Ford must copy Toyota, which copied Ford. Other carmakers should follow suit.

Interesting....


http://www.freep.com/apps/pbcs.dll/a...014/BUSINESS01


TOM WALSH

Ford must copy Toyota, which copied Ford
Other carmakers should follow suit

February 18, 2007

BY TOM WALSH

FREE PRESS COLUMNIST

Today, as the once-vaunted DaimlerChrysler merger frays, as Chrysler Group
casts away 13,000 workers, as Ford Motor Co. fails to meet even the modest
targets of its second Way Forward revival plan, as General Motors Corp.
struggles to produce a coherent 2006 financial report after weeks of
delays, it seems fitting that "The Machine That Changed the World," the
seminal 1990 book on lean manufacturing as practiced by Toyota Motor
Corp., is now being reissued.

In the next few weeks, Simon & Schuster will publish a paperback edition
of the book, with a new foreword and afterword reflecting on Toyota's
ascendance to the top of the world automotive heap during these past 17
years.

The foreword, titled "Why Toyota Won: A Tale of Two Business Systems,"
notes that when authors Jim Womack, Dan Jones and Dan Roos wrote their
book in 1990, Toyota was only half the size of GM and two-thirds the size
of Ford.

"Today," they write, "Toyota has easily passed Ford and is surging past GM
to become the largest and most consistently successful industrial
enterprise in the world."

The sad part -- for Detroit anyway -- is that Toyota managers unabashedly
based their business model and production theories on those practiced by
Henry Ford in the original Model T plant in Highland Park, circa 1914.

GM and Ford butchered the lean-production system in subsequent decades and
lost their zeal for rooting out waste. When Toyota and Honda and other
carmakers set up shop on American shores in the 1980s, Detroit responded
with denial and excuses for its loss of market share to foreign-owned
rivals. But even after conceding the merits of Toyota's system, the
Detroit Three have found it difficult to duplicate.

Wonder why?

Jim Womack, chairman and founder of the Lean Enterprise Institute in
Cambridge, Mass., relates this unsettling tale on his Web site
www.lean.org

"In 1997, I got a call from Jac Nasser, who had just taken over Ford's
North American Automotive Operations on his way to becoming CEO of Ford.
He matter-of-factly told me that Ford's Explorer and F-series pickup
trucks were the only Ford products that made serious money and that he
calculated that he had four years to become as efficient as Toyota.
Otherwise, the large pickups and SUVs would be copied by foreign firms at
lower cost with higher quality and Ford would be in terminal decline.

" 'So,' he asked, 'how can Ford become Toyota in four years?' We sat down
to talk over just what this would mean -- dramatically changing the
supplier management system, dramatically changing the product development
system, dramatically changing the production management system,
dramatically changing what managers do -- and he quickly concluded that it
was just too hard. So he changed the management metrics, purged the
poorest managers according to the metrics, and experimented with selling
cars on the Web. I was not asked back and had no desire to go back."

In short, Nasser saw the future correctly -- Toyota and others would
challenge Detroit dominance in trucks and SUVs -- but didn't have the
stomach to do what was needed.

Womack's prescription for new Ford CEO Alan Mulally is the same: "Ford
needs to remake itself once more, this time in the image of the company
that copied Ford's original system: Toyota."

GM and Chrysler should pay heed, too. Time is growing short.

Contact TOM WALSH at 313-223-4430 or



--
Politics is the art of looking for trouble, finding it everywhere,
diagnosing it incorrectly and applying the wrong remedies.

-- Groucho Marx

Today, §qu@r3 Wh33£s made these interesting comments ...

> Interesting....
>
>
> http://www.freep.com/apps/pbcs.dll/a...0070218/COL06/
> 702180693/1014/BUSINESS01
>
>
> TOM WALSH
>
> Ford must copy Toyota, which copied Ford
> Other carmakers should follow suit
>
> February 18, 2007
>
> BY TOM WALSH
>
> FREE PRESS COLUMNIST
>
> Today, as the once-vaunted DaimlerChrysler merger frays, as
> Chrysler Group casts away 13,000 workers, as Ford Motor Co.
> fails to meet even the modest targets of its second Way
> Forward revival plan, as General Motors Corp. struggles to
> produce a coherent 2006 financial report after weeks of
> delays, it seems fitting that "The Machine That Changed the
> World," the seminal 1990 book on lean manufacturing as
> practiced by Toyota Motor Corp., is now being reissued.

