Managing Business Activities

to Achieve Result
report on
Ford Fiesta’s floor carpet improvement

System to manage & monitor quality

Ha Tuan Anh Lecturer

Improvement of org performance

MBAAR - Ford Case BTEC-B1304
Nguyen Dinh Bao B130058
Monitoring OHS progress
Managing Business Activities to Achieve Result
Ford Fiesta’s floor carpet improvement

Table of contents
Introduction 3

3.1 Fiesta floor carpet painting systems to manage & monitor quality standards 4

3.2 Ford quality culture to ensure continual monitoring, evaluation & development 13

3.3 Improvements recommendation based on Ford values & corporate strategies 16

3.4 Report on wider implications of proposed changes within Ford 19

4.1 Ford Motor risk assessments to ensure appropriate action is taken 21

4.2 Examples & demonstration of health & safety regulations & legislation 24

4.3 Systematic review of organisational health & safety policies & procedures 26

4.4 Practical application of health & safety policies & procedures 28

Conclusion 29

References 30

Acknowledgement 32

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Ford Fiesta’s floor carpet improvement

Introduction
Ford Motor Company is one of the first American automotive
companies that even today successfully manufactures and sells
automobiles, trucks, buses and automotive parts. Ford is the
second largest US automaker and the fifth largest vehicle seller
in Europe and the world, based on 2010 vehicle sales.
On the scope of this report, we will design a quality system which
would help Ford Motor to improve their Fiesta floor carpet
production process. The report also provides an understanding
of quality culture and structural reforming in Ford, as well as
recommendations on changes and applicable improvements.
Lastly, this report aims to create effective planning, on how
the management of Ford Motor can improve their occupational
health and safety system, as well as providing practical methods
for Ford operational staff to be aware of OHS issues.

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Ford Fiesta’s floor carpet improvement to Manage & Monitor Quality Standards

3.1
Ford Motor Co. is engaged in the
manufacturing and distribution Ford Motor
of automobiles across six
continents. The company through design floor carpet painting
its subsidiaries also engages
in other businesses, including
system to manage &
financing vehicles. monitor quality standards
- Forbes, Ford Motor overview -

1 Ford Motor: the company over view and

their quality system
Ford Motor Company was incorporated in
Delaware in 1919 to produce and sell automobiles
designed and engineered by Henry Ford (Ford, 2014).
They are a global automotive industry leader, whose
headquater based in Dearborn, Michigan. They
manufacture and distribute automobiles across six
continents. With about 181,000 employees and 65
plants worldwide, their automotive brands include
Ford and Lincoln. They also provide financial
services through Ford Motor Credit Company.
In the effort of managing and monitoring
quality standards for Ford Fiesta floor carpet
manufacturing process, Ford Motor Quality We look at the talent, the creativity and the interest
Department is required to construct a quality in the car. That’s why it’s important for us to
management system in accordance with ISO complement the internal talents that we have around
standard. Ford quality management system the world working on other parts of the vehicle.
concentrates in achieving quality policy and quality Things that we’ve learned in spending time in
objectives to meet customer requirements (Anton, Silicon Valley is to attract and retain talent by giving
2006). It is expressed throughout Ford structure, them meaningful and interesting work, beyond a
production policies, procedures, processes and Ford competitive compensation.
safety policies. - Mark Fields -
With modern methodology, Ford Motor does Ford Motor CEO
not only manage and monitor Fiesta carpet painting
process by statistics and random sampling, but also utilize new movements in quality management
field: Total Quality Management (TQM). Before delving into designing a system for managing &
monitoring quality, next part will focus in briefing 5 approaches towards quality management,
from quality inspection to TQM.

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 Managing Business Activities to Achieve Result Design System
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1.1 Quality inspection

This is application of statistical methods to quality control, including specifically control
charts and acceptance sampling (Juran, 1995). Though this 1930s method is not applied on large
extent, but Ford Motor quality managers utilize its statistics to ensure all floor carpet meet the
requirements. Moreover, the statistics of quality inspection can be used to form reports on quality
management. It is also a foundation for the next level: quality control.

1.2 Quality control

This method mainly manages Ford business process. In case of Ford Fiesta floor carpet quality
management, the quality control method carries out a range of inspections and test before Fiesta
floor carpet reach Ford assembly workshop (where all parts of are combined). It helps Ford Motor
reducing the high number of rejection and error entry in developing product through checking
sample carpet before it is transfered to assembly system.
However, the most efficient way of quality control is through control of the process of
production (in this case is painting), rather than through inspection of the finished floor carpet.
Quality control focuses on input-process-output matters that affect the quality of product such as
raw material, process design, transporting and storage.

INPUTS

TRANSFORMATION
PROCESS PROCESS

OUTPUTS

To manage input, Ford quality managers focus on 5M: materials, manpower, machineries,
methods and money. The input data management will be discussed in up-coming section.
To manage transformational process, Ford quality mangers co-ordinate with HR Department
to deliver specific work breakdown structure to each functional position. The work flows quickly
when members fully acknowledge their roles and responsibilities. And with advance technology,
Ford quality managers applied robotics and the industry-standard computing system in their
manufacturing system to achieve cost & time efficiency. Moreover, robotics controlled by computing
system also operates the work with higher accuracy.
To manage output, Ford should concentrate in customer satisfaction. The output can also be
audited for continual improvement.

