Changes in continuous flow can prevent dramatic plant closures like Ford’s

Ford recently announced its decision to close its plant in the ABC region of São Paulo, which will certainly have enormous impacts, affecting employees, the municipality, suppliers and the company itself.

The news reports cite as reasons the reduction in volumes, the plant's technological obsolescence, high costs, changes in product lines, etc. These issues certainly built up over time and did not arise overnight.

Without going into the specific reasons that led Ford to make this decision, the case serves for a broader reflection on the changes taking place in the automotive sector and in almost all others. And on how companies react to or prepare for changing scenarios.

The mobility sector feels, more and more each day, the impact of a series of transformations resulting from technological advances, changes in cities and also shifts in people's consumption habits and desires.

For example, the technological developments that increasingly force the replacement of the production of traditional vehicles with hybrids, electric vehicles and, even more recently, autonomous vehicles.

There are also other changes under way, not only those related to technology, but also in the organization of urban mobility in large cities. In other words, people are increasingly looking, even out of necessity, for types of transportation other than the traditional “private car”, such as shared transportation, public transit, bike lanes, etc. Not to mention changes in employment, with more and more people able to work from home, without commuting to work as before.

Added to this is the fact that Brazilian companies face, day to day, the “Brazil cost”, resulting from the high tax burden, regulations that are sometimes excessive and bureaucratic, the precarious logistics infrastructure, etc., which hinder their competitiveness for integration into internationalized production chains.

It is necessary, then, to prepare, because all productive sectors will be increasingly subject to these types of changes, since they all also feel the impacts of these same social shifts.

And how do you prepare for this?

One way is to try to respond in long cycles. The other is to make improvements more quickly and permanently, always adapting to new situations. The lean philosophy, or lean thinking, always prefers to act in small batches, which in this case would be the second option.

Letting issues pile up, intending to make big changes later, as a rule requires major impacts and investments or even becomes unfeasible, leading to the closure of units.

The lean way is to make improvements in continuous flow, advancing in shorter cycles. Companies that reduce their waste every day and reinforce their real value-adding are at every moment better prepared to face changes in the markets.

Thus, it is necessary to have management that ensures the rapid development of new products and services that meet consumers' rapid and radical changes. That develops flexible production able to change the ways products are made, in line with market transformations. And that develops people who adapt to change and do their work better every day.

I recently visited Toyota plants in Japan and was able to see in loco how much lean thinking, which was born there, has made the Japanese automaker one of the companies best prepared to withstand the social changes of the new times.

I noticed, for example, that for a long time they have been investing continuous and structured efforts in producing vehicles across different ranges: traditional, hybrid and fully electric. In this way, they offer customers a range that meets different needs and tastes. And they do this on fully flexible production lines, with real conditions to adapt quickly to any type of change, whether technological or in consumption. As should happen in every kind of company.

The news of this plant's closure is unfortunately neither the first nor will it be the last. Take the opportunity to reflect: is your company slow to change, accumulating the need for huge adjustments, which are sometimes no longer possible, or does it make improvements in continuous flow? This may be a decisive factor in ensuring that it is not the next one to have a dramatic ending.