Ford: Putting on the Top Hat
Commonality as a business practice may help reduce costs, but how do you make sure it doesn't sacrifice product differentiation?
For the past several years, automakers have been reducing product development and engineering costs through the reuse of parts and platforms. In several cases, this has resulted in products that look alike so there's little differentiation between vehicle brands, save for interior trim packaging and optional equipment. But this has changed, in large part due to advances in computer-aided design and flexible manufacturing systems. Now automakers can reuse the basic architecture and structure of a vehicle but then put with vastly different body styles, or top hats, over them. Ford is the latest automaker to join the top hat revolution and it is moving aggressively forward with plans to use fewer global architectures over multiple vehicle segments to improve profitability and operational efficiency.
"At Ford, we view the top hat as being the upper body structure of the vehicle which is set on a common set of underpinnings. The upper body could be a number of variants from a crossover to a sedan or coupe," says Bruce Hettle, executive director of manufacturing at Ford, who points out that because they're reusing the base, they get economies of scale, but because of the different top hats, the customer gets extensive product differentiation. Sounds simple, right? Think again. Implementing a comprehensive and successful top hat strategy requires a complete change in process from the start of design through to manufacturing job one. It isn't as simple as buying the latest PLM software or flexible manufacturing cell.
Ford is making huge changes to the way it conducts its product development activities to accommodate increased reliance on more top hats based on fewer architectures. The automaker has revamped its entire product development, engineering and manufacturing disciplines to encourage early communication throughout the product development, assuring vehicle architectures can accommodate numerous top hats before freezing platform dimensions and having to make costly modifications down the road.
"We do not have separate product development and manufacturing functions at Ford anymore, both functions are fully collocated," says Hettle. The automaker is also shifting to a "gold standard" streamlined global bill of design, process and materials focused on just two vehicle architectures: unitized bodies and frame-based vehicles, with complete commonality between every vehicle within these architecture segments by 2012, including manufacturing sequences.
"Prior to this approach, we would have one or two vehicles in an assembly site, but now the plan calls for 3, 4 or 5 differentiated products," Hettle says. As an example, Ford is investing $100-million in flexible tooling to move production of its Lincoln Navigator and Ford Expedition full-size SUVs to its Louisville, KY, truck plant in spring 2009 alongside the Super Duty pickup to maximize efficiency at the plant, which was dedicated solely to the Super Duty. "Once we make these investments we will be able to build the new Super Duty model along with the next Navigator and Expedition and fluctuate that mix up and down so when the new Super Duty is launched we can run that product all out and reduce the number of Navigators and Expeditions and vice versa," Hettle adds.
Preplanning Reaps Rewards
Relocation of the Navigator and Expedition has freed up capacity at Michigan Truck for Ford to respond quickly to changing market condition in the U.S. and move its European C-segment based vehicles-Focus, C-Max and Kuga-into the plant beginning in early 2010. Unlike prior product relocations, Ford will only have to invest $75-million to retool the plant for the shift because the automaker put $300-million into the plant in 2005 for flexible tooling in the body shop, which can be easily reconfigured to accommodate the smaller unibody-based vehicles and their top hats. "The way we configured the original body shop is that 80% of the infrastructure was non-vehicle specific, allowing those pieces to remain in place. The other 20% that requires changes are the fixtures that touch the sheet metal along with minor modifications to the paint shop," Hettle says. This approach to forethought is a critical part to executing a successful top hat strategy, and Ford will push the boundaries even further with its Fiesta B-segment vehicle platform, which will include crossover and MPV body style variants after 2010 sharing a singular global design built in plants with identical tooling and layouts. "There will no longer be a reliance on regional designs and processes," Hettle says.
Top hats may help to improve the bottom line through increased reuse, but there are limits to the benefits. Building too many variants-more than six or seven-at one facility could inject excessive complexity into the manufacturing process, thus eliminating the cost savings generated when only three or four variants are built. Likewise, only building two variants could lead to problems if both vehicles are failures in the marketplace. Still, failure to implement a cohesive top hat strategy is like leaving money on the table and in this day and age that's a massive waste of potential resources.