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 Managing Business Activities to Achieve Result Design System
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1.3 Quality assurance

It is a planned process including inspection and quality control plan. Quality assurance
in Ford Motor has been reviewing, monitoring plan and enabling quality management system
(QMS) to control quality. In this case, the main purpose is to help Fiesta floor carpet quality meet
customer requirement. Brush marking on the carpet is an example of requirement from customer:
Ford ought to ensure those marks will not appear on the carpet anymore. Therefore, the company
should have clear policies on quality with measurable objectives to raise the customer satisfaction.
Additionally, quality assurance provides training for all Ford employees in order to construct
quality culture. Ford Motor QMS should provide policies and procedures which include in
following table. Ford Motor QMS policies and procedures
Briefly, quality assurance is a higher level
of quality control and inspection. It contains Business continuity policies & Disaster recovery plans
two key features: the policies and the quality Environmental policies
culture.
Communication policies
Ford Motor quality culture will continue
to be discussed section 3.2. Information and data security policies

1.4 Quality circles

A quality circle is a participatory
management technique that enlists the help of
employees in solving problems related to their
own jobs. Circles are formed of employees
working together in an operation. They meet at
intervals to discuss problems of quality and to
devise solutions for improvements (Lawler and
Mohrman, 1985). Employees who participate in
Ford Fiesta quality circles will receive training
in formal problem solving methods, such as Quality Circles - Ford Fiesta
floor carpet painting system improvement
brain-storming, Pareto analysis, and cause-and-
effect diagrams.
And then they will be encouraged to apply these methods to solve actual problems, which are
related to floor carpet painting system in this case. After completing an analysis, they are required
present their findings to upper management and then handle implementation of approved solutions.
Quality circle emphasizes the importance of the leader in constructing quality culture, as
well as the incentive of individuals. Briefly, quality circle is a higher level of quality assurance
(policy & culture), quality control (input-process-output) and quality inspection (statistics); as well
as including 2 new factors mentioned.

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1.6 Total Quality Management

TQM aims to manage all factors involved in production process for the overall quality of
product. It consists of organization-wide efforts to install and make permanent a climate in which
an organization continuously improves its ability to deliver high-quality products and services to
customers (Martínez-Lorente, Dewhurst and Dale, 1998). The main techniques to implement TQM
consists in ISO 9001:2008, lean production and 6 Sigma.
Both lean production and 6 Sigma will be mentioned in 3.3 as recommendations for Ford
Fiesta floor carpet painting system improvement. Hence, ISO 9001:2008 standards will be discussed
below, before delving into design a system to manage & monitor quality standards.

ISO 9001:2008 standards: certification, effectiveness and advantages

The ISO 9000 quality management systems standards is designed to ensure an organization
meet customers’ needs and other stakeholders’ needs, as well as regulatory requirements related
to their product (Bozena, Jens Jörn, Marc 2002). There are certification bodies exist to audit an
organization and issue ISO 9001 compliance certificate upon success. It is relevant to marketing
agencies or head hunters: they charge fees for their services. If Ford applies ISO 9001 certification,
they will audited based on an extensive sample of their products, services and processes.
Effectiveness of ISO 9001:2008 system arises from the commitment of senior management
to monitor, control, and improve quality (Beattie, 1999). It creates a pathway for auditor to find and
communicate areas of improvement, which are difficult to see from inside-out. On the outside-in
scope, ISO system focuses on improving the customer experience. Hence, Ford ISO system should
take into account all areas of the customer experience and the industry expectations, and seek to
improve them on a continual basis.
It is widely acknowledged that proper quality management improves business. ISO system
often acquires a positive effect on investment, market share, sales growth, sales margins,
competitive advantage, and avoidance of litigation (Sroufe and Curkovi, 2008).

Advantages of having ISO system

Creates a more efficient, effective operation

Increases customer satisfaction and retention

Improves employee motivation, awareness, and morale

Reduces waste and increases productivity

Common tool for standardization

Next part will focus in designing a system for managing quality and a system for monitoring
quality.

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 Managing Business Activities to Achieve Result Design System
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2 Ford Motor’s system for managing quality

On strategic management level at Ford, their job is to identify the roles, responsibilities and
authority of those people who are in charge for product and services quality. Hence, Ford Board
of Directors designs long-term strategies for quality management. On tactical management level,
Ford middle managers design the quality control for each process and provide guideline to lower
level. Finaly on operational management level, engineers and production managers control and
monitor all daily activities include the input and output of production process. Therefore, they can
identify potential production problems during the process and report to higher authority about
possible solutions to prevent. Overall, from both top-down and bottom-up authority, the quality
system ensure all defects are minimized and eliminated.
Based on this quality system, the Board construct a pathway to measure their performance,
as well as to improve the quality. Why it is a pathway, not a highway with advance infrastrudture?
It is because the plan at this moment is still on paperwork; and it ought to be carried out by layers
of functional department within the company to become an actual system that works. Therefore,
next part will discuss in detail the roles of Ford Motor’s functional departments in managing
quality system.

2.1 R&D activities managing

R&D management is the discipline of designing and leading R&D processes, managing R&D
agencies, and ensuring smooth transfer of new technology to other groups or departments involved
in innovation (Boutellier, Gassmann and von Zedtwitz, 2000). The production of Ford Fiesta ought
to be in accordance with local conditions, including transportation infrastructure, and PESTLE
environmental factors. For instance, cars produced for exporting to Thailand are right-handed,
unlike those designed for Vietnam.
Tax rate on CO2 emissions is another concern that Ford R&D Department has to notice. For
instance, tax payer in the UK will receive a capital allowance in their tax payble if their motor car
has CO2 emissions less than 120 grams per kilometre (HMRC, 2015).

140g/km 25%
Capital Allowance base level of CO2 emission writing-down allowance

Car benefits 120g/km 100%

low CO2 emission car capital allowances rate
Individual income tax

In Vietnam, the National Assembly considers to pass a bill named Environment Tax for
automobiles, which will be levied in accordance with their CO2 emissions rate (Phuong Anh,
2009). This regulations will cause Ford to import automobiles with lower emission rate to reduce
tax amount, which affects to buyer decision directly. This is an example on how R&D Department
can enhance quality system to deal with changes in business environment.
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2.2 Input data managing

It is the Marketing and Production Departments to carry out market research in order to
identify up-coming production plan. Reports on market demands, potential sales and customer
trends provided by Ford marketing managers will be sent towards the Board. Once these input
data are audited and approved, Production Department will be in charge for drawing up a detail
plan. For Ford Fiesta floor carpet, production quantity depends on vehicle sales forecasting and the
needs of replacement.
Based on input data, the next step in managing quality system is to manage production
material input.

