DETROIT - Just as the economy changes over years, the concentration of the auto industry adapts along the way. Thinking rationally, and effective, Ford Motor Company is working to reconstruct the company’s product portfolio to meet economical needs. Nevertheless, the DNA of Ford Motor Co. stays the same.
Recently, Hau Thai-Tang, group vice president, Global Purchasing, updated the Ford Retired Engineering Executives (FREE) club on the changing business, and Ford’s plan to meet evolving objectives.
“One of the elements of the One Ford plan is for us to restructure and resize our business to be aligned with the national demand and part of that is right sizing the capacity and making sure we’re operating in the right places around the world and also in the right segments,” said Thai-Tang.
A key step in staying ahead of the game is that the company simultaneously continues to define the brand clearly by keeping a heavy focus on Ford and what the business stands for, but also flourishing as times change.
“The one message we always try to get across is that the automotive business is still a growth business, and it’s going to grow,” he said.
According to Thai–Tang, if you look at where we’ve come in terms of rationalizing our product portfolio the number of platforms we’re focusing on is decreasing over time. In 2007 we had 27 platforms all around the world; now going in to 2014 we’re at 15 platforms.
However 90 percent of our volume comes off of 9 core platforms, so the focus is shifting.
“Our plan is to phase out some of those legacy platforms and get down to 9 core platforms by the end of our business plan period,” said Thai-Tang.
So far, the company has had some challenges harnessing global scale at the supplier site and translating it into material costs savings – a key learning point for Ford Purchasing and one of the major focus areas moving ahead.
“Global scale is a great indicator, but we’re starting to shift our focus from global scale to regional scale,” he said. “As we tweak our cycle plan we’re starting to think about how do we not take that critical mass of volume and fracture it.”
Next step for the company is to not only build on an attractive global product lineup that meets consumer demands and stands strong against the competition, but improve on effective scale in doing so.
“In regions where we don’t have sufficient scale we need to start thinking what else do we build there and how do we drive commonality across those products that we build in that location,” said Thai-Tang. “The bottom line message is that our One Ford plan is working our company results are very strong, our factor is to meet the objectives.”
Each month a new guest speaker attends this event. Next meeting Mark Fields, Chief Operating Officer, will be speaking to the group. Click here for more information on FREE and their initiatives.
More than 450 Ford alumni are members of FREE – making it one of the largest and most prestigious retiree organizations in the company. With more than 40 years as an active retiree group, FREE membership is limited to those with supervisory experience at an LL5 (SG11) or above.