‘One Ford’ Strategy Streamlines Purchasing Operations
By Byron Pope WardsAuto.com, Jun 6, 2008 10:27 AM

DETROIT – 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 at the Ward’s Auto Interiors Show here.

“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.”

Kuga shares platform with several models.

The matched-pair system works well with Ford’s “Aligned Business Framework” program, which was rolled out in September 2005 to “develop a sustainable business model to drive mutual profitability and technology advancement.”

The program was intended to cut Ford’s key supplier base 50% while strengthening relationships with select preferred suppliers and improving quality.

To date, some 60 suppliers have been pulled in under the ABF umbrella, and Ford plans to continue and expand the program, Taylor says.

Working with its ABF suppliers globally has allowed Ford to trim costs through increased commonality and higher volumes.

The ABF and matched-pairs programs already have demonstrated impressive results, including trimming the number of platforms and components Ford utilizes worldwide, while at the same time allowing for more models to be built off common underpinnings, Taylor says.

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“Off a single platform in Europe we build the Focus, Focus coupe/cabriolet, C-Max, Kuga and Volvo C70 and C30,” he says. “We also used many of the same components for our EUCD platform, which is used for the Ford Mondeo, S-Max, Galaxy, Volvo S80 and V70.”

To further reduce complexity and eliminate redundant engineering, Ford assigned each region specific responsibilities.

For example, North America now is responsible for V-6, V-8 and large diesel engines, automatic transmission and hybrid-electric vehicles, while Europe is charged with the development of inline gasoline engines, diesels and manual transmissions.

“The matched-pair process really supports our global product-development processes and our actions,” Fisher says. “Over the last year and a half, we’ve made great strides toward globalizing our organization with a global cycle plan.

“We’re reducing platforms and increasing the number of vehicles (built from them). By 2012, we expect 70% of Ford vehicles will be built off eight platforms.”

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 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.”

bpope@wardsauto.com