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A not so nice view on Hackett


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I only know a few folks (no management) left in Dearborn so I won't pretend I know what's truly going on. However, this is a pretty negative view of Hackett.  Peter can be pretty negative about things so this is a bit over the top. However, I would love to know their strategy and if it's just this nebulous idea. They need a clear direction, while still being as nimble as they can when things change (and they will). <<<<<------------- The last sentence I wrote, is incredibly difficult for old larger corporations in any sector.

The Autoextremist

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I’ll say this much and I guess we will find out-For all the accolades that Mullaly got running Ford-it sure as hell went back to shit within 5 years of him leaving. To me that means that the underlying structure in place didn’t change at all-just circled the wagons till he left. 

With Hackett there seems to be a lot of bitching from the establishment-which I’ll assume is the same group of people who are part of that structure that didn’t do much with the previous leadership to keep the things started by Mullaly going and what Hackett is doing for better or worse is to break that group of people apart so Ford doesn’t wind up in the same place it is now in another five years or so. 

People don’t like change. 

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I don't claim to know whether what he's doing specifically is good or bad but all of those points and quotes in both articles sound very familiar to anyone who's trying to get a decades old company to think differently and do things differently.   It's exactly what Mullaly was doing but probably bolder moves and Mullaly was a much better communicator.

There are people who don't understand it and people who don't want to understand anything because they don't want change.   Here is a perfect example:

Quote

In a debate over whether customers should wait 81 days for their vehicles, the team wanted to help him understand why. But, as far as Hackett was concerned, the issue wasn’t about understanding. He simply didn’t agree that it should take that long.

He said he had to use a graphic to illustrate his points.

“I was frustrating people where they thought, ‘God, is he ever going to get up to speed?’ But I had already moved on,” Hackett explained.

They want to explain to him why it takes 81 days and why that doesn't need to change.   But that wasn't the question.  The question was how can you think outside the box and figure out a way to get them to consumers more quickly.   People assume that they have to continue doing things they've always done or that rules can't be changed.   But if you start thinking about it from a clean sheet approach you'll usually find better easier faster cheaper ways to do something.  That's what he's trying to get them to do and most of them apparently don't embrace that.  It doesn't mean that you have to solve the problem it just means that you need to at least try to find new ways of doing things.

I can think of 2 things that would speed up retail orders and I'm not even in the business.

Assign retail orders a priority of 1 and build them as soon as they're buildable - screw the dealer allocation model.

Investigate delivering those vehicles by truck instead of by rail (and charge extra if necessary - call it rapid delivery).

That alone would cut 2-3 weeks in most cases.

 

 

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I read both of those and then I read the one Silvrsvt just posted.   It's been 22 months - if the executives still don't get it then they need to get new ones.

 

He's trying to get them to think about transportation as a service instead of just building vehicles.  And to embrace new technologies and the old guard wants none of that.

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46 minutes ago, akirby said:

I don't claim to know whether what he's doing specifically is good or bad but all of those points and quotes in both articles sound very familiar to anyone who's trying to get a decades old company to think differently and do things differently.   It's exactly what Mullaly was doing but probably bolder moves and Mullaly was a much better communicator.

There are people who don't understand it and people who don't want to understand anything because they don't want change.   Here is a perfect example:

They want to explain to him why it takes 81 days and why that doesn't need to change.   But that wasn't the question.  The question was how can you think outside the box and figure out a way to get them to consumers more quickly.   People assume that they have to continue doing things they've always done or that rules can't be changed.   But if you start thinking about it from a clean sheet approach you'll usually find better easier faster cheaper ways to do something.  That's what he's trying to get them to do and most of them apparently don't embrace that.  It doesn't mean that you have to solve the problem it just means that you need to at least try to find new ways of doing things.

I can think of 2 things that would speed up retail orders and I'm not even in the business.

Assign retail orders a priority of 1 and build them as soon as they're buildable - screw the dealer allocation model.

Investigate delivering those vehicles by truck instead of by rail (and charge extra if necessary - call it rapid delivery).

That alone would cut 2-3 weeks in most cases.

1. Assign retail orders a priority of 1 and build them as soon as they're buildable - screw the dealer allocation model.

Not saying there's no way to improve this but adding  all those variable builds at short notice and Ford  immediately throws out the window all of its pre-planned supplier ordering, the build sequence is  planned months in front to be delivered just in time. What they may need to do is find a way to add in customer orders say, four one or two weeks out from build day but I can see that costing Ford a packet to do.

