Knowledge management (KM) in ford motors


Knowledge management (KM)

This is a recent discipline that was introduced in the year 1991 and is progressively being adopted and practiced by many companies and has turned out to be more of a business strategy for these companies in order to stay a competitive in the current dynamic and challenging business world.

Knowledge management is a system that entails various activities in a given organization with the sole objective of creating, distributing, adapting and identifying certain experiences that comprise of knowledge that is usually embraced by the practices of that given organization or maybe embraced by the company’s work force.

Apart from KM being relatively new, most of its units course work is taught in other discipline or professional courses like information systems, business administration and many more.

KM is a widely practiced discipline and is also practiced by many private and even some public organizations.

It must be realized that the prime focus of KM is to help many companies to achieve their full potential by catapulting their performance levels that are in line with the company targets. It is also very pivotal in helping the company meet its objectives of enhanced performance, innovative management and definitely achieving a competitive advantage.

The other reasons why most companies are practicing KM is because it also helps to encourage the sharing of knowledge among the employees, it enables the sharing and learning from different experiences.

The advantages of KM are many but I would like to only mention a few and later elaborate on the impacts of these advantages and their significance to the Ford motor company, which is the focus of this research paper.

These advantages that come as a result of different groups sharing information include;-

The reduction of redundant work

Reducing the loss of time through training of new employees, this training also has cost implications so by eliminating training the company is able to cut down on its spending

It also helps in the reduction of intellectual capital loss within an organization.

It also helps companies to adapt to the ever changing business environment and the market.


This is an automaker company that was found by Henry Ford, the company was then incorporated in the year 1903 in the month of June. The company over the years has steadily transformed to an American multinational company and currently holds the fourth place in the automaker industry as the fourth largest automaker following the company sales volumes. The company is based in Dearborn, Michigan.

The Ford motor company co-owns and also owns certain vehicle brands namely the Ford, mercury, Lincoln, Mazda and Aston martin.

Henry Ford introduced a system that was largely known as Fordism by the year 1914.This system comprised of a large-scale method of manufacturing cars and also a large scale system of managing an industrialized workforce

The Ford Company being a global car manufacturer has employees more than 360, 000; it also has more than 110 manufacturing facilities in more than 30.

One of the greatest assets a company can have is the knowledge base of its employees and the Ford Motor company has realized just that and has decided to capitalize on this fact and effectively tap this talent.

In order for the company to manufacture, design and distribute some of the best cars in the world, the management realized that it had to strategically incorporate the knowledge of its workforce.

This drastic transformation was prompted by the changing global economic times and the constant need to get closer to the customers and also to understand their needs better thus the company satisfying them.

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This can only be achieved by optimizing the techniques employed in the management of knowledge there by improving the process of business.

The knowledge Management at Ford

The Ford Company adapted the KM and its utilization in the product verification process and this was particularly for the product development department that really used to cost the company a lot of money, The Company’s corporate strategy demanded the use of the previous verification information and the systematic observation of the engineering principles to help reduce the costs of verification and to enhance the quality of the products.

This is why the KM system was initiated and practiced by the company. The success story of the corporate strategy is dependant on the proper implementation of the KM.

Usually there are a number of methods used by companies to ensure improved quality of products even as the products are replicated in large numbers a common example of the quality improvement method used is the 6-sigma method. The common challenge facing many manufacturing companies all over the world is the issue of replication of their products while at the same time maintaining quality.

The solution to this challenge is a system that will ensure the capture and the harmonization of all the quality improvements that occur in all the sectors of the company.
In the year 1995 the ford company realized that they could successfully use a web based Knowledge Management enabler in replicating and also leveraging quality improvement throughout their business institution.

This web based enabler is called the Best Practice Replication (BPR)

Case study

In the year 2001 there was a case in the Dearborn Assembly plant, in Dearborn which used to produce about a hundred thousand units of the Mustang vehicle model (the total unit production given was a yearly one) and there were reports that some of the air conditioners were defective, this meant that the quality of the products had been compromised and this also meant the percentage of the dissatisfied customers was also high.

An investigation team led by the automation engineer and the production specialist from the Dearborn plant discovered that the air conditioners were working to specification but the problem was that the air was not being cooled consistently in some isolated cases. They then realized that the problem had originated from defective airflow which was later corrected; this had its advantages in terms of improved customer satisfaction.

This incident contributed to the utilization of the best practice replication (BPR).

The BPR is an application that is intranet based and is used by the Ford Company to share best practices of replication with companies world wide.
The quality improvement on the Mustang vehicles was then replicated to ten other vehicle assembly plants using the BPR.

The second case study is in M aumee stamping plant. This particular stamping plant produces about 115,000 tons of steel and 300 tons of aluminum fenders for the Ford Explorer and other different Ford vehicles.

