Managing to Achieve Results
Table of Contents Introduction2 Details3 1. Structure and culture of Ford Vietnam3 1. 1. Structure of Ford Vietnam3 1. 2. Culture of Ford Vietnam5 1. 3. Inter-relationships between the different processes and functions of the organization9 2. Mission, aims and objectives o Ford and the effect of these on the structure and culture of the organization10 3. Process maps, output evaluation, and quality gateway analysis12 4. Resources, tools and systems required to support the business process17 5. Quality audit system/ practice to manage and monitor quality to standards specified22 6.
Quality culture embedding to ensure continuous monitoring and development of the process25 6. 1. Quality in employees25 6. 2. Quality in process26 7. Recommendation to improve quality and the function of Ford Vietnam27 7. 1. Problem27 7. 2. Reasons27 7. 3. Recommendations and evaluation29 Conclusion33 References34 Introduction At the present car industry in Vietnam is huge. Its expansion grows strongly due to market demand and social development. Ford Vietnam is one of car enterprise which has entered in this market for over 15 years and gained quite a lot of success.
For 15 years in Vietnam, despite of being competed by many rivals, Ford Vietnam still stands firm in the car market. Last year, with the new models, the sale volume of Ford reached approximately 8,000 cars. However, its market share in recent years has decreased by few amounts. Our group 19 had a chance to visit Ford factory and observed it with the purpose of understanding its culture, structure and process in order to make suggestions for how to improve quality and the function of Ford organization. Details 1. Structure and culture of Ford Vietnam
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Organizational structure and culture play a very important role in terms of creating the organizational success. Based on the company’s business and objectives, there are various organizational structures and cultures which can be applied to organizations. 1. 1. Structure of Ford Vietnam Theoretically, organizational structures can be defined as tall structure and flat structure; centralization and decentralization; functional structure, product structure, market structure, geographic structure and matrix structure; multifunctional teams and multidivisional structures.
According to the p of control, there are two kinds of organizational structure: tall organization and flat organization. A flat organization is one which, in relation to its size, has a small number of hierarchical levels. This implies a wide p of control. A tall organization is one which, in relation to its size, has a large number of level management hierarchy. This implies a narrow p of control. According to the degree to which authority is delegated, there are two kinds of organizational structure: centralization and decentralization.
Centralization is the concentration of authority for making most decisions at the top levels of organization. In contrast, decentralization is the dispersion of authority to make decisions throughout all levels of the organization. Besides, the structure of an organization can be classified by geography, by function, and by product and brand. Additionally, there are some kinds of organization structure that are more complex: the matrix, multifunctional teams and multidivisional structures. The matrix is a structure in which people are grouped by function and by product team.
A multifunctional team is a group of individuals brought together from more than one functional area of a business to work on a problem or process that requires the knowledge, training and capabilities across the areas to successfully complete the work. A multidivisional structure is an organizational structure in which each district product line, market or business unit is placed in its own self-contained unit or division and each division has within it several functional sub-divisions for production, marketing and so on.
Ford Vietnam has established and developed its organization based on nine fields with nine managers including Technical Affair, Finance, Human Resource, Marketing, Sales, After Market Sales and Service, Public Affair, Deputy Manager, Quality manager. Under the authority of Technical Affair manager, there are two departments: Manufacturing and Supply Operation. The manager of manufacturing department is responsible for four divisions including Body shop, Paint shop, TCF (final assembly) and support function. There are three divisions in the supply operation department: Logistics, purchasing, and launching.
In fact, the name of each field, each department and division is clearly based on their tasks. Therefore, the structure of Ford Vietnam has organized by functional structure. Furthermore, Ford Vietnam is considered as a large company in Vietnam with more than 500 employees. Mr. Michael Pease, the General Director of Ford Vietnam tried to emphasize in the authority and responsibility of individual managers, who enact the role expected of their position. In this company, everybody can make decisions based on their level of authority. Hence, Ford Vietnam follows the decentralized structure and the tall structure as well. . 2. Culture of Ford Vietnam Organizational culture is defined as “the informal set of value, norms, and beliefs that control the way people and groups in an organization interact with each other and with people outside the organization”. There are four types of culture: power culture, role culture, task culture, and person culture. Power culture is the culture in which the organization is controlled by key, central figures – often the owners of founders of the organization. Role culture is used in classical, rational organization or bureaucracy.
In task culture, management is seen as completing a succession of projects or solving problems, often as part of a team. Person culture is a culture where the organization tends to serve the interest of the individual within it. Ford Vietnam was established in 1995. Since then, there were 15 years for Ford Vietnam to build up its culture which can be represented by its slogan, image, clothing, office decor, rules, policies, motivation, leadership style, belief and attitude, and so on. It is so surprising that you can see a lot of slogans in manufactory of Ford Vietnam.
For example, to emphasize the value that Ford Vietnam wants to build up as well as motivate the workers in the plants, Ford VN uses the slogan “ Ford moving with you, quality is job # 1”. Additionally, Ford VN realized that saving is an important with the development of its business. As a result, there are a number of slogans about saving in the plant, office, canteen, even in toilets such as “the higher saving energy, the higher salaries”, “one hour oven burning equals to 100 oxen”, “one hour air compressing equals to 100 pumpkins”. Ford VN understands that the majority of its workers were grown up in farms.
Therefore, using the familiar things with the workers such as ox, pumpkin is to make the workers more understand the slogan and then m work more effectively. Addition to the slogans, the company publics the price list of the tools the workers using to make them understand the value of each tools they are using, the take care of those tools, saving and using effectively. [pic] Figure 1: Ford Vietnam Symbol is an element showing the Ford VN culture. It acts as shorthand way to keep people aligned as well as the way to indicate status within a culture.
