Managing Quality

MANAGING QUALITY

Managing Quality

DRAFT

Ford Motor Co

7577881290

12/15/2012

Introduction

As a proud boy growing up in Detroit it was one of my dreams to work for the renowned Ford Motor Company. Founded in Detroit, Michigan in 1903 by Henry Ford and a group of investors, Ford introduced the Model T in 1908 and by 1923 was producing more than half of all U.S. automotive vehicles. Through the Lincoln Motor Company, Ford produced luxury Lincolns and Continentals. After years of declining sales, the Model T was succeeded by the Model A in 1927 other companies such as General Motors took the opportunity to make an advance into Ford's dominance.

Ford Motor Company is the world's second largest manufacturer of cars and trucks with products sold in more than 200 markets. The company employs nearly 400,000 people worldwide, and has grown to offer consumers eight of the world's most recognizable automotive brands.

The company was reincorporated in 1919, with Ford and his family acquiring full ownership. Henry Ford, his son Edsel and grandson Henry Ford II have led the company but CEO Alan Mulally now leads it. Ford has bought and sold companies' such as Volvo, Jaguar, Kia, Land Rover, Ashton Martin and others but have sold most of them in an attempt to recapture market share and focus on it's brand.

Ford Motor Company reported 2011 full year pre-tax operating profit of $8.8 billion, an increase of $463 million from a year ago, as strong performance in North America and Ford Credit offset challenges in other parts of the world. This marks the company's third year in a row of improving annual operating profits.

"[Ford] delivered strong results for the full year as [they] continued to serve [their] customers around the world with best-in-class vehicles and make progress toward [their] mid-decade goals," said Alan Mulally, Ford president and CEO. "Despite the continued uncertainty in the external environment, the strength of Ford's North American and Ford Credit operations allows [them] to continue to invest for future growth and develop outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value."

[Ford's] [f]ull year 2011 net income was $20.2 billion, or $4.94 per share, an increase of $13.7 billion, or $3.28 per share, from a year ago. The results include a favorable one-time, non-cash special item of $12.4 billion for the release of almost all of the valuation allowance against the company's net deferred tax assets.

Ford has continued product momentum--launched all-new global Ranger; launched 1.0-liter, 3-cylinder EcoBoost engine; and debuted all-new Escape

Third consecutive year of higher U.S. market share and three-point share gain over the period for Ford brand; higher share in Asia Pacific Africa; three consecutive quarters of year-over-year share gains in Europe

Two consecutive years of more than $8 billion in pre-tax operating profits and third consecutive year of improved annual profits

Automotive debt reduced by $6 billion; year end Automotive cash net of debt increased by $8.4 billion to $9.8 billion Broke ground on four new assembly and power train plants in Asia Pacific Africa region, and launched Ford Sollers joint venture in Russia.

Problem Statement

Despite all Ford's gains in sales and profits, Ford Motor Co.'s reliability ranking in the Consumer Reports annual auto survey tumbled as its namesake brand slid to 20th from 10th last year among 28 brands while Japanese automakers captured nine of the top 10 spots.

Ford's ranking suffered because the new Explorer SUV, Focus compact and Fiesta subcompact all scored below average for reliability, the Yonkers, New York-based consumer publication said in a statement. Buyers reported problems with dashboard touch-screens in some Ford vehicles. JD Powers ratings, which is a survey of approximately 74 thousand vehicle buyers and lessees after 90 days of ownership, listed Ford as having 118 problems per 100 vehicles, which is well below the industry standard of 102 PPV.

Despite past gains in quality these reports are an indication of performance issues within the organization. Ford must quickly act to determine if the entire company as a whole, need to have its quality management program revamped. If they fail to act then all of these failures will send the company into a tailspin of the old days and continual loss of global market shares to competitors that are solved the puzzle of quality and customer satisfaction.

Literature Review

The Association of Internal Management Consultants (AIMC) recently partnered with ASQ to conduct a bench marking survey to examine the need for increased internal consulting skills in organizations with quality management initiatives. Prior research indicated that quality professionals would benefit from learning more about skills needed to succeed in the future. The survey was open to members of four of ASQ's member units: Quality Management Division, Human Development and Leadership Division, Lean Enterprise Division, and the Six Sigma Forum. More than 800 respondents indicated how to enhance their roles in the overall organization, Developing closer linkages/relationships with client organizations, Including improved connections with their planning process. Utilizing a more consistent/formalized approach to providing advisory-type services, including project/program management. Employing a "balanced" set of performance measures, including ROI, customer/client, operational process, employee, and innovation metrics. There also was recognition of the need for new approaches to drive "rapid improvement/results" programs. These areas, [were] showcased at [an earlier] AIMC meetings, include:

* Rapid results/benefits programs and early wins.

* Rapid strategy development and implementation/execution.

* Rapid process redesign.

* Comprehensive continuous improvement systems.

Key challenges and goals for future development also emphasized important internal consulting competency areas, including:

* Interpersonal skills, including communications and customer focus.

* Strategy