Ford puts buyers at centre of business overhaul

13 January 2010

13 January 2010 | Jake Kanter

Procurement is playing a vital role in carmaker Ford’s plans for a new manufacturing strategy.

In an announcement this week at the North American International Auto Show in Detroit, the company said buyers have had to develop global supplier relationships to help manufacturers in three continents with plans to build cars using shared processes, tools and technologies.

A range of 10 car models, including the latest Ford Focus, will be produced using this single manufacturing process in Germany, Spain, Russia, China and the US.

Ford said building the global supply base to support this has been the primary objective of the purchasing team. Instead of working with vendors regionally, they have gathered at central meetings where buyers have provided suppliers with more information on product features, manufacturing volumes and locations than ever before.

Tony Brown, group vice-president, global purchasing, said: “By coordinating our efforts at an earlier stage, suppliers can drive potentially huge cost efficiencies. They also contribute significantly to ensuring consistent levels of excellent quality."

He added that suppliers would benefit from an increased volume of work as a result of the scheme.

Procurement has also been working with product development engineering specialists to create a “commodity business plan” for each of its 112 highest-value materials, including chassis control arms and brake discs.

Each plan provides details of prices, technological developments, sourcing strategies and supplier assessments. “We want the best quality and technology at lower costs, through higher volumes, increased commonality and reduced complexity so we can build appealing, affordable vehicles,” said Paul Stokes, executive director of Ford purchasing.

The company has pre-sourced – told preferred suppliers they have won business instead of going to tender - more than 75 per cent of the commodities for the new Focus. With a clear idea of who the best vendors are, the firm said the method saves time and money for both parties.

“Pre-sourcing helps provide suppliers with an ongoing flow of business, which gives them assurance to invest in new facilities around the world to support Ford globally,” it said. Ford added that this has cut costs by more than 60 per cent compared with the amount spent on producing vehicles in 2006.

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