The way some NASCAR teams operate probably violates all the rules at Harvard Business School. Joe Gibbs Racing, Huntersville, N.C., spends an incredible amount of money on R&D, tests every component that goes into race cars in a $2.5-million metrology lab, builds cars and engines to exacting quality standards, and has millions of dollars worth of inventory that can’t be sold on the open market.
Its products don’t last a year, and all the R&D is in danger of being obsolete by the next race. Yet it is one of the most successful operations in the rapidly growing Nextel Cup NASCAR racing business.
I can’t recommend that American industry emulate the business model of a NASCAR team, but what Joe Gibbs Racing does should be taught in our engineering schools and MBA programs. We can learn a lot from this down-home race shop.
Contrary to what you might think, it’s not a greasy old race shop. Joe Gibbs Racing is housed in an ultramodern, three-story, 135,000-sq.-ft. building with nearly 300 employees, all nestled in a business park. It’s a high-tech, multimillion-dollar manufacturing operation. Its Web site (www.joegibbsracing.com) is better than those of most industrial vendors.
NASCAR racing is big business and requires huge amounts of money. Each driver on the Joe Gibbs team, which includes Tony Stewart and Bobby Labonte, has 20 cars. This includes four cars for each type of race track: road courses, super-speedways, short tracks, medium-size tracks and speedways.
Each car has a 780-hp motor that costs more than $50,000 to make -- and it is designed to last one race. The team goes through about 280 engines in one season, and it makes nearly every part for the engines in its modern machine shop.
As part of an ongoing R&D program, test engines are run extensively on sophisticated dynamometers. The dynos can simulate the stresses and strains of practice, qualifying and 500-mile races, complete with pit stops and caution laps.
Joe Gibbs Racing has suffered only one engine failure in the last 12 months, and none in a race (knock on wood) this season. That’s because every part in the engines and on the cars is examined in the metrology lab. There, exotic equipment measures clearances, surface hardness, finish, weight and every other spec you can imagine. Every part is then labeled with a laser. In the event of a part failure, it can be traced back to its origins.
Gibbs also buys parts from specialty suppliers. All those parts are tested, too. In many cases, Gibbs can test the parts to higher tolerances than the suppliers can. When Gibbs started its parts testing program, it rejected 95% of the purchased parts as being out of spec. Now, after having worked closely with suppliers to improve their manufacturing techniques, Gibbs rejects only 5% of incoming parts.
If an engine fails during a race (gasp!), panic ensues. The team removes the engine on Monday morning, disassembles it in the lab and analyzes what happened. The last failure revealed an engine oiling problem, so the team had to devise a fix, make the new parts and retrofit them to 40 engines immediately. Four of the engines had to be fixed the next day because of a race the next weekend. These guys do not fool around.
Quality control is so important that Joe Gibbs Racing purchased a $500,000 Primar MX4 coordinate-measuring machine, one of only three being used by race shops in the world. The other two are at Ferrari and Williams-BMW, both Formula 1 teams.
Other test equipment in the metrology lab is from Mahr Federal, MSI Viking Gage and Starrett, all of which are sponsors on the cars.
And don’t think F1 has a lock on racing technology. The guys in Huntersville don’t take a back seat to anybody when it comes to R&D, quality control, testing, instrumentation, telemetry and so on. Although those “rolling billboards” may look crude and 1960-ish on the outside, on the inside is the most sophisticated racing equipment on the planet.
For example, Wix Filters, Gastonia, N.C., worked with Joe Gibbs Racing to develop a carbon monoxide filter that scrubs air flowing to the driver’s helmet. Not even Formula 1 has such a system.
Testing consumes a huge amount of time and money. Each of the cars is fully instrumented. They measure everything on the car: temperatures, pressures, stress, strain, acceleration and flow everywhere in the engines, brakes, transmission, drivetrain and suspension. They also measure the driver’s reactions to any changes, such as in the suspension or shock valving. The data acquisition and telemetry systems measure hundreds of sensors at data rates that rival anything being done in the manufacturing and process control industries. Things happen fast in a race car, and the DAQ system is up to it.
The data acquisition and telemetry cannot be used by the team during the race, but it plays an extensive role during testing. NASCAR can access the on-board test equipment at any time for “investigative purposes,” which helps keep teams legal.
Maintenance and repair operations are extensive. If a car is damaged during a race, the sheet metal is replaced. Gibbs has sheet-metal specialists who earn “in the six figures” and fabricate all the sheet metal by hand, using tools such as English Wheels. Bodies have to fit NASCAR templates within a few thousandths of an inch.
When cars return from a race, the team measures and records everything. If a car is relatively successful, its exact parameters will be used to set the car up for the race next year. Then, a new engine goes in and the old engine is removed, disassembled, analyzed and rebuilt.
Such sophistication has its price. The cost of a major car sponsorship is in the $10-million to $20-million range. Although Gibbs declined to provide numbers, adding up all the revenue sources makes Joe Gibbs Racing a $100-million operation (in my estimation). The number of teams capable of operating at that level and winning a NASCAR race is dwindling. Noncompetitive teams lose sponsors and drop out of the sport. Therefore, it is getting harder for NASCAR to fill the field with competitive teams.
NASCAR is the top dog in the sports entertainment world these days. The marketing geniuses at NASCAR came up with a product that captivates the public, and the five teams that currently rule the roost all use the same techniques to make their winning products. We could all learn a lesson in manufacturing by watching how companies like Joe Gibbs Racing run their businesses. So could Harvard Business School.
Rich Merritt is senior technical editor for Plant Services, Control and Control Design magazines. E-mail him at [email protected].