2.Investigate delivering those vehicles by truck instead of by rail (and charge extra if necessary - call it rapid delivery).

Maybe this is what Hackett was told but he wants it done at no cost  "think outside the box" as in no money. I will add that a customer's car should not sit in holding yards for weeks and weeks while someone waits for a train or truck, that is definitely something that must improve. The fact that that still happen in 2019 is shameful.

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33 minutes ago, akirby said:

I don't claim to know whether what he's doing specifically is good or bad but all of those points and quotes in both articles sound very familiar to anyone who's trying to get a decades old company to think differently and do things differently.   It's exactly what Mullaly was doing but probably bolder moves and Mullaly was a much better communicator.

 

 

 

Mullaly had a big advantage - the wolf really was at the door when he took the helm. GM and Chrysler were on the ropes, and would soon be begging for a federal bailout.

To paraphrase Samuel Johnson, the hangman's noose focuses the mind wonderfully. So does the prospect of going out of business. Ford is a healthier company today than it was when Mullaly came to town. That influences how much change the employees are willing to accept.

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3 minutes ago, jpd80 said:

 

Not saying there's no way to improve this but adding  all those variable builds at short notice and Ford  immediately throws out the window all of its pre-planned supplier ordering, the build sequence is  planned months in front to be delivered just in time. What they may need to do is find a way to add in customer orders say, four weeks out from build day but I can see that costing Ford a packet to do. Maybe this is what Hackett was told but he wants it done at no cost  "think outside the box" as in no money.

See, you're coming up with reasons not to do it.   It doesn't have to change any of that.  Worst case it would simply delay another dealer stock build with similar options.  And it only gets scheduled if the parts are available.

But worst case let's say that is an issue, then come up with solutions to that problem.   Maybe the simple answer is keeping 10% extra parts on hand and maybe the cost to do that is $100 per retail ordered vehicle.  So you charge $250 for expedited delivery, the customer is happy and you made an extra $150.  Win/win.

Whether you think something is possible or impossible, you're correct.

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11 minutes ago, akirby said:

Maybe the simple answer is keeping 10% extra parts on hand and maybe the cost to do that is $100 per retail ordered vehicle.  So you charge $250 for expedited delivery, the customer is happy and you made an extra $150.  Win/win. 

That's a good idea. Problem is most of the assembly plants are set up in such a way that they physically can't hold 10% more parts in the MP&L areas.  When Ford adopted the just in time policy they went all in on it, for better or worse. Long term it's possible as plants get retooled and reconfigured but short term probably not. 

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7 minutes ago, grbeck said:

Mullaly had a big advantage - the wolf really was at the door when he took the helm. GM and Chrysler were on the ropes, and would soon be begging for a federal bailout.

To paraphrase Samuel Johnson, the hangman's noose focuses the mind wonderfully. So does the prospect of going out of business. Ford is a healthier company today than it was when Mullaly came to town. That influences how much change the employees are willing to accept.

That is an excellent point.

I think they'll have to replace most of the upper and middle managers to really change the thinking.

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4 minutes ago, fuzzymoomoo said:

That's a good idea. Problem is most of the assembly plants are set up in such a way that they physically can't hold 10% more parts in the MP&L areas.  When Ford adopted the just in time policy they went all in on it, for better or worse. Long term it's possible as plants get retooled and reconfigured but short term probably not. 

There are ways around that too but I don't think it's necessary.   Like I said just bump a dealer stock order by a week or two and nobody will notice or care.

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7 minutes ago, fuzzymoomoo said:

That's a good idea. Problem is most of the assembly plants are set up in such a way that they physically can't hold 10% more parts in the MP&L areas.  When Ford adopted the just in time policy they went all in on it, for better or worse. Long term it's possible as plants get retooled and reconfigured but short term probably not. 

Yes thank you, I was about to post that, Ford did away with on site storage to save lots of money. They took the good with the bad to save money.

 

I'm curious about reprioritizing dealer stock orders and if that could be done, it would help the situation but again the different parts for the customer order would have to be supplied quickly - maybe this is the sticking point.....

 

 

 

 

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8 minutes ago, akirby said:

There are ways around that too but I don't think it's necessary.   Like I said just bump a dealer stock order by a week or two and nobody will notice or care.