This includes clothing, office decor, and so on. In term of clothing, Ford VN designed uniforms for its employees based on the characteristics of the work the employees carrying out. For example, the staffs working in the office wear the blue shirt while the workers in the Paint shop wear a green-stripe suite which is quite convenient, and suitable with the condition in Paint shop. Meanwhile, the uniforms of workers in Body shop and Final assembly are different from the office staffs and Paint shop workers but quite similar to each other.
These uniform are not only for identifying the employees in different fields of work, but also for showing the spirit that Ford VN wants to build up for its employees. From that, they are proud to be the employees of Ford VN and then have behaviors that are appropriate for their status and position. In term of office decor, the manufactory looks quite friendly with the environment. There are a lot of green grass between blocks with beautiful flowers and trees which are taken carefully.
Besides, to support the rules and policies about the safety in the manufactory, there are drawings to distinguish the paths for walking and paths for goods carriers. It looks like an in-zooming traffic system in the manufactory. In addition to policies about the production, safety and saving in the notice-board, there are a lot of signboard in the plant. For example, there are signboard about the areas for smoking and no smoking, areas for using cell phone. Moreover, there are a lot of pictures, certificates, cups divided into two groups.
One group is about the Ford Company in history, introducing the presidents of Ford, the T-model, and achievements. The other group is about the achievements of Ford VN. In the office, there is no separate room for each department. The departments are all in a huge hall and separated by the sectors. That is quite helpful for the employees among departments to communicate with each other easily. In term of motivation, the company has done a lot of activities to motivate the employees. Firstly, when becoming the employees of Ford VN, they have opportunities to take part in training courses sponsored by Ford.
Furthermore, if the workers want to exchange the field in job in the plant, they can register and will be provided a six month training to improve their skill so that suitable with the position they want to change. Moreover, they can be exchanged to other manufactory of Ford in the world wide. It is the good way for the employees to develop themselves and be globalized. Suggestion plan is an activity motivating the employees have new ideas to improve the quality of production which is updated every first day of a week. If the new ideas are evaluated as the good ideas, the ones who have those ideas will be given a bonus.
If those ideas can be applied in production, those will be rewarded. Besides, there is a closing ceremony to acknowledge the best idea every year. Additionally, the best employee will be recognized and rewarded. The bonus will be given based on that situation of the company. Besides, the company also organizes a consulting sales competitive festival in the whole Vietnam. In addition to activities related to the production and operation, the company also organizes competitions on chess, billiards, table-tennis, tug of war, and so on. It helps the employees entertain after tired working ours. Moreover, there is a family day in which all the member in the family of employees can come to visit the manufactory and join the party with others. Besides, there are a lot of propagandas from Ford Vietnam so that the employees enhance their sense to take care of themselves. From example, the company propagandized about the way to prevent from chicken blue H1N1 when that disease appeared. Additionally, HIV-AIDS is a century disease that the whole society is taking care, so is Ford VN. There are a lot of pictures and slogan in the manufactory propagandizing about it.
Besides, there is a automatic machine selling condom in the Man toilet with very low price (VND 1000). The company is doing the job showing the right way for their employees to prevent and protect themselves from that disease. In term of leadership, Michael Pease, the General Director of Ford VN is apprised to follow the democratic leadership style. He is commented that he is an open-hearted, friendly, funny, condescending, reliable, and stable man, especially in the business. Within more than two years from the first day he came to Ford VN, he succeeded in building trust, faith with the employees.
In Ford VN, every employee can take part in the decision making process and made decision based on the level of their authority. With the important issue, normally the one makes the final decisions is still the general director. In term of social responsibility, Ford VN always considers that activities contribute for the society is one part of responsibility of the company. Ford VN has carried out many programs in driving safety, environment protection, and prevention in Vietnamese traditions, and other charity activities.
For example, Road safety education for both children and adults, driving skills for life which guide the driver how to drive safety. Besides, in 5 years ago, Ford VN sponsored a lot of cars for American war veterans with about USD$ 150,000. Additionally, Ford Grant sponsors for the environment protection and prevention in cultural traditions with about USD$ 40,000. In conclusion, by the way Mr. Pease decentralize the power of the authority in the company, his individual managers can understand clearly their works and responsibilities, so that they can take their own decision in their field of business.
Besides, individuals in the company tend to learn an expertise without experiencing risk. Additionally, employees are rewarded for their expertise and their contribution to the company rather than simply for their position in the hierarchy or their length of service. Furthermore, he also wants to build trust, respect and commitment, and work best when wanting to receive input. Theoretically, it is called role structure. Moreover, the employees in Ford VN work with team based. There is no dominant or clear leader. The performance is judged by the results.
The most important thing is how to get the job done. Theoretically, Ford VN also follows the task culture. In conclusion, the culture of Ford VN is combined between role culture and task culture. 1. 3. Inter-relationships between the different processes and functions of the organization Among the departments of Ford VN, there are two kinds of close relationships that will be mention and evaluate below. The first kind the writers want to mention is the relationship where the output of this department becomes the input of other departments.
This kind of relationship make the departments inside Ford VN become the internal customers of each others, and ensure that the process inside the company will be fluent and qualified. In reality, the output of each department in Ford VN is created based on the orders of other departments. For example, the output of Marketing department is the fact that customers come to the company, and this fact becomes the input of the sales department. The output of the sales department: cars sold to customers becomes the input of the Aftermarket sales & service department.
