The Ford Production System

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Case Details:

Case Code : OPER040
Case Length : 15 Pages
Period : 1991 - 2004
Organization : Ford Motor Company
Pub Date : 2004
Teaching Note :Not Available
Countries : USA
Industry : Automobile

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

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.

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Background Note

Ford was established by Henry Ford on June 16, 1903, with an initial investment of $100,000. Ford initially produced cars using the Craft Production System (CPS). Under CPS, all cars were produced with same basic chassis and engine but with different designs according to individual customer preferences and tastes. However, in CPS, the manufacturing costs were high and did not decline with greater volumes.

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 system6 throughout the production process...

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5]  This was one of the earliest and most successful models in the Ford Family of automobiles. It was launched in 1908 and positioned as an affordable car for the masses.

6] A measuring system in which the same unit of measurement was used for all parts and components.


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