Centralization of manufacturing processes at a major automotive OEM

Ford is moving from decentralized control of manufacturing processes to centralized control. Prior to this centralization effort, product development occurred as a central function, but individual plants were largely allowed to select vendors, machine tools, suppliers, etc. for production without central oversight (other than accounting and cost control). Ford has now formed a group, manufacturing engineering, within powertrain operations (PTO), as well as analogous groups in other business units, to standardize and centralize these functions for the production of engines and transmissions. To date, the group has formally centralized machine design and purchasing with some success and a fair amount of upheaval in the daily tasks of on- site launch team members. Two technical aspects of this shift are examined, beginning with higher communication costs. These costs are the time and effort spent relaying information to understand and select a course of action for a production network rather than a course of action for a single plant. Communication costs for Ford are shown to increase with the number of plants or platforms involved in a product or process decision. After evaluating these delays, methods to improve communication costs by modifying individual responsibilities as well as methods used by other centralized manufacturers are discussed. In addition to modifying communication across the production network, common production processes also allow for flexible production within the network. Once plants share common equipment and processes they can produce the same products. A simple model is used to demonstrate that the network becomes more flexible and opportunities arise to improve the overall supply chain for engine production.

Department dc:contributor.department

Leaders for Manufacturing Program at MIT

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2004

Author dc:creator

• Kornick, Adam Marcus, 1974-

Advisor dc:contributor.advisor

• David Simchi-Levi and Thomas Roemer.

• Sloan School of Management.
• Civil and Environmental Engineering.
• Leaders for Manufacturing Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/34779

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/34779