In this kind of relationship, the departments of Ford VN become customers of each other and they have to try their best to satisfy their internal customers and to keep their products qualified with ISO 9001. In the structure of Ford VN, there is a department which supervises the output of the others: the quality manager department. This department represents for the customers. As a result, their comments and ideas are very important to the other departments. The second relationship is the supporting relationship among the departments. All the departments have a main aim: the development and profit of Ford VN.
Therefore, they team up to create the power of Ford VN. Every part of the process has the contribution of the whole company. For example, in a marketing campaign, from the preparation to the implementation, there are contributions of the public affair department, marketing department, sales department, and after sales and service department. First the marketing department will research the market to find out the demand, the needs and wants of the customers, and then they design a proposal which call for the contributions of the other departments.
The ideas come to make the proposal more applicable. After that, the proposal will be tested by the quality manager department, whose voice represents for the voice of the customers. After that, the proposal will be brought to trial after the agreement with the finance department, then moving to implementation process, and this process depends on the efforts of the sales department and the service and after sales department. To ensure that a proposal running right as it was designed, the whole company has to participate and support each other. 2.
Mission, aims and objectives o Ford and the effect of these on the structure and culture of the organization ? Mission To talk theoretically, a mission describes the organization’s basic function in society, in terms of the products and services it produces for its clients (BPP 2004). A mission can also be an answer for the question: “why does the company exist? ” Bases on this definition and to link up with Ford Company, our group considered that the firm’s mission is “To build up a safety, creative and comfortable working environment for everybody. ” ? Aims
Aims or goals give a sense o direction for the activities of an organization and are sufficient for the satisfaction of the organization’s mission (BPP 2004). There are some important functions to make a statement as an aim. Firstly, aims provide a standard of performance. Second, Aim can be considered as a guideline which provides the basis for planning and management control of the firm’s activities. Next, aims influence the structure of the organization and determine the nature of the technology employed. Last, aims are the basis objectives and policies of the organization.
In terms of understanding exactly what the aims are, Ford has some main and important ones. Ford Vietnam wants to focus on satisfying the needs of the customers and improving the quality of its cars. Furthermore, the company will expand the scale of the firm in Vietnam by developing more retailers and customer services around our country. Not only this, Ford Vietnam wants to improve the organization’s market share because Ford had lost too much share to other competitors. ? Objectives Objectives are very necessary for a company.
We can understand objectives as the goals of the firm but more particular. An objective often includes five elements, Specific, Measurable, Achievable, Result-orientated, Time-bounded. In case of Ford Vietnam, it has some objectives for the year 2010. First, Ford will take a new model of its car, named Fiesta to Vietnamese market in the second quarter of 2010. This model got a big success in Europe market and was voted as one of 10 cars of the year 2010. Therefore, Ford Vietnam believes that it can get the same result in Vietnam market as well.
Moreover, Ford wants to open new retailer, customer service centre, raise the number of dealer to 23 at the end of two first quarter of the year. Through it, the firm will raise people’s awareness and maintain the stand in customer’s mind. Lately, one of many important purposes in this year is to raise the share in Vietnam market from only 11% to 25% at the end of this year. ? Effect of mission, aims, objectives to the structure and culture of Ford Vietnam Aims and objectives are the first factor in terms of creating the firm’s structure and help facilitate systems of communication between different parts of the organization.
To achieve aims and objectives, Ford creates the One Ford structure; include One team, One plan and One goal. It helps Ford’s agents all over the world to be identical to Ford Company. As this result, it will be easier to control the structure and make a general plan for the organization. [pic] Figure 2: One Ford model The most important mission of Ford is to create an equal and comfortable working environment for all employees of the company, so it influences so much to the organization’s culture. 3. Process maps, output evaluation, and quality gateway analysis
Body shop Paint shop and accessories There are quality gateways in the process maps that the writers want to mention. The first quality gateway is placed right after the completion of the frame of the car, with doors and engines. In this gateway, the workers take a completed frame randomly and take it to a room where they use machines and modern technology to check whether the frame achieved the size and quality that they want or not. If the frame has no issue, it will be certified to be the completed frame and be moved to the paint shop.
If it has issues, the worker will check the whole lines to see whether those issues happens in all the other products or not, and they will fix it. The second gateway is placed after the frames are painted. Here, the worker will check whether the surface of the painted frames achieved the quality. If not, the frame will be re-clean and repaint. If the frames are qualified, they are considered completely painted. They will be moved to the area where bumpers, accessories and tires are installed.
The last quality gateway that a car must pass to be certified is a combo of tests such as water proof test, speed test, acceleration test, etc… If the car fails any of these tests, it will be moved to the fixing area and be re-testing till it passes all of these tests. After that, the car is considered completed, qualified with ISO 9001, ISO 14001 and QS 9000, and ready to be sold in the market. The cars of Ford are the products of a strict process. The quality of the Ford cars have been proved and accepted all over the world. However, in Vietnam, Ford is not so favored as Toyota, Kia, and Hyundai.
The main reasons are the design of Ford cars and the fact that Ford cars consume more fuel than other brands. The design of Ford cars, according to some professional ideas, looks muscular than other brands. Another problem is the fuel consumption of Ford car. Because Ford cars have the higher engine capacity, they consume more fuel than almost the cars of other brands in the same segmentation. However, in the recent years, Ford has tried a lot to improve these problems and we now can see more Ford cars on the road. 4. Resources, tools and systems required to support the business process
Ford’s success totally depends on such supporting elements as resources, tools and systems. Acknowledgement of those supports will determine the human recruitments, managements, therefore helps to evaluate the sources of cost and sales of Ford. ? Resources required supporting Ford’s process In a business process, identification of its resources is very important because from identifying resources, we can acknowledge what we have and therefore are able to build up an appropriate strategy, in order to support the business process. The resources can be divided into these groups: ?
