Ford To Reduce Its Supply Base from 2,500 to 1,000

Ford will reduce its supply base dramatically and provide longer-term contracts to key suppliers in an effort to reduce costs, said Tony Brown, senior vice president of global purchasing in a recent report.

The goal, he says, is to reduce its total number of suppliers from 2,500 to 1,000 and develop closer relationships with those suppliers, instead of focusing on cost reductions from a broader base of suppliers.

"We've worked with our key suppliers on several programs to take out waste, increase economies of scale, improve quality and customer satisfaction, and create a framework for stronger relationships. It is clear we have a business model that doesn't effectively work for them or for us. If our suppliers are marginalized, they can't do for us what we need, so we are taking affirmative actions to improve the state of the Ford family of suppliers."