Ford Motor Co. expects to save more than $2 billion by 2010 by introducing a flexible manufacturing process at assembly plants.
To make those plants flexible, tooling cells based on common vehicle platforms are put into place to speed model change-over or balance product mix quickly with market demands as they emerge.
Matt DeMars, Ford's vice president of North American vehicle operations, discussed flexible manufacturing with Special Correspondent Tim Moran.
Please define Ford's flexible manufacturing concept.
It's our ability to be able to change over in a quick period, maybe months, to be able to produce different levels of vehicles built off a common platform structure.
Does this use tooling developed by Ford or outside vendors?
It's all developed together.
Ford works with outside suppliers to build tools to what we call our bill of process.
The flexible cells have been developed in conjunction with our input, and at the end Ford owns them.
You have said that eight out of 19 plants are converted or are being converted to flexible manufacturing.
Eight already are converted, and by the end of the decade, 75 percent of plants will be flexible.
Kansas City (Mo.), Norfolk, Dearborn Truck and Chicago Assembly are examples of plants that would have been converted over to flexible manufacturing.
Others that would not be considered would be Kentucky Truck, which builds a specific platform, like the Super Duty.
The Super Duty is not shared with any other platform, and so it would not be a candidate for flexible assembly.
What has Ford's investment been in flexible manufacturing?
We don't like to report those numbers. We like to talk in relative terms, so as plants convert, the design monies become common because you're building to a common bill of process.
At changeover you can save 50 percent of the installation investment that would have been spent.
In the past, if we had spent $1,000 changing over a plant, the next time we would spend only $500 because you have some things you keep through the change.
So the biggest bang for the buck comes in that first changeover. You don't save another 50 percent at the second changeover.
Absolutely. But it is repeated the next time you change; you maybe save 10 percent.
If we wouldn't have changed that manufacturing, you would not get the 50 percent in the first place.
It's a one-time shot, but it's a good one-time shot.
You have been talking about billions in savings by 2010, but it sounds as though the biggest savings happen up front when this process is introduced.
In speaking of the savings that we see, in fact you get the initial savings associated with the program size, which is a good savings but not the substantial one.
The substantial savings comes with the second generation of changeover.
As we reflect, Chicago won't get its bigger saving until its second time through, which will be in a couple of years.
Hermosillo (Mexico) is just launching. Their savings, again, would come in a couple of years, when it comes to those programs.
There must be assembly traditionalists who have scoffed at flexible assembly. How have you answered those doubters?
We are at the beginning of our journey.
We have convinced everybody of the business case. We have provided the investment for the future. And now as we need to move forward to respond to customer demand, we will do that in the quickest possible fashion.
The payoff will come as we prove we are able to do that.