Services to the Ford Motor Company

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The following projects were accomplished by CTI's John Eilertsen:

Ford Third World Country Project - Turned around a loosing operation in a Third world Country market. Investigated situation, determined problem solution, developed a new product entry, and implemented the action whereby company profits increased by more than $11.0 million U.S. dollars on an annual incremental basis.

Background: In one of this company's highly competitive major foreign markets two key product lines were being merchandised with neither showing profits over the last three years. Their dealer organization was deteriorating at an annual rate of 20%. Serious labor problems at the assembly plant with 40% of the labor force on lay-off precluded the plant from operating either efficiently or near capacity. A problem analysis, based on sales, marketing, manufacturing and financial information indicated (among other things) the existence of a product line deficiency within an important market segment. A formal presentation to the company suggested the adoption of a new product line entry. The initial macro-economic analysis showed a potential profit opportunity of $5,500,000 with a net 16.4% time adjusted rate of return. Authorization was granted to proceed through a detailed study phase.

These are the selected examples of investigations/actions taken to prove the viability of the proposed product program: DEVELOPED specific product content and detailed specifications. PREPARED a detailed parts list of all components. REQUESTED/SECURED a Make/Buy analysis to determine optimum sourcing (local versus import) to achieve maximum cost effectiveness. 

COMPILED a comprehensive work plan covering open issues and SECURED Staff concurrence based upon available manpower. ANALYZED apparent high local source part costs and RESOLVED current/comparable economics issue based upon unique computer runs (resulted in an $800,000 dollar favorable piece cost improvement). OBTAINED shipping and handling costs to heat-treat components on an outside (local) source basis (eliminating nearly $1,000,000 dollars in facilities expenditures, while accepting a slightly higher piece cost penalty).

EVALUATED assembly plant cost effect to delete selected unique product features to reduce tooling and facility  expenditures. CONFIRMED/RESOLVED acceptable product and price levels (eliminating selected unique/unnecessary features and adopting new components on existing product lines to improve overall investment levels, while maintaining total cost/price/product integrity).  

PREPARED an updated profitability (including quota requirements/exchange rates) and TARR (improved initial profit estimate by 30% and the time adjusted rate of return from 16.4% to 35.4%).

RESULTS:  A Profit Improvement of $11,200,000 and an ROI of 35.4%

The company approved the proposed product program for implementation and will realize an annual incremental profit improvement of $7,200,000 dollars for the local (foreign) market alone. Additionally, $3,000,000 dollars will be realized due to a resourcing action resulting from a favorable export incentive.  Furthermore, $800,000 dollars will be actualized through marketing selected components creatively from the new product line onto the existing product lines. The dealer organization is very satisfied with the up-graded, modern, fully competitive product lines. No further loss of dealerships is anticipated and the local assembly plant will be brought up to full capacity with the labor unrest finally settled. Final ROI was 35.4%.

 

Ford DPO China Project - Organized and developed a major eight hour long slide presentation on the Development of a Modern Product that was presented to the People's Republic of China in Beijing at a major Technical Seminar.  In-depth detail was provided as to how a major U.S. multi-national corporation plans and engineers a key new product from the "Idea" stage, through the "Development" stage to the public "Introduction" stage covering a typical multi-year product program.  The actual presentation was heavily oriented and detailed in the areas of product, marketing, engineering and manufacturing. The scope, quality, and depth of the presentation resulted in the establishment of a multi-million dollar trade agreement between China and the company.

 

Ford Complexity Reduction - Established a Complexity Reduction Program to resolve and correct an international multi-plant bottle-neck caused by the introduction of hundreds of new unique part assemblies.  A net savings of 20% was realized through this effort. The existing facilities could neither be altered without incurring expensive tooling changes, nor could any new production facilities be constructed in time to meet production timing commitments.  The company also realized additional savings in: direct and indirect labor costs; inventory control; floor space; and staff paperwork requirements.  Over $25,000,000 was realized (at existing economics) in savings to the company.