Ford Motor Company didn't "fail to meet even the modest
targets..", it was an unspecified number of individual
organizations who didn't meet their target for volutary buy-outs,
while others exceeded them and needed to un-offer some. This is
hardly unprecedented and not at all a problem. When buy-outs and
early retirements do not meet total manpower reductions, and they
never do, the next step is cascading lay-offs, separate between
BU and NBU.

> In the next few weeks, Simon & Schuster will publish a
> paperback edition of the book, with a new foreword and
> afterword reflecting on Toyota's ascendance to the top of the
> world automotive heap during these past 17 years.
>
> The foreword, titled "Why Toyota Won: A Tale of Two Business
> Systems," notes that when authors Jim Womack, Dan Jones and
> Dan Roos wrote their book in 1990, Toyota was only half the
> size of GM and two-thirds the size of Ford.
>
> "Today," they write, "Toyota has easily passed Ford and is
> surging past GM to become the largest and most consistently
> successful industrial enterprise in the world."
>
> The sad part -- for Detroit anyway -- is that Toyota managers
> unabashedly based their business model and production theories
> on those practiced by Henry Ford in the original Model T plant
> in Highland Park, circa 1914.
>
> GM and Ford butchered the lean-production system in subsequent
> decades and lost their zeal for rooting out waste. When Toyota
> and Honda and other carmakers set up shop on American shores
> in the 1980s, Detroit responded with denial and excuses for
> its loss of market share to foreign-owned rivals. But even
> after conceding the merits of Toyota's system, the Detroit
> Three have found it difficult to duplicate.

I don't think the choice of words above accurately reflect what
happened. Ford, GM, and Chrysler clearly failed to properly and
fully adapt to new ways of doing business and aggressively
implement not only cost-effective methods but greatly improved,
world-class quality. But, to say that they have "butchered" lean-
production is a gross overstatement. And, I see no evidence of
anyone losing "zeal" for "rooting out waste" but if the author of
this article has personal experience in this, he/she would'nt say
that. Any company, domestic or foreign, finds it ever more
difficult to continue a torrid pace of cost reductions and
efficiency increases. The Law Of Diminishing Returns quickly
takes over, meaning that management's budget, guided by their
board of directors and available cash or credit, is limited for
each new product. Compromise necessary in everyone's life,
certainly those who develop new products. Liabilities such as
health care, pensions, and wages, no matter who is to blame are
very huge impediments to match world-class efficiency.

> Wonder why?
>
> Jim Womack, chairman and founder of the Lean Enterprise
> Institute in Cambridge, Mass., relates this unsettling tale on
> his Web site www.lean.org
>
> "In 1997, I got a call from Jac Nasser, who had just taken
> over Ford's North American Automotive Operations on his way to
> becoming CEO of Ford. He matter-of-factly told me that Ford's
> Explorer and F-series pickup trucks were the only Ford
> products that made serious money and that he calculated that
> he had four years to become as efficient as Toyota. Otherwise,
> the large pickups and SUVs would be copied by foreign firms at
> lower cost with higher quality and Ford would be in terminal
> decline.
>
> " 'So,' he asked, 'how can Ford become Toyota in four years?'
> We sat down to talk over just what this would mean --
> dramatically changing the supplier management system,
> dramatically changing the product development system,
> dramatically changing the production management system,
> dramatically changing what managers do -- and he quickly
> concluded that it was just too hard. So he changed the
> management metrics, purged the poorest managers according to
> the metrics, and experimented with selling cars on the Web. I
> was not asked back and had no desire to go back."
>
> In short, Nasser saw the future correctly -- Toyota and others
> would challenge Detroit dominance in trucks and SUVs -- but
> didn't have the stomach to do what was needed.
>
> Womack's prescription for new Ford CEO Alan Mulally is the
> same: "Ford needs to remake itself once more, this time in the
> image of the company that copied Ford's original system:
> Toyota."
>
> GM and Chrysler should pay heed, too. Time is growing short.

I doubt that Rick Wagoner, Alan Mulally or Tom LaSorda need to be
reminded that time is more than short. Time has simply run out
for them and they are in one or more phases of a crisis. GM
appears to be coming out first, but they have delayed their final
2006 results until March and it is anybody's guess what 1Q07 will
bring. Ford hemorraged $12.7B last year and is probably bleeding
heavily right now, as is the Chrysler Group.

> Contact TOM WALSH at 313-223-4430 or
>
>
--
HP, aka Jerry