As Ford expanded its product lineup by 20% in the late Nineties, the automaker reduced the number of expensive prototypes by one fourth with the help of a Prototype Optimization Module (POM) that also cuts weeks and millions of dollars from development of the custom-built pre-production models used to verify designs of new vehicles, systems and components.
Ford's POM was among six finalists for the Franz Edelman Award for Achievement in Operations Research and the Management Sciences, presented earlier this month to Jeppesen Sanderson at the INFORMS® national convention in Salt Lake City. Other finalists were IBM, Air New Zealand, Fingerhut and the Federal Aviation Administration.
Ford and other auto manufacturers devote substantial resources to test designs and systems of new vehicles. Inspired by an integer programming example in a graduate-level operations research course offered by Wayne State University in Detroit, Ford engineering managers developed the POM to help manage and optimize the number and type of test vehicles needed to verify and improve vehicle performance.
From its introduction in 1996 on the prototype fleet of the Ford Transit van – Europe’s top-selling medium commercial vehicle – the automaker developed and refined a global best practice called the POM-Predictor, a collection of optimization and expert system modules, budgets and plans prototype for all vehicle programs at Ford, Lincoln, Mercury, and Jaguar. The original tactical version of POM validated on the Transit is routinely used on complex new vehicle programs such as the Ford Taurus, Windstar and F-Series truck, Mercury Grand-Marquis and Lincoln Town Car.
POM has been a key driver in revamping Ford's engineering prototype management, reducing from months to weeks the time for prototype planning (a key element in reducing the time it takes to bring a new car or truck to market) and placing prototype budgeting on a solid foundation.
The cost of a single prototype routinely exceeds $250,000. With various body styles, powertrain combinations and other optional equipment, a complex vehicle program may require from 100 to 200 full prototype vehicles. The POM has helped Ford reduce prototypes by approximately 25 percent, with multi-million annual savings.
It has also promoted wider customer-oriented dialogue among design and test engineers and management, by establishing earlier design verification plans. By specifying early on the number, type and duration of tests requiring prototypes, Ford engineers are encouraged to share prototypes or use CAE tools or other alternative testing methodologies where prototypes aren't absolutely essential.
The Ford POM offers potential new applications to non-automotive businesses where prototype testing of complex combinations is important, while establishing within Ford a precedent for the application of operations research models in such areas as late design changes, product development, and flexible assembly.
The title of the Ford project recognized by the Institute for Operations Research and the Management Sciences (INFORMS®) is "Rightsizing and Management of Prototype Vehicle Testing at Ford Motor Company." The authors are John Sidelko and Alex Przebienda of Ford, and Kenneth Chelst, Jeffrey Lockledge, and Dimitrios Mihailidis of Wayne State University.
29th Year of Competition
This is the 29th year that the prestigious $15,000 competition has been held. The award is jointly sponsored by INFORMS and the Practice Section of INFORMS, formerly the College on the Practice of Management Science (CPMS).
The INFORMS Edelman Award recognizes outstanding implemented work that has had a significant, positive impact on the performance of the client organization. The top finalist receives a $10,000 first prize.
The judges of the Edelman competition were Russ Labe; Joseph Discenza, Wagner & Associates; Howard Finkelberg, BBDO; H. Newton Garber, Garber Associates; Stephen C. Graves, Massachusetts Institute of Technology; Yoshiro Ikura, Saitech; Peter C. Bell, University of Western Ontario; and Donald Smith, Lucent Technologies.
All the finalist papers will be published in the January 2001 issue of Interfaces: An International Journal of the Institute for Operations Research and the Management Sciences.
The Institute for Operations Research and the Management Sciences (INFORMS®) is an international scientific society with 12,000 members, including Nobel Prize laureates, dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, the stock market, and telecommunications. The INFORMS website is at http://www.informs.org.