2.3 Production material input managing

Ford’s management of production material input mainly utilizes the system of material
requirements planning (MRP). This is an IT-based inventory management system designed
to assist production managers in scheduling and placing orders for items of dependent demand
(Hasin, Ahsan, and Pandey, 1996). Dependent components are required to assemble a finished Ford
vehicle, such as aluminum body parts, engine and gear components, and subassemblies. In this
case, materials input are the inventory amount needed to sustain Fiesta floor carpet production,
equivalent to both demands for new cars’ production and faulty carpet replacement.
The information input into MRP systems comes from three main sources: a bill of materials, a
master schedule, and an inventory records file (Minty, 1998). Accordingly, bill of materials required
for Fiesta carpet production should be arranged in a hierarchy, so that Ford produciton engineers
and QA managers can see what materials are needed to complete each level of production. The
master schedule outlines the anticipated production activities of the plant. And Fiesta carpet
inventory records file is used to track information on the status of each item by time period.
Using information extracted from these materials bill, master schedule, and inventory records
file, Ford Fiesta MRP system determines essential requirements for raw fabric, pigments, solvents
and additives for each stage on Fiesta carpet production process. MRP process first determines
gross material requirements, then subtracts out the inventory on hand and adds back in the safety
stock in order to compute the net requirements.

2.4 Infrastructure and machineries managing

Ford Fiesta infrastructure maintenance programs are determined including scheduling and
responsibilities. As discussed in report A1, areas of responsibilities of Ford marketing, finance, and
personnel departments are all involved in providing adequate infrastructure for the production of
Fiesta’s floor carpet. For instance, replacements, purchases and sales of plant and mechineries in
the floor carpet production system are undertaken according to plans made; and are in line with
Ford quality policies and gateways.

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In order to utilize machineries at highest efficiency possible, all information regarding to

the characteristics of Fiesta carpet and their respective market requirements is accessed by Scott
Sterbenz, Ford Body Engineering team leader, and HP Pelzer experts. Recommendations for future
plans are prepared based on analysis of this data. And lastly, Occupational Health and Safety (OHS)
hazards identified, risks assessed and suitable controls are incorporated into the planning process
as well (Stevenson, 2002). This issue will be discussed again in section 4, Health and Safety.

2.5 Production process managing

Production process ought to be approved by Scott Sterbenz, head of Ford Body Engineering.
Any reallocations of materials, machineries or personnel are conducted with the planning and
consultation required by Ford quality policies, and within all relevant quality gateways and
regulations. Situations that leads unplanned maintenance are managed within these standards as
well.

2.6 Final report control

Data, observations and documentation recorded during carpet production cycle are analyzed
in accordance with Ford Fiesta quality regulations, gateways and guidelines. These files are created,
maintained and kept as described in Ford infrastructure plan, OHS requirements, and machineries
management programs. Specifications of clearness and accuracy are to be kept as well. And lastly,
these reports ought to be available, accessible, meaningful and useful for Ford managers.
Ford Motor’s system for monitoring quality will be discussed in following part.

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 Managing Business Activities to Achieve Result Design System
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3 Ford Motor’s system for monitoring quality

Managerial monitroing and assessment is a systematic effort, in order to establish feedback
criteria, standards and layers of network; to compare final achievements to defined norms; and to
ensure resources were and are utilizing effectively for reaching organization’s objectives (Mockler,
1972). And there lays variety of reasons for a systematic performance assessment exists in Ford
Fiesta carpet production system. It is not essential, it is vitally required.

3.1 Internal system for monitoring quality

Firstly, Ford Motor, on Production department’s scope, will be able to evaluate monthly
target of a particular workshop or assembly chain. Assessment to monthly target means a lot more
than just calculating commission for mechanical engineer. This index demonstrate effectiveness
of resources’ utilization in Ford Motor, whether in term of cost effectiveness, finance, or human
resources. For instance, if operational cost were arising unexpectedly in Fiesta carpet painting
system, Ford engineers and QA managers in charge would be responsible for auditing daily records
of direct operational team, in order to prevent frauds and resources wasting.
Secondly, performance assessment elucidates forthcoming goals to obtain, with levels
of priority. For instance, by a report from electronic engineer, about an error occured in paint
blending system at Fiesta carpet production system, leader of Ford Body Engineering Scott
Sterbenz and HP Pelzer partners could appoint an expert for verifying that system. The issue might
lead to important conclusion: the paint blending system was out of date, and hence required to be
upgraded. Subsequently, Sterbenz formed a proposal of new paint blending technology demand to
prevent inadequate paint ingredients. After cautiously deliberated the proposal, Ford Vice General
Director John Ellenberger would appoint his financial officer to find rental agreement with a
leasing company. Overall, this chain is a typical consequent of performance assessment that leads
to movements in organizational goals. Besides, as another function of assessment, discovery and
prevention of error co-ordinate with risk management to provide a safety net for Ford Motor. This
issue will be discussed again in section 4.1.
Finally, the process of assessment will reduce unnecessary paperwork for staff, due to specific
reporting standards and responsibilities. Each functional position will be responsible for a range
of tasks, and will not be interfered by non-major missions. An administration staff should not be
involved in production process, except in case of recruiting new personnel, and HR officer needs
advice to write job description for operating engineer position.

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 Managing Business Activities to Achieve Result Design System
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3.2 External system for monitoring quality

External quality monitoring (EQM) is an all-encompassing term that covers a variety of
quality-related evaluations undertaken by bodies or individuals from external institution (German
Institute of Internal Auditors, 2002). It provides Ford General Manager and other teams that
rely on the work of internal monitoring activity, with independent confirmation of the quality of
work carried out. External quality monitoring should be performed by qualified persons who are
independent from Ford Motor, who have no conflict of interest, and to whom no such conflict could
be imputed.
As discussed in report A1, efficiency in making decisions at Ford Quality Department can be
improved by applying matrix management and team project. And accordingly, the improvement
in Ford Fiesta’s floor carpet production system is carried out through a project team, involving
at least six specialists from a combination of functions. Now with external quality monitoring,
external auditors will appear in the team structure and report directly to Ford General Manager.