Financial Resources A financial plan consists of sets of financial statements that forecast the resource implications of making business decisions. It is important because the financial plan will need to take into account sources of finance, costs of finance, and costs of developing the project, as well as the revenues and likely profits to justify the expansion programme. Financial plans are typically made out for a given time period, e. g. one, three or five years. Without a financial planning, Ford will not be able to know which target to aim and do not know how much to spend.
It will avoid unnecessary debts and be more effective in the construction, use and protection of its wealth through the years. An audit of financial resources would include assessment of the following factors: |Existing finance funds |- Cash balances | | |- Bank overdraft | | |- Bank and other loans | | |- Shareholders' capital | | |- Working capital (e. g. tocks, debtors) already invested in the business | | |- Creditors (suppliers, government) | |Ability to raise new |- Strength and reputation of the management team and the overall Ford | |funds | | | |- Strength of relationships with existing investors and lenders | | |- Attractiveness of the market in which the business operates (i. e. s it a market that is attracting investment | | |generally? ) | | |- Listing on a quoted Stock Exchange? If not, is this a realistic possibility? | ? Human Resources The importance of human resources within an organization is becoming increasingly understood in today's rapidly changing and uncertain business environment. In order to assist employees in helping Ford to reach its strategic business goals, effective human resource managers often gather job related information in a job analysis and job description, which is vital to creating or re-designing jobs which provide employees with a high level of job satisfaction.
The basic human resource activity can help Ford to achieve strategic goals more efficiently and effectively by avoiding both duplication and overlapping of work. An audit of human resources would include assessment of the following factors: |Existing staffing |- Numbers of staff by function, location, grade, experience, qualification, remuneration | |resources | | | |- Existing rate of staff loss | | |- Overall standard of training and specific training standards in key oles | | |- Assessment of key such as morale, business culture | |Changes required to |- What changes to the organization of Ford are included in the strategy (e. g. change of location, new locations, | |resources |and new products)? | | |- What incremental human resources are required? | | |- How should they be sourced? | ? Physical Resources The category of physical resources covers wide range of operational resources concerned with the physical capability to deliver a strategy.
These include: |Production facilities |- Location of existing production facilities; capacity; investment and maintenance requirements | | |- Current production processes - quality; method & organisation | | |- Extent to which production requirements of the strategy can be delivered by existing facilities | |Marketing facilities |- Marketing management process | | |- Distribution channels | |Information technology |- IT systems | | |- Integration with customers and suppliers | ? Intangible Resources It is easy to ignore the intangible resources of a business when assessing how to deliver a strategy - but they can be crucial. Intangibles include: |Goodwill |- The difference between the value of the tangible assets of the business and the actual value of the business | | |(what someone would be prepared to pay for it) | |Reputation |- Does the business have a track record of delivering on its strategic objectives?
If so, this could help gather | | |the necessary support from employees and suppliers | |Brands |- Strong brands are often the key factor in whether a growth strategy is a success or failure | |Intellectual Property |- Key commercial rights protected by patents and trademarks may be an important factor in the strategy. | ? Tools required supporting Ford’s process Policy is a mandate and directive from the top of the organization. Its purpose is to influence behavior. From it, management provides the overarching principles under which the business operates. It should not vary in its message or enforcement model. Procedures are process specific and detail the steps taken to achieve an objective. Procedures include operations manual, user manual, and all manner of process documentation. Policies are usually seen as the rules, or laws, of an organization, whereas the procedures are the processes used to enact the policies.
However, many companies see policies and procedures as belonging to the Legal/Compliance department, and create another set of processes — usually referred to as an "operational guide" — that are created and maintained by the operational area that executes the actual processes. If it is put into BPM (Business Process Management), then some of these operational procedures may be further documented in the process. Besides, there is the responsibility issue that is referred to above lead to the question who is responsible for each of these essential bits of corporate documentation. If process maps are created within a BPMS, do they become part of the business process documentation, replace part of it, or stay as a separate "implementation view" of the processes?
There are several cases where the process maps in a BPMS bear little resemblance to what the business perceives as its processes, either due to limitations in the BPMS environment or to the business having an incomplete view of the process. Third is the whole technology issue: how is all of this information captured, published and synchronized? There are tools such as Rules Arts and Rule Burst that help to capture policies as high-level non-executable rules — an approach that makes more sense than just trying to document them free-form in a word processor while praying for consistency. Some of this systems are also business rules engines, that is, they execute the rules and can be called from other applications; some are just platforms for non-technical users to document policies, detect gaps and exceptions, and help to ensure compliance. Processes based on rules.
Those organizations documenting their policies in a word processor are likely also documenting their procedures in the same way — in fact, possibly in the same document — using descriptive text and a few diagrams. At some level of detail, someone starts drawing process maps, although these are usually as illustrations to the descriptive text rather than a replacement for it. Policies are guidelines and best practices which are enforced by an organization to achieve a desired outcome consistently to the benefit of an organization. There are two distinct types of policies – technical policies and business policies. Changes in technical policies may or may not impact the business processes.
Changes in business policy will certainly affect business processes since business policies are nothing but externalization and manifestation of business rules using XML and BPEL. Service orientation provides the capability to alter the business processes dynamically and instantaneously as per the changing business needs by applying the policy changes unlike in the traditional IT + Business environments, where a simple policy change can take several months to implement. ? System required supporting business process A structured, measured set of activities designed to produce a specific output for a particular customer or market. It implies a strong emphasis on how work is done within Ford, in contrast to a product focus’s emphasis on.
