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Good OM Reading: Ford’s Strategy for Reliability–and Failure

November 18, 2012

From tires to hinges to helicopter blades, everything breaks eventually. The only question is when, writes Wired Magazine (Nov., 2012). This must-read article, titled “Why Things Fail,” is worth sharing with your students if you are teaching the topic of reliability (Chapter 17). Ford Motor knows product failure, and still recalls the 2000 disaster in which some 192 people died when their Explorers’ Firestone tires fell apart. But it is clear that, in the tragedy’s wake, the company learned something. As it overhauled its testing program, Ford’s warranty costs plummeted, and its vehicles went from having some of the worst reliability scores in 2000 to having some of the best today. From the embers of the Explorer disaster, Ford has become one of the best companies in the world at managing failure–equalling Honda and Toyota.

The failure curve

At Ford, learning exactly when and how things will fail—over many years and across a spectrum of millions of vehicles around the world—now saves billions of dollars (and, of course, many lives). So in Building 4, a massive complex in Dearborn, MI, called Ford’s Tough Testing Center, parts like the gas petal hinge endure a constant torrent–simulating years of use–until they finally fail. Building 4 is a monument to a dark truth of manufacturing: Even the best-engineered products fail. Some percentage of all mechanical devices will break before they’re expected to. “Companies say they want to be 100% failure-free after three years,” says one industry expert. “But that’s impossible. You can’t do it.”

Whenever a new part—like that gas-pedal hinge—is designed, the first question Ford asks is, how long does it need to last? Ford’s standard warranty guarantees parts for 3 years and the engine/transmission for 6. But to ensure that parts easily surpass warranty claims (and hopefully ensure that buyers feel they own a reliable product), Ford aims to have everything last 10 years. Upholstery, transmissions, paint—all of it is built to last at least a decade. Quite a change from the planned obsolescence of my father’s cars of the 1960’s!

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