Consumer Driven Six Sigma at Ford

            
 
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Case Details:

Case Code : OPER041
Case Length : 12 Pages
Period : 1998 - 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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Birth of Six Sigma

The journey towards Six Sigma quality at Ford began in late 1999, when Phong Vu (Vu), Director of Quality for Global Truck Business was looking for innovative approaches to improve the quality of Ford's vehicles. The answer was Six Sigma, a data driven statistical technique, invented by Motorola in the 1980s and implemented by companies like General Electric (Refer Exhibit I for a concept note on Six Sigma). Vu conducted research on leading companies which had implemented Six Sigma to develop an understanding of its implementation process and its benefits. Vu then suggested to Ford's management that the Six Sigma quality improvement program be taken up.

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

The suggestion was accepted and the management decided to launch Six Sigma, with the dual objectives of enhancing vehicle quality and improving customer satisfaction levels. Accordingly, the initiative was called 'Consumer-driven Six Sigma'.

Ford found that in the manufacture of a car, there existed about 20,000 opportunities for defects. Through Six Sigma, the company aimed at reducing the defect rate to just one defect for every 14.8 vehicles. Commenting on the motive for launching Six Sigma, Henry Wallace, Chief Financial Officer of Ford said, "We have a very strong desire to improve our level of customer satisfaction and we found we were doing incrementally better and not moving the needle to the extent that we wanted. So we looked for something that would really give us a quantum leap forward."6 The implementation of Six Sigma required both on-the-job and off-the-job training of employees.

The Six Sigma projects had to pass through a standard methodology known as the DMAIC (Define, Measure, Analyze, Improve and Control) cycle, which formed the integral part of the project.

Training

The first step for implementing Six Sigma was the training of employees. By January 2000, the top 50 executives of Ford, including CEO Jacques Nasser, had received executive training. Executive Training was also imparted to 200 other officials of the company which included the top management group, an officers group and a leadership group...

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6]  "Nasser, Ford Embrace Data-Driven Quality Plan," Mark Truby, www.detnews.com, January 26, 2000.

 

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