TRAVERSE CITY, MI – After announcing here two years ago it would dramatically improve the flexibility of its assembly plants, Ford Motor Co. is hitting its bogies and already reaping benefits that could end up saving it $1.7 billion in reduced investment in body shops between now and the end of the decade.

“Add final assembly and paint operations, and we’re probably closer to $2.5 billion by the end of the decade,” says Ford’s William P. Russo, director-operations manufacturing engineering.

Five Ford plants now feature standardized production “templates” and cells that enable them to build a variety of vehicles, and 80% of Ford’s plants will have the capability by the end of the decade, Russo says.

Ford may never hit 100% because not all its plants, such as the one producing its hot-selling Super Duty pickups, need to be flexible, Russo says.

William P. Russo, director-operations manufacturing engineering, Ford Motor Co.

Manufacturing flexibility is the new Holy Grail among Detroit auto makers, which have been burned in recent years by their inability to react to marketplace shifts.

One of the most glaring examples occurred several years ago when the Chrysler Group could not add production of its then hot-selling PT Cruiser to its underutilized Belvedere, IL, Neon assembly plant, even though the PT is built on the same platform.

Toyota Motor Corp., Honda Motor Co. Ltd., and Nissan Motor Co. Ltd. all have plants in the U.S. capable of building a wide variety of products, which helps prevent them from falling prey to one unpopular model.

Nissan’s new plant in Canton, MS, for instance, builds the Armada and Infiniti QX56 SUVs, the Quest minivan and two versions of the Titan fullsize pickup truck.

But Detroit’s Big Three, which in good times have made huge profits churning out just one or two products from the same plant, now are changing their ways, commonizing production systems and components so they resemble giant global Lego sets.

While everybody now is doing it, Russo says Ford’s system enables it to shift a plant’s production mix on the fly. Russo suggests that is something rivals may not be as good at. Pure flexibility is not what separates companies – it’s the execution, Russo argues.

Despite the giant savings in capital investment costs, the biggest benefit of increased production flexibility is the ability to react to market changes faster, Russo says, and that is especially important in today’s increasingly fragmented marketplace.

The ancillary benefits, however, are far more than mere frosting on the cake. What started out as a project to gain flexibility in manufacturing actually changed Ford’s approach to product development and reached far into its design studios, Russo says.

However, in comments during a panel discussion following his remarks, Russo notes that implementing flexible production methods requires difficult cultural changes within the organization, in part because it requires lots of standardization.

Standardization, he says, is difficult in engineering cultures that have traditionally been based on innovation and deployment of new technologies. Says Russo: “Standardization, quite frankly, comes hard.”

dwinter@primediabusiness.com