General Manager

External Auditors

R & D Production & Engineering Quality Management HP Pelzer

Ford Fiesta Researchers Managers & engineers Managers & consultants Engineers

Project 02 Researchers Managers & engineers Managers & consultants Engineers

Project 03 Researchers Managers & engineers Managers & consultants Engineers

Next section will focus in the quality culture at Ford Motor. This is a self-evident movement
from Quality Control (manage and monitor input-process-output) to Quality Assurance, which
involve the creation of Ford quality policies and culture.
Ford Motor factory in Detroit, USA
Source: Detroit Free Press

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 Managing Business Activities to Achieve Result Ford Quality Culture to ensure continual
Ford Fiesta’s floor carpet improvement Monitoring, Evaluation & Development

Ford Motor F-150 assembly factory

Source: Forbes, 2015

Ford quality culture

to ensure continual monitoring,
evaluation & development
3.2

1 Ford quality culture

Traditional quality management approaches (QMS, work process design, etc.) facilitates Ford
Motor to reduce their risk for errors, but these conventional methods do little in terms of creating
additional value. And by additional value, it means quality culture. Constructing a quality culture
within Ford unlocks new sources of value through improved customer experience and employee
productivity. In fact, a company with a highly developed culture of quality spends, on average, $350
million less annually fixing mistakes than a company with a poorly developed one (Srinivasan and
Kurey, 2014). Therefore, Ford Motor quality culture ought to be compulsorily constructed.

1.1 One team

This term indicates an environment in which people working together as a lean, global
enterprise for automotive leadership. Ford One Team performance is measured by the satisfaction
of their customer, employee, dealer, investor, supplier, labour union, and community.

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 Managing Business Activities to Achieve Result Ford Quality Culture to ensure continual
Ford Fiesta’s floor carpet improvement Monitoring, Evaluation & Development

1.2 One plan

The plan consists in four main points to be conducted. Firstly, business and production
activities ought to be aggressively restructured to operate profitably at the current demand and
changing model mix. Secondly, development of new products is accelerated maintain customers
want and value. Thirdly, business plans and investment are to be financed, as well as improving
balance sheet. Finally, to be consistent with One Team statement, all Ford functional departments
and part are expected to work together as one team.

1.3 One goal

This one goal is excitingly simple and understandable. Ford’s viable goal is to deliver profitable
growth for all stakeholders.

2 Interrelationship between Ford quality culture and their vision & mission
As a result of increasing pressures from competitive automotive market, Ford Motor managers
must find a new approach to quality, the one that moves beyond the traditional quality control tools.
And it is the culture of quality to reinforce quality managing and monitoring system at Ford. But
how Ford Motor can create a culture in which their employees live quality in all activities? How
Ford employees can be passionate about quality as a personal value rather than simply obeying an
edict from on top management?
Solution is to link Ford vision & mission statements with the quality culture. Accordingly,
Ford employees do not only follow quality guidelines and gateways, but also consistently see
others taking quality-focused actions, hear others talking about quality, and feel quality all around
them. It is a top-down approach to spread out quality culture. As a result, Ford top management
is involved to act as a model of stricly conducting quality. This is labeled as the involvement of
leadership in quality management at TQM level.
According to Safty (2012), Ford Quality Department should conduct five following techniques
to establish a strong connection between quality culture and vision & mission statement.

A mentality of ‘we’re all in this together’, similar to Ford One Team, One Plan and One Goal

Constructing a culture where open, honest communication is understood

Information accessibility must be enabled by Ford leaders

Focusing on processes and avoiding the blaming game to happen

It is learning experience that matter, and successes or failures should not be emphasized

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Managing Business Activities to Achieve Result Ford Quality Culture to ensure continual
Ford Fiesta’s floor carpet improvement Monitoring, Evaluation & Development

3 Ford Motor’s training courses on quality culture

After emphasizing the importance of quality in vision & mission statement, Ford Quality
Department should conduct a range of training and workshop to ensure all members have
acknowledged quality concept and are able to actually comply Ford quality gateways and the ISO
standards.
Firstly, the person in charge of each process ought to be identified and entitled. For instance,
Scott Sterbenz, head of Ford Body Engineering, will be responsible for the quality of Fiesta
floor carpet. He might be sent for a training course about carpet standard and new techniques
in painting process. Then, equipped with certain knowledge, Sterbenz’s capability in conducting
quality management is expanded, and hence he can lead Fiesta ‘Find the Right Things’ team more
efficiently.
Secondly, the operational team is trained by their leader about Ford quality culture, ISO
standards and relevant issues At this level, quality theories will not be emphasized, but practical
techniques to maintain quality will be focused. Team members will be able to recognise potential
opportunities to use or install more resources-efficient painting systems. Furthermore, the team
also has to identify and react appropriately to OHS hazards.
Beyond training, Ford Quality Department should conduct programmes of monetary
incentives and sharing of best quality practices as well.

4 Ford Motor’s quality culture, leadership and peer involvement

Ford managers ought to be trained that quality is a leadership priority. Therefore, a leadership
emphasis on quality should be repeatedly maintain amongst Ford management. The message
will gain its credibility by sustaining a open communication through both top-down, bottom-up
and peer-to-peer channels. Thus, peer involvement will be fostered and employees feel they are
empowered. These are the result of Ford quality culture based on leadership and peer involvement.

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Managing Business Activities to Achieve Result Improvements Recommendation
Ford Fiesta’s floor carpet improvement based on Ford Values & Corporate Strategies

Improvements recommendation
based on Ford values & corporate strategies

3.3
This section recommends three main processes to improve Ford Fiesta carpet painting
system: customer satisfaction evaluation, non-comforming product control, and corrective &
preventive action.

