Introduction
Ford Motor Company is an American automotive company that manufactures cars under the brand “Ford.” The headquarters of Ford Motor Company is located near Detroit, in Dearborn, Michigan, USA. The firm produces a wide range of products: cars of different sizes, purposes, and costs; representative offices and factories of the corporation are scattered around the world. The firm’s business mission is based on providing people with perfect products, taking into account reduced production costs. Additionally, Ford’s high average annual net profits, competitive positions in the segment of inexpensive cars, and brand awareness among consumers are the company’s key characteristics. Nonetheless, at the moment, the organization is facing various difficulties such as unsatisfactory product quality and design, customer criticisms, high production costs, internal and external failures, and much more. However, such production management concepts as Six Sigma, Lean Principles, TQM, SPC, and BSC will significantly offset potential adverse effects and threats due to these issues. This paper aims to identify the main problems of Ford Motor Company in the field of quality management, as well as provide recommendations for implementing the initiative to eliminate these issues.
Identifying a Quality Management Related Problems in the Firm
Poor Quality Levels
The low quality of the automobiles sold and the growing proportion of dissatisfied customers demonstrate a minimal level of quality management on the part of the company. The Consumer Reports rating in 2021 once again confirmed the fact that the reliability parameter of Ford cars leaves much to be desired, and this criterion is not the only one that requires careful work (Foote, 2021). Furthermore, as practice shows, the release of Ford models often incurs enormous losses, and the brand image is gradually fading amid negative consumer reviews and growing competition. For example, in 2018, the firm recalled about 350 thousand SUVs and trucks due to problems with the vehicles’ parking equipment (Chappell, 2018). By the way, recently, Ford recalled more than 700 thousand cars due to oil leaks and software failures in brake control (William, 2022). Accordingly, the pre-sale of the new brand models is often associated with various harmful, unpleasant, and sometimes painful consequences for both the company and clients in general.
Additionally, the corporation does not want to pay attention to many “eternal” problems. As a rule, they include inconvenient visual systems, large oil leaks, car jerks, as well as troubles with fuel consumption, engine, spark plugs, bodywork, and many other details (Kelsall, 2020). In this context, it is necessary to remember that the first impression is difficult to change; if it is initially negative for buyers, then, with a higher degree of probability, they will buy a car from a competitor. Consequently, the negligent attitude to products, the lack of reliable quality control of the goods offered for sale, and the unsatisfactory results of the company’s activities concerning solutions to eliminate these aspects can aggravate the organization’s situation on the market if appropriate initiatives are not taken in time.
High Cost of Quality
Most of the company’s costs are spent on developing and creating the best cars according to the standards and requirements for the quality of goods. Despite the time, resources, and efforts spent working on new cars and trucks, Ford is periodically forced to face various production errors that require rapid spending of the corporation’s funds. In fact, any of the above-mentioned recalls cases cost the firm not only its reputation but also an infusion of a lot of money. For the most part, such recalls reflect the poor quality of the company’s management systems and related business processes (Teli & Murumkar, 2018). Hence, any, even the slightest undetected defect carries unfavorable results for the company in terms of financial aspects. Thus, selling high-quality goods occasionally costs Ford more than initially planned. In this situation, one should only recall the words of the great Henry Ford that one should not look for a mistake but must try to find a way to fix it.
In addition, the company’s costs sometimes exceed its profit in general terms. Experts report about Ford’s collision with a more complex operating environment in terms of growing incentives and increased costs for expanding the product line, as well as the inflated prices of goods and the loss of high demand in some areas of America (Moody’s changes, 2018). Butler (2019) claims that the firm’s total revenue in all segments decreased by about 2%. In these cases, one can safely talk about the organization’s failures to fully achieve specific financial goals and indicators, compensating for all production expenses and mistakes made.
Poor Product Design
In the brand’s history, several “embarrassments” and “force majeures” have been repeatedly outlined in innovative, unique, and advanced product design. Nevertheless, these “ailments” continue to manifest in some cases today. In these situations, Ford’s lack of proper relationship with the targeted audience, which does not take into account the preferences and wishes of customers, most often leads to failed campaigns. Hence, similar “experiments” took place in 1959, and the failure of the Ford Edsel launch is being discussed even today (Chi, 2021). In addition, relying on other, more specific, and individual examples of models, the author can refer to the second-generation Ford Scorpio. Thus, the first “Skorp,” introduced in the mid-80s, had a good reputation, and maybe it was a little “boring” in appearance, but it was spacious, comfortable on the go, and well equipped. Anyway, when the veil was finally removed from the new Scorpio at the Paris Motor Show in 1994, an awkward silence hung in the air due to this automobile’s repulsive and ridiculous appearance (Bevis, 2020). By the way, since then, Ford has not even tried to produce large sedans.
Moreover, a consumer can note similar moments even in the modern Ford’s models filled with various technologies. For instance, flaws in the software and the confusing interface of electronic systems are one of the most popular reasons for Ford’s failures (Lancaster, n.d.). Thus, a driver or passenger may inadvertently press the engine start and stop button due to its incorrect location. Despite the enormous achievements of humankind in the field of UX and related areas of design, Ford continues to make such gross mistakes. Therefore, Ford should learn from both others’ and its own mistakes from the point of view of design, as well as listen to customers’ opinions, study current trends, and develop technologies to avoid “miss” again.
