Automaker drives wireless in plants
Citing poor coordination between its production lines and its extensive supply chain, Ford Motor Co. last week outlined the business drivers for overhauling its manufacturing plants with wireless networks that should allow workers to call in automotive parts orders from the shop floor.
"We're trying to clean up our production lines," said Jim Buczkowski, director of manufacturing and supply-chain systems at the Dearborn, Mich.-based auto giant. "If you pile up inventory all over the place, its more difficult to control what's going on."
Controlling line movement and reducing inventory levels are top strategic initiatives for the nation's No. 2 automaker, said Buczkowski last week at Forrester Research Inc.'s Automotive Summit here.
But perhaps more important, Ford's wireless overhaul is the first step in a broader technology drive that's aimed at enabling build-to-order systems through which vehicle manufacturing gets initiated by actual customer orders instead of by forecasting, he said.
During the past two years, Ford has been implementing a wireless network called e-Smart in 25 plants in the U.S., Spain and Belgium. E-Smart synchronizes in-plant parts replenishment activities on Ford's production lines and inventory bays, and with its suppliers.
When an inventory bin on one of Ford's production lines reaches a minimum level, a line operator simply pushes a call button that's located on either a piece of equipment or a nearby wall.
This action sends a 2.4-GHz wireless signal that triggers a request to the parts maker for materials such as a fender or ball-bearing supplier, and to the plant's internal inventory center. The system also sends periodic wireless updates to the network to help synchronize parts deliveries to both the plant and the assembly line. Ford tapped WhereNet Corp. in Santa Clara, Calif. to develop the infrastructure for the wireless tracking system.
Dan Garretson, an analyst at Cambridge, Mass.-based Forrester, said better management of information should help Ford and other major automakers have build-to-order systems partially in place by 2003. The wireless, real-time feedback from the line improves supply-side planning by reducing the wait time for new parts, he said.
Detroit-based General Motors Corp. is also moving to a build-to-order model. Executives at the nation's top automaker, which cut its inventory levels from suppliers by 10% as part of a cost-reducing measure in December, cited the challenge of having to integrate its manufacturing plants and the parts shipping schedules of its suppliers as a major obstacle the company must tackle.
Step in the Right Direction
"We have to enable our back-end systems, the systems in the plant, from a lean manufacturing standpoint and line up our supply-chain pipeline and be more efficient," said Mark Hogan, president of e-GM, the automaker's business-to-consumer Internet unit.
Thilo Koslowski, an analyst at Gartner Group Inc. in Stamford, Conn., said initiatives such as e-Smart bring automakers closer to their goal of tighter integration with their suppliers.
"A lot of the communication between suppliers and autommakers is over the phone and with fax," said Koslowski. "It's a small improvement, but they still have to solve the big supply-chain planning problem."