A process is thus a specific ordering of work activities across time and space, with a beginning and an end, and clearly defined inputs and outputs: a structure for action. ... Taking a process approach implies adopting the customer’s point of view. A typical characteristic of a successful process-based organisation is the absence of secondary activities in the primary value flow that is created in the customer oriented primary processes. The characteristic of processes indicates that processes are embedded in some form of organisational structure. Also, a process can be cross-functional, i. e. it ranges over several business functions. A structure system required for supporting a business process identifies: ? The activities and tasks within a business process. ? The actions (i. e. steps) performed in each task, the mode in which each action will be performed, and the time that will be required to execute the task. ? The inputs/materials required by a task. ? The outputs/products produced by a task. ? The internal and external customers and suppliers of a task. ? The organisational units that will be responsible for performing the task and the geographical locations where the task will be performed. ? The sequence in which the tasks will be performed. ? The data required by a business process and the quality and timeliness requirements of the data. ? The process measurement capabilities designed into the new business processes. 5.
Quality audit system/ practice to manage and monitor quality to standards specified By adapting some models which based on controlling quality in manufacturing and operated process, Ford Vietnam is the only one Motor company in Vietnam that was granted three quality certifications by International Organization for Standardization, that are ISO 9001, ISO 14001 and QS 9000. In specific certification about quality was set, Ford Vietnam was passed the test and standard quality certification ISO/TS 16949 by International Automotive Task Force (IATF). ISO 9001: when receiving this kind of certification, that means Ford Vietnam was the company that achieves all the requirements about quality regulation.
There are some kinds of quality objectives was required, they are quality of broad of directors and quality of all departments of company to meet the customer demands. ISO 14001: is the standard of environmental management requirements given its management of environment needs for organizations. The purpose of ISO 14001 is to help organization protecting its environment. By receiving this standard, Ford Vietnam expresses that they built the environmental management system and set the environmental objectives and had the system to control what they had set. QS 9000: The QS-9000 Quality System requirements are divided into three sections. Section 1: Common requirements, includes the exact text of ISO 9001 with the addition of automotive / heavy trucking requirements.
Section 2: Additional Requirements, includes requirements beyond the scope of ISO 9001, common to all three manufacturers. Section 3: Customer Specific Sections contains requirements unique to either Ford, General Motors, or Chrysler. ISO/TS 16949: is the quality system requirement for Ford Motor Company suppliers (production and service parts and materials). It includes innovate and improve quality of products cause of changing requirements all the time. Receiving these standard certifications that means Ford was accepted by customer cause of quality. As the result, Ford needs to apply a quality audit system to keep going these standards. In recent time, by always innovate the quality of product and management, ith slogan “Quality is Job number one”, Ford is using TQM (Total Quality Management) system to manage and monitor the standards specified. Based on the Managing activities to Achieve Result BBP course book, TQM was defined that “as the management approach of an organization centered on quality, based on the participation of all its members and aiming at long-term success. This is achieved through customer satisfaction and benefits to all members of the organization and to society”. TQM requires the integration of all functions of organization (marketing, finance, production…). As a tool support to meet objective of TQM that “Do the right thing, right the first time, every time”, Six Sigma was concerned within Ford Company.
Mike Stock, a Ford Master Black Belt said “Consumer Driven 6-Sigma allowed us to look at the interactions between all of the components to find the true root cause; the data it produced allowed us to identify all of the key contributors, and how much each truly impacted the overall issue” First of all, “for each department of Ford Vietnam like Marketing, Finance, Human resource must achieve target 6-Sigma” _ say Mr Vuong. That explains the first rules of 6-sigma that everyone must be involved. According to Mr Vuong, every management levels and team of staffs have a Scorecard that set objectives about safety, quality, and delivery have to achieve. Each staffs of team in company need to have their own objectives based on the top-management objectives and have monthly review.
In 6-Sigma, there are two pieces Project in Ford, they are Green Belt and Black belt teams. Black Belts typically use tools such as process mapping, cause-and-effect diagrams, failure mode and effects analysis, design of experiments, and mistake proofing in their daily work. Black belt team is gathering of the ones who have experiences, skills. Green belt team learns to help Black Belts do projects faster. Green Belt training allows the people who are affected by the Six Sigma projects to be able to continue to monitor and control the improvement and to do their jobs better. To Ford, 6- sigma is the channel to conduct training in manufacturing for SPC (Statistical Process Control).
As the Process map was discussed in part above, at the end of each period of process, there are the testing step from input to output, the staff in testing step will check whether having mistakes or not. For example, in body shop, after frame of car was assembled, there have the 3D measure checking machine to check whether the standard parameter meets the requirements or not. Moreover, any issue appears in assembling process, the employee will warn to manager of this part and he will solve the issues. Furthermore, the feedback of customer voice will be concerned and solved. In conclude, the quality audit system was used by Ford is TQM with the improvement method is Six-sigma. The quality of human and products of Ford was improved and developed. 6. Quality culture embedding to ensure continuous monitoring and development of the process
Automobile industry requires strictly safety condition, because it relates to safe of consumers. Before reaching to consumers, they are tested many times carefully. Thus, if the company focuses mainly on quantity, ignore quality, defects may occur that affects to customer satisfaction. In addition, the company might encounter with compensation for their defects that affect directly to revenue of the company. Therefore, in order to avoid errors that results in costing money, and risk of losing customers, quality-focus should be carried out and be the culture of the company. It means that quality should be concerned by all employees and continuous improving it.
