Consumer Driven Six Sigma at Ford


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Case Details:

Case Code : OPER041
Case Length : 12 Pages
Period : 1998 - 2004
Organization : Ford Motor Company
Pub Date : 2004
Teaching Note :Not Available
Countries : USA
Industry : Automobile

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"Ford's Consumer-driven Six Sigma is a very powerful tool to significantly improve customer satisfaction and shareholder value by reducing variability in every aspect of our business. We believe it will accelerate the flawless execution of our existing processes, including FPS, to deliver customer satisfaction and cost-improvement results faster, and to sustain them on an on-going basis. Consumer-driven Six Sigma reinforces a mindset that emphasizes skill building, teamwork, management commitment and accountability. It's data-driven - to deliver measurable results - not promises."1

- Louise Goeser, Quality Vice-President, Ford Motor Company.

"Ford Motor Company's vision is to become the world's leading consumer company for automotive products and services. To do that, we are focusing intensely on our customers and have made customer satisfaction our highest priority."2

- Jacques Nasser, CEO of Ford Motor Company in 2001.

Introduction

In 2001, JD Power and Associates (JDPA)3 announced the results of its annual Initial Quality Study (IQS)4. Surprisingly, the study ranked Ford Motor Company (Ford) seventh in terms of quality among the leading automobile manufacturers in the world. More than a century old, Ford, headquartered in Dearborn, Michigan (USA), was the second largest automobile company in the world. In 2003, when JDPA came up with the results of its IQS, Ford was ranked fourth, a notable improvement over this two-year period. Analysts felt that this improvement was the result of a series of quality initiatives which Ford had taken since late 1999, prominent among which was the Six Sigma.

Ford was the first major automobile company in the world to adopt the Six Sigma initiative in a big way.

Launched as a quality control initiative aimed at enhancing customer satisfaction, Six Sigma earned wide spread appreciation among employees and also brought in major financial benefits for Ford. Appreciating the significance of the initiative, Pauline Burke, a Master Black Belt at Ford said, "I liked the philosophies of Six Sigma. I liked the disciplined approach to solving problems. I feel great fixing problems for customers and making the company stronger by improving quality. When the employees are happy, they do better work. When they do better work, the customer wins. They're getting a better vehicle, they save money and quality rises."5The black belts trained by the company as part of the initiative were groomed to take leadership positions in future.

Consumer Driven Six Sigma at Ford - Next Page>>

1]  "Under the hood of Job 1," www.manufacturingcenter.com, April 2000.

2] "Consumer-driven Six Sigma saves Ford $300 mn," Scott M. Paton, www.qualitydigest.com, September 2001.

3] Headquartered in California, US, JD Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from mns of consumers annually.

4] The 2001 Initial Quality Study was based on survey responses from more than 54,000 new-vehicle owners and lessees after 90 days of ownership.

5] "Six Sigma at Ford Revisited," Kennedy Smith, www.qualitydigest.com, June 2003.

 

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