Ford Assembly Plant, Chicago III; Ford Engine Plant, Romeo, Michigan and Ford Engine Plant, Chihuahua, Mexico (Refer Exhibit I). The award was given in recognition of Ford's efforts to streamline its manufacturing operations. By using lean manufacturing principles, Ford had significantly improved the quality of automobiles it produced. Jim Padilla, Ford's group Vice-president of Global Manufacturing said, "Ford is aggressively implementing lean manufacturing principles through the Ford Production System at all of its manufacturing operations. This is key to our success in an increasing competitive vehicle market."4Ever since it began operations in 1903, Ford has been recognized as a manufacturing process innovator in the automobile industry. For instance, in 1907, Ford introduced the mass production system, which produced cars of uniform quality and features in bulk, and sold them at an affordable price to customers. In 1913, Ford introduced assembly line manufacturing, a totally new approach in automobile making (Refer Exhibit II). Ford also became the first automobile maker to adopt 3D visualization tools like CAD, CAM in its manufacturing operations in the 1970s. In the mid-1990s, Ford revamped its operations, to induce greater flexibility and enhance the efficiency of its manufacturing processes. The reengineering effort was known as Ford Production System (FPS). Modeled on the famous Toyota Production System, FPS aimed at developing and applying the best practices in automobile manufacturing. FPS involved the implementation of techniques used in lean manufacturing. Apart from using advanced technologies to help reduce waste, FPS emphasized the human

aspects as well. It required its employees to form teams called work groups, and empowered managers to take work decisions without wasting time. Ford implemented the FPS in its plants across the world and realized improved productivity levels and financial performance. Initially, at the Ford factory, the assembly stands on which a whole car was assembled by one fitter (assembler) were used. A Ford worker assembled a large part of a car before proceeding to the next car. The fitters performed the same set of activities repetitively at their fixed assembly stands. Workers procured the necessary parts, so that they could fit and then bolt them at the appropriate places. Later, to increase the efficiency of the process, each workstation was supplied with the required parts. This allowed the assemblers to remain at a given place throughout the day. In 1908, Ford introduced the mass-production system for the production of Model T5. The novelty in this system was that the parts were standardized and fixing them on became much easier. To enable the parts to be used interchangeably, Ford standardized the gauging system6throughout the production process... In January 1995, Ford employed a company-wide re-engineering initiative called Ford 2000. One of the major objectives of Ford 2000 program was to develop and implement a new manufacturing system called the Ford Production System (FPS). According to Ford's website, "The vision of FPS is a lean, flexible and disciplined common production system, defined by a set of principles and processes, that employs groups of capable and empowered people, learning and working safely together, in the production and delivery of products that consistently exceed customers' expectations in quality, cost and time." FPS was an attempt by Ford to transform itself from mass production system to lean manufacturing system... Lean

Manufacturing in Practice
Lean manufacturing aimed at bringing together human, material and mechanical resources at the right time and place to accomplish a task. It strived to eliminate every kind of waste including wastage of time, labor, scrap material, defective parts, etc. There were several instances in which the company achieved massive productivity improvements through lean manufacturing techniques...

Production Sytems of the Future

By 2003, all the plants of Ford had adopted FPS in their operations. It was estimated that after the implementation of FPS, Ford had achieved savings to the tune of $500 mn per year. The personnel at the plants also received web-based training while best practices were identified and shared between the plants. By mid-2003, Ford was in the process of standardizing manufacturing operations across all its plants globally. The company planned to implement standard operating procedures and uniform plant layouts...