Quality is considered as the most concerned factor of Ford with slogan: “Quality is job number one. ” Quality is not only carried out in steps of process but also in employees. 6. 1. Quality in employees Beginning with employees of Ford organization in Vietnam, located in Hai Duong, most of them are qualified and skilled employees. Bachelor degree for staff with English skills, experiences, interview, team work, and so on. Workers at least intermediate degree to satisfy working requirements, i. e. English skills, technical abilities, team work, and interview. After that they have training course to accustom to the work. Salary for Ford employees are competitive compare to other companies.
They are also received bonus depends on the company situation. The best employee will be awarded for the one who work best each month. It proves that the company selects and trains employees carefully to maintain and attract quality employees. Through our visiting to Ford, Ford employees are friendly; show us their operation dedicatedly, answer all questions responsibly that makes advantages for us to do assignment well. They also work really discipline. Workers follow safety labor strictly. In addition, in this factory, clinic is quite clean and equipped; first aid process is displayed everywhere, there are at least two nurses in the clinic in case there is any accident.
Thus, the most serious accident in this factory is lost one part of a finger. 6. 2. Quality in process Qualified employees help manufacturing process in factory go well. As we mentioned in some parts above, input and output are tested carefully in each period, and in general. In addition, Ford care about feedbacks as well as complaints of customers. Ford products must satisfy Ford standards in particularly, achieve ISO, requirements of car industry, i. e. ISO 9001, QS 9000, ISO 14001, TS 16949. If there are more orders than usual, Ford still focuses on quality, careful in each step of process. Although it takes time and lengthen delivered time, it brings guaranteed for consumers.
Furthermore, Ford builds quality culture based on two factors of Six Sigma system, i. e. Green Belts and Black Belts. Green Belts support for Black Belts to carry out projects more effective. Employees take one week training program to understand Six Sigma system as well as Black Belts basically. There are three classes in Green Belts training which depends on fields that employee trained, i. e. technical, manufacturing, and transactional. Apart from these, one of the responsibilities of Green Belts is to ensure the quality improvement, continuous monitoring, and control it which can avoid losing control management. In terms of Black Belts which used some methods, i. e. xperiments, mistake proofing, process map, cause and effect diagrams, failure mode and effect analysis in their daily work to avoid errors that make work better. Ford has applied Black Belts for two years and DMAIC cycle model, which stands for Define, Measure, Analyze, Improve, Control for current operations, will be organized for one month to train employees. To sum it up, Ford is now carrying out to maintain as well as improve quality to make it become culture of the organization. However, building quality culture to ensure monitor and development of process is take time and cost. 7. Recommendation to improve quality and the function of Ford Vietnam 7. 1. Problem Ford VN is evaluated as one of the companies which have the best working environment.
In fact, with half a day visiting in the manufactory of Ford VN, everything seems to be very good. The employees are equipped with many modern working tools. Besides, the manufactory is clean and quite friendly with the environment. In addition, all the employees follow the roles, policies and procedures of the factory. Moreover, there are a lot of activities to motivate the employees. However, our group realized that the atmosphere in the manufactory is so serene that there is very little communication among employees. Of course, when they are in the working hours, they focus on the works that they have to get done. However, it is not better in the break time.
In the lunch, the employees just stand in a queue to wait for taking their meals. After that, they sit down, eat, give back the dishes, and then go back their places. There is no hurry, fun, sense in their face. Everything happening likes a film in slow motion and repeats every day. 7. 2. Reasons There are two main reasons for that problem such as the characteristic of the job and the not high pressure in work. ? The characteristic of the job The main characteristic of the job is the specialization in production. It means that each employee is a specialist in a specific job, so that they will repeat the acts in the assembly line day by day. As a result, it will make the employees feel boring.
In fact, the first using assembly line with Model T in 1908 by Henry Ford created the success and strong brand of Ford Motor Company. Henry Ford did not invent the automobile or the assembly line. He did, however, change the world by using an assembly line technique to produce cars which could be afforded by everyone. By improving the assembly line so that the Model T could be produced ever more inexpensively, Ford placed the power of the internal combustion engine within reach of the average citizen. He transformed the automobile itself from a luxury to a necessity. From 1909 to 1029, the Ford Motor Company built more than 15 million Model T[1]. Without a doubt, Henry Ford transformed the economic and social fabric of the 20th century.
However, this masterpiece of the 20th century is now becoming a headache problem of the 21st century. In fact, the company makes many chances for the worker to exchange their job in the assembly line with six months training. Nevertheless, this seems to be not effective in improving the atmosphere in the manufactory. ? The not high pressure in work The work with not high pressure or even quite love pressure is a peaceful work. It might sound good. However, stability and peace are not a good element to motivate the employees. It may cause boredom for the employees, and then may cause the reason for their leaving. The main reason why the pressure in work is low is the very low demand consuming products of Ford VN.
The productivity of the manufactory is quite low only reached about 10%. Although, the sales volume of Ford in 2009 is grow up comparing with the sales volume of Ford the year before, it is quite low comparing with the biggest competitor, Toyota and the development of Car market in Vietnam. The first reason is the product itself. The design of products of Ford is not outstanding in comparison with products of other motor company such as Toyota, Honda, GM Daewoo, and so on. Meanwhile, the main customer buying car is the one who have very how income and care about the fashion trend so much. Moreover, the engine of products of Ford is petro consuming and quite cumbersome.
It is a very big advantage of products of Ford in the period of financial crisis. Besides, the marketing activities of Ford VN are quite quiet. As a result, the image of Ford VN is dimmer and dimmer. Many people don’t know about the different product line of Ford VN. If this problem continues to happen. This will make the decreasing in market share. As a result the profit of the company is also going down, then the profit is decreasing, and then the bonus is also decreasing. This will lead to a result of the leaving of their employees. 7. 3. Recommendations and evaluation Due to reasons mentioned at the previous part, there is a need of changing in the Ford VN.
