1. As Tony Brown, how would you proceed with implementation of ABF?

2. How would you build trust with your suppliers and address their concerns regarding the new relationship between Ford and its suppliers?

   

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Case 2-3 Ford Motor Company: Aligned Business Framework? Tony Brown, senior vice president of global sourcing at Ford Motor Company (Ford), was putting the finish- ing touches on his plan for the company's new supply chain strategy-"Aligned Business Framework" (ABF). ABF was a bold step that would significantly change the relationships between Ford and its suppliers. Tony described his motivation: "We want to operate a supply chain management system that delivers on the dimen- sions of quality, technology, delivery and cost, while Cxocuting programs in a disciplined fashion with faster time-to-market." It was August 10, 2005, and Tony was expected to re- view the final details of his proposal with company chuir- man and CEO William Clay (Bill) Ford Jr. before making a formal public announcement the following month. ABF would substantially reduce the number of suppliers and give those that remained long-term contracts and carly involve- ment in new product development programs. Tony expected I to cut its salaried workforce, reduce capacity by closing that the strategy would provide benefits to Ford through overall lower costs, while suppliers would benefit from long-term financial stability and profitability. The question remained, however, how he would convince Ford's supplier community to commit to the principles of ABF. FORD MOTOR COMPANY Founded in 1903, Ford was the no. 2 U.S. automaker with global sales of approximately $177 billion. In 2005, its global brands included Ford. Lincoln, Mercury, Jaguar, Land Rover, Aston Martin, and Volvo." In recent years all of the "Detroit 3" (General Motors, Ford, and Chrysler) automakers were struggling under intense global com petition, rising fuel prices, and steep product discounts and rebutes. In the most recent quarter, Ford reported a S1.1 billion operating loss and the compuny's debt had recently been downgraded to junk-bond status. To turn around company performance, Ford had announced plans plants and selling the Hertz rental car division, and ramp up production of hybrid vehicles. Case 2-3 Ford Motor Company: Aligned Business Framework? Tony Brown, senior vice president of global sourcing at Ford Motor Company (Ford), was putting the finish- ing touches on his plan for the company's new supply chain strategy-"Aligned Business Framework" (ABF). ABF was a bold step that would significantly change the relationships between Ford and its suppliers. Tony described his motivation: "We want to operate a supply chain management system that delivers on the dimen- sions of quality, technology, delivery and cost, while Cxocuting programs in a disciplined fashion with faster time-to-market." It was August 10, 2005, and Tony was expected to re- view the final details of his proposal with company chuir- man and CEO William Clay (Bill) Ford Jr. before making a formal public announcement the following month. ABF would substantially reduce the number of suppliers and give those that remained long-term contracts and carly involve- ment in new product development programs. Tony expected I to cut its salaried workforce, reduce capacity by closing that the strategy would provide benefits to Ford through overall lower costs, while suppliers would benefit from long-term financial stability and profitability. The question remained, however, how he would convince Ford's supplier community to commit to the principles of ABF. FORD MOTOR COMPANY Founded in 1903, Ford was the no. 2 U.S. automaker with global sales of approximately $177 billion. In 2005, its global brands included Ford. Lincoln, Mercury, Jaguar, Land Rover, Aston Martin, and Volvo." In recent years all of the "Detroit 3" (General Motors, Ford, and Chrysler) automakers were struggling under intense global com petition, rising fuel prices, and steep product discounts and rebutes. In the most recent quarter, Ford reported a S1.1 billion operating loss and the compuny's debt had recently been downgraded to junk-bond status. To turn around company performance, Ford had announced plans plants and selling the Hertz rental car division, and ramp up production of hybrid vehicles.