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.




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