In general, Ford VN should change in two issues: increasing the market share and motivation. The main job of increasing the market share is to create the demand for the Vietnamese customers. Based on the reasons of the problem, carrying out market researches, developing marketing activities, and changing in the product itself should be done to increase the market share. Although it may cost a lot in short-term, the company can obtain benefits in the long-term. The company does not have to apply all methods presented below at the same time, they can be applied depends on the situation of the company and the Vietnamese car market in specific period. ? Market researches Market research includes four methods, i. e. urvey, interview, observation, focus group. Depends on the situation of the company, Vietnamese market, appropriated methods can be applied. The company should carry out two kinds of market research. Firstly, the company should do a research inside the company. It means that the company should understand clearly about the strengths, weaknesses, opportunities as well as the threats of the company. It is important for the company to find out the disadvantage competitive to make it better and the advantage competitive to develop. The company should also find out about the distribution system to support them. Secondly, Ford VN should do research market about car market in Vietnam.
It is important for the company to understand clearly about the potential market size, and trends of the car consumers. With the development of technology, the trends of the customers are changing so much days by days. They also care about the reputation of the brands, the fashion trends, petrol-consume and so on. Therefore, by doing the market research regularly, Ford can catch up the new trends of the market in common. Additionally, the company also can set up the price so as suitable with the Vietnamese living standard. Besides, the company may update information about the competitors in Vietnamese market. The best way to be the leader in the car market is to itself create its trends that attract the customers.
However, the result of market research may not really precise; thus, the company should not rely totally on those results. ? Marketing activities Although Ford is a well-known brand, and familiar to Vietnamese customers, rarely do Ford products circulates in Hanoi streets. Through our observation, one of the reasons is rate of advertising on television, public places is rather low. In addition, car is luxury goods, not everyone can afford it, thus customers tend to consider carefully before making decision based on price, infrastructure, climate, petrol-consume, and so on. Therefore, marketing and sales is very important to increase market shares in Vietnam.
It is common knowledge that there are six lines of Ford cars in Vietnam, i. e. New Focus, Mondeo, Escape, Everest, Ranger, and Transit. Each of them has their own functions and features that appropriate with Vietnamese geography. Vietnam is divided into three areas, i. e. the North, the Middle, and the South with different geography. Geography in the North is flatter than the Middle and the South. Thus, Escape, Everest, and Ranger are likely to be suitable for the Middle and the South. New Focus and Mondeo are appropriated to the North, and some parts of the South where has flat terrain. Therefore, Ford should carry out promotional activities that suitable for each place based on Vietnamese geography.
There are a range of promotional activities, i. e. advertising, sale promotion, public relations, direct marketing, and personal selling, and so on. On the other hand, cost for promotion is very high. Therefore, promotional activities should be applied effectively and creatively. Advertising It is important to regain attention of Vietnamese customers by advertising to prove that Ford is new trend and people will be fashionable when drive it. Besides, Ford should increase rate of advertisement on television, magazines, cinemas, placards, posters in public places. Ford can advertise in golden hours, from 7p. m to 10p. m to catch attention of customers.
Advertisement should be in long-term. Feature of cars should be emphasized to remind customers that they select the most appropriate car. Advertising should be assigned to experience as well as creative advertising company. Public relation Besides advertising, public relation is very important. In this method, some celebrities should be invited to use and promote Ford cars to show that it is fashionable when driving Ford every day. Furthermore, in order to build up a good cooperate image, good relationship with customers, some activities should be carried out: • Sponsoring for events, e. g. V-League championship, concerts, sport events, and so on.
Especially, there is ceremony of 1000 year of Thang Long - Hanoi, Ford can take part to sponsor this activity. • Awarding scholarship for poor children or encourage pupils, students who have excellent result. • Participating in charities programs, or celebrates the days about environment. Sales promotion: Ford can discount for sales promotion, or reduce tax, free-register, or give gift for customers. Ford should concern about old customers, e. g. discount guaranteed. Direct marketing Among six lines of products, Transit is likely to be used in enterprises. Therefore, besides those activities above, direct marketing should be applied. With business buyers, there always have a group of people response o select product for their business. Ford should use face-to-face marketing method at the first stage by offer some experienced employees with communicative ability, flexible, professional to come to these firms to introduce. With those activities are presented above, although the cost is high and can make loss for Ford in short-term, the company can achieve the good result in long-term. Along with that, with activities Ford plan to contribute to community, it is proved that Ford is an ethic company, has responsibilities for Vietnamese and to be favored by Vietnamese citizens. ? Changing in the product itself This changing in the product mostly depends on the market research.
Furthermore, the most difficult thing of Ford VN is that the main job of the company is to assemble the car based on the design of Mother Company in the United State of America. Every spare parts and engine are imported from foreign countries. However, the company can propose the changing to the suppliers so that the products of Ford are more suitable with the demand and trends and the car market in Vietnam. Nevertheless, changing in the product applied for Vietnam must ask for permission from the Mother Company as well as shareholders. Thus, it may take time whether the suggestion is passed or not. In addition, the suggestion applied for Vietnam should be similar to other countries.
Ford cannot manufacture a new design only for Vietnam because it cost too much and it does not guarantee that whether the company can cover the loss or not. In term of motivation, the company has quite done a good job in creating the good working environment for its employees. However, there are some changes the company should do to manage and motivate employees more effectively. Firstly, the company should have a little bit change in conditions of taking the training courses sponsored by Ford VN. There is a problem that, some employees of Ford taking the Master course at the faculty of international education at NEU have serious attitude in studying because there is no rules or condition between the employees and Ford VN. Then, they were absent a lot.