1 Process for evaluating customer satisfaction

This process establishes a system for evaluating the floor carpet provided by Ford Body
Engineering and HP Pelzer, Ford’s partner. Customer satisfaction surveys may provide valuable
feedback on Ford Fiesta floor carpet production effectiveness. Therefore, Ford Quality Department
encourages comments and feedback from their customer. Left chart below illustrates a typical
process for evaluating customer satisfaction. And the right on illustrates a process to control
customer complaint.
Process for evaluating customer satisfaction Process to control customer complaint

Fiesta customer satisfaction Receiving Fiesta customer’s

measurement plan complaints & feedbacks

Communicate with Ford

Approval Fiesta Sales managers

Recommend solutions
Determine measurement
methods & required info Letter of
excuse &
Reduce
Compensation
selling
explanation or exchange
price

Implement measurement
& collect required info
Approval
Analysis of collected data
Implement approved solutions
Summarize report for
management review Satisfied customer?

Record Customer complaints register

Summarize report for

management review

Record Nguyen Dinh Bao 16

Managing Business Activities to Achieve Result Improvements Recommendation
Ford Fiesta’s floor carpet improvement based on Ford Values & Corporate Strategies

2 Process for controlling non-conforming products

Ford Qualiyty Department
Identify non-conforming Fiesta floor carpet
ensures that Fiesta floor carpet
which does not conform to Ford
requirements is identified and Identify & control by signal to prevent
controlled to prevent its unintended unintended use or delivery
use or delivery. A documented
process ought to be established Investigate causes of error
to define the controls, related & recommend solutions
responsibilities and authorities
for dealing with non-conforming
Fiesta floor carpet. Rework Regrade Concession

Implement new solutions for Fiesta carpet

Verification

Synthesize report for

management review

Record

New flexible manufacturing lines on display at a Ford plant in Michigan

Photo by: Sam VarnHagen/Ford Motor Co.

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Managing Business Activities to Achieve Result Improvements Recommendation
Ford Fiesta’s floor carpet improvement based on Ford Values & Corporate Strategies

3 Process of corrective and preventive action

Corrective and preventive action process is an improvements to Ford Motor production
processes to eliminate causes of non-conformities or other undesirable situations (US Environmental
Protection Agency, 2012). This process is a part of Ford Motor overall quality management system
(QMS), and is illustrated below.

Finding problems within painting system

Investigate causes of error

& non-conformity

Suggest corrective
and preventive actions

Approval

Implement new solutions for painting system

Verification

Synthesize report for

management review

Record

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Managing Business Activities to Achieve Result Report on Wider Implications
Ford Fiesta’s floor carpet improvement of Proposed Changes within Ford

Report on wider implications

of proposed changes within Ford Motor
3.4

1 Changes in technology
It is a traditional thought that automotive production consists of assembly lines, manufacturing
robots, and batteries of safety and performance simulations on massive supercomputers. But at
Ford Motor, big data is having a significant impact on the parts and features of those cars before
they’re ever part of a design file (Harris, 2013). From the cars in stock at dealership to the car
engine performance in a rainstorm, big data is infiltrating nearly every aspect of Ford experience
and the company themselves.

“Data from cars meshed with third-party data creates the opportunity to give back to the greater
good.” – Sefi Grossman, Ford’s Team Detroit (Grossman, 2014)

And automobile is one of the most promising areas in the emerging Internet of Things trend,
and Ford Motor is investing significant resources behind this lucrative growth area. The resulting
data from Ford can then be used to create meaningful and positive features for consumers.
According to John Ginder (2013), manager for systems analytics with Ford Research & Innovation,
the company has been doing advanced business modeling for about 20 years, but big data is different.
Modern technologies are allowing Ford to handle larger, more-diverse datasets.
An obvious example of data influencing on driving experience is the types of data Ford Motor
is providing drivers. Ford’s Energi line of plug-in hybrid cars generate 25 gigabytes of data per
hour. Then data will be processed and given back to drivers via a mobile app. It tells them about
battery life, the nearest charging stations and other data about the vehicle’s performance (Harris
loc cit, 2013). This is how Ford Motor reacts against Internet of Things trend in automotive industry.

2 Changes in Ford organizational structure

Alan Mulally, CEO of Ford Motor Company from 2006-10, has reformed the company
internal structure, fostered collaboration between functions, and encouraged innovation under
his guidelines (Caldicott, 2014). He has led Ford through the great economic recession in 2008,
and promoted a cultural change that took Ford car and truck from the edge of bankruptcy to the
forefront of growth in the U.S. automotive industry.
When Mulally entitled as CEO in 2006, Ford was in tough shape. It had lost a whopping 25%
of its market share since 1990 (Caldicott loc cit, 2014). The company held a huge portfolio of brands

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Managing Business Activities to Achieve Result Report on Wider Implications
Ford Fiesta’s floor carpet improvement of Proposed Changes within Ford

including Jaguar, Land Rover, Aston Martin, and Volvo. But none of these brands was performed
well, and each required major capital infusions to compete. From this tough situation, Mulally
created and implemented a plan of One Ford to ensure quality of their vehicles.
As discussed previously, this plan consists of One Team, One Plan and One Goal to be
fundamental elements, on which the whole structure of Ford Motor is shifted and aggressively
restructured to operate profitably. This is how Ford Motor, especially their top management, reacts
to changes in organizational structure.

3 Cultural changes
According to Caldicott (loc cit, 2014), the second important change Mulally did at Ford Motor
is the corporate culture transformation that laid the foundation for the company to innovate. Early
in his occupation, Mulally asserted a shocking but accurate statement.

“We have been going out of business for 40 years.” - Alan R. Mulally, CEO of Ford Motor
Company (Kiley, 2014)

Ford top management was in conservative mentality in the way meetings were conducted,
the way supplier agreements were developed, and the way people treated each other day-to-day.
Ford executives seeked for vulnerability among their peers, and practiced self-preservation over
collaboration (Kiley loc cit, 2014). Mulally changed all that. He shaped executive meetings into a
safe environment, where data could be shared without blame, improving collaboration and setting
the stage for innovation success. This is how Ford Motor and their top executives react towards
changes in culture.