That would require them to not do production schedules as far out as they do, not that 5 weeks is that far away. Maybe only schedule 3 weeks in advance instead, though I'm sure they don't want to do that because it allows less wiggle room for parts shortages or plant breakdowns.

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3 minutes ago, fuzzymoomoo said:

That would require them to not do production schedules as far out as they do, not that 5 weeks is that far away. Maybe only schedule 3 weeks in advance instead, though I'm sure they don't want to do that because it allows less wiggle room for parts shortages or plant breakdowns.

I'm sure that all of this was explained to Hackett but he didn't listen,  I'm an ideas man, don't bother me with problems....

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8 minutes ago, jpd80 said:

Yes thank you, I was about to post that, Ford did away with on site storage to save lots of money. They took the good with the bad to save money

 

Ok, let's say that was a problem - let's do a business case.

Let's say Oakville sells 250K Edge/Nautilus per year and let's say 5% of those are retail orders and half of those folks are willing to pay $250 for expedited ordering so they get their vehicle 2-4 weeks earlier than normal.   That's $1.563M in additional revenue per year.

Let's say in order to do that they have to add space in Oakville either with construction or shipping containers and the cost to do that is $250K for 10 years.

You would break even after 2 months and you'd have an additional $1.5M profit every year thereafter.  Why wouldn't you do that (assuming the consumer will pay the $250?).

Those are the kind of options he wants his people to bring him.  Don't just say no we can't do it.

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1 minute ago, akirby said:

 

Ok, let's say that was a problem - let's do a business case.

Let's say Oakville sells 250K Edge/Nautilus per year and let's say 5% of those are retail orders and half of those folks are willing to pay $250 for expedited ordering so they get their vehicle 2-4 weeks earlier than normal.   That's $1.563M in additional revenue per year.

Let's say in order to do that they have to add space in Oakville either with construction or shipping containers and the cost to do that is $250K for 10 years.

You would break even after 2 months and you'd have an additional $1.5M profit every year thereafter.  Why wouldn't you do that (assuming the consumer will pay the $250?).

Those are the kind of options he wants his people to bring him.  Don't just say no we can't do it.

At the core of your solution is changing the order in which vehicles are made.

If Ford is locked into a supply process that prevents that happening, then it's the supply contract that needs to change first...

I don't know if this is true or not but if it is, it explains a lot of why the suits are telling Hackett it can't be done.

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15 minutes ago, jpd80 said:

At the core of your solution is changing the order in which vehicles are made.

If Ford is locked into a supply process that prevents that happening, then it's the supply contract that needs to change first...

I don't know if this is true or not but if it is, it explains a lot of why the suits are telling Hackett it can't be done.

A lot of parts come in sequence from the supplier. All ford would need to do would be to communicate the change in production order with the supplier. Or set aside an empty part rack on the line for parts for cars that are out of order on the line like we used to do with Focus door panels and mirrors. 

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14 minutes ago, fuzzymoomoo said:

That would require them to not do production schedules as far out as they do, not that 5 weeks is that far away. Maybe only schedule 3 weeks in advance instead, though I'm sure they don't want to do that because it allows less wiggle room for parts shortages or plant breakdowns.

Not true.  They could find the newest scheduled dealer stock vehicle (scheduled a few days ago e.g.) that has the same options and swap it and reschedule the dealer stock order next week.

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5 hours ago, akirby said:

That is an excellent point.

I think they'll have to replace most of the upper and middle managers to really change the thinking.

Isn't that what leadership is all about?.  You don't replace every one-you get them to change-and quickly..And it sounds like "Theory" or in DeLorenzo's view, "bullshit" vs focused (hate that buzzword but it is correct IMO) attention on the problems is what Hackett has to do. Direct them-don't replace them-they are not rookies  Totally understand the downside of "just in time inventory" and given the amount of outsourcing I would imagine it is like stopping a super tanker,  But getting finished product to the customer sooner?  How complicated is that?  logistics 101. Knock off the easiest and most obvious issues first.

40 minutes ago, SoonerLS said:

You're missing the forest for the trees.

This isn't about changing a specific thing--it's about getting people to find solutions instead of excuses. 

Amen. Real leadership to confront the situation at hand.  The big difference between Mulally and Hackett..  Mulally.."where are we this week vs where were we last week and did we get better? And if NOT- why?.  Hackett.. "Read this book"...At least that is the continual impression I get.

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