How Ford got its innovation mojo: Interview with Rick Amori (transcript)

In this PEX Network interview, Rick Amori, Six Sigma Deployment Champion for the Research and Innovation Center at Ford talks more about the company's unique approach to innovation.

Editor’s note: this is a transcript of a podcast and has been edited for readability. To listen to the original podcast, click here.

PEX Network: The founder of the Ford Company, Henry Ford, has a famous quote about innovation and faster horses and it really seems that his great-grandson, William Clay Ford, Jr, who’s currently Executive Chairman of Ford Motor Company, has really taken that advice to heart with new innovations such as alternative propulsions and systems and development of what you call your Ford SYNC and MyFord Touch technologies. Is Ford trying to become the Google of car manufacturing?

Rick Amori: Well, I think you’re referring to the quote from Henry Ford where he said if he had asked people what they wanted they would have said faster horses. There’s actually some controversy; some people think he didn’t actually say that - there are no actual records. But we’ll claim credit for that statement!

You’ll remember that Ford Motor Company fell into an innovation trap back during our Model T years from 1915 to late 1920s and we focused all of our attention on process efficiency. Henry Ford stated that we would offer the Model T in any colour as long as it’s black, and that really simplified the manufacturing process. But we were eventually out-innovated by our competition.

We’ve learnt from our past and since then Ford has had a longstanding history of innovation and industry firsts. You know, Henry Ford’s vision was to open the highways to all mankind and so we’re making good on that vision through the technologies that we’re developing and researching today.

SYNC and MyFord Touch as you mentioned, are certainly industry defining technologies. We know that, because you can see how our competitors are all trying to play catch-up today in the field.

But our innovations aren’t only focused on technologies that you mentioned. Those technologies are sort of customer experience technologies. We’re also applying industry first innovation to all areas of the company. For example, in our manufacturing divisions we want to improve quality – especially where we do see cost and time and waste in our manufacturing processes - with innovative techniques. We’re also trying to increase sustainability of the materials in our vehicles, such as our seats and carpets. So all of these areas are benefiting from our innovative processes.

PEX Network: It sounds like innovation is really part of the culture at Ford?

Rick Amori: It sure is and that’s the only way we know that we can succeed, we have to be innovative and not follow the field.

So I’ll give you an example of some of our new manufacturing innovation. We’re using this 3D mapping technology - the first application in the auto industry that I’m aware of - on rear axle parts of the F-Series pickups. We take a 3D photograph with multiple cameras of the axle gears and it creates a 3D picture and then we can compare the 3D photograph image to our CAD model of the gear to identify defects, which is much better than just a normal visual inspection, which was our current state of the technology just a few years ago.

PEX Network: That’s really interesting how you’re bringing to bear new technologies to enable completely both new ways of working and new technologies for the car.

Rick Amori: That’s right, and the customer benefits in any case. We’re either putting this technology in the vehicle where they can touch and feel it and get enjoyment out of it and it’s helping them with better quality and lower cost in the vehicle.

PEX Network: Just five years ago the American car industry as a whole was really on its knees. The government ended up bailing out GM and Chrysler and Ford requested a line of credit - although it must be said Ford didn’t receive a bailout - but today your profits are up, third quarter pre-tax earnings in 2012 were a record $2.2 billion and the prospects for Ford are really looking rosy. It’s quite a remarkable turnaround for the industry. How much would you attribute this to renewed focus on innovation?

Rick Amori: As you said, Ford did not seek financial assistance from the government at that time, but we did establish a line of credit with a clear goal that we wanted to use this financial infusion to help develop innovative products, such as the things you’ll find on the all new Ford Fusion, and it’s really paid off for us. The Fusion has been drawing record sales now and as a result our investment grade debt rating was restored about a year ago. So that’s all good news for us and for our investors.

Our focus on innovation has touched many aspects of the company. We’ve developed an industry first inflatable seatbelt technology, designed to reduce head and neck injuries for rear seat passengers, especially for children and older occupants of the car. And we’ve incorporated sustainable materials in most of our vehicles. Like in the Fusion, we’ve got innovative soy-based foam in our seat cushions and we’ve got our recycled denim in the car’s carpeting and carpet backing. So the Ford Fusion is sort of one of our showcases for technology in our company’s turnaround.

It’s the first global vehicle programme from any auto manufacturer to use seat fabric made from recyclable materials. It’s got the potential to recycle enough plastic bottles and post industrial waste to make 1.5 million yards of fabric annually in our new innovative process. That’s equivalent to about 800,000 to 900,000 yards in North America alone when the Fusion is in full production.

You know, that’s our example of our commitment to use recycled materials whenever possible. In North America, for instance, Ford has increased the use of recycled yarn from zero in 2007, just five years ago, to nearly 66% of all our vehicle programmes for 2013.

That’s just some of the examples of how the investments that we’ve made have helped us turnaround, including all this great innovation that we’re providing for our customers.

