Jim Womack sent out one of his emails today, this time focused on Ford, with their termoil. Either he writes quickly or he already knew Ford was in trouble and was inspired to write by the appointment of new CEO Alan Mulally.
It’s a long email, I’ll post the full text under “comments”. I don’t think the LEI posts them online, but you can subscribe to Womack’s emails by clicking here. Update: here is a direct web link to Womack’s piece.
“In 1997 I got a call from Jac Nasser, who had just taken over Ford’s North American Automotive Operations on his way to becoming CEO of Ford. He matter-of-factly told me that Ford’s Explorer and F100 pickup series were the only Ford products that made serious money and that he calculated that he had four years to become as efficient and effective as Toyota. Otherwise, the large pickups and SUVs would be copied by foreign firms at lower cost with higher quality and Ford would be in terminal decline. “So,” he asked, “how can Ford become Toyota in four years?”
We sat down to talk over just what this would mean — dramatically changing the supplier management system, dramatically changing the product development system, dramatically changing the production management system, dramatically changing what managers do — and he quickly concluded that it was just too hard. So he changed the management metrics, purged the poorest managers according to the metrics, and experimented with selling cars on the web! I was not asked back and had no desire to go back.”
I wonder what Womack’s history with Alan Mulally is? I’ve heard Jim tell the story about how Boeing wouldn’t listen to him and how they kicked him out, thus prompting Jim to start the non-profit LEI.
So lean transformation IS hard. That doesn’t mean the alternatives were necessarily any better or helped Ford any more. At least they would have gotten somewhere had they tried to follow the Toyota path.
It’s not a lack of knowledge that holds the auto industry back. It’s not the unions, it’s not labor costs. It’s a lack of leadership. Thanks to Womack for making that very clear.
Part of Womack’s prescription for Ford, circa 2006, is good advice for many companies:
“Fundamentally rethink the supplier management system. Fundamentally rethink the product development system. And fundamentally rethink the production system from order to raw materials and from raw materials to delivery, with special attention to the information management system. (Much can still be learned from Ford’s Mazda subsidiary, which became an able pupil of Toyota after a crisis in 1973.) Above all, fundamentally rethink what mangers do and how they do it in order to regain the gemba consciousness that originally took Ford to world dominance. In brief, Ford needs to remake itself once more, this time in the image of the company that copied Ford’s original system: Toyota.“
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