4 Environmental changes
Ford Motor is accounted for 27% of US emissions, is pushing for top position as the greenest
car company with their environment-friendly movements (Carus, 2011). Due to carbon-dioxide-
caused climate change, Ford Motor is partly responsible to produce vehicles that use and
manufactured with green technology. Unless such movements are conducted, Ford Motor might
confront a decrease in their annual sales against Japanese brands like Mitsubitshi or Toyota. This
is how Ford Motor reacts towars environmental changes.

Next 4 sections focus in health and safety concerns at Ford Motor, especially their Fiesta
floor carpet painting system.

Nguyen Dinh Bao 20

Managing Business Activities to Achieve Result
Ford Fiesta’s floor carpet improvement Ford Motor Risk Assessments

Risk assessment
in Ford Motor as required by
legislations & regulations
4.1

Organizational health and safety (OHS) is significantly prioritized in manufacturing field,

especially like Ford Motor in automotive industry. Accordingly, Ford Quality Department should
fulfil at least their minimum legal duties on OHS requirement. As an employer, Ford has a ‘duty
of care’ to ensure, as far as possible, their employee’s health, safety and welfare while they are at
work. And this process starts with a risk assessment to spot possible health and safety hazards.
They have to appoint a competent person trained in health and safety to administer OHS area.
And there are Ford Motor HR and Quality Department in charge for managing and planning them.
Hence this section will discuss two main OHS management elements, including risk assessment
and health & safety in workplace.

1 Risk assessment in Ford Motor

A risk assessment is an essential action in shielding employees for Ford Motor and their
business activities. Risk assessment also deals with act in accordance with governmental regulations
and restrictions. Ford Quality Department ensures their capability to remain focal point on causes
of problems.
In particular situations, simple measurement can readily manage risks. For instance, promptly
cleaned floors prevent workers in Fiesta painting workshop from falling on the floor. And safe
equipment being constantly verified with standardized quality prevents the workers from getting
burnt, as well as saving them from painting spray emitted out by painting machines.
Furthermore, well-managed safety standards established by Ford quality management
team, such as fire safety drill every 6 months, brings worthy preventive barriers against potential
accidents and damages. Complying OHS regulations costs less than compensating workers for their
injuries at work. Ford Quality Department should conduct a five step plan, which helps carring out
risk assessment in order to ensure appropriate actions are taken. The plan is described next page.

Nguyen Dinh Bao 21

Managing Business Activities to Achieve Result
Ford Fiesta’s floor carpet improvement Ford Motor Risk Assessments

Assess & priorities risk 02

Identify hazards
01 03 Develop risk
reduction plan

Result review
Monitoring risk Measuring risk 05 04 Develop system
to effectively monitor
& measure risks

The following table delves into explaination of each step in risk assessment process.

Risk assessment step Examples in Fiesta floor carpet painting system

• Identity hazards • Spilling of paint from high pressure valve

• Assess and prioritize risk to • The whole production line and its workers will be affected, as
employee pigment, solvent and contaminated additives leak out.
• These leaks are hazards substance to inhale or touch with bare hands
• Ford executives and managers are also affected, due to the increased
costs of good sold from the spill of paint

• Develop risk reduction plan • Improve storage quality and strengthen pipeline joints to reduce
and establish improvements paint spilling
• Paint bucket are to be checked by Ford quality department and HP
Pelzer before passing into painting system
• Develop effective monitoring • Implement sensor alarm to gauge paint pressure in the valves, in
and measurement system which if pressure raises to a limited point, the sensor turns of painting
pump
• Spilled paint are to be collected in tray and cleaned by vacuum
• Workers involving in cleaning leaked paint are required to wear
plastic gloves, industrial conductive shoes, face mask and protective
eye classes
• Wastes or disposal should be packaged in notified areas, which have
alert signs of Ford safety standards

• Review result • Record all accidents and error actions, and compare them with
previous months for a general review on the conduct of OHS issues

Nguyen Dinh Bao 22

Managing Business Activities to Achieve Result
Ford Fiesta’s floor carpet improvement Ford Motor Risk Assessments

2 Quantitative calculation of risk on seriousness and frequency

Seriousness of an accident is often measured as the expected value of an undesirable outcome.
And the probability of a negative event is estimated by using the frequency of past similar events.
Calculation of a particular risk is done by multiplying these index together. A range of risky
elements in an industrial manufacturing system requires the sum of all possible risks. Therefore
overall formula is defined as below.

Risk assessment: R = �(seriousness x frequency)

for all accidents

3 Risk management based on forecasting and preventive plan

The Occupational Health and Safety regulations require Ford Motor to ensure that the design,
installation, operation, use or maintenance of the following meet the compulsory standards.

Buildings & structures (permanent or temporary), guards, guard rails, barricades and fences
Protective devices, machinery, equipment, tools, vehicles, and mobile equipment
Boilers, pressure vessels, elevators, electrical generation equipment & distribution systems
Heat generating equipment and heating, ventilating and air conditioning systems

Ford Motor also has a further obligation to ensure that levels of temperature, humidity,
ventilation, lighting, sound and vibration meet with prescribed standards, and that their employees
are not exposed to levels exceeding prescribed exposure limits (Her Majesty the Queen in Right
of Canada, 2011). These hazardous substances include controlled products and any other chemical,
biological or physical agents that may be harmful resulting from their storage, handling or use in
Ford workshops and factories.
By identifying all factors leading to undesirable outcomes, Ford Motor Quality Department
forecast potential risks and prepare and preventive plan. Purpose of this plan depends on
seriousness and frequency of a particular risk. In addition, preparation of this plan is the last step
in risk assessment process, and next section 4.2 will delve into applicable law on OHS issues.
Avoidance of risk is conducted when there is a high possibility of an accident to happen. Risk
reduction plan is prepared for an acceptable level of risk taken place. It means finding a balance
between negative risk and the benefit of the operation or activity. For instance, no fire is allowed
in Fiesta floor carpet painting system, due to the extremely flammable chemicals inside. Risk
outsourcing plan aims to transfer financial loss to a third party, usually an insurrance institution.
And risk retention plan is conducted when the possibility and damage costs are low, and Ford will
accept a certain level of risk happening.

