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.