Moving Man

Joe Hinrich's career path could be viewed as a trial run for his current role as executive director of material planning and logistics (MP&L) for Ford Motor Co. During the past 11 years, the 35-year-old Hinrich and his family have made nine interstate moves. In the process he presumably learned something about getting stuff from here to there. And that's what Hinrich's organization is all about, albeit on a much larger scale. Based in Dearborn, Mich., Ford's MP&L group coordinates the movement of billions of dollars worth of automotive parts and vehicles each year. It coordinates production forecasts with the company's supplier community, plans parts delivery and schedules output for Ford assembly plants around the world. It is also responsible for material flow, inventory-reduction goals and implementing pull systems within the factories themselves. On the outbound side, the group handles the shipment of finished vehicles to dealerships. In North America alone this effort involves more than 1,000 people, 36 factories and 7,000 dealers. "It's a complex business to say the least. It's complex, but it's also the hub of the company," the softspoken but articulate Hinrich observes. "It's a business where, if we do everything well, we don't hear from anybody. If we make one mistake out of 60,000 part numbers on any given day, or if a transit failure happens or a truck breaks down, then we're the most popular people in Ford, and not for the right reasons." Hinrich seems to relish his new role, and the role that his organization ultimately plays in the profitability of the company. That's a good thing considering the $9 billion total loss that Ford's automotive operations reported last year, and the subsequent pressure that's been applied across the company, and on the MP&L group in particular, to reduce and eliminate costs. There are obvious differences between the logistics group and the manufacturing facilities where Hinrich previously served as plant manager. Still, he has begun to apply the same principles of frequent communication, an emphasis on teamwork and recognizing success that have worked well for him elsewhere. In his recent stint as plant manager at Ford's Van Dyke Transmission Plant in Sterling Heights, Mich., he lead an effort that reduced costs 10%, boosted output while cutting overtime in half and reduced warranty costs by 60% in less than a year. Since being appointed executive director of MP&L in May, Hinrich has reemphasized the need of the disparate functions within the material planning and logistics organization to work together as a team. In recent months the group has developed a standardized improvement process. As part of this so-called "waste walk" program, a team made up of representatives from Ford's finance, Six Sigma organization, purchasing, engineering and outside logistics suppliers all go into a factory for a couple of days. They watch trailers, talk to people in the plant and review data on delivery frequency, truck utilization and costs. From this analysis the team develops a list of improvement ideas. "We have seen some profoundly positive results as a result of that process," Hinrich reports. Suggestions might include changing the ship frequency, receiving product once per week instead of twice per week for example, assuming that inventory carrying costs are less and material floorspace is available. Or it might be a matter of redesigning the transportation network, switching from truck to rail. "There isn't one answer, but that's part of the answer. You have to put a team in place that goes into each plant and looks at what's the best solution for that plant," he adds. In his career Hinrich has seen many examples of such cross-functional, team initiatives simplifying processes and reducing costs within the four walls of a factory. He sees the MP&L organization playing a pivotal role in driving such activity across Ford. Offering a product-development example, he wants his organization to be engaged in the cycle early enough so that it can make suggestions -- changing the dimension of a frame a few centimeters so parts can be packaged more densely -- that could save a lot of money over a program's life. "The customer gets the final say, but if it's something the customer doesn't know about, or doesn't care about, we can influence it," he explains. Inside the material planning and logistics organization, Hinrich's arrival has been a breath of fresh air, but he has really only begun to lay the groundwork for the type of organization he envisions. In this vision Ford's MP&L group will always deliver on its commitments, financial and otherwise (cost per unit, quality, on-time delivery). It will be a team where people are excited to be working, where they feel valued and are recognized for that value, because they are successfully meeting their commitments. And it will be a place where other areas of the company logically turn for solutions to their problems. "It's such an interdependent system. It just takes one break in the chain, and the whole system crumbles. You could be missing one bolt at a plant that has thousands of parts, and we're not going to build that vehicle," he observes. Part of the solution, drawn from his factory experience, is to establish disciplined, repeatable processes, and then get everyone to follow those processes. "You have to take the variability out of the system, because the variability will kill you."