Nguyen Dinh Bao 23

Managing Business Activities to Achieve Result Examples & Demonstration of
Ford Fiesta’s floor carpet improvement Health & Safety Regulations & Legislation

Examples & demonstration

of OHS regulations & legislation
4.2
True genius resides in the capacity for evaluation of uncertain, hazardous,
and conflicting information
- Winston Churchill -

1 Entitle the person in charge for OHS issues and relevant regulations
As discussed in 4.1, Ford Motor Quality Department is considered as an ideal candidate for
being responsible on OHS issues and relevant regulations. However, Head of Quality Department
should maintain a steadfast communication channel with HR Department, due to the fact that HR
has in-depth knowledge in dealing with legal concerns. And it is also HR managers who provide
job description for the position in charge of OHS. Therefore, the two departments ought to co-
ordinate and appoint the right person.
Ford Motor Director of OHS ought to handle variety of responsibilities, ranging from ensuring
the implementation of OHS policies within Ford, to mitigating the impacts and likelihood of OHS
risks. Relevant skills and experience are mandatorily required to obtain this position. List of job
requirements will be provided by Ford HR managers, with support from Quality Department.

2 Applicable OHS regulations & legislation in Vietnam

Ford Motor has presented in Vietnam since 1995 (Ford Vietnam, 2015). And their plant in Hai
Duong is the first automotive manufacturer in Vietnam with ISO 9001, ISO 14001, QS9000 and
ISO TS 16949 accreditation. Consequently, Ford Motor business and production activities have
been complying the Vietnam Health and Safety Law from 1998 version to the new one in 2012.
There are twenty important statements affirmed in Chapter 9 of this act applicable to Ford Motor
Vietnam. Amongst them, four points have arisen as a brief explaination of Ford obligation on OHS
issues.
Firstly, Ford Director of OHS ought to make the workplace safe and prevent all risks to health.
Adequate first aid facilities are also required. Secondly, potential hazards are defined clearly in
labour contracts, as well as emergency plans to be established. Thirdly, working conditions (air
ventilation, temperature, lighting, toilet, washing and rest facilities) and work equipments are
provided, properly used and regularly maintained. Finally, Ford must provide health supervision
as needed for their employee, especially the ones working in manufacturing sector.

Nguyen Dinh Bao 24

Managing Business Activities to Achieve Result Examples & Demonstration of
Ford Fiesta’s floor carpet improvement Health & Safety Regulations & Legislation

In case of Ford Fiesta floor carpet painting system, the operational staff is working under
hazardous environment and therefore has the right to claim for special treatment. These engineers,
managers and workers must be accessible to use all safety materials, equipment, devices and
clothing that are provided by Ford Body Engineering workshop. They can also require training
courses, work place committees and OHS representatives to help them working insuch hazardous
environment. Lastly, first-aid facilities, health services, sanitary and personal facilities must be
fully provided in Ford Body Engineering workshop, in order to maintain employees’ long-term
healthy life.

3 Applicable OHS regulations & legislation in United Kingdom

According to UK Health and Safety at Work (1974), Ford Motor has to comply variety of duties,
ranging from general duties towards their employees to enforcement against criminal proceedings.
There is another act Ford Director of OHS has to pay attention: EU directives on Health and Safety
(1993). Both of them were established with the main purpose to provide guidelines towards Health
and Safety issues for business. They have a wide category suitable for different types of business.
Furthermore, the law is the formal regulatory framework relation between owner and employees
the liability. Finally, the UK relies on local authorities to monitor and supervise compliance with
legislation on enterprise.

4 Construct OHS regulations & policies in Ford Motor and organize training courses
Similar to Ford quality culture, the construction
of OHS regulations and policies requires the factors to
be identified: Ford’s intention, persons in charge and
Training course on OHS
operational process. Firstly, Ford OHS policies aim
to provide adequate control of the health and safety
risks arising from their business and manufacturing Initial awareness
activities. Secondly, the entitled person for each
functional position must be competent to do their Acknowledging
tasks, and be given adequate training. Ford engineers,
managers and workers are expected to take reasonable
Motivation
care of their own health and safety, as well as co-
operating with supervisors and reporting all health
New knowledge & skills
and safety concerns. Finally, production processes,
machineries and contaminated chemicals are notified
with clear instruction, which guides operational staff Apply to actuality
to carry out the work correctly.
Responsibility
Ford managers can utilize their priorities in
changing the staff attitude on OHS issues through
training courses. This is an endeavour to strengthen Improved awareness
employees’ awareness on their own safety.
Nguyen Dinh Bao 25
Managing Business Activities to Achieve Result Systematic Review of Organisational
Ford Fiesta’s floor carpet improvement Health & Safety Policies & Procedures

Systematic review of OHS

policies and procedures
4.3
One of the great mistakes is to judge policies and
programs by their intentions rather than their result
- Milton Friedman -

1 Occupational Health & Safety Auditing System (OHSAS) 18001

OHSAS 18000 is an international framework for occupational health and safety management
system specification. It comprises two parts, 18001 and 18002 and embraces BS8800 and a number
of other publications (OHSAS, 2015). There is a range of improvements in OHSAS 18001:2007. A
greater harmonisation with ISO 9001 Quality and ISO 14001 Environmental Management Systems
Standards has taken place. The OHSAS 18001:2007 also requires the inclusion of management
systems planning tools, including the hierarchy of controls. Requirements for consultation is
strengthened for investigation of incidents as well.
The audit will focus on ensuring Ford Motor system is designed to manage manufacturing
risks, whether they are health & safety related, or other risk management themes such as risks to
the environment or to Ford quality reputation.

