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Old 06-06-2002, 07:04   #1 (permalink)
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Ford challenges suppliers to improve, but they blame automaker's late changes

By AMY WILSON AND DAVID SEDGWICK
Automotive News

On May 17, Ford Motor Co. summoned powertrain component suppliers to discuss the automaker’s quality woes.

After a three-hour session devoted largely to the vendors’ shortcomings, one participant asked for a show of hands: How many suppliers in the room also sold parts to Toyota and General Motors? Nearly everyone raised a hand.

“It sent a very loud message,” said one supplier who attended the meeting.

Do Toyota’s vendors suffer a sudden quality collapse when they ship parts to Ford? If Ford’s suppliers are delivering faulty components, it is partly because of Ford’s own purchasing practices.

This year, Ford Motor significantly toughened its requirements for suppliers to retain their Q1 quality rating. The automaker has put 393 supplier factories on its watch list, and 79 of those must improve or risk the loss of future contracts.

Some suppliers say they can live with Ford’s new rules. But a number of suppliers say Ford’s last-minute design changes have caused much of the automaker’s quality problems. Suppliers don’t have enough time to test these parts or discover how the changes affect other components.

“Ford leaves everything until the last minute — then they change everything,” said the supplier who attended the meeting. “Does Toyota change things? Yes. But they are fine-tuning their designs. They make tiny changes.”

When it comes to late design changes, Ford is one of the worst offenders, according to a survey by Planning Perspectives Inc., a management consulting firm in Birmingham, Mich.

According to the survey, Ford generated the highest volume of late engineering changes among six major North American automakers.

The survey suggests that Ford places more emphasis on cost-cutting — as opposed to quality — than GM, Toyota, Honda and Nissan. Only DaimlerChrysler focuses more heavily on cost. Vendors also say they receive conflicting demands from Ford’s various departments.

“The suppliers obviously must accept some blame for quality, but it’s not unquestionably just their fault,” said Planning Perspectives President John Henke. “In fact, a good portion of the blame should fall on Ford’s shoulders.”

Henke based his initial conclusions on questionnaires completed by more than 150 suppliers. A more complete survey of about 225 suppliers will be published in June, Henke said.

Ford officials would not comment specifically for this article. But in response to the Planning Perspectives survey, they did acknowledge that despite some progress with suppliers on quality and cost objectives, much work remains.

In its defense, the company already is taking steps to improve its vehicle design procedures. In January, Chairman Bill Ford vowed to stop the rash of late engineering changes. The automaker also has started a “back to the basics” program to detect manufacturing glitches in its assembly plants.

Thus, Ford executives have stressed that they are not blaming vendors for all of the automaker’s quality woes. But some suppliers say Ford Motor delivered a tough mandate during an April 16 meeting with its largest vendors: Improve quality or lose contracts.

An internal Ford document used in the April meeting presents a snapshot of some of Ford’s supplier-related quality problems. Among them:

Suppliers are forecast to deliver 174 defective parts per million to Ford this year, well above that of rival automakers. By contrast, GM says its suppliers will deliver fewer than 30 defective parts per million in 2002. Ford has asked its suppliers to cut defects this year to 131 per million.

Ford Motor predicts supplier-related quality problems will force it to halt the shipment of vehicles from its assembly plants 268 times this year. The automaker has suffered a steady rise in “stop shipments” since 1998, and it wants to reduce their frequency to 200 incidents this year.

New parts are eight times as likely as carryover parts to cause a stop shipment. Meanwhile, manufacturing problems caused 83 percent of these incidents, while design problems caused 17 percent.

Ford Motor’s campaign to improve quality may gain added urgency in the wake of a new quality survey by J.D. Power and Associates. Last week, J.D. Power released its annual Initial Quality Study, which measures vehicle quality in the first 90 days of ownership.

The survey for the 2002 model year recorded 143 problems per 100 vehicles for Ford’s various brands — an improvement over the previous year. But competitors such as Toyota, Honda, GM and DaimlerChrysler did even better, leaving Ford worse than the industry average of 133 problems.

While some suppliers are skeptical about Ford’s quality shakeup, others see an opportunity to win business. One supplier who attended the April meeting is looking for ways to capitalize.

David Westgate, CEO of Rieter Automotive Systems in Farmington Hills, Mich., said: “It’s an opportunity for the supplier that wants to aggressively go after the quality and engineering issues. There’s new business out there.”
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