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US: Ford purchasing and development goes global

By just-auto.com editorial team | 3 April 2008

Ford is reorganising global product development and global purchasing units into an integrated team to speed development of new vehicles, improve quality, reduce costs and eliminate duplicate engineering and purchasing efforts.

"The changes reflect evolution of the 'One Ford' philosophy of taking advantage of the company's global scale and expertise around the world," the automaker said in a statement.

Changes effective on 1 April mean senior executives in the product development and purchasing organisations now assign global responsibility for key vehicle segments and major purchasing functions.

Ford has also established a global network of engineering centres responsible for developing the core attributes of Ford brand vehicles worldwide.

"These changes will allow Ford to more effectively and efficiently support the company's regional business units in the Americas, Europe and Asia Pacific and Africa," the statement added.

"We have successfully shared technologies across many of our product lines in the past. These changes will allow us to fully leverage [our] global product development and purchasing organisations to create more customer- focused vehicles faster," said global product development Derrick Kuzak, under whom Ford consolidated global product development activities in December 2006.

Since then, work has been done with group vice president Tony Brown's global purchasing organisation to more closely integrate the two groups and eliminate duplication in how vehicles are created, engineered and sourced.

"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 said. "This is consistent with the principles of our aligned business framework, which is strengthening collaboration with our key suppliers."

Under the new structure, Ford is designating global product development leads for different vehicle segments, such as small, mid-size and large cars, utilising the company's engineering expertise around the world.

At the same time, the automaker is assembling joint product development and purchasing teams world-wide with responsibility for core engineering and purchasing functions.

North American teams will be responsible for electrical and body (interior and exterior) engineering  as well as select powertrains such as V6 and V8 engines, hybrids and automatic transmissions.

European teams will handle chassis engineering, and some powertrains, including I4 petrol 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 though APA will remain responsible for specific global product development programmes and all regional programmes.

The global core engineering teams will ensure that all Ford brand vehicles around the world share "common DNA", including consistent driving dynamics, interior quietness and other vehicle attributes, Ford said.

The core engineering and purchasing teams also will improve relationships with the global supply base to achieve economies of scale through common sourcing, reduce complexity and increase sharing of common parts.

The changes are designed to further enhance the speed at which Ford brings new vehicles to market.  In the past four years, it has shaved eight to 14 months off this time, depending on programme complexity.

The average age of the product line in North America will shorten 35% by 2009. By the end of 2008 in Europe, the complete product portfolio will have been replaced or refreshed within the last three years.

Despite the move to a global product development system, certain vehicle systems will continue to be developed on a regional basis - chassis engineering for F-series trucks, for example, will remain in North America.

Asia Pacific and Africa teams will also continue to be responsible for the global compact pickup truck development programme. However, there will be closer coordination on a core engineering and commodity purchasing level to improve efficiency and eliminate duplication of work.

The organisation changes begun this month will continue as new vehicle programmes are started and, Ford said, will not result in layoffs or large-scale relocations.

"This is a crucial part of the plan that we started more than a year ago," said president and CEO Alan Mulally.

"We need product development and purchasing organisations that are aligned on a global scale.  This is an important step in fostering a 'One Ford' approach that leverages our global resources and expertise."