The stamped parts were then placed on a conveyor belt for inspection, the belt moved at a speed of about 16 parts/minute. The inspection of the stamped aluminum fenders is done by inspectors who have approximately 4 seconds to check each defective stamp. This is was quiet ineffective because the reaction time for stopping the conveyor was long and by the time the conveyor was stopped there were about 10 defective parts that would pass through and escape the eyes of the inspectors stationed along the conveyor belts

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This entire process proved to be extremely costly to the company mainly because it involved the physical removal of the defective fenders in order to separate them for further repairs, this meant that a lot of time was lost during the stoppage of the conveyor thereby reducing the productivity and also increasing the costs of repair and maintenance.

After extensive research and boardroom meetings the quality coordinator at the Maumee stamping plant discovered that they could adapt a system called the quadrant inspection method where the fenders were divided into four visible quadrants and them adopting a systematic section by section inspection.
The inspectors were expected to only inspect the top right quadrant for the first section of inspection then the bottom right corner for the second inspection then the bottom left corner for the third inspection then the final inspection would involve inspecting the top left right corner.

This method ensured that the entire fender was inspected effectively and the results of this method of inspection proved to very effective because there was reduced number of defective fenders.

In the long run the method helped reduce the number of human handlers needed to retrieve the defective fenders and also it reduced time wastage then finally the method also help improve the customer satisfaction.

The quality of fenders improved and this also helped boost their sales and this reflected on the profit margin of the company.

This proven and effective practice was the introduced to the BPR by the Maumee stamping plant quality coordinator.

The use of the BPR enhanced and also ensured the improvement of the quality production by replicating the Best practices to other stamping plants

The third case study involves the Ford Motor vehicle Credit Company and its six data bases and the three excel spreadsheets that were to help track skip accounts.

In order to understand the skip accounts better, I will briefly explain what the skip account is all about.

A skip account was the type of account that had information relating to the untraceable car owner and the vehicle, meaning that some car owners had increasingly become difficult to trace and yet they were in possession of the company vehicles that had been loaned to them and therefore they were defaulting in payment.

Some of the characteristics of the skip accounts included the following:-

Poor history of debt repayment, this can be got from other creditors who might indicate that the client’s possibility of skipping is high.
The second characteristic is that the client might give an invalid phone number that is unreachable or permanently disconnected.
The client could also be unable to verify their employment meaning that they are unemployed.
An invalid email address.

With all these problems at Hand, there was growing necessity to streamline the process by using a 6-sigma project that was implemented Black belt mike Delmonico.
This project enabled Delmonico to bring together the different sources of information to one skip data base.
This then enabled the relevant teams to effectively and consistently report on the skip accounts through comparison of the skip accounts from the different service centers.
The results were positive since this had helped reduce the costs and also improved productivity.
This proven practice was then entered into the BPR system in the year 2003.So the use of the BPR and the replication of the improved quality practices resulted into enhancement of productivity and cost reductions

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All the practices were all geared at improving the quality and were mostly initiated by the Ford motor company to ensure it maintained or improved its product quality.

The reason for using KM to improve the quality

The main reason for the utilization of the utilization of KM in quality efforts is because an active KM programme will ensure the harmonization of quality improvement strategies from the local level to the enterprise level.

A well coordinated knowledge management will ensure that there is maximization of value from the local level to the higher enterprise level.

The KM programme can also in a great way help to boost the local efforts of quality improvement by replicating them to the enterprise level.

Benefits of the KM in the quality improvement efforts.

There has been a registered improvement by the Ford Company in its initial quality of up to 18 percent and this was between the year 1998 and 2003.

Secondly the Ford Company managed to reduce its warranty cost by a whooping one billion dollars between the year 2001 and 2004.

The introduction of 6-sigma in the year 1999 has helped the Ford company realize a reduction of about one billion dollars in terms of costs incurred in wastes globally.
Quality improvement strategies of the Ford Motor Company

The Ford Company has a number of strategies to ensure that the quality of its products remain top in the competitive market.

Given the fact that the company’s tag line is ‘Quality is job 1′
These strategies include;
The quality leadership initiative
This was introduced in the year 2002 to help the company achieve its back to basics strategy.
The key method is to encourage the employees and also to improve the customer satisfaction together as a team.

The quality operating system

This particular strategy was launched in the year 1990 and it was aimed at ensuring that there was strict observation of all the principles that would result to high quality products.

This meant that all the standards and procedures that were set for the production of quality products were adhered to.

The 6-sigma system

For this system to be successful it must be consumer driven. This system was also introduced in the year 1999 and it was meant to improve quality. It majorly uses statistical methods to help reduce the number of defects and in the end improve the quality of the products and the services that are provided.
The above three strategies can only be effective with the careful practicing of the KM system by the employees, the BPR system is also handy at this stage.
Application of KM in quality improvement

The KM must be used to quantify the captured knowledge for example there needs to be some type of metrics to help measure the type of identified knowledge. The mention metric must be properly defined for the purposes of replication.

These should be in the following classes namely; Safty, Cost, Motivation, Environment, Delivery and Quality.


The current market demands for the production of high quality goods if the company’s is intent on making sales and also maintaining a good customer base.
This therefore calls for the employment of the quality improvement techniques like the use of the 6-sigma, the BPR replication system of quality.
A well managed KM system will increase the company’s ability in capturing and even replicating enhanced quality practices within the organization thereby making the increase its customer base and customer satisfaction.


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