How Does Flexible Manufacturing Fit?

Bob A. writes-

The Big 3 auto makers are in trouble. Honda and Toyota and are eating up the market ...

Just recently, Ford and DC (Daimler-Chrysler) changed their manufacturing strategy from making a couple of different models in a single factory to expanding their product mix (a.k.a. Flexible Manufacturing) within a factory to reduce their overall costs.

Currently, DC is producing the PT Cruiser in Mexico, with the Neon built in Belvedere, Ill. They admit this is a mistake and will be changing.

Ford and DC feel 'flexible manufacturing' is a strategy they must and will employ to survive. GM has already begun the process of implementing 'flexible manufacturing'

So, is the 'focused factory' a good strategy? I think the Manufacturing person employing this concept better know his customers and the market.

Q's Commentary-

Focus, product variety and technology are all inter-related. I think the key to effective thinking on this is to ask "What makes a product different?"

For example, the consumer would consider red and black cars as different and hardly interchangeable. From a manufacturing perspective, they are different if your paint system requires hours to cleanup and changeover. But, with a quick-change paint system, there might be no significant manufacturing differences and, therefore, we have only a single product.

Flexible manufacturing is all about using technology to reduce the effective differences between products. To the extent that this is feasible, we can have a highly focused factory that still produces a wide (customer-perceived) variety of products.

The key questions for Ford and DC are: "Can we make the technology work?" and "Will the infrastructure cost to support flexible manufacturing outweigh the apparent savings." In my view, this is an open question. There are examples of highly successful flexible manufacturing and other examples of disaster.

Detroit has attempted several drastic changes in manufacturing strategy over the years. Remember Roger Smith? He was going to leapfrog the Japanese with high-tech, flexible manufacturing. It almost destroyed the company. And, all the auto companies have attempted to emulate Toyota with limited success.

Culture and organization are important. Any Manufacturing Strategy is "wrong" if the company and organization do not have the wherewithal to execute it.

I am quite familiar with the automotive industry, especially the Detroit branch. It has a very strong culture rooted in history and long-past success. Each of the carmakers have also had their own subculture. The Detroit culture is resistant to meaningful change and does not fit well with Lean Manufacturing. For insight on this, check out "Ford: The Men and The Machines" and compare it to "The Rise and Fall of The Packard Motorcar Company" and "Decoding The DNA of The Toyota Production System."

The Smith regime at GM did have several notable successes. Saturn did very well in the early years. All of its people were hand-picked for both technical and interpersonal capabilities. They were sent to the backwoods of Tennessee and isolated from the parent corporation with complete freedom.

Another GM success from this period is little-known. Their factory in Saltillo, Mexico was a truly world-class facility. Some of the knowledgeable people who worked there attributed that success to both the local leadership and their physical isolation by desert, distance, mountains and culture.

For the current Detroit group, my personal bet is on Ford. Bill Ford seems to have the right attitude and leadership ability. His name is also on the front door and this carries tremendous weight in the Ford culture. Moreover, the Ford family has twice before produced leaders that rescued the firm from near-disaster. It might happen again.

I especially agree with your final comment. I would add that the manufacturing person must also know his technology and organization.