Ford Motor Company had its first quality initiative in the 1980s when it embarked on implementing Total Quality Management in an effort to reduce cost and increase the market share (Paton, 2001). However, in the late 1990s Ford Motor Company was facing serious quality issues that saw it rank last among the seven US auto-manufacturers. The quality issues resulted in a sharp decline in market share and customer satisfaction (Paton, 2001). To lower cost and improve customer satisfaction Ford Motor Company adopted the Six Sigma led by Phong Vu (Paton, 2001).
Smith (2003) observes that the Six Sigma quality initiative encompassed three quality management systems:
Quality leadership initiative that required all employees to be engaged in the initiative through partnerships with unions, dealers and suppliers, training and feedback, and rewards and recognition to employees
Quality operating system that involved use of data and statistical methods in product creation, quality in production (3.4 defective parts per a million parts), sales and services
Consumer driven Six-Sigma a data driven approach to problem solving that follows the Define, Measure, Analyze, Improve, Control (DMAIC) cycle (Smith, 2003)
Ford select Six Sigma projects that satisfy three main criteria: the project must relate to customer satisfaction, the project must reduce defects by at least 70%, and each project must yield cost savings of more than $250,000 (Paton, 2001).
The results of the Six Sigma quality initiative are measured on three key variables: one, vehicle quality that considers customer satisfaction, reduction in Things Gone Wrong (TGW), and residual value, two, sales and service satisfaction, and three, elimination of waste. As of 2003, Ford Motor Company had saved over $1 billion in waste elimination, and customer satisfaction had increased by 5% (Smith, 2003).
One example of a Six Sigma project involved resolving a customer complain that the mouldings on the Ford Focus were lifting on the edges. Ford applied the DMAIC process to identify the root cause of the problem and developed a solution that involved engaging the supplier to change the hole location and ensure that the moulding was flat (Smith, 2003). The projects translated into $100, 000 savings in waste elimination and there were no more customer complaints in respect to body mouldings on the Ford Focus (Smith, 2003).
Ford Motor Company experienced some challenges in implementing the Six Sigma quality initiative the key challenges being sceptical staff, inadequate resource allocation and lack of data (Paton, 2001). Ford was able to overcome employee scepticism by demonstrating the success of the initiative through time. Managers bought into the Six Sigma quality initiative when they saw the cost savings and the improvements in production because of implementing Six Sigma. Training employees and managers on the Six Sigma took a toll on the company time, money, and output. In addition to spending $6 million in training license, Ford had to send its senior managers and top 350 leaders through weeks of training in a short span of time and this taxed Ford’s resources and productivity (Paton, 2001).
Six Sigma quality initiative was a data driven method of making decisions and Ford Motor Company did not have a management information system that would generate the kind of data required by the Six Sigma quality initiative. To overcome this challenge, Ford developed new measurement systems and developed databases that allowed for the sharing of data and information across various departments (Paton, 2001).
References
Paton, S. (2001, September 1). Consumer-driven Six Sigma saves Ford $300 million.
Retrieved January 7, 2016, from http://www.qualitydigest.com/sept01/html/ford.html
Smith, K. (2003, June 1). Six Sigma at Ford Revisited. Retrieved January 7, 2016,