2 Commitment from Ford executive level in conducting OHSAS 18001

Firstly, Ford Director of OHS ought to consult the policy committee on the development,
implementation and monitoring of a program for workplace hazards prevention. This program
aims to provide Ford employees fundamental education in health and safety matters. Consultation
must also occur between Ford Motor Company and the policy committee in the development,
implementation and monitoring of a program for the provision of personal protective equipment,
clothing and devices. This committee can be an external auditing agency, hired by Ford executives
to have a objective review on their OHS system.
Ford Director of OHS and the Quality Department are required to to cooperate with policy
committees, work place committees and health and safety representatives. Together they construct
an internal responsibility system, which is the collaborative approach taken by Ford Motor and their
employees to resolve health and safety concerns at workplace or when performing manufacturing
activities. A well functioning internal responsibility system is a valuable asset for Ford Motor to
improve working environment and products’ quality as well.

Nguyen Dinh Bao 26

Managing Business Activities to Achieve Result Systematic Review of Organisational
Ford Fiesta’s floor carpet improvement Health & Safety Policies & Procedures

3 Identify hazards, assess risk and develop monitoring system

As discussed in 4.1, the procedure to conduct OHS monitoring system requires all following
factors to be assessed: Ford’s routine business and manufacturing activities; operations of
individuals at work, including Ford staff and clients; workforce behaviour and capability. External
and internal risks that may have negative impact onto worker’s health and safety condition must be
monitored and observed by Ford Quality Department, Director of OHS and the policy committee.
For example, in Ford Body Engineering workshop, there must be a common use of fire alarm
system and relevant sign boards such as exit, fire, no smoking, emergency exit etc. These signs are
placed to make it easier for employees to acknowledge hazardous areas. Ford engineers, managers
and worker in Body Engineering workshop are handed out the health and safety document, and
are trained with Ford Motor OHS regulations.

4 Change management
As reported in 3.4, to develop Ford’s business catching up with the intensely competitive
automotive market, Ford management teams must know how to respond quickly to market
changes. This mentality is expected to spread widely from top-down: executive level to operational
staff. Ford Motor managers need to acquire necessary tools in the struggle against fast changing
environment. New manufacturing and commercial technology reveal whole new types of potential
risks, accompanying with valuable opportunities. Ford Director of OHS and Quality Department
are in charge of exploring newly emerged risks and carry out an effective corrective and preventive
plan.
Ford Motor has been reformed to accept the change and forge these changes in their
organisation. These cultural and structural shifts are resulted from the work of Ford CEO 2006-14
Alan Mulally and his executive team. In overall, evaluating the effectiveness of health and safety
regulations it is necessary for Ford and their Fiesta carpet painting staff to assess whether they are
efficient and compliant enough to practice OHS policies and regulations.

Nguyen Dinh Bao 27

Managing Business Activities to Achieve Result Practical application
Ford Fiesta’s floor carpet improvement of Health & Safety Policies & Procedures

Practical application
of occupational health & safety
policies and procedures
4.4

1 Commitment from Ford operational level in conducting OHSAS 18001

Ford Motor operational staff also has responsibilities for their own health and safety at work.
As self-managed worker, they can refuse to do something that is considered not safe without being
threatened with disciplinary action. If they think Ford is not meeting corporate responsibilities as
committed in labour contract, firstly a meeting will be organized to identify problems and appoint
the person in charge. The safety representative from OHS policy committee may be involved to
support them on maintain an acceptably safe environment to work within.
And the operational staff at Ford Motor is expected to recognize potential risks that may
lead to serious damages on human lives, plants and machineries. They have an obligation to report
about these error to the direct supervisor in order to take appropriate preventive actions. For
instance, properly ventilated, with clean and fresh air ought to be maintained in Fiesta carpet
painting workshop, due to the fact that this place with be highly contaminated with pigment and
solvent then. If no adaquate rections have taken place though it is possible, restriction and fine may
be applied to those who are in charge.

2 Guarantee of OHS training amongst Ford employees

Firstly, Ford Director of OHS and Quality Department are responsible to provide their
employees with the information, instruction, training and supervision necessary to ensure their
health and safety at work. Employees are assigned with access to a copy of Occupational Health
and Safety Regulations, and if necessary, the training on how to access them. Secondly, Ford middle
management also needs training in occupational health and safety and their responsibilities under
governmental regulations and Ford OHS policies. Finally, every person who granted access to
the work place, ought to be trained with the prescribed safety materials, equipment, devices and
clothing and ensure that every person is familiar with the use of them.

Nguyen Dinh Bao 28

Managing Business Activities to Achieve Result
Ford Fiesta’s floor carpet improvement Conclusion

Conclusion
Ford Motor has been conducting a strict quality management
system to ensure their final product meet customer’s
requirements. Applying a range of managing & monitoring
method from Quality Control to TQM allows Ford QA manager
to act as a core function to drive company forward in achieving
future success.
All tools & methods should be researched and verified carefully
to give Ford right directions towards quality management.
Adaptation roadmap to future changes requires Ford Motor to
continualy improve their product quality, in the effort to compete
against competitors from Japan and Korea.
Then, implementing an appropriate OHS system of OHS and
effective monitoring, control also helps providing the healthily
standardized workplace for operational staff.

Nguyen Dinh Bao 29

Managing Business Activities to Achieve Result
Ford Fiesta’s floor carpet improvement References

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Nguyen Dinh Bao 31

Managing Business Activities to Achieve Result
Ford Fiesta’s floor carpet improvement Acknowledgement

Acknowledgement
In addition, a thank you to our lecturer Mr Ha Tuan Anh, who
introduced us to the methodology of time management, work
breakdown structure, and whose passion for the continual
development of Vietnamese working efficiency.
For further discussion on time & project management methods
or the work breakdown system, or even the topic how why &
how Vietnamese people’ working efficiency is lower than other
people, please contact me via conversation or e-mail.
At last, thank you for spending time on my work. I hope the
audience will find this report is well-prepared and valuable for
knowledge.

Nguyen Dinh Bao 32