Six Sigma - Paper Helicopter

Denis Ramos de Oliveira

Implementation of Six Sigma at Ford Motor Company

About Ford Motor Company:

The Ford Motor Company is an American multinational automaker headquartered in Dearborn, Michigan, a suburb of Detroit. It was founded by Henry Ford and incorporated on June 16, 1903. The company designs, develops, manufactures, and services cars and trucks across six continents under the Ford and Lincoln brand names. In addition, provides services and products in the areas of maintenance, collision, vehicle accessories, and extended service warranties under the Genuine Ford Parts, Ford Custom Accessories, and Motorcraft brand names. The organization employs more than 213,000 people and operates 90 plants worldwide. It is described by Forbes as "the most important industrial company in the history of the United States." Ford is the eighth-ranked overall American-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion.

Overview and Quality problems faced:

Ford Motor Company created in the 1980s a slogan - “Quality is Job 1” – as it introduced revolutionary new products and used Total Quality Management to reduce costs and capture market share. However, Ford has faced some problems that cost it dearly in customer satisfaction and market share. Ford has fallen behind its rival General Motors Corporation in overall quality and now ranks last among the big-seven automakers, according to a recent J.D. Power & Associates survey.

Ford has recently faced more than its fair share of very public quality problems. However, the company actually began overhauling its quality process nearly two years ago. As might be expected with a big company like Ford, the results take time to show.

The company redefined the way that the overhaul on its quality process approaches its business. Ford wants to be known as a consumer product company.

Jacques Nasser, the ford CEO, said at a recent internal meeting that the vision of the company is to become the world’s leading consumer for automotive products and services. "To do that, we are focusing intensely on our customers and have made customer satisfaction our highest priority."

He knows that the improvement on the customer satisfaction relates to improvements in the bottom line. "Our data show that customers who are highly satisfied remain loyal," says Louise Goeser, Ford's vice president of quality. "In fact, one and a half points of customer satisfaction drive about one point more loyalty. In North America alone, this translates into more than $2 billion in incremental revenue and roughly $100 million in profit."

Six Sigma approach:

To become a consumer products company and gain the coveted increase in customer satisfaction, Ford turned to Six Sigma. The program, pioneered by Motorola and made famous by Jack Welch's General Electric, utilizes many of the same tools as TQM, QS-9000 and other quality initiatives. Six Sigma enables processes to produce results with no more than 3.4 defects per million.

The Ford Motor Company started to use Six Sigma in late 1999 when the director of quality for Ford's global truck business was looking for new ways to improve quality. Phong Vu suggested that they should start to look for ways to improve their quality faster than the company was. "I did research, visited with Mikel Harry of Six Sigma Academy, and benchmarked with GE and other large companies that were using Six Sigma.", said Vu, who is now the director of corporate deployment for Consumer Driven 6-Sigma at company.

Top management of Ford agreed with Vu's suggestion. It was a perfect method to achieve their twin goals of improving customer satisfaction and improving quality, for them. Ford started with its Six Sigma process, called Consumer Driven 6-Sigma, in January of 2000.

The first phase of Ford's Six Sigma effort was to focus on immediate customer satisfaction issues. "In order to accelerate our quality improvement efforts, we have identified the top 25 customer concerns by vehicle line at each of our assembly plants, and there will be Six Sigma projects associated with each of these concerns," Nasser, the CEO of the company, explained.

Ford's senior management fully supports the Six Sigma initiative. Goeser, Ford's vice president of quality, said that they should put together a plan to implement Six Sigma throughout the whole company. It occured in October 1999 with a couple of leading groups, "Two other groups jumped on board once they got through executive training. In December 1999 and January 2000, we started with the top management group, and then moved on to the officer group and the leadership group, which comprises our top 350 people.", he said. In fact, not only did Nasser go through Six Sigma training, but he also regularly champions Six Sigma projects.

Training for success:

The company quickly began rolling out the process throughout Ford's entire global operations, once the top leadership at Ford had been trained. Leadership training was followed by training for the people who would become the backbone of the Six Sigma process: Master Black Belts, Black Belts and Green Belts. In the first year and a half of the initiative, Ford trained nearly 10,000 employees in Six Sigma, a feat aided by the purchase of a $6 million training license from Six Sigma Academy.

Ford has 2,300 Belts trained currently. They want to maintain about 2,500 Black Belts at all times. And they have a goal to train all of our salaried professional employees to be Green Belts. The company already has more than 6,000 Green Belts trained, and hopes to increase that number to 10,000.

The key personnel in Ford’s Consumer Driven 6-Sigma initiative follows:

Green Belts: They receive one week of training. It includes a basic understanding of how Six Sigma works and an overview of the Black Belt tools. In addition, this training allows people who are affected by the Six Sigma projects to be able to continue to monitor and control the improvement and to do their jobs better. Therefore, Green Belts learn to help Black Belts do projects faster and better.

Ford Motor Company divides Green Belt training into three different classes: technical, manufacturing and transactional, depending on the type of employee receiving training.

In addition, Green Belts have to maintain the improvement as soon as the projects are complete at the company. Vu, says: "If they don't understand the control or cannot manage