Benteler (suspension), Arvin Meritor (exhaust), and Pireli (tire assembly). Each supplier manages its own production processes...

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Benteler (suspension), Arvin Meritor (exhaust), and Pireli (tire assembly). Each supplier manages its own production processes and line settings on the site, and maintains its own competitive priorities. Although these suppliers are not responsible for the final assembly, some of them carry out quality check measures beyond the boundaries of their embedded plants. This additional step ensures that the difference in competitive priorities and processes do not hinder the quality and seamless flow of production in the entire plant. The workforce at Camacari is also different in a number of ways. The entire plant employs approximately 9,000 workers, including the suppliers. Because the majority do not have any prior industrial work experience, they undergo a 900- hour training program. This collective training program enhances the cohesiveness among employees and facilitates a culture of collaboration and joint problem solving. Unlike many U.S. auto plants, where workers' responsibilities are strictly limited to specific job classifications, workers are encouraged to learn as many skills as possible, which allows the plant to be flexible. By having such a plant, Ford is able to have module suppliers commit to the success of the whole product because they get paid when the product is approved and functionally accepted. The suppliers would have to prioritize resolving delivery or quality issues with Ford, which eventually improves the final quality. When there is a problem with a part, it is simple to track down the source and work with the related supplier to correct it. Due to closer communication and knowledge transfer between companies and employees, Ford is experiencing faster learning curves and cross fertilization of practices in the workforce. Ford can shorten the development times and launch times for new products, and quickly ramp up production volumes because of the increased collaboration and involvement of suppliers. The reduced inventory and logistics costs more than compensate for the high interest rates charged for credit in Brazil. However, this approach may have some disadvantages as well. Salary negotiations may align toward the entire plant's standards, reducing margin for the suppliers. Decision making can take longer for some issues, such as labor union negotiations, which require agreement of all the partners. Managing organizational culture is also not an easy task. This may complicate the startup of the factory, because of the mix of various management styles and company cultures the suppliers may bring into the plant. Finally, it increases the organizational inertia, because change is less likely to happen with suppliers embedded within the plant. When a module faces technical improvements, there is a risk that it might not be compatible with other modules, and it may require Ford to a change a supplier. Overall, focused operations along with flexibility and close supplier involvement make the Camacari plant one of the most innovative ones among Ford's worldwide network of facilities. The Camacari plant is an example of how the PWP concept can be established beyond a single firm's boundary and create a closely integrated production facility that incorporates the benefits of collaborative problem solving at the interorganizational level.? MANAGERIAL PRACTICE 2.1 Plants-Within-a-Plant at Ford Camacari Ford Motor Company is a global automotive company with manufacturing operations located worldwide, including Brazil, Canada, China, Mexico, United Kingdom, and United States, among many others. Its Ford do Brasil subsidiary was established in 1919, and underwent several transformations in its ownership structure and range of manufacturing and assembly operations over the past hundred years. In Bahia, Camacari, a city in the rural northeast region of Brazil, Ford has invested over $4 billion to build one of the most advanced automobile factories in the world. Ford Ecosport Mini SUV and the Ford Fiesta models for the Brazilian market and other developing countries are manufactured here. The Camacari plant, which opened in 2001, is more automated than several of Ford's facilities in the United States, with more robots here than in many U.S. plants. Ford Camacari is also one of the most flexible factories in the world, capable of producing five different vehicle platforms at the same time on the same line. Ford owns the land and buildings, and all employees on the site are registered on a single human resource system. However, the real revolution at Camacari lies in the close integration of Ford suppliers in the assembly process, while retaining individual processes and workforces for each supplier. The idea is to involve suppliers right from the vehicle's design stage to the final assembly. By locating the suppliers within the vehicle's manufacturing facility, the respective modules are manufactured and delivered to the main assembly line, with little logistics involved. While Ford controls the final assembly process, 21 component suppliers and 4 service providers are located on the site. Eight additional component suppliers are located offsite, but in close vicinity. Of the 21 component suppliers, 10 are in the final assembly area, which forms the "plants-within-a-plant" (PWP) configuration. They are Faurecia (door module), Visteon (cockpit), Pelzer (soft trim), Interim (headliner), Lear (seats), Mapri-Textron (fasteners), Valeo (front-end