Why Manage Better?

Friday, June 17, 2011

So is Ford a Manufacturing company or a Service one?

Does Bennie Fowler, Group VP of Quality and New Model Launch at Ford, read my blog? I have just finished watching a four part video post of Bennie talking to Paul Borwaski, CEO of ASQ.  (You can watch it here.) And I am grinning ear to ear as the first part of the video post has Bennie talking about Leadership taking a decision about Quality and then demonstrating the right behaviors. This he is says is what is ‘under the hood’ at Ford. My post last week talked about exactly this – quality culture is about intolerance for poor quality and delivering on promises. And demonstrating the right behavior. Sounds similar. Isn’t it?

While closing the post, Paul says, “I was struck by Bennie’s remark that today, quality must focus on more than product—it must focus on the entire customer experience.”

Brilliant comment Bennie.  So true.  Finally product companies are realizing what Drucker said years ago – all companies are service companies.  (I am not sure if these were his exact words but he did say something similar).  Think of Ford.  Do you just buy a car? You buy the ambience at the dealership, the courteousness of the sales staff, the professional advice you get, the timeliness of deliver, the maintenance service of your car…the list just goes on. Ford (or any other car company) has 100s of chances to spoil their reputation well after they have delivered the product to you.  So is Ford a manufacturing company or a Service one?

In the last 15 years while I have been active in industry, the more I have looked at manufacturing companies the more I see a service company hidden under the hood.  Look around yourself.  Everything is a service.  A product is part of the experience, at best.  I can’t claim to be a trend spotter – but seeing all companies as Service companies could the next big trend in Quality!

A lot of industries are yet to make this journey.  In many ways financial services and similar industries have skipped a generation – and have focused on customer experience far earlier in their life cycle as other companies.  This could be because of the competition they face or maybe because they face the customer far more directly and often than a car company would.  But this is changing.  Most car companies make more money on service, insurance, and resale of old cars than they make on their core-business.

So what can we learn from the NEW Ford.  First, choose your leader wisely.  Alan Mulally was a brilliant choice. There is no better business leader today who is so focused on quality.  Boeing’s loss was Ford’s gain!  Second, choose your priorities wisely.  When other car companies were crying hoarse for government aid to revive their fortunes, Alan and team put their head down and worked on reviving Ford.  They took responsibility and changed how they worked. 

A good example of Ford getting it right in India after Alan moved in is the new models they have launched.  They do not now bring outdated models to India.  They realized the Indian customer is now as aware, if not more, as the American one.  Launch of Figo was a sucker punch in the Indian market.  The model is a huge success and Ford has learnt its lessons well.


Narayana said...

For any organisation, MFG and Service or only Service shall provide importance for quality. In MFG with service sector there must be high weightage for quality in production shop as well as in service shop. There must of coupling between product research, design, sales, marketing, services etc. Right now one challenge I always observe in most of the industry in de linkage between above said parameters. I think if quality can be made as a part of the entire business chain, it will do wonders for any organisation. Even though enoromous investment in technology, training hardly ( I think none to my knowledge) any company would have achieved this level of maturity. Only one answer is organisation shall put all energy towards establish such quality system,(If customer pulls the chain, entire system shall work).

Antony said...

In the Mfg sector, Quality process many times driving its focus limited with final product requirement - where as in the service industry, it extends to the customer expectation / desire / delight - when the interactions directly with customer.
Now, this the time to revisit & establish new quality system.

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