Ford revamping engineering centers to speed product development

24hoursnews Though its late but the thinking of upgrading is really a good news for FORD lover.
- Organization changes will align Ford's global product development and
global purchasing units into an integrated team

- Actions will accelerate development of new vehicles, improve quality,
reduce costs and eliminate duplicate engineering and purchasing efforts.

- Changes reflect evolution of "One Ford" philosophy of taking advantage
of the company's global scale and expertise around the world.


Ford Motor Company is taking further steps to align its product development and purchasing organizations into an integrated global team to accelerate the creation of vehicles customers really want, reduce costs, enhance quality, and improve efficiency by eliminating duplicate engineering and purchasing efforts.

Ford Motor Co. (NYSE: F) has recognized in the last 24 months that it needs to get the kind of vehicles that customers actually want to purchase to market much faster. Foreign competitors have been able to do this for a while now, which is a reason Toyota Motor Co. (NYSE: TM) has moved up the chain to become the global automotive heavyweight to beat these days -- even ahead of General Motors Co. (NYSE: GM).

In that vein, Ford has sold off some of its niche brands, reorganized focus on its core manufacturing and sales finesse and is now taking another step under "fixit" CEO Alan Mulally. The global automaker is reorganizing its design and engineering centers worldwide to speed product development on a global scale. Not only will this help Ford compete more effectively, but let's also hope the company knows -- in advance -- what the majority of customers want to buy in terms of new vehicles. Unless I'm completely wrong, the large SUV won't be at the top of those plans for a long while.

It's been said that the business world of sellers and buyers takes place in a "global village" -- and automakers like Ford are finally realizing that a broader global view makes perfect sense in trying to maintain consistent sales when one market may be down while others are up. It's no secret that U.S. auto sales have been down for a long while -- and the capability of shifting more product mix to non-U.S. markets to deflect slowing sales would seem to have been on Ford's roadmap much sooner than it actually was. Better late than never, though.
From ford press release
Under changes effective April 1, Ford is reorganizing senior leaders in the product development and purchasing organizations to assign global responsibility for key vehicle segments and major purchasing functions. In addition, Ford is designating a global network of engineering centers that will be 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.
"We have successfully shared technologies across many of our product lines in the past. These changes will allow us to fully leverage Ford's global product development and purchasing organizations to create more customer- focused vehicles faster," said Derrick Kuzak, Ford's group vice president, Global Product Development.
Ford consolidated its global product development activities under Kuzak in December 2006. Since then, work has been underway with the purchasing organization under Tony Brown, group vice president, Global Purchasing, to more closely integrate the two organizations 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, leveraging the company's engineering expertise around the world.
At the same time, Ford is assembling joint product development and purchasing teams around the world with responsibility for the company's core engineering and purchasing functions. Teams in North America will be responsible for electrical and body (interior and exterior) engineering for vehicles worldwide, as well as select powertrains such as V-6 and V-8 engines, hybrids and automatic transmissions. Teams in Europe will be responsible for chassis engineering, and certain powertrains, including 4-cylinder gasoline 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. APA will remain responsible for specific global product development programs and all regional programs. 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. The core engineering and purchasing teams also will improve interaction with Ford's global supply base to leverage 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 is bringing new vehicles to market. In the past four years, Ford has shaved eight to 14 months off the time its takes to bring a new vehicle to market depending on program complexity. The average age of the product portfolio in North America will improve by 35 percent by 2009. By the end of 2008 in Europe, the complete product portfolio will have been replaced or refreshed within the last three years.
While Ford is moving rapidly to a global product development system, certain vehicle systems will continue to be developed on a regional basis. For example, chassis engineering for F-Series trucks will remain in North America. Teams in Asia Pacific and Africa will also continue to be responsible for Ford's global compact pickup truck development program. However, going forward there will be closer coordination on a core engineering and commodity purchasing level to improve efficiency and eliminate duplication of work.
The organization changes supporting the new structure will start in April and continue as new vehicle programs are started. They 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 Alan Mulally, Ford president and CEO. "We need product development and purchasing organizations 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."
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles in 200 markets across six continents. With about 245,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo and Mazda. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford's products, please visit http://www.ford.com/ .