Ford achieved a breakthrough in sourcing with diverse suppliers by purchasing $5.5 billion in goods and services from its minority supply base in calendar year 2005. The figures reflect direct spending of $3.7 billion with tier one minority suppliers and an additional $1.8 billion in purchases with minority and women business enterprises at the tier two level.
“For many years, Ford Motor Company has sustained its leadership position in supplier diversity by enabling its diverse suppliers to enhance their capacity for business growth which, in turn, has led to increases in spend at both the tier one and tier two levels,” said Tony (Thomas K.) Brown, senior vice president, Global Purchasing.
Beginning in 2003, Ford launched