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Todays Cycle Time in the automotive industry

Updated: Nov 10, 2022

Cycle Time in the automotive industry using the Ford Motor Company as an example.

At present, #Ford can neither meet its delivery commitments, nor specify firm delivery schedules

Like most automobile manufacturers Ford Motors, too, initiated a large number of "Change Projects" in the 80s, aimed at reducing costs and enhancing quality. Only a few of these programmes were sustainable. Most often, such projects were replaced by new projects during the project phase itself, because the expected results looked even better on paper.

At that time, Ford Motors was of the opinion that the shortening of cycle times would be the basis for most improvements. For more than 10 years, several automakers had already been losing money. Production processes were improved with the help of ‘lean’ methods and Japanese experts, and not without a degree of success; however, these did not lead to the desired improvements in the bottom line. One reason surely was that while a car was manufactured within an average of 11 hours, the cycle time from order to delivery was, however, approximately 40 days. Between 1999 and 2001, a research project was launched with the participation of Ford Motors, to reduce the cycle time from order to delivery to 3 days. This project was supported by the Department of Industry (DTI-UK) and the Engineering and Physical Sciences Research Council (EPSRC). Build-to-order in 3 days must have been a very ambitious project. 5 days would be far more realistic. The fact that Ford, even today, is not in a position to meet confirmed delivery schedules of 120 days, let alone confirm long-term delivery schedules, shows that very little has happened in the last 10 years. In Germany, at least 70,000 jobs are expected to be lost in the automobile industry in the next few years. Among the main causes of this are the billions being invested in development of electro-mobility and correspondingly in self-driven cars. Aided by "artificial intelligence" (AI), processes and products are likely to become more flexible and efficient.

Increasing numbers of companies are turning towards digitization as a solution to their problems. This includes Ford, since according to W. Kopplin – Managing Director - Marketing and Sales Ford Germany, - the opportunities arising from digitization are still underestimated. The fact that digitization still has a hard time in practice, is brought home to us on a daily basis.

There are however, also developers who have recognized the problem. In the words of Michael Cyankiewicz – of M/s. Young Digitals "Digital product development unfortunately still concentrates mainly on the pure implementation of ideas arising from gut feelings, without ascertaining whether they actually solve problems in the first place." Or A. Gerauer of Tickaroo "The Machine Learning hype continues – but the question still arises as to what extent models actually deliver what they promise. In training scenarios, they often provide the desired results, but in practice they repeatedly show weaknesses.

" As Grady Booch, a pioneer in object-oriented-modelling brilliantly puts it,

”A fool with a tool is still a fool"

Those who have still not been able to optimize their processes, reduce cycle times and create transparency, will also have a tough time with digitization

Ford Motor - Order to Cash Cycle 2019

#cycletime #o2c #automotive #operations #production #deliverytime #supplychainmanagement

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