Tuesday 10 December 2013

KM case study - the Ford BPR system (Quantified success story #78)

73 Ford Mustang Mach I The Best Practice replication system was an early Knowledge Management approach, applied by Ford in the 90s, to share improvements around the 37 manufacturing and assembly plants in the Vehicle Operations division.

The interesting thing about this system is that it is rigorous, defined, quantified, all the things that we often think Knowledge Management should NOT be, but for a long time it worked extremely well at Ford.

  • Within this CoP are “Focal Points" responsible for best practice in specific areas
  • At each plant, innovations and improvements are identified and tagged as "Best Practices"
  • These have to be "proven practices" - ie they have to be shown to work, and to significantly improve things.
  • There is a validation step, to demonstrate that these practices really are good, and really are worth replicating
  • These validated practices are entered into an Intranet-based system. this is done through an  Intranet report page, which records things like where idea came from, how much time, money or manpower it saved, who to contact for details, images and video  
  • The system "pushes" the practice to the other focal points in the CoP
  • Between 5 or 8 practices per week come through the system
  • Each focal point who receives a practice needs to fill in a form saying what has been done with this knowledge in their local plant - adopted it (and if so, what value did it add), rejected it (and if so, why), improved it, put it on hold for further investigation.
  • Statistics of adoptions and value were captured and reported regularly
  • Plant management meetings were held on a regular basis to review levels of adoption
  • Engineers within the community would meet quarterly face to face, to build trust and relationships
  • Engineers have reciprocal site visits, to visit each others plants and to understand each others contexts.
  • All of this was within a context of a strong pressure on operating costs, which drove the management of each plant to be very receptive to any ideas that would cut cost.
Ford claim that the Best Practice replication system delivered $1billion in hard documented value from 1995 to 2002, for an annual investment of $500,000 (that's an ROI of nearly 300-fold).

The Best Practice Replication system itself has been licensed to many organisations, including Shell, Nabisco, Kraft, and the US Navy


Christel Steinvorth Fernandez said...

Thanks Nick, very informative and no doubt a model to follow for making more efficient or improving processes that lend themselves to be documented. Do you know why they stopped doing this or how they transformed this approach after 2002?

Nick Milton said...

I don't Christel - I have lost contact wit them. Maybe one of our other readers can help? I do know that the system is still operating in parts of Shell.

gautam said...

Any suggestions on how to contact the right people at Ford?

Nick Milton said...

This case study was 20 years ago Gautam - I expect the people have all moved on since then.

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