Ford turns to purchasing for lead in savings drive

4 June 2003
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05 June 2003 | Robin Parker

Ford Motor Company is stepping up its purchasing-led benchmarking scheme in a bid to save $350 million this year.

The group is extending its Team Value Management programme, which brings together purchasers, engineers and suppliers to deliver the company's products cost-effectively.

The scheme, seen as playing a key role in Ford's plan to deliver 65 new models in five years, will cover non-production spend such as IT and transport.

In the ISM conference's keynote opening address, Tony Brown, Ford Global Purchasing's vice-president, said many areas uncovered in the first stage of the programme were "eye-opening and frankly embarrassing".

He cited the discovery that the European production of many parts cost 15 per cent more than at Ford's peers, an issue that has been addressed.

Brown said the biggest hurdle had been to get purchasing used to working with other departments to boost competitiveness.

"It's been a huge shift of mindset, but now it's got to the stage where you wouldn't know who was a purchaser or an engineer and it wouldn't matter."

Delegate Mark Kimmet, director of purchasing for the exhaust division of Faurecia Exhaust Systems, a first-tier supplier to Ford, said while his firm was seeing huge benefits from the scheme, many suppliers needed persuading of the benefits of being open with Ford in ways that exposed their technical data to competitors.

SMjun2003

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