1. © F. ALIZON, 2008 DETC2008/DFMLC-49420 1 Acknowledge support from NSF Grant Nos. IIS-0325321, and IIS-0325402. Fabrice Alizon Steven B. Shooter Timothy W. Simpson Henry Ford and the Model T: Lessons for Product Platforming and Mass Customization DETC2008/DFMLC-49420

2. © F. ALIZON, 2008 DETC2008/DFMLC-49420 2 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

3. © F. ALIZON, 2008 DETC2008/DFMLC-49420 3 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

4. © F. ALIZON, 2008 DETC2008/DFMLC-49420 4 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?

5. © F. ALIZON, 2008 DETC2008/DFMLC-49420 5 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

6. © F. ALIZON, 2008 DETC2008/DFMLC-49420 6 Diversity Overtime Touring 1926 Touring 1908

7. © F. ALIZON, 2008 DETC2008/DFMLC-49420 7 Model T Platform Model T - Improved overtime Dana’s Rolling Chassis Skateboard Model TT Tractor/Truck… stretching (scaled-based) the Model T chassis to obtain a 1-ton light truck

8. © F. ALIZON, 2008 DETC2008/DFMLC-49420 8 Flexible Configurations… New solutions? Ford’s Touring model (1914): four-seat car to truck Mercedes’ Vario Research Car (2003): wagon to sedan to convertible

9. © F. ALIZON, 2008 DETC2008/DFMLC-49420 9 Mass Customization…

10. © F. ALIZON, 2008 DETC2008/DFMLC-49420 10 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.

11. © F. ALIZON, 2008 DETC2008/DFMLC-49420 11 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

12. © F. ALIZON, 2008 DETC2008/DFMLC-49420 12 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

13. © F. ALIZON, 2008 DETC2008/DFMLC-49420 13 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

14. © F. ALIZON, 2008 DETC2008/DFMLC-49420 14 91 rue du Faubourg St Honoré 75008 Paris, France Phone: +33 (0)6 37 20 62 47 Fabrice.alizon@keyplatform.com www.keyplatform.com 24/99 Software Park Building Chaengwattana Rd, 11120 Nonthaburi, Thailand www.S3-World.com Labs QUESTIONS…