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One Ford Strategy Streamlines Purchasing Operations

Executive Summary

Ford Motor Co.'s One Ford strategy, implemented by CEO Alan Mulally to better align the auto maker's global resources, has had profound impact on the company's purchasing operations and its suppliers, two top-level managers say. Key to the strategy is the formation of the system, which teams product-development personnel with those from purchasing. In the case of vehicle interiors, Mike Taylor, director-global

Ford Motor Co.'s “One Ford” strategy, implemented by CEO Alan Mulally to better align the auto maker's global resources, has had profound impact on the company's purchasing operations and its suppliers, two top-level managers say.

Key to the strategy is the formation of the “matched-pairs” system, which teams product-development personnel with those from purchasing.

In the case of vehicle interiors, Mike Taylor, director-global interior purchasing, is matched with Marcy Fisher, director-body interior engineering.

The two work together to align Ford's interior development and purchasing strategies worldwide.

The system, formed in 2006, continues to evolve even while it has helped Ford address lingering problems in its purchasing program, Taylor says in a panel discussion at the Auto Interiors Show.

“We really needed to simplify our parts and subsystems through greater sharing and reuse of common designs globally,” he says. “And we had to improve engineering efficiencies through the elimination of duplicate work.

“Another (objective) was to share a common cost objective and improve our supply-base interface, and that was through identifying a single product-development and purchasing contact for a particular commodity.”

The matched-pair system works well with Ford's “Aligned Business Framework,” launched in 2005 to boost profitability for suppliers with longer-term contracts and a closer working relationship with select preferred suppliers. The program was intended to cut Ford's key supplier base 50%.

So far, most suppliers seem pleased with the ABF and matched-pair programs.

Randy Koenigsknecht, vice president-sales and marketing for Intier Automotive Seating, says Ford and its suppliers now are able to react more quickly to changing market conditions.

Decisions are “primarily driven by a common focus on consumer metrics,” he says. “If we bring in data that supports the consumer benefits of a given action, decisions can happen quickly and efficiently.”

During the launch of the Ford Edge cross/utility vehicle, it was discovered seat covers were too tight, causing production problems for Intier, Koenigsknecht says. In the past, the supplier would have had to cut through layers of bureaucracy to remedy the problem.

“Bringing that issue to Ford, and their understanding of our needs and the impact it could have on the program, allowed us to quickly process a change to address that issue,” he says.

Ray Shemanski, vice president and general manager-Ford business unit for Johnson Controls Inc., says Ford's new processes have led to greater efficiencies, cost reductions and quality improvements, largely through a closer, more transparent relationship.

The “matched-pair (system) allows a clear focal point for us at the right level in the organization to engage, and it's very clear how to engage Ford now to get change and have our voice be heard,” he says. “It's a very effective process.”

Ford to Better Leverage Global Purchasing, Product Development
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