Ford Focuses on Supplier Revamp

Ford Motor Company has selected 15 new corporations to work as its suppliers. This action is being taken to limit the number of auto parts firms it is working with, a vital part of the company’s restructuring program.

The decision to get hold of these 15 new firms came into view two years later than the announcement of Ford’s intention to do a revamp of its supplier line up. Ford aspires to cut down the number of firms that provide 20 chief auto parts such as axles, seats, and brakes. This plan is geared to the objective of coming up with better arrangements that will be advantageous to the operations of the company.

This plan is still in progress. To this point, Ford Motor Company has picked out suppliers for only 13 of the 20 most important auto parts. The company aims to trim down its yearly supply expenditure that generally amounts to $90 billion. For this reason, it seeks to reduce its supplier support to only 700 to 800 firms, which is a significant cutback from the previous set of 2,500.

Among the 15 firms preferred by Ford are Cooper Standard, Siemens VDO, and The Bing Group. It is a long-term goal that in 2011, the suppliers chosen by Ford should witness no less than 15% development as Ford Company reallocates the production of some of its innovative models. In turn, Ford Company looks forward to numerous technological advancements that will be provided by these suppliers.

According to Ford’s Senior Vice-President of Global Purchasing Tony Brown, the entire process of trimming down and selecting suppliers are centered on diminishing “complexity and improving efficiency and profitability in the supply chain.”

Brown refused to give an exact date of completion for this endeavor. However, he verified that the reallocation of production to chosen suppliers will happen as the company manufactures new models.