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EuroAuto: ZF Group’s Approach to Product Development

ZF Group is working to implement its version of the Toyota Production System to assure timely launches and production quality.

Frederick Winslow Taylor’s Principles of Scientific Management was first published in 1911. It was the direct result of Fordismus, a term coined in Germany to explain the revolutionary Ford system in which supply and production, workforce and markets could all be measured, planned and combined into a giant whole. Taylor’s book was translated into Russian, German, French, Italian, Japanese, Swedish, Spanish, and Dutch within two years of publication. “Taylorism” took the Fordismus concept further. It was not simply a matter of measuring work and standardizing its component parts and then planning and timing a manufacturing process that took the division of labor to its logical conclusion. It included redesigning the workspace, the work flow and the machines, improving the lighting, ventilation and working conditions. It also meant paying higher wages for greater output with careful supervision and training.

Fast forward almost a century and you have the “Global Production System” that has been steadily introduced across the ZF Group (www.zf.com) over the last three years. While the Toyota Production System is quoted as the basis on which the German global company has created its own system, its roots can be traced further back to the dawn of motoring and mass production. As the new chief executive of the ZF Sachs subsidiary and a main board member of ZF Group, Dr Peter Ottenbruch is a passionate disciple of the initiative and has very much made it his personal quest to deliver the message and implement it across his group. “We have the buildings, the machinery and the infrastructure, but in the middle are the employees, and they are the most important thing. Giving them the chance to tell us what they think could be better in production is vital. That is what it’s all about,” says Dr Ottenbruch “There are only some rules. One is don’t reinvent the wheel. Use standards. Instead of creating new parts, combine old parts with new products. That gives flexibility. Working with standards allows for flexibility.”

He then explains how the entire ZF organization is technology-driven and that innovation is very much part of the group’s DNA but “innovation and standards do not need to work against each other,” he says. “We need continuous improvement and that means continuous change. We have to create an environment for our employees that allows them to continuously change their environment. This means we have to give them flexibility and take away the fear for change. There are two major roles for our processes: just in time and zero defects. You don’t need more than that. Do it once, do it correctly and do it when the customer expects it. Everyone downstream is the customer of everyone upstream, both inside the company as well outside. Process orientation and customer/supplier relations are what it’s all about and this is where the employees have an important role to play.”

Zero defects, says Dr Ottenbruch, means error prevention rather than repair. And if an error occurs, it must be rectified and then eliminated. But it must also be something that people talk about. “The biggest problem about errors, though, is not talking about them. It’s also a problem if you’re excellent and don’t talk about it because no one can learn from it. With errors, though, the only way to solve them is to talk about them without fear of recrimination.” It is this aspect which is one of the fundamental elements of the Global Production System. Ottenbruch explains that there is a meeting of top ZF personnel two or three times a year where issues are discussed. Then on the level of Sachs there are three or four annual meetings that include German production experts as well as their international colleagues where issues are discussed. Dr. Ottenbruch admits that this is not rocket science, but that it is essential to have the buy-in of the workforce, that the personnel know that their suggestions will be listened to and acted on if necessary.

While the Toyota Production System and the kaizen philosophy is part of the inspiration behind ZF’s Global Production System, the Porsche Academy in Stuttgart, Germany, has also played an important role. “Porsche started its own production system that was based on Toyota’s in 1993,” says Dr Ottenbruch, “when Dr Wiedeking, the Porsche CEO, realized that his company was facing a very severe problem. It was building less than 20,000 very expensive vehicles a year and it could not handle the complexity. He understood that a major change was necessary if the company was to survive, which was when he invited some experts in from Toyota. The result was that a form of the Toyota Production System was implemented for Porsche which has enabled the company not just to survive, but ultimately to thrive. It also has led to it setting up its own academy which is available for external companies.”

The ZF Global Production System does not just apply to mass production but also to product development, logistics, sales, and procurement. “In our case, 6% of the product price is development,” says Dr Ottenbruch, “and another 6% is in technology and engineering. Most of the money is spent in making the parts and then another third in assembling them. However, 70% of the cost of the product is defined in the development phase. It is quite simple to make a line on a drawing, but every line is a process, and if we don’t have the process to produce the line with our equipment, then we should not make the line. If we want to solve problems and get better, the development and R&D engineers need to talk to the production engineers so that what is possible and what is not can be established at a very early stage.”

This process is also very closely related to the Start of Production (SOP) with further lessons being drawn from Toyota as Dr Ottenbruch explains: “Rather than working to an SOP deadline with all the resources being pulled in to meet it on time, the Toyota way is to examine the existing processes and standards to reach a sensible SOP. In other words, to be well prepared and start the development work with processes that you know. When you don’t know your processes, you don’t know your parts.” He suggests that this lack of understanding results in the need to do a great deal of work after SOP, which is when the next program should start. This means both capacity limitations and the increase of risk. Toyota, says Dr Ottenbruch, “waits years and generations to change something, and when they do, they work on it long before SOP. The European culture is to do everything at the same time, where we go after a new customer in a market with a new product and new processes and sometimes with new suppliers. What Toyota does is have its processes and its standards. It never changes a supplier in a running program, and it never starts a program with a supplier it doesn’t know.”

The fundamental element is people, though, how they work and where they work. Dr Ottenbruch is adamant that for ZF Group and ZF Sachs to succeed, these lessons must be learnt throughout the entire group by everyone. Were Frederick Winslow Taylor to return to the 21st century, he would be pleased to see that his creed was still being followed. 

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