COLOGNE, Germany - Ford Motor Co. has designated its first group of strategic partners in the realignment of its purchasing activities. Birgit Behrendt, 46, has been purchasing chief for Ford of Europe since February. Since joining Ford as a Cologne-based business trainee in 1978, she has had management positions in material planning, logistics, drivetrain and purchasing in both the United States and Europe. She talked with Staff Reporter Klaus-Dieter Floerecke of Automobilwoche about Ford's expectations for suppliers and its new relationship with them. Automobilwoche, like Automotive News, is published by Crain Communications Inc.
In the past year, Ford has begun naming strategic partners. Where are you in this process?
First, we dealt with the 20 most important product groups. We wanted to finish this by midyear and we are practically done with it. Now we are looking globally at the next group of components to continue the selection process.
In the end, how many key suppliers do you want?
We haven't settled on a definite number. On average, we want to work with two to three suppliers per product group. In the past, too many companies competed for a specified volume. That wasn't really efficient for either side. But suppliers who work with us must have enough financial resources, along with a competitive cost structure, quality level and an innovative environment, to be able to accompany us in a certain level of growth.
Do companies have to be systems suppliers at the global level to be selected?
No, the group is relatively diverse. There is a whole series of German family enterprises on the list. So it's not size alone that is crucial in the selection but also whether the supplier can offer a suitable environment for innovation.
What is the maturity level of Chinese suppliers?
That can't be answered across the board, since there are great differences. For the parts that we source from China, the quality data are absolutely comparable with those of western and eastern European manufacture.
To what extent do you share with suppliers any savings from improved processes?
I always tell the company that we will share the future business that we develop through the savings. We don't work with a fixed breakdown. Ford expects that its partners work with the company to seek an optimization of costs. What we then collectively share is ideally the advantage that the customer sees in the product and buys our vehicles for that reason.
Where do you see savings potential in purchasing?
I believe that the potential for optimization exists basically in all fields, and not just in purchasing. Adjusting the number of suppliers is one example. This way, Ford can link with its selected partners on a closer and more long-term basis, so the company can make its investments more efficiently. Naturally, cost reductions through innovation are the best, whether it's in manufacturing technology or product innovation. In the end, quantum leaps only come when something is approached in a totally new way. We want to signal to our suppliers that innovation is back on top for us.
Do you see a reaction from the suppliers?
Recently, the CEO of a large global supplier told me his employees had informed him that working with Ford was fun again. Naturally, that makes me happy. Especially recently, my staff and I have worked hard to present Ford as a reliable partner. And if we certainly have a lot of work to do, I believe that we are dealing with one another very openly in the meantime.
Where is this new openness being exhibited, for example?
A few weeks ago, Ford of Europe had a supplier meeting where we presented future Ford products to about 60 top suppliers. In the past, this would not have occurred at such an early stage.
By doing this, we wanted to show that we trust our most important partners to such an extent that we are laying almost everything open. We naturally hope that the trust is returned.
Recently, there have been a number of corruption cases. What measures has Ford taken to protect itself?
To start with, we have very strict guidelines and regulations. Our employees can even turn to hot lines anonymously to report these sorts of things. On this issue, there is no tolerance at our company.
Is that true for your own employees as well as for suppliers?
Yes, for both sides.
Are these corruption cases the tip of the iceberg or just exceptions?
I believe that they are exceptions, but they can happen at any time, wherever there are large sums and large contracts at stake. It would be fatal if our industry were disproportionately affected.
You may e-mail Klaus-Dieter Floerecke at [email protected]