Henry Ford and the Model T Lessons for

Henry Ford and the Model T: Lessons for Product Platforming and Mass Customization Fabrice Alizon Steven B. Shooter Timothy W. Simpson DETC 2008/DFMLC-49420 Acknowledge support from NSF Grant Nos. IIS-0325321, and IIS-0325402. DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Outline • Motivation • Model T – Diversity • Overall • Overtime – Platform – Mass customization • Discussion & Conclusion “You can have any color car you want so long as it’s black” …Henry Ford 2 DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Motivation • Rick Benjamin and his Touring 1923 Model T in Lewisburg • Few realize that Ford’s Model T could be viewed as one of the greatest platforms ever created, enabling his workers to customize this model for a variety of different markets. • Offering valuable lessons for product platforming and mass customization None of the first Model T models were proposed in black 3 DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Model T – Scoop? • First Model T: – Touring, offered in red, followed by the Roadster in pearl grey – Black why? Dry faster – No diversity • Changes were due to four main reasons: (1) improve speed of the production, (2) cut costs, (3) increase customer appeal, and (4) order through different suppliers with different manufacturing processes. • There were so many modifications during the Model T lifecycle that it is impossible to generalize and specify a features/year rule. • End of life Model T – Mass production limits – Late to renew products? 4 DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Overall Diversity 1908 to 1927 ~15 M cars Highly competitive market Hundreds of carmarkers - Emerging market - Not expensive - Performance - Easy to drive/repair/modify - Network effect (pieces) - Mass effect DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Diversity Overtime Touring 1926 Touring 1908 6 DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Model T Platform Model T - Improved overtime Dana’s Rolling Chassis Skateboard Model TT stretching (scaled-based) the Model T chassis to obtain a 1 -ton light truck Tractor/Truck… 7 DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Flexible Configurations… New solutions? Mercedes’ Vario Research Car (2003): wagon to sedan to convertible Ford’s Touring model (1914): four-seat car to truck DETC 2008/DFMLC-49420 © F. ALIZON, 2008 8

Mass Customization… 9 DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Mass Customization 2 • 5% of the demand was satisfied through customization • 5000 Gadgets • Product platform sold as a product • Outsourcing Mass customization – The customization was realized by Ford but mainly by specialized companies tailoring it to exact customers’ needs. 10 DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Discussion • Henry Ford successfully designed and sold a product line – Integrating significant variety with eleven basic models – Offering customization with a line of 5000 gadgets, and customized models offered through specialized manufacturers • Modern vehicles are designed and launched (Phase 1) and then improved during a second phase (~2 -3 years after the introduction) to better fit customers’ needs, costs, etc. • It is interesting to compare Ford’s approach and modern strategies; while hundreds of carmakers were offering cars at that time in the United States. In fact, Ford continuously improved his models, and each year a complete new line was launched, while most of today’s “new” models just offer small modifications, mostly a repackage of the previous year. – This can be one of the keys to success of the significantly long lifecycle of the Model T 11 DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Discussion - Platform • Ford realized what most industries want to achieve: design a strong common platform sustaining variety through common interfaces; thus, only bodies were specific. • This platform was dynamic and constantly improved, benefiting the entire family of derivative products • By extension, Ford proved that it was possible to build a common platform and design and assemble a specific body. So, under conditions of profitability, automakers should be able to build a common platform and ensure variety through specific bodies, thereby taking full advantage of the late differentiation 12 DETC 2008/DFMLC-49420 © F. ALIZON, 2008

Conclusion • Model T was one of the first platform-based products ever produced in quantity and one of the most efficiently designed • Most of Ford’s techniques are still relevant today and should be better considered by industry • For the lifecycle, industry should recognize that wider variation of the product line over time can generate a longer lifecycle 13 DETC 2008/DFMLC-49420 © F. ALIZON, 2008

QUESTIONS… 91 rue du Faubourg St Honoré 75008 Paris, France Phone: +33 (0)6 37 20 62 47 Fabrice. alizon@keyplatform. com www. keyplatform. com Labs 24/99 Software Park Building Chaengwattana Rd, 11120 Nonthaburi, Thailand www. S 3 -World. com 14 DETC 2008/DFMLC-49420 © F. ALIZON, 2008