Ford Cuts Supplier Base, Aims for Improved Rollout


Detroit Free Press

Ford Motor Co. is at a turning-point in how it deals with sup­pli­ers – with the goal of rolling out new tech­nolo­gies faster while keep­ing an eye on qual­ity, profitability.

Ford exec addressed these issues at the Tra­verse City Man­age­ment Brief­ing Sem­i­nar.

Ford said today it has intro­duced the next phase of a pro­gram to to con­tinue to work more closely with 104 select com­pa­nies of which 76 make pro­duc­tion parts.

The goal is to roll out new tech­nolo­gies faster while improv­ing both qual­ity and over­all prof­itabil­ity, Bir­git Behrendt, Ford’s vice pres­i­dent of pur­chas­ing oper­a­tions, said at the Man­age­ment Brief­ing Sem­i­nars near Tra­verse City.

Aligned Busi­ness Frame­work 2.0 is part of a larger effort to have fewer but larger global sup­pli­ers who can reduce costs through economies of scale and deliver parts glob­ally. Ford wants to do all sourc­ing through 750 sup­pli­ers. There are 1,150 now. Behrendt would not say how long it will take to whit­tle them down.

The updated frame­work will improve com­mu­ni­ca­tion between Ford exec­u­tives and sup­pli­ers, and speed new tech­nol­ogy ideas to market.

“The evo­lu­tion of the Aligned Busi­ness Frame­work helps us to fur­ther inte­grate with our prod­uct devel­op­ment team, and encour­ages our sup­pli­ers to bring their best and most inno­v­a­tive tech­nolo­gies to Ford,” said Behrendt.

“As we con­tinue to con­sol­i­date our sup­ply base, we plan to increase the amount of busi­ness we’re con­duct­ing with ABF sup­pli­ers to around 70%,” she said.

Ford is sourc­ing 65% of its global pro­duc­tion busi­ness with ABF sup­pli­ers now, up from 34% when it was intro­duced in 2005.

Key com­po­nents and ser­vice sup­pli­ers are iden­ti­fied as part of the effort to con­sol­i­date the sup­ply base as Ford has increased its vehi­cles capac­ity by 400,000 units in 2012 and another 200,000 units this year.

Behrendt said strong regional sup­pli­ers have as much chance as big global com­pa­nies to become design bench­marks and be inte­gral to Ford’s prod­uct development.