Back in 1927, the man who brought motoring to the masses, and then nearly blew it all by insisting "the public can have any colour it wants so long as it's black", was forced to a fundamental rethink. General Motors' new Chevrolet was thrashing Henry Ford's long-serving Model T. Featuring several technical innovations and available in a wide choice of colours, the Chevrolet did so well it ultimately forced Ford to shut down his Model T production line and lay off 40,000 workers. It was seven months before Ford finally unveiled the replacement Model A, technically more advanced and offered in a range of tones and tints. Thus did Ford learn lesson one about the perils of forfeiting competitive advantage.
While the lesson seems to have permeated the culture of the Ford Motor Company, these days it's the shrewd use of information technology that's seen as the way to steal market share in an increasingly global marketplace. And never more so than here in Oz.
Thanks to the twin forces of globalisation and computerisation, much of Australia's car industry, once almost universally damned as hopelessly inefficient, is already running at close to international levels of performance.
Still, Ford Australia is confident it can go the competition one better. It intends to ensure the next model Falcon, to be launched next year, will be Australia's first truly world-class car. "We are stepping into a world echelon," says product development vice-president Ian Vaughan. "Previously we were designing down here in Australia with the handicap of being a small design outfit. Now it's as if we were in Detroit or London or Cologne. We're on the world stage; we've got access to all the world technology; and there's no reason why our car can't be as perfect a design as anyone else's," he says.
The new Falcon will be the first tangible outcome locally of the Ford 2000 strategy. Globally, Ford is using the strategy to get products to market faster, at the lowest possible cost, and with less dependence on a progression of prototypes (the historical way of validating cars on the way to market). In Australia there is even greater value. Here, where the threat of tariff cuts forced Ford to seriously consider becoming an importer of product developed overseas, the strategy gave Ford Australia a business case to continue to develop product locally.
Ford Australia traditionally designs its local cars from a clean sheet of paper, making the company the biggest design house in the nation. In contrast the General Motors Commodore has its origins in a German Opal Omega which is then modified for Australian use. Toyota and Mitsubishi assemble cars around designs done in other parts of the world. Ford has no doubt its local design innovation is its competitive edge.
With the local Design-Ford 2000 combination, Ford has discovered a new business proposition that's able to "fly in Australia", giving Ford Australia a reason to stay, says Vaughan. "If you stay you've got the opportunity to design something that really is perfect for the market. We believe if we can work out what the market needs and give it to them. That gives us a competitive advantage," he says. At the same time, Ford 2000 is helping Ford develop a rigorous philosophy about the use of IT as a business case enabler and the value of in-house-developed software in helping build competitive edge.
If the gap between the quality of European and Japanese cars and that of the local product has already narrowed considerably, Vaughan says the improvement is at least partly due to the mechanisation of the design process. Vastly increased mechanisation is expected to provide an even bigger pay-off for the new model. Much of the difference lies in the ability, Vaughan says -- never previously possible -- for stylist, designer, supplier and assembler to work together as a team.
Worldwide, the Ford 2000 strategy will see Ford designers, engineers and third-party suppliers around the globe communicating in a single computer language by 1999. The common weapon in the Ford global product development armoury is C3P -- a computer software package and strategy that is allowing the company to link its computer-aided design (CAD), engineering (CAE) and manufacturing (CAM) operations with its global product information management (PIM) system.
"Ford spent a lot of time deciding where our next echelon of computer-aided services should go, shopped around for a whole bunch of software, and then decided on C3P as a strategy," says advanced Falcon product manager Paul Roberts.
The outcome of the strategy is that the Australian design and engineering team can tap into a US-based network of supercomputers, equivalent to 115 Cray C90s (expected to reach 1573 by the year 2000). And while they can draw on a massive knowledge base of experience from their peers around the globe, they are equally contributing to that knowledge base as they strive to design the perfect Aussie car.
Vaughan says the car industry is both capital-intensive and increasingly global. "Ford Australia has found a niche in that: called making the Falcon. We are very Australian on the one hand, but we are very global on the other -- and using global systems quite considerably," he says. By tapping into the massive global network to conduct design and engineering calculations on the next generation Falcon, Ford's ultimate goal is to eliminate 90 per cent of all physical prototypes used today (for example in numerous iterations of crash testing) by the year 2000.