PEX Network: A lot of companies want to be innovative, but I think very few achieve the level of Apple, Google or even Ford by the sounds of it! What has that focus on innovation actually meant for your company; what are you doing to stimulate the levels of innovation that you’ve seen?

Rick Amori: Well, that’s a really great question. Part of the problem is that now we’re developing expertise and building knowledge in areas where we’ve previously had no experience. Some of these fields have had no place in traditional automotive design in the past, for example, the development of in-vehicle connectivity.

The cycle for developing and improving and keeping up with the current state of the art in vehicle connectivity is a much, much faster pace than what we’re used to in the automotive design world where we have three or four or five year cycles on vehicle development.

Technology - from connectivity and Wi-Fi and cell phones and all that - moves at such a fast pace that we really have to develop the expertise and the processes to keep up and keep a step ahead. We have to be creative in our thinking and how to compete.

Now one example of how we’re innovating in this field is that we’ve invited outside developers through a programme called OpenXC - an open source hardware specification that we’ve developed to attract developers interested in experimentation with user interface and vehicle data. Through OpenXC developers are able to access the software and hardware toolkit that we’ve offered to them – these are people outside of Ford – to create plug and play modules to test their ideas for the future of vehicle connectivity interaction. In this way, we’re reaching out to the experts that aren’t even within the company and really trying to innovate and think differently about how to progress our ideas.

PEX Network: You mentioned experimentation and I understand that statistics comes into this. There are those that say that numbers and statistics are the antithesis of creative thinking and that they don’t really go well with innovation. Would you agree with that sentiment?

Rick Amori: There certainly is a lot of discourse out there on how Six Sigma and structured problem solving can inhibit innovation and innovative thinking. I suppose they could if they’re used in the wrong way and for the wrong purposes.

At the beginning we were talking about Henry Ford and how in the early 1900s we focused so much on process efficiency that we lost sight of innovating our product. That meant we lost serious market share to General Motors back in the early 20s.

But that doesn’t mean that there isn’t a place for statistical thinking in our current world of increased innovation. The difficulty is in working up front in research and in new technology development.

The difficulty in applying statistics is that we don’t have a lot of data available in this world that I work in. We’re working on the fuzzy front-end of innovation, as they call it, which means we don’t have a lot of parts that we’re playing with where we can collect data. For instance, we’re not using field data from millions of vehicles on the road.

Some would say it’s hard to use statistics when you’ve got such little sample sizes, but there are other ways to do it. In any event we still have to make decisions based on data, whether we’re working on the fuzzy front-end or resolving problems with vehicles that are in the field.

So what we end up doing is experimenting with physical prototypes or lab tests with low sample sizes from a statistical sense. One of the alternatives we have is to rely on computer or mathematical models to simulate the physical actions or the performance of our technology.

That’s where a lot of our focus is spent in the Research and Innovation Centre here at Ford. Statistical analysis is key when we’re working on these analytical models. It’s helpful to establish the competence of the models we’re working on. We use statistical analysis to solve the models for optimization. We also can use some mathematics and statistical analysis to assess the robustness of our technology, even up front in the concept phase.

So I’m here to say that statistics is alive and well in the innovation arena and that’s what I spend most of my time on is teaching and instructing our scientists and research staff in how to use statistics and some of the engineering principles to develop better and more robust ideas for implementation.

PEX Network: My final question is: you’re going to be speaking in more detail about Ford’s technology development process at our upcoming conference [refers to June 2013 Manufacturing Process Excellence conference], what are some of the highlights about what you’re going to be speaking about?

Rick Amori: Well, to get the real sense of my presentation you have to be there. But if you can’t make it or if you’re interested in what I’m talking about, I’ll give you a brief synopsis right now.

My paper is really focused on contrasting traditional methods of developing new technology that are in the industry today. Ford has taken the traditional techniques for assessing innovative ideas and they’re infusing some of our product development, engineering disciplines into the up front innovation processes.

For example, some of the techniques that are used in industry today use a gated process to develop technology from an idea through to building some lab prototypes or bench prototypes, collecting data, assessing the performance of these prototypes and developing pre-manufacturing concepts, and then ultimately approving the designs and putting the designs into production.

But what we’re doing here at Ford is beyond that kind of common progression from ideas to prototypes to testing and data collection and performance evaluation. We’re baking in some of the engineering disciplines that we use in product development.

For example, we focus highly on failure mode avoidance philosophy. This means from the early beginnings of our ideas we identify all the potential failure modes that could occur in this technology, even in a concept level. We identify them, we track them, and we evaluate them and simulate the failures throughout the concepts development.

One of the key tools we use, even at a concept level, is the failure mode and effects analysis or the FMEA. And that’s really the backbone of our concept and innovation development; it’s really the backbone of our technology development system.

We also spend a lot of time assessing function of our systems, and so I’ll be talking in the presentation about how to identify ideal function of your concept, identifying the requirements of each ideal function, identifying the potential for failure modes of the functions, and how you can strengthen your innovative process by identifying the functions and tracking their performance throughout your innovative process.