High Levels of External Failures
Primarily, it is essential to emphasize that Ford Motor Company, in particular, depends on external and internal conditions that determine the success and further development of the entire company. Ford is mainly associated with the US and European markets, which limits the business’s profits and revenues, and sales of brand products are declining from year to year due to market saturation. Furthermore, several months ago, American Ford stopped all its activities in India, closing two factories. The company’s total losses due to the constantly shrinking market amounted to about $ 2 billion. Misunderstanding of the target audience, market, positioning, and product design led to the fact that Ford “swallowed the dust” in the country (What went wrong with Ford in India, 2021). Perhaps, the rejection of plans for the production of cars in India is one of the crushing failures in the history of the firm’s development within the framework of external phenomena.
Moreover, today, Ford is actively and continuously struggling with changes in the field of positive dynamics in the development of autonomous driving and ride-sharing, as well as high demand and sales of electric vehicles (Moody’s changes, 2018). Accordingly, the company will be forced to spend the vast majority of the money on electric cars. However, it is unknown whether Ford will succeed in the electric pickup segment or they will have to fail. Consequently, the above aspects pose additional challenges for the company, which requires Ford’s competent and correct adaptation to the industry’s new and rapidly changing conditions.
High Levels of Internal Failures
Secondly, Ford should not underestimate the power of internal factors that, to some extent, could undermine several of the firm’s ideals. Thus, for example, in 2019, Ford cleaned up the structure of the “extra” layers of bureaucracy, firing several hundred managers and ordinary workers in the United States (Stock, 2019). By the end of this year, the company had 7,000 fewer employees worldwide. Further, robots, 3D printing, and virtual reality technologies were replacing people, which would speed up the work of the chain from design to production of machines. As practice shows, layoffs do not contribute to profitability development, harming creativity and invention (Stock, 2019). Therefore, due to such reforms, Ford’s operating profit will fall in the future, and sales will decrease worldwide.
Furthermore, relying on another, no less crucial internal factor as a supply chain, it should be remarked that the company also has difficulties in meeting the high demand for products due to improper distribution and use of logistics processes. For illustration, “constant disruptions in the supply chain” demonstrated the results of Ford car sales significantly lower than previously expected (Assis, 2022). Separately, the ongoing shortage of semiconductor chips due to the COVID-19 pandemic is also worth mentioning, affecting the global automotive industry and reducing the production of Ford cars. Ford was forced to stop production of new cars at two plants in the United States, in the states of Kentucky and Ohio, which produce Expedition, Super Duty, and Lincoln Navigation. The lack of these details has become more terrible for the auto industry than a pandemic, and this event is one of the crushing and painful, which Ford, unfortunately, cannot fully cope with, competently controlling the situation and allocating the necessary resources.
A Recommended Direction
Based on the results of the identified problems, the author suggests considering the following recommendations for Ford. Firstly, improving the quality of automobiles can be achieved by enhancing the skills of personnel, since most defects occur for this reason. Hence, proper training will reduce car owners’ complaints, improving the image of the brand’s cars assembled in a particular country. In this case, the firm should develop production processes to reduce the cost of vehicles, provide the most competitive car prices, and stimulate sales. Furthermore, Ford must actively develop innovations to avoid losing market share when a new opponent appears and achieve competitive advantages over other automakers. Such procedures will give the opportunity to compete with alternative modes of transport. In order to keep buyers from switching to a Ford competitor, the company should inform clients about the favorable loan program for purchasing a Ford car and focus on introducing environmentally friendly new fuel.
In addition, as a car manufacturer, Ford must be committed to continuous improvement to succeed in today’s financial world. The company must constantly look for more efficient ways to produce products and services, continuously improve their level and focus on consumers, external and internal, and make their satisfaction the primary goal of the business. In order to do these procedures, each employee of the organization should be focused on improvement and use the following practical methods.
Six Sigma
Firstly, the company is encouraged to continue using and developing the Six Sigma strategy to improve product quality and customer satisfaction. This tactic will allow Ford to focus on improving productivity by reducing variations of defective products (Gleeson et al., 2019). It should be emphasized that by their essence, nature, and idea, the method has a wide range of beneficial sides and positive aspects. Therefore, the number of defective samples per million manufactured often does not exceed the mark of 3 or 4. Based on the situation with the organization, the expert notes that with the help of this popular management concept, Ford needs to minimize the number of defects for every 14.8 cars, taking into account 20,000 opportunities for defects in the production processes (Kumar, 2020). In other words, with the help of Six Sigma, in more than 99% of cases, the Ford products will be of high quality, reliable, safe, and durable.
