Trucks When you look around the automotive industry, there are many companies, some of them very large corporations, which are in financial difficulty. Is somebody getting it seriously wrong, or is it all down to global economic conditions? Ford Motor Companys global purchasing chief, Tony Brown, believes that it is less a case of managerial incompetence than a reflection of the struggle to maintain volumes. Excess production capacity is a major bugbear for the industry in several significant markets. Brown refers to Europe as the archetype for this condition but reminds me that we could have had the same conversation about North America in 2008 and 2009. Whenever we are in a situation where there is more capacity than demand, the business models simply dont work, he says flatly. When Alan Mulally joined Ford as President and CEO in 2006, the importance of matching production to demand was high on his agenda. Ford then began the process of reducing its excess capacity in a drive to become more operationally cost-effective. Brown believes that, in some respects, component suppliers, depending on their region, are caught up in similar circumstances. In Europe today, there is perhaps more financial distress among the tier two and tier three suppliers because of the capacity situation volume down and capacity exceeding demand. In North America it is less of an issue than it was two or three years ago, he says. This business is a very big capital consumer, so pretty large investments have to be made and, if the volume doesnt materialise, it creates a difficult situation. Brown accepts, of course, that there are instances of mismanagement. Some business people make bad business judgments. Because the cycles in our industry are long and capital is a heavy requirement, it doesnt take much movement around the breakeven point to make what looked like a pretty good business look like a pretty bad business really quickly. Fords recent announcing of impending European plant closures sent a frisson through the supply base but Brown is quick to offer a measure of reassurance. We embarked on a strategy some years ago to work with a smaller group of strategically-important suppliers, he reminds me. Part of doing that, and we call it the Aligned Business Framework (ABF), is to allow us to work closely with suppliers to help them achieve a larger portion of our business portfolio which will help to stabilise their businesses and put them in a better position to weather the more difficult times. Put simply, the ABF is designed to create a sustainable business model to increase mutual profitability, improve quality and drive innovation. Fords global spend is around $90 billion annually of which some $65 billion to $70 billion is on direct purchasing of production materials and $20 billion on what the company terms Facilities, Material and Services Purchasing. In each of the major regions of the world Brown has a lead purchasing executive who has a dual reporting relationship; a system which he thinks works well in Fords business model. They report to me from a skill team perspective, but at an operating level they report to the in-country executive who has the profit and loss responsibility, he explains. In North America, Joe Hinrichs heads the P&L for the Americas and Birgit Behrendt, the purchasing executive, reports to him and to me. In Europe, it is Stephen Odell and Alan Draper and in Asia Pacific and Africa it is David Schoch and Keith Cooper. The way we run the business from a purchasing standpoint is via matched pairs. Each of my purchasing executives including myself is aligned with his or her product development colleague. For example, the ultimate matched pair in the company is Raj Nair, Group Vice President Product Development, and me in terms of managing the supply relationship. Each of the senior leaders in the organisation is aligned with a corresponding engineering executive down to the commodity level where an individual manager or director will be matched up with their engineering colleague. This system not only gives the individuals concerned a greater insight into corporate requirements, it benefits suppliers who are actively engaged with two primary functions, purchasing and engineering, particularly during the development phase of a programme. Over the past several years, Ford has made a significant improvement in the number of suppliers it sources with globally. The automaker has reduced the global number of production suppliers eligible for new product sourcing from 3,300 in 2004 to about 1,350 at year-end 2011. They have identified plans that will take their supply base to about 850 suppliers in the near- to mid-term, with a further reduction to about 750 targeted. Ford has a robust supply risk management process which has been benchmarked with companies such as Boeing, IBM and Cisco. The process comprises three important elements. Firstly, supplier financial management where supplier financial risk is assessed using several financial ratios and other external and internal data to anticipate financial distress. Quarterly financial rating reviews are held with the global purchasing teams to identify and address poor ratings. Secondly, Ford reviews suppliers by how heavily dependent they are on other OEMs, as well as by their overall quality and cost. Additionally, the purchasing team monitors for potential geopolitical issues. Finally, Ford aims to increase supply chain transparency by reviewing risks not only with its tier one suppliers, but also extending it to its tier two supply base. Because we source from where we build, its very important for us to have international purchasing offices 17 across the globe in order to have a more hands-on approach to the challenges that may occur in specific regions, explains Brown. It is a Ford priority to source from where it builds to help shorten the supply chain within the regions. Ford takes the performance of its suppliers seriously, and we are working closely with our supply base to ensure they are prepared to meet our global volume targets without sacrificing quality, says Brown. We expect quality to be inherent in all of our suppliers products and require transparent measurement and reporting on all parts and processes no matter where they are sourced from. There is a cynical viewpoint from some suppliers and logistics providers which holds that, other things being equal, the lowest bid will secure the contract. Tony Brown is at pains to stress that, while price is an element in the decision-making process, it is not the only consideration. It is not just a price discussion, it is a cost discussion, and the way we think about our business here at Ford and in our One Ford plan is to talk about products that customers want, he emphasises. In order for our products to be differentiated in the marketplace we need suppliers to provide us with more than just a low price. We place a premium on technology because part of our strategy is to democratise technology. If we have a supplier working with us who cant deliver a component sub-system or system to us on time then we cant satisfy customer demand. If we have a supplier delivering to us a part sub-system or system which doesnt meet the performance expectations of the customer then we have no advantage. Certainly, one of the elements of the purchasing decision is price, there is no question about that, but it is not the only decision-making criterion that we use at Ford Motor Company. Part of the reason for us to align as matched pairs is so that we can evaluate the suppliers capabilities, not just in terms of their cost but also their technology and their process capability. All those things come into play when we make a sourcing decision. About the Author: 相关的主题文章: