Friday 28th Oct 2016 - Logistics Manager

Ford scheme to optimise supply base

Ford Motor Company is simplifying how it works with suppliers by reducing complexity and expanding part commonality.

As a result it expects lower development costs and greater economies of scale for the global supply base.

Birgit Behrendt, executive director of global programs and Americas purchasing, explained Ford’s ONE development plan in a management briefing seminar at the US Centre for Automotive Research earlier this month.

Behrendt said: “The ONE Ford transformation is improving competitiveness not just for Ford – but for our suppliers around the world.”

Ford intends that by 2012, 72 per cent of the vehicles sold under the brand will be built off 15 core platforms, to leverage the company’s global assets.

The manufacturer’s purchasing organisation is working with suppliers to optimise the vehicle development process.

For example, using the same parts across all geographic regions, allowed supplier TRW to keep the part count for steering systems unchanged for derivatives from Ford’s global B-car platform.

Without such complexity reduction, TRW’s total part count for the steering systems could have doubled. By holding part counts steady, TRW was able to more than triple the volume per part, allowing the company to spread the cost of the parts across more vehicles.

In another example, Ford provided suppliers for the new Focus, including seat supplier Johnson Controls, early access to vehicle development and manufacturing plans. This allowed the suppliers to design and engineer parts once that could be uniformly produced across the globe on a large scale. Costs of developing seats, for example, were reduced 40 per cent.

“These types of improvements would not be possible without a globally integrated Ford working closely with a supply base that is also coordinated around the world,” said Behrendt.

Both Johnson Controls and TRW are members of Ford’s Aligned Business Framework (ABF), a network of component and service suppliers chosen for long-term relationships and closer collaboration.

As the manufacturer shifts more of its vehicles and engine architectures to global platforms, ABF companies are playing a larger role in the company’s global supply base.

Last year, approximately half of its global production purchases were sourced to ABF suppliers, up from 34 per cent in 2006.

Since the framework was set up in September 2005, it ha staken on 67 production and 22 non-production ABF suppliers from around the world.

Suppliers are required to increase financial data transparency, commit to minority- and women-owned suppliers and bring leading-edge technology innovations to Ford.

Ford’s promises to ABF companies include long-term sourcing, improved parts commonality and more information sharing of product and manufacturing plans, as well as forecasts.