module), Benteler (suspension), ArvinMeritor (exhaust), and Pireli (tire assembly). Each Benteler (suspension), Arvin Meritor (exhaust), and Pireli (tire assembly). Each supplier manages its own production processes and line settings on the site, and maintains its own competitive priorities. Although these suppliers are not responsible for the final assembly, some of them carry out quality check measures beyond the boundaries of their embedded plants. This additional step ensures that the difference in competitive priorities and processes do not hinder the quality and seamless flow of production in the entire plant. The workforce at Camacari is also different in a number of ways. The entire plant employs approximately 9,000 workers, including the suppliers. Because the majority do not have any prior industrial work experience, they undergo a 900- hour training program. This collective training program enhances the cohesiveness among employees and facilitates a culture of collaboration and joint problem solving. Unlike many U.S. auto plants, where workers' responsibilities are strictly limited to specific job classifications, workers are encouraged to learn as many skills as possible, which allows the plant to be flexible. By having such a plant, Ford is able to have module suppliers commit to the success of the whole product because they get paid when the product is approved and functionally accepted. The suppliers would have to prioritize resolving delivery or quality issues with Ford, which eventually improves the final quality. When there is a problem with a part, it is simple to track down the source and work with the related supplier to correct it. Due to closer communication and knowledge transfer between companies and employees, Ford is experiencing faster learning curves and cross fertilization of practices in the workforce. Ford can shorten the development times and launch times for new products, and quickly ramp up production volumes because of the increased collaboration and involvement of suppliers. The reduced inventory and logistics costs more than compensate for the high interest rates charged for credit in Brazil. However, this approach may have some disadvantages as well. Salary negotiations may align toward the entire plant's standards, reducing margin for the suppliers. Decision making can take longer for some issues, such as labor union negotiations, which require agreement of all the partners. Managing organizational culture is also not an easy task. This may complicate the startup of the factory, because of the mix of various management styles and company cultures the suppliers may bring into the plant. Finally, it increases the organizational inertia, because change is less likely to happen with suppliers embedded within the plant. When a module faces technical improvements, there is a risk that it might not be compatible with other modules, and it may require Ford to a change a supplier. Overall, focused operations along with flexibility and close supplier involvement make the Camacari plant one of the most innovative ones among Ford's worldwide network of facilities. The Camacari plant is an example of how the PWP concept can be established beyond a single firm's boundary and create a closely integrated production facility that incorporates the benefits of collaborative problem solving at the interorganizational level.? MANAGERIAL PRACTICE 2.1 Plants-Within-a-Plant at Ford Camacari Ford Motor Company is a global automotive company with manufacturing operations located worldwide, including Brazil, Canada, China, Mexico, United Kingdom, and United States, among many others. Its Ford do Brasil subsidiary was established in 1919, and underwent several transformations in its ownership structure and range of manufacturing and assembly operations over the past hundred years. In Bahia, Camacari, a city in the rural northeast region of Brazil, Ford has invested over $4 billion to build one of the most advanced automobile factories in the world. Ford Ecosport Mini SUV and the Ford Fiesta models for the Brazilian market and other developing countries are manufactured here. The Camacari plant, which opened in 2001, is more automated than several of Ford's facilities in the United States, with more robots here than in many U.S. plants. Ford Camacari is also one of the most flexible factories in the world, capable of producing five different vehicle platforms at the same time on the same line. Ford owns the land and buildings, and all employees on the site are registered on a single human resource system. However, the real revolution at Camacari lies in the close integration of Ford suppliers in the assembly process, while retaining individual processes and workforces for each supplier. The idea is to involve suppliers right from the vehicle's design stage to the final assembly. By locating the suppliers within the vehicle's manufacturing facility, the respective modules are manufactured and delivered to the main assembly line, with little logistics involved. While Ford controls the final assembly process, 21 component suppliers and 4 service providers are located on the site. Eight additional component suppliers are located offsite, but in close vicinity. Of the 21 component suppliers, 10 are in the final assembly area, which forms the "plants-within-a-plant" (PWP) configuration. They are Faurecia (door module), Visteon (cockpit), Pelzer (soft trim), Interim (headliner), Lear (seats), Mapri-Textron (fasteners), Valeo (front-end module), Benteler (suspension), ArvinMeritor (exhaust), and Pireli (tire assembly). Each