Volvo expects to gain 'significant purchasing efficiencies' through its connections with Ford, said Steve Armstrong, vice president of purchasing at the Swedish carmaker.
'We will benefit from increased volumes and from the move to more proficient suppliers than before,' said Armstrong.
Ford acquired Volvo Car in January 1999 and later incorporated the company into its Premier Automotive Group of luxury brands alongside Jaguar, Land Rover, Aston Martin and Lincoln.
Armstrong said Volvo would always maintain its own supplier base but 'a proportion' would be common with Ford's.
'We work closely with Ford, but they don't dictate,' he said.
Global councils within the Ford group review the supplier base for each commodity and choose what is best for each brand, Armstrong explained.
He expects the number of suppliers specific to Volvo to fall from its current level of 350 to below 300 as more companies common to Ford are brought in over time. This is already starting to happen with Volvo's future vehicle programs, Armstrong confirmed.
Volvo participated in defining the new version of Ford's Q1 quality program.
'We now have one method of assessing suppliers' performance, and measuring it, across the world - and it is consistent,' said Armstrong.
Volvo suppliers will have to go through a period of faultless performance within the Q1 measurement criteria before being certified. Rollout is gradual, beginning with those suppliers Armstrong judges to be most critical to Volvo quality.
In addition, Volvo and its suppliers are adopting the so-called 6 Sigma management technique, a tool that Ford has already implemented widely. Aimed at reducing cost and removing waste and inconsistent quality, 6 Sigma will be implemented throughout the Volvo purchasing department over the next two years. About 500 people will be given training.
Even for existing Ford suppliers who are certified to the old Q1 system, there are big changes.
'Instead of self-certification, suppliers now have to prove their performance. We don't take things for granted,' said Armstrong.
But Volvo will not be adopting the business model that Ford is pioneering in Cologne with its pay-on-production contracts with line builders.
'I am sure it will be successful and that everyone involved will get a return on it,' said Armstrong. 'But whether it becomes an industry norm depends on factors such as the willingness of suppliers to participate in such contracts and the availability of finance.'
Also, Armstrong is not convinced that a pay-on-production business model suitable for building 1 million vehicles a year is right for Volvo's annual volume of about 250,000 units.
He added: 'Our business model has to be geared to Volvo's needs.'