Applying Knowledge Management to Improve Quality

2 High Priority given to Quality at Ford Motor Company Strategy: Quality is JOB #1 Quality Operating System (QOS) Performance to Standards Quality Leadership Initiative (QLI) Engage all employees Consumer Driven 6-Sigma Data driven decision making

3 Leverage Quality Improvement Programs Corporate Strategy: Quality is JOB 1 Top Down: Corporate Programs - QOS, QLI, 6-Sigma… Bottom Up: Employee based proven methods to improve quality… …apply Knowledge Management

4 Applying KM to Improve Quality Illustrative examples will be displayed and discussed during the presentation

5 Measurable Quality Improvements at Ford Motor Company JD Power Initial Quality Study: Ford Motor Company products had more than 16% improvement Consumer Reports 2004 – New Car Preview – 19 Ford Motor Company products received “Recommended Buys” “Recommended Buys” Warranty Spending is down 18% from 2002 Consumer Driven 6-Sigma efforts saved more than $1.3 B since its inception in 2000 Source: FCN December 15 th, 2004, & 2003 Annual Report

6 Ranked #4 by Fortune 500 Ranked #4 by Fortune 500 Manufacture and distribute automobiles in 200 markets across 6 Continents Manufacture and distribute automobiles in 200 markets across 6 Continents 2003 Global Revenues: $164 Billion 2003 Global Revenues: $164 Billion 327,000 Employees 327,000 Employees Celebrated 100 th Anniversary Celebrated 100 th Anniversary

7 Very Brief History of Best Practice Replication 1994: Formalized process of replicating proven practices 1995 – Faxing best practices amongst vehicle assembly plants 1996: Launched Ford Web Hub; BPR used the Web across 53 plants globally. As of 2004: Launched 53 communities of practice. 2,334 Focal Points: Vehicle Assembly, Plant HR, Paint Engineering, Ergonomics, Safety, Plant IT, Finance, Environmental…

8 BPR Principles Capture only Proven, High Value Practices Value-Add to business must be identified Manage the Process Business Partners provide the content and the people, IT group provides the enabling tool

9 Practice Implemented at a Ford Facility Review by each Location Approve & Distribute & Distribute Collect ManagementReview of Results Adopt/ Don’t Adopt Decision Decision LessonsLearned Inspiration FPS CPIPS SiteVisits Practice is Proven AND generates Value Task Best Practice Replication with prescribed Roles & Responsibilities Many Sources of Ideas 8Ds Selection and Replication of Proven Practices at Ford 6-Sigma

10 Typical BPR Community of Practice Senior Leadership Site 1 Focal Point Site 3 Site 2 etc. Community Gatekeeper Knowledge Workers Focal Point

11 Best Practice Replication 9 Step Process DRAFT PRACTICE: Focal Point at Locations enter Proven Practices: 1 REVIEW DRAFT PRACTICES: Gatekeeper looks for replicable practices; Collaborates with SMEs. APPROVE PRACTICE: Gatekeeper approves only replicable high-value practices. PUSH the KNOWLEDGE: Outlook notification to all Community Focal Points at each Location. PRACTICES REVIEWED by each location team members for applicability. ADAPT/ ADOPT/ NOT ADOPT DECISION made at each location. “Copy with Pride” FEEDBACK: Focal Point at each location enters adopt/not adopt decision. REPORTS: Progress Reports available to all PEER RECOGNITION of practice originators & replicators

12 BPR Results Summary 2,800+ active high value practices. Since 1996: Average of 10,000+ replications/yr 53 Communities of Practice 2,334 active Focal Points Process licensed to Shell Oil, Nabisco, Kraft Foods, and US Navy

13 Contacts Stan Kwiecien Best Practice Replication Deployment Manager Sanjay Swarup Senior Knowledge Management Specialist Dar Wolford Manager, Venture Transitions and Knowledge Management Robyn Valade Best Practice Integration Manager

14 Applying KM to Improve Quality # 1 Applying KM to Improve Quality # 1 KM System must capture Knowledge AND value metrics (Cost Savings, Quality, etc.)

15 Applying KM to Improve Quality # 1 BPR has 168 different types of value metrics in 6 broad categories

16 Applying KM to Improve Quality # 1 Illustrative examples will be displayed and discussed during the presentation

17 Applying KM to Improve Quality # 2 KM System must capture Quality Improvement Practices from ALL areas of the Enterprise. from ALL areas of the Enterprise.

18 Applying KM to Improve Quality # 2 Illustrative examples will be displayed and discussed during the presentation

19 Paint Engineering Paint Engineering Final Assembly Final Assembly Stamping Operations Stamping Operations Environmental Environmental Ford Financial Ford Financial Industrial Materials Industrial Materials Human Resources Human Resources Lean Manufacturing (Ford Production System) Lean Manufacturing (Ford Production System) Energy Energy All 53 Communities of Practice share quality improvement practices: Examples Applying KM to Improve Quality # 2

20 Applying KM to Improve Quality # 3 Capture the replication and feedback of Improved Quality Practices

21 Applying KM to Improve Quality # 3 Illustrative examples will be displayed and discussed during the presentation

22 Applying KM to Improve Quality # 4 Establish a Robust process to transfer replicable findings of closed 6-Sigma projects to the KM System transfer replicable findings of closed 6-Sigma projects to the KM System

23 Applying KM to Improve Quality # 4 Illustrative examples will be displayed and discussed during the presentation

24 Applying KM to Improve Quality # 5 Leadership MUST provide ongoing encouragement and support for initiating AND replicating Quality Improvement Practices

25 Applying KM to Improve Quality # 5 Sample of Recognition given to Initiators

26 Why use KM to Leverage Quality Efforts? Quality Improvement without KM Quality Improvement with KM QualityLocal onlyEnterprise-wide Value Effort Value generated is local only Maximize Value Enterprise-wide Minimal additional effort for Enterprise- wide replication Max effort at one location

27 High KM activity AND High Quality Improvement activity = Maximum Value KM activity Medium ValueMaximum Value Medium ValueMinimum Value Quality Improvement Activity HighLow High

28 Recap: Applying KM to Improve Quality 1: Capture Knowledge AND Value Metrics #2: Enable enterprise wide capture of Quality improvements #3: Replicate and capture feedback #4: Robust Process of linking KM and 6-Sigma #5: Leadership MUST provide ongoing encouragement and support