Ford is a company known for its high quality, as well as a dynamic and innovative approach to production. It is essential to mention that the high results and excellent achievements in the industry were mainly due to the use of Six Sigma. It is known that implemented by Robert Holtz Paul Campbell, this project once saved Ford about 50 thousand dollars a year to pay for special equipment, parts, and components (Sharif et al., 2019). Furthermore, according to Kumar (2020), the introduction of Six Sigma allowed the firm to eliminate total losses of about $2 million worldwide, implement about 10,000 projects with minimal costs, and increase customer satisfaction by more than 5%. Therefore, the company must coordinate its efforts, time, and resources to develop a quality management plan within the framework of Six Sigma.
Lean Principles
Secondly, considering the previously designated disadvantages, it is also crucial and necessary to pay attention to Lean Principles. Thus, introducing the manufacturing principles at Ford enterprises will not just change the situation by correcting several essential elements but completely transform the way that exists in the company, allowing Ford to reduce various defects, increase productivity and spend less time making cars. Furthermore, Ford Motor Company is rightfully considered a valuable contributor to the development, progress, and evolution of lean manufacturing, and Henry Ford, due to the electrification of the steam engine and new production and management methods, was able to bring car production to a new level (Dave, 2022). Moreover, even competitors used these principles, but their attempts often led to failures because they could not understand the fundamental directions outlined by H. Ford and, most importantly, competently apply them in practice (Dave, 2022). Thus, it is vital to turn to the origins of the firm, take note of Ford’s “legacy,” and use it in such a way as to beat the competition and become No. 1 in the industry.
Moreover, special attention should be paid to the merger of Six Sigma with Lean Principles, in other words, Lean Six Sigma. It is an innovative combination of process management approaches based on the concepts of Six Sigma, emphasizing that they can be successfully used in production and any business area. It should be remarked that they perfectly complement and, in some cases, replace each other since lean manufacturing does not put the process under special control, and Sigma itself does not increase the speed of operations (Gleeson et al., 2019). Synthesizing two powerful strategies will significantly reduce production costs, increasing speed and quality.
Total Quality Management (TQM)
Thirdly, the author should also be reminded of such an excellent method as Total Quality Management (TQM). According to the TQM concepts, in its activities, Ford must bring to the fore the philosophy of morality, which requires treating an employee as a person. Consequently, TQM contributes to creating and inventing a positive psychological atmosphere in the company, which, in turn, provides the ground for developing an individual’s creative potential. Hence, all personnel, from top management to ordinary workers, should share the organization’s goals, perceiving quality as the highest value.
Therefore, Ford must continue to develop, improve and refine the ideas of TQM adopted by the firm back in the 90s. Admittedly, due to this organizational approach, Ford has managed to minimize the phenomena that hinder the efficiency of human work and the use of equipment, energy, raw materials, and tools. Moreover, the corporation was able to increase supplies’ reliability, reduce entrance control costs, and eliminate defects in the supplied parts on the spot due to a close, long-term, and competently built partnership with suppliers.
Statistical Process Control (SPC)
Fourthly, the author is not recommended underestimating the potential and possibilities of such an approach to monitoring the production process as Statistical Process Control (SPC). SPC is one of the simplest and most effective ways to separate signal from noise, allowing Ford to visualize the actual data, reduce the possibility of “false alarms,” and detect special causes of variations. Moreover, the analysis results using SPC can be easily perceived by specialists of various profiles.
Thus, statistical process control (SPC) in producing Ford cars is an essential subsystem of quality management in general. It should direct Ford’s collective activities to improve processes and thereby ensure joint, well-coordinated work with product developers. Therefore, quality management must be based on principles different from Taylor’s regulations. This can be considered an implementation of the Shewhart system. All quality work should be of a team, group nature, eliminating the conflict inherent in the Taylor system.
Balanced Score Card (BSC)
Fifthly, Ford should use a strategic performance management tool such as the Balanced Score Card (BSC). It is one of the powerful tools of strategic management that allows one to measure the effectiveness of the enterprise using specially selected and weighted indicators that comprehensively reflect its current condition. BSC’s main idea is to shift the vector of management’s attention when assessing the company’s success from financial indicators to other criteria related to customer relationships, improving internal business processes, and many others. Without any doubt, profit is vital for Ford, but the firm will not grow and develop without considering the needs of customers and providing high-quality products to a targeted audience. Ford’s problems presented earlier demonstrated that many buyers of the brand’s cars are unsatisfied with the quality of the purchases Ford initially guaranteed. Therefore, Ford’s solution should focus on improving cars’ reliability, quality, and safety by introducing newer and enhanced technologies and ensuring the best comfort for customers.
Conclusion
Summarizing the above facts and details, it is required to state that Ford Motor Company is one of the leading and most well-known worldwide companies in the automotive industry. Nevertheless, despite many years of experience and recognition from clients, the firm today faces such difficulties in the field of quality management as poor machines reliability and product design, high costs for the quality of the vehicles, as well as the presence of failures in terms of external and internal aspects. Accordingly, in order to eradicate the previously identified problems, Ford needs to turn to such effective and efficient methods as Six Sigma, Lean Principles, TQM, SPC, and BSC. Each of them plays a vital role, permitting Ford to achieve success and prosperity in its activities over time.
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