11/1/2000 | 3 MINUTE READ

System Skills

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For several years, the automotive industry has been enamored with the concept of modularity.


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For several years, the automotive industry has been enamored with the concept of modularity. GM has gotten the lion’s share of the publicity regarding modularity, and with the much-publicized Yellowstone fiasco of 18 months ago, and the subsequent announcement of two new highly modular plants in Lansing, Michigan, GM certainly deserves the headlines. However, most other manufacturers are moving as quickly—or even more quickly—toward modular assembly. The DaimlerChrysler Jeep plant in Toledo is expected to incorporate many modular concepts, and a recent announcement by Ford of a large supplier complex near its venerable Chicago Assembly Plant gives some indication of its modular plans for many of its older plants. Yet as these companies are gearing-up their modular plants, the Ford/Firestone troubles may be an all-too-visible indication of the pitfalls of modular assembly.

A year ago, we released a report on modularity entitled “Modularity, where are the economic benefits?". This report was based on a survey sent to the largest automotive suppliers—those companies that were most likely to be considered "module suppliers." The survey included several interesting results, but most interesting to the current Ford/Firestone situation was the strong belief by the suppliers that modularity would only reach its true potential if the manufacturers were willing to "let go" of the engineering. That is, the suppliers felt that the manufacturers had to be willing to allow the suppliers to take control—and responsibility—for the engineering of the modules. Shadow engineering by the manufacturers was going to have to be eliminated if cost targets were to be met. The manufacturers were to be only knowledgeable as integrators.

It is interesting that the more that is made public about the Ford/Firestone problems, the more it sounds like a case of "letting go" gone horribly bad. Jac Nasser has gone before those on Capitol Hill and told them that Ford had little knowledge of engineering and manufacturing done by Firestone. Other published reports suggested that Ford engineers claimed responsibility for the suspension system, but not necessarily the details of the tire.

The question that must be asked is this: How much engineering expertise must a vehicle manufacturer have to ensure that the program is optimized at the vehicle system level? According to a few supplier engineers whom I have spoken with recently, there is concern that at least one domestic manufacturer already doesn't have the system management skills to execute a new vehicle program.

In mid-September Nasser was a guest speaker at Dell Corporation. Dell, the great innovator of modular assembly was an interesting place to see the embattled leader of Ford. Might it be that there is a difference between computers and cars? Some people, such as Richard Hervey of Sigma Associates, have argued that the motor vehicle is by nature not conducive to a modular build strategy. By dividing the vehicle into chunks, it sub-optimizes the entire vehicle. Instead, it may be more beneficial to attempt to optimize at the system level, where the greatest efficiencies may be gained.

Returning to Jac's friends at Dell: Michael Dell's computer may best be described as a "modular product." The different modules can be optimized, plugged and played with little negative impact on other modules. A vehicle, on the other hand, cannot be viewed as quite as simply.The entire system must be optimized. The company whose name is on the product must be a vehicle system expert and to do that, it must understand the intricacies of all elements of the vehicle. If all modules are optimized to gain a balance between cost and performance at the module level, there is certain to be interfaces between modules where the results are less than optimal. And, maybe more illustratively, if Michael's computer crashes (and mine does frequently), you restart it. If Jac's truck crashes, you may die.