Ford to Better Leverage Global Purchasing, Product Development

Ford Motor Co. is realigning its global product-development and purchasing teams in an effort to reduce costs, enhance quality, improve efficiency and eliminate redundant engineering and purchasing efforts.

Senior leaders in product development and purchasing are being assigned global responsibility for key vehicle segments and major purchasing functions.

Additionally, Ford is designating a global network of engineering centers that will develop specific core attributes of Ford brand vehicles worldwide.

The realignment is key to the “One-Ford” strategy implemented by Ford, President and CEO Alan Mulally says in a statement. “This is a crucial part of the plan that we started more than a year ago. We need product development and purchasing organizations that are aligned on a global scale.”

The changes, which began April 1, allow Ford to more effectively and efficiently support its regional business units in the Americas, Europe, Asia/Pacific and Africa.

“We have successfully shared technologies across many of our product lines in the past,” Derrick Kuzak, group vice president-global product development, says in a statement. “These changes will allow us to fully leverage Ford’s global product development and purchasing organizations to create more customer-focused vehicles faster.”

Ford consolidated its global product-development initiatives under Kuzak in December 2006.

Since then, work has been done with the purchasing organization under Tony Brown, group vice president-global purchasing, to better integrate the two organizations and eliminate duplication.

“Better alignment of our resources not only helps Ford, it will also improve the way we do business with our global supply base by simplifying our sourcing process,” Brown says in a statement.

Under the new structure, Ford is designating global product-development leads for different vehicle segments in order to leverage its global engineering expertise. Global joint product-development and purchasing teams will be assigned responsibility for core engineering and purchasing functions.

Teams in North America will be responsible for electrical and body (interior and exterior) engineering, as well as V-6 and V-8 engines, hybrid-electric vehicles and automatic transmissions.

Ford of Europe will oversee chassis engineering, 4-cyl. gasoline and diesel engines and manual transmissions.

Asia/Pacific and Africa engineering and purchasing resources will be integrated into Ford’s global core engineering and purchasing groups in Europe and the Americas. However, Asia/Pacific and Africa will retain responsibility for specific global product development, as well as all regional programs, Ford says.

The global core-engineering teams ensure all Ford-brand vehicles will share a common DNA, the auto maker says. They also will improve interaction with Ford’s global supply base to better leverage economies of scale through reduced complexity and the increased sharing of common parts.

The changes will allow Ford to accelerate the speed at which it can bring new vehicles to market, the auto maker says, noting in the last four years, it has shaved eight to 14 months off the time it takes to launch a new product.

With the new global plan in place, the average age of Ford’s product portfolio in North America will improve by 35% by 2009, officials say. By the end of 2008, Europe’s entire product portfolio will have been replaced or refreshed within the last three years, the auto maker says.

While most vehicles will be developed under the new global structures, others will continue to be developed on a regional basis, Ford says, noting chassis engineering for its F-Series trucks will remain in North America.

Teams in Asia/Pacific and Africa will continue to lead Ford’s global compact-pickup development program, but there will be closer coordination on core engineering and commodity purchasing.