Quality in the Slow Lane

To meet the quality challenge, Adams has rolled out Project Execution. At Ford's truck plant in Louisville, Ky., one of several producing the F-Series pickup, for example, he's using a quality verification system, a wireless monitoring system that tracks—via barcoding, software and sensors—a vehicle as it makes its way through assembly. The idea is to make sure that no assembly steps are left undone, and that each vehicle passes a series of performance and quality tests along the way. Should something be missed, an electronically controlled gate won't let it out of the plant.

Adams is also creating a business analytics system to gather and analyze data coming from a variety of sources, including Ford's warranty processing offices, emergency call centers and 6,000 dealers. By "mining that data," Adams says, problems that might have long gone unnoticed "we can now often flag" before they get far into the assembly process.

Ford is also pushing ahead to use IT more to boost collaboration, especially on the product development side, where more of the process is going digital. There's no way to make the process entirely electronic, cautions designer Pat Schiavone, whose new version of the best-selling F-Series pickup truck will hit the road in 2003. "You can't really choose a design off a computer screen. It's something you still have to get to really see." But the number of clay, wood and fiberglass models can be sharply reduced, and far fewer running prototypes are necessary, since it's becoming easier to simulate real-world testing on the computer.

Not only does that mean cost savings, but it also speeds time to market. Example: The new Ford GT sports car. Modeled after the legendary GT40 that Ford successfully campaigned on the European racing circuit 30 years ago, its 500-plus horsepower V-8 will push the new two-seater to speeds approaching 200 miles an hour. But this GT was designed with speed in mind—the first virtually designed vehicle on the Ford product lot.

Not long ago, an automaker like Ford would need four to five years to transform a concept vehicle into a production car, but the GT project, thanks to IT collaboration technology, is on course to break the production speed barrier: Unveiled in concept form at the North American International Auto Show in January 2002, it didn't get the formal go-ahead until nearly three months later. Yet a running prototype was ready in November, and the first customers will start taking delivery in June 2003. The GT "has been virtually designed and virtually engineered," says Chris Theodore, Ford vice president of product development.

The use of computer-aided design, engineering and manufacturing systems "has been extremely successful in improving the productivity of product development," says Theodore, not just with the GT, but for a variety of new vehicles that will come to market over the next few years.

Another plus of going digital? Dozens of prototypes might be crash-tested before finding an acceptable design that meets federal safety and fuel efficiency regulations. With the GT, Ford will crash just one prototype—and then only to validate its computer-rendered results for skeptical government regulators.

Yet on all of these projects, Adams is just getting started. Keenly aware that rivals are also getting hip to the in-house power of the Net—Chrysler, for example, already uses Net-powered scanners to track warranty claims and fix defective parts—Adams wants to apply the quality and cost-cutting drive to IT projects and to suppliers as well.

The automaker's new product design portal looks just like any internal Ford home page, but it is intended to work like a doorway to most of the data and services an engineer needs to design vehicles, "and it's accessible anywhere in the world," says Smither, who until recently ran Ford's IT operations for product development.

Another critical goal of Adams' work is to share quality and cost goals with purchasing managers. There's been plenty of talk in the auto industry about the build-to-order concept—Nasser had envisioned a day when a buyer could hit a button to order a custom-configured Ford Mustang online, then transmit a slew of information directly to the dealer who would deliver it, the finance and insurance units that would underwrite it, the factory that would build it, the suppliers that would provide its components and the Ford designers brainstorming future models.

Adams doesn't buy any of that, at least for now, saying he doesn't foresee any immediate plans to produce cars directly to customer orders. That's realistic, industry analysts contend, since nearly 19 out of 20 U.S. buyers will gladly settle for what's on the dealer's lot. But there's still a critical need to smooth out the order process and to drive in discipline that ensures Ford builds and delivers a vehicle on time and at budget. CEO Bill Ford sees it as part of Adam's job to help take $700 out of the cost of producing a car—a companywide goal, but one that Adams thinks IT will have the most influence on achieving.

And while Adams is backing off some of the flashiest bits of Ford's failed Net strategy of yore, some of the lessons of the Nasser-era are being applied: Wingcast is gone, but the automaker is putting telematic systems on fleet vehicles that will provide operators the ability to track performance and, if necessary, schedule servicing.

The online ConsumerConnect unit has effectively disappeared, but now that the FordDirect.com retail site is being run by dealers, it is having a measurable impact on sales. "It is very efficient and has reached the goals we sought far earlier than we thought," notes Scheele. It is now generating 10,000 sales a month from Net leads, and Ford says it sold 100,000 vehicles this way last year—60 percent of those from leads it wouldn't have gotten otherwise.

And last but not least, Ford, like many companies, is investing heavily in Web-based communications systems—but for inside the company, this time—to improve the efficiency of Ford's workers, all the way up to the top tiers of management.

Ford is a major client of Northwest Airlines, which dominates the Detroit air hub, and Ford operates a fleet of its own aircraft at Detroit Metropolitan Airport. It takes a toll, especially when senior executives are consistently out of reach. But these days, Scheele can reach more people in less time, thanks to a worldwide leadership team videoconference scheduled every Monday morning. The automaker now operates more than 500 video conferencing sites worldwide, and over the next two to three years, its goal is to reach into virtually every office and conference room in the company.

"We will start moving our traditional videoconferencing into the IP space," says George Surdu, Ford's director of technical services, "and go to Voice over IP in telephony. The age of connecting two PCs over the Internet will allow us to get very sophisticated at a very cost-effective price."

Can Adams pull it all off? No question that the bulk of Adams' IT strategy, he says, is "correction mode"—for now. But Adams also believes that Ford can and must get IT strategy in better sync with business goals before Ford can start moving to more sophisticated real-time marketing and production systems—the key to more cost savings and sales gains. That sounds about right to Ford critics. "The message is that Ford has now recommitted itself to making and selling better cars, and that's a good thing," says analyst Phillippi.

Adams is more analytical. "We've recognized that the higher ROI comes from technology that's deeply integrated into the core operating systems, practices and processes of the company—not a strategy that puts an Internet veneer in front of things that still need to be fixed," Adams says. "For us and most corporations, the real Internet revolution—new, information-enabled ways to make, buy, market and sell products—has really just begun."

Paul A. Eisenstein is publisher of TheCarConnecton.com, an automotive news Web site. His work has appeared in some 60 media outlets, including CIO Insight and The Economist. Debra D'Agostino contributed to this report. Comments on this story can be sent to editors@cioinsight-ziffdavis.com.