"When we first introduced computer-aided engineering, which is largely techniques based on finite element analysis, we used it for problem solving," Roberts says. "We did our designs, built our prototype around those designs, and ran it at the test track. Then when we'd find a problem we'd home in on that, build detailed models of computer analysis around it, and come up with a fix to the problem before it went to market.
"With our new model Falcon program we've expanded the scope of CAE quite extensively," Roberts says. "We're using CAE models right from the very first designs, which we call our feasibility designs. We're making computer models of those and exercising those models not just to see -- Does it work? Does it not work? -- but to validate them. You've got much more freedom 24 or 30 months before the job is on than 12 months before the job is on [and] you've committed to actually making tools and steel parts. That's a big shift in our culture," he says.
While Roberts says he can't envisage the company turning its test track over to sheep grazing during his time with Ford, the advantage of computerisation is significant. Indeed the massive increase in computing power is already producing impressive results. In 1995, it cost $60,000 to conduct a frontal crash simulation. Today, by computer, it costs 1/300th of that. For a human being with paper and pen to perform the calculations for the frontal crash simulation would take 68 million years. On a personal computer it would take 15 weeks. On Ford's brand new 16 processor Cray Triton supercomputer it takes just 15 minutes.
In designing the new Falcon, Ford is halving the number of occupant kinematics tests (which evaluate the movement and forces the occupants are subjected to in a crash, using real prototypes) from 100 to 50. That represents a serious saving. To crash a fully instrumented prototype car costs about $200,000, and many of the crashes are conducted overseas. But it also comes with other major pay-offs. "Since we've done a lot more simulations on the computer than that 50, we've been able to optimise the design to a much greater degree before we've gone into testing hardware. We're a world-class leader in that kind of technology," Roberts says.
In the not too distant future, Ford envisages being able to test its designs on a virtual car in the shape of a full-size hologram. "In fact for our new model Falcon the prototype cars that we've built are already the most representative that we've ever built for any program," Roberts says. "I think that's a good thing, because it means what we are evaluating is representative of what we intend to sell. And it also gives us scope to go into more thorough testing.
Because we've done a lot of the work up front by using the CAE, the prototypes that we test then are much more defined."The Australian organisation is leading the global organisation in the area of noise and vibration analysis -- important in avoiding vehicle shake or vibration. By extending basic techniques picked up from Ford internationally, the Australian body structures and CAE engineering group has learned to predict road noise up to a much higher frequency than was previously possible. "It is one of the areas where we have extended the envelope of the global knowledge bank," Vaughan says. "We've made a contribution back to the global intelligence by expanding one piece of software to new boundaries. In this way we are a giver as well as a taker of technology."Health and occupational safety gains are another advantage. "We used to have eight operations where the operator actually had to climb into the engine bay during the assembly process. For this program there are no operations where the operator has to climb inside the engine bay," Roberts says. But the overall gain is a much better optimised, more weight-efficient and evenly stressed design, with a better surface finish.
Keeping it in-house
Ford has a policy of not outsourcing any of its design work. "Once you lose control, you never get it back," Vaughan says. And much the same philosophy applies to the company's use of IT.
Ford has just installed Cray Triton supercomputers with 36 processors. Ford is one of Cray's largest customers worldwide, and routinely installs each new supercomputer model. To capitalise on that massive investment, Ford has organised into three main product lines across national boundaries, the three sharing a common set of global computer programs. Vaughan, part of the large vehicle centre, reports to a boss located in Detroit. He says the re-organisation was part of the Ford 2000 strategy, and recognition that the global synergy of product was more important than international geography.
"We're not organised under geographic lines any more; we're organised under product lines and in families of products. We're in the large vehicle family, so I've instantly got access to anything in the large vehicle family," Vaughan says. "My boss is frequently saying: 'We've got a problem over here that sounds a bit like the one you had. We've solved it, here's our solution.' And alternatively, I can link into other vehicle centres," he explains.
At the same time, Ford's massive US-based research department spends millions of dollars writing in-house software to conduct many of the necessary simulations. Those researchers are closely connected with third-party software vendors. Where those third-party vendors have some special expertise, such as in the area of crash analysis, Ford will buy from them -- "We don't believe in reinventing the wheel," says BPR manager Brenda Richardson -- but will also work with them to develop the product further to suit Ford's precise needs.
