By Alisa Priddle, Detroit Free Press –
TRAVERSE CITY, Mich. — By building vehicles the same way in every plant around the world, Ford expects to reduce its manufacturing investment costs by 8 percent a year while boosting by 25 percent the number and types of vehicles that can be produced per facility by mid-decade.
In keeping with the global “One Ford” plan, a single manufacturing operating system will support the Dearborn, Mich.-based company’s largest expansion in 50 years including nine plants in Asia Pacific, many of them in China.
Ford wants to be selling 8 million vehicles a year by 2015 — the kind of growth needed to retain status as a major global automaker.
Ford should be well positioned to not fall short of capacity in North America, although some production bottlenecks might need to be addressed if demand remains high for compact cars and the new Escape, said John Fleming, head of global manufacturing, before his presentation Monday at the Center for Automotive Research Management Briefing Seminars here.
Europe has the opposite problem: too much capacity.
Despite efforts to keep production in line with demand, overcapacity is an issue for Ford and the industry in general. “We’re losing money at the moment, as are a lot of people in Europe,” Fleming said.
“We haven’t come to any conclusion as to what we need to do,” he said. “We can reduce shifts, overtime. There are a lot of things you can do. You don’t necessarily have to close a plant.”
Fleming would not give a timeframe for a decision on what action will be taken, but said it will take some time to finish assessing the alternatives.
Globally, Ford’s average capacity utilization is below 100 percent now but should increase 27 percent to an unspecified amount above 100 percent in the next five years, based on 2-shift operations, Fleming said.
Ultimately, the manufacturing chief wants full utilization with plants running on three shifts. Ford has been adding a third crew to many of its U.S. plants as part of a plan to add 400,000 units of production to meet demand.
Fleming travels around the world overseeing implementation of flexible manufacturing so new plants can make many different vehicles from a single body shop and quickly retool for new models.
Japanese automakers have been the benchmarks in flexible manufacturing; enabling them to quickly change what they build to meet consumer demand while keeping costs down. And they have been leaders in producing full lineups of vehicles from few platforms or underpinnings, which also saves money in engineering and parts.
Ford also is reducing the number of vehicle families it has to nine core platforms by 2015 while increasing the number of derivatives from each for greater economies of scale worldwide and better capacity utilization of each plant.
In 2011, 55 percent of Ford plants had flexible body shops to make numerous models. That figure will increase to 65 percent this year, Fleming said.
“There will always be some dedicated plants, like F-Series, but the majority will be flexible,” Fleming said.
Every new Ford plant will have a body shop able to build many vehicle derivatives. By 2015, Ford will be able to make 4.5 different vehicles per plant or 25 percent more derivatives on average compared with 3.6 vehicles in 2011, Fleming said.
The cost to produce a derivative has come down by 60 percent and will continue to fall by 8 percent a year, Fleming said.
Some of the new facilities in Asia Pacific are designed to produce as many as seven different vehicles. In North America, the most flexible plant is Michigan Assembly, which that makes the Focus and Focus Electric and is adding the C-Max hybrids.
A single blueprint for all plants means they will use common processes and systems to track material, delivery, maintenance and environmental costs at every plant.
Greater use of virtual tools to simulate how cars are assembled for the best processes will reduce the cost of new plants and tooling changes for new models.
Their use has already reduced the cost of assembling a vehicle by more than 20 percent since 2009. Fleming said in 2006 Ford had about 600 manufacturing issues to resolve when a new vehicle launched. “That is down to five or less now.”