Ferrari, McLaren, and Williams have the financial and human resources to throw at a problem. Jordan Grand Prix doesn’t. It retained Celerant Consulting to help streamline processes, improve supply chain efficiency, and increase product quality. Now the only thing that gets everyone over the wall at the same time are the pit stops.
Jordan Grand Prix isn’t the wealthiest team on the Formula One grid, but it may be the scrappiest. With a reported budget of approximately $65 million–a far cry from Ferrari’s rumored $250 million to $450 million–Jordan has to make the most of its resources. The daily demands of racing leaves little time for improving practices or chasing waste from the system. So, with little time and less money, Jordan retained Celerant Consulting (London, England) to assess its business practices, supplier relationships, and off-track activities.
“The reality of Formula One is that there is massive innovation going on throughout the season, and our job is to help Jordan systematize this so they can maximize their efforts,” says Dereck Clow, Celerant Consulting’s project manager for the Jordan Grand Prix effort. Over the past two years, Celerant has helped Jordan Grand Prix realize a:
- 30% increase in productivity
- 15% reduction in lead time
- 22% increase in on-time deliveries from suppliers
- 60% defect reduction in parts sourced from outside the company
- 50% reduction in design changes during manufacture
- 10% improvement in wind tunnel down time
- 50% reduction in build time
- 80% reduction in non-value-added activity across the organization.
“We broke the whole relationship down into waves of activity that fit with the issues that arose over a season,” says Clow, “and studied how the organizational design supported them.” Built around a core group of diehard racers, and buoyed by the gregarious personality of team principal Eddie Jordan, the organization operated on an informal basis. As each race weekend approached, team members often found themselves filling in the gaps, and making decisions on-the-fly. Delays stacked up in non-critical areas, and few in the team were aware of the status of current projects.
This also meant it was difficult to track what–if any–improvements had been made, and what effects they might be having on the rest of the organization. “Jordan has a pretty creative team pouring out ideas all of the time,” says Clow. “When you try to rush these ideas through between races, as every F1 team does to some extent, the information and process systems let you down because priorities within the organization aren’t always aligned.” So Clow and his team–he has one full-time person on-site at Jordan and involves others on an as-needed basis–spent their initial effort on role definition and accountability, establishing metrics and measurement systems, coordinating planning and scheduling functions, and improving communication within and between functions. Call it classic project management.
The initial focus at Jordan centered on three areas: the wind tunnel, design office, and the production system. By shifting focus from a task-oriented process to one in which managers are challenged to justify their project’s place in line and the time allocated to it, programs moved forward more quickly with no increase in staff. The 14-day work schedule no longer contains 25 days worth of work, and parts are now ready one race ahead of schedule. Also, the design office’s loose operating structure has been replaced by a system that establishes clearly defined critical paths where delay can or can’t be tolerated, and a reporting structure that includes areas within the organization affected by these potential delays. Per person productivity is up 10%, and the time necessary to go from concept to development has been reduced by 30%.
“Because Jordan doesn’t have the money to support the hundreds of people and the reporting structures that build up over time, it can’t keep throwing money at a problem until it is fixed,” says Clow. His team helped create a database where the team captures and cross-references all data from test sessions and races so issues can be raised at the factory, not at the track. This process was expanded to support an investigative function that looks for the root cause of a problem, not a quick fix. And it opened further to manage the team’s supply chain.
Without the resources necessary to produce the entire vehicle in-house, Jordan Grand Prix has to rely on the cottage industry that has grown up in England to support motor sports. Though built on informal relationships, this reliance often has resulted in parts that didn’t meet specification, or budget, or weren’t reliable. “Out of the 3,500 total parts, there are 1,500 components that are redesigned at least seven times over the course of a season,” says Clow. “So we instituted rigorous Key Performance Indicators to make sure the supplier is achieving the required cost, quality and timing levels, while reducing the complexity of the component.” The latter, called “Opportunity for Defects,” tracks the likelihood of a component failure during the season-long enhancement process. It is part of an overall process that tracks the lessons learned, areas for enhancement, potential reliability issues, and builds this into the planning process for next season’s car.
It also moves the team from following the Formula One norm of inspecting in quality to demonstrating quality at each step in the process. “We had to implement small changes with our suppliers and demonstrate a few successes,” says Darren Smith, Jordan Grand Prix’s Quality Assurance manager. “Once people at Jordan and at our suppliers saw the benefits,” he says, “all I had to do was provide the best practice TQM tools and techniques, and start empowering people to see these initiatives to conclusion.” Quality, on-time delivery, and value-added activity are all up at Jordan Grand Prix as a result.
“Doing something is a good thing in Formula One,” says Celerant’s Dereck Clow, “but the pace is such that they don’t have the space to reflect on what they’ve learned.” However, it remains to be seen whether it’s the final frontier for consistent success.