As a result, the training courses sponsored by Ford VN that those employees took were not effective. Besides, there is a problem that, after taking the training courses sponsored by Ford VN, some employees left Ford and went to other company, the competitors of Ford, for example. Therefore, instead of no condition of taking the training courses, the company should have some conditions when support the employees taking the training courses to hold its employees. Additionally, the company should build up an entertainment room for the employees. From that, it increases the communication among employees, and then creates enthusiasm for the employees.
Moreover, the company should build a hostel building for the employees whose houses are far from the manufactory. Furthermore, the company should also have a psychological consulting room. In that room, the employees can share all their worries, opinion, and so on as well as receive advice from the profession. It is the good way to reduce stress for employees and have better results in working. Conclusion After observing, analysing and evaluating Ford’s organisation, we, group 19 has drawn to the conclusion as well as some recommendations for Fords to change for improvement of quality and its function. 15 years has gone by and Ford’s market share has decreased while the sale volume is increasing rapidly each years.
It means that Ford is not the trend-setter but trend-follower. Ford’s line seems to be in the position of wait, which is not appropriate in this competed market when lots of car enterprises took part in the market such as Mercedes-Benz, Toyota, BMW, Daewoo, Hyundai, etc. As for the middle class car, Ford was unable to compete with Hyundai or Daewoo whose prices are suitable for most of Vietnamese people. Besides, luxury car of Ford has no chance to compete with Mercedes-Benz, Camry of Toyota or Audi of BMW, etc. On the other hands, Ford’s cars have a disadvantage that lead to the slow sale volume is petrol-consuming whether others Cars Company has considered of this problem long time ago.
Therefore we have analysed and evaluated Ford’s situations and drawn some recommendations for it to improve quality as well as its function. However, this recommendation is still in theory, it depends on market’s variety and requires sensibility and sensitivity of Ford’s managers, in order to act suitably with the change of market. References • CBS News (2010 February 4), Toyota Admits Prius Brake Problem [Online], Available from: http://www. cbsnews. com/stories/2010/02/04/business/main6172360. shtml [Assessed April 24, 2010] • History of Model T [Online], Available from: http://www. modelt. ca/background. html [Assessed April 24, 2010] • Howard Smith and Peter Fingar (2003). Business Process Management.
The Third Wave, MK Press [Assessed April 22, 2010] • Linh Anh (2010 February 15), Michael Pease – The General Director of Ford VN: Vietnam attracts me [Online], Available from: http://dddn. com. vn/20100204104043406cat100/michael-pease-tong-giam-doc-ford-vn-viet-nam-cuon-hut-toi. htm [Assessed April 23, 2010] • One Ford mission [Online], Available from: http://www. ford. com/about-ford/company-information/one-ford [Assessed April 23, 2010] • Pete Pander and Larry Holpp (2002), What is Six Sigma? McGraw-Hill, New York • Pham Huyen (2010 March 16), Ford Vietnam may also have accelerator problems [Online], Available from: http://en. www. info. n/transport/214-autos/2634-ford-vietnam-may-also-have-accelerator-problems [Assessed April 20, 2010] • Quynh Trang (2009 November 23), New expectation of Ford Vietnam [Online], Available from: http://www6. vnmedia. vn/newsdetail. asp? NewsId=180590&CatId=305 [Assessed April 24, 2010] • Resources of a Business (2009). Resources required supporting business process. [Online] Available at: http://tutor2u. net/default. asp [Assessed April 22, 2010] • Scott M. Paton (n. d. ), Consumer-driver Six Sigma saves Ford $300 million [Online], Available from: http://www. qualitydigest. com/sept01/html/ford. html [Assessed April 21, 2010] • Six Sigma Black Belt and Six Sigma Green Belt [Online], Available from: http://www. sixsigmaonline. org/six-sigma-training-certification-information/articles/six-sigma-black-belt-and-six-sigma-green-belt. tml [Assessed April 21, 2010] • Thomas Pyzdek (2003), 101 things every six sigma black belt should know [Online], Available from: http://www. sixsigmatraining. org/101 [Assessed April 23, 2010] • VON HALLE, Barbara & GOLDBERG, Larry (2006 October 9). The Business Rule Revolution. [Assessed April 22, 2010] ----------------------- [1] History of Model T, Available from: http://www. modelt. ca/background. html ----------------------- General Director Quality Manager Deputy Manager Public Affair After market sales & service Sales Marketing Technical Affair Human resource Finance Supply Operation Launching Purchasing Logistics Manufacturing Body shop
Paint shop TCF Support function Materials (Body parts, paints, engines, etc. ) Yes No No No Yes Stored in the ground Completed cars Fix Is the car water-proof? Water-resistance test Are the functions of the car qualified? Functional Tests Yes Yes Yes Yes Is the frame of the car installed right? No Yes Check, then fix or discard if cannot fix Accessories, bumpers and tires installation Is the surface of the paint qualified? Body shop (ground up frames, install engines, etc. ) Paint shop (paint the car) Stored in the warehouse Yes No No Yes Yes No Material from warehouse Doors installation Engine installation Are there any issues with the frame?
Are there any issues with the materials? Change and check the whole materials in the warehouse. Frame ground up Random size check with specific machines Is the size of the frame achieved the estimated quality? Completed frame with engines and doors Moved to paint shop Moved to testing area Completed car, prepare for last tests Accessories installation Yes Tires installation Bumpers installation No Yes Re-clean the surface Are there any issues with the surface of the frame? Surface check Dry room Paint No Are there any issues with the surface of the frame? Surface check Flow the surface to clean it up with high speed fans Completed frame with engines from body shop
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