And then the company goes one further. Since Ford keenly believes the information technology it deploys is vital to its competitive advantage, and is hence reluctant to use the same technology being used by its competitors, it also has a large team in the research area charged with developing Ford-specific methodologies and procedures for using that software. All methodologies and procedures are maintained on the Ford intranet, and each arm of the global company provides feedback on improvements.
Vaughan says the approach ultimately results in a better end product which is more differentiated from the competition. "The best way to describe it is to go back to what the customer sees," he says. "The customer sees one product versus another. The motoring journalists will say: 'This one handles better. This one has got better noise levels. This one's got a better engine. This one's got better seats.' In the end it comes back to the technology that's in those sub-components. And the quality of your technology is in the quality of your engineering.
"The three goals of this computerisation process are quality, cost and speed.
The quality of execution is by far the most important, because that's where you get your competitive edge. And if you can do it faster and better, with more iterations of safety design, and end up with a safer car than the guy down in Fisherman's Bend, you end up with a competitive advantage. And it ripples right back into the tools you use, and the people who are using them.
"We're very strong on teamwork being a major competitive advantage. Unless you're at the leading edge of using teams, and their interactive knowledge, it doesn't matter how good your software and your hardware are. It's people who win the battle," Vaughan says.
So, when Ford does use third-party software, it relies on its teams to give that software added value in order to help maintain its competitive edge. "It's the way you use that software that gives you that competitive edge," Vaughan says. "That's where you're adding your intellect. It's the procedures and methods and how you adopt them; and the intellect and the experience of your people. The operator is more important than the machine they operate."Ultimately, Ford expects the Ford 2000 initiative to have an impact on its total business equation. To justify designing a new model locally, Ford says it must sell between 80,000Ð100,000 cars a year.
"The only way we can sell 80,000Ð100,000 a year -- which is outselling Toyota and Mitsubishi by two to one -- is to have something that they don't have," Vaughan says. "And that's why it pays to be Australian; and that's why we have to be world-class Australian to be twice as good as Toyota and Mitsubishi. If we weren't twice as good we wouldn't sell 80,000, we'd only sell 50,000; and at 50,000 we can't afford to invest in an Australian-made car."SIDEBARRapid TransitToday, Ford 2000 and C3P are both seen as integral to Ford's business process re-engineering effort, which has been effectively under way for the past 10 years. Newly appointed BPR manager Brenda Richardson (formerly CAD/CAM/CAE/CIM systems manager) says Ford worldwide is very process-oriented, with people at every level involved in improving cross-country processes. This involvement from all levels is one of the strengths of Ford's BPR approach, she says.
"The idea is for BPR to become a mind-set, so that people actually think about what they are doing, and whether there is a better way of doing it, and identify their own concerns," Richardson says.
Ford has developed its own approach to, and introduced its own tools for, BPR, including RAPID (rapid action process improvement deployment), a brainstorming technique that serves as a structured way of holding meetings for process improvement. "We say there is a pyramid in process improvement, and at the base of that pyramid is RAPID," Richardson says. "The way it is working is that as people get involved in these as part of a team, having gone through the process, they then apply the same method, to solve problems in their own workplace."Ford is now analysing corporately the process change that has come with C3P.
But Richardson says neither C3P nor BPR can happen overnight, and both are also iterative. "The phase we are in now is really in introducing tools so that we can actually address some of these process ideas that people have got," she says. "In the past we've done a lot of work on getting people involved and getting them to think that way. Now we're trying to provide more tools so they can do something about it."Richardson says Ford sees BPR as an ongoing process that will always require considerable management commitment. "I don't know if you can ever say you've finished it," she says. "Technology will always improve, and customer demand will always change.
"There is a lot of commitment to BPR at board level. Eighteen months ago we combined some IT and some quality initiatives and some process initiatives to form process leadership. I think that was a big step because it gave a focus to the whole thing that said: 'Technology is here to support the process changes and the business changes in its own right.'"Certainly [senior executives] have been very supportive in Australia. The operating committee has generated ideas on process improvement. We've got support at all sorts of levels, but we've really got to build on that now and integrate it across the company. You shouldn't have to have one person behind it driving it, it's got to be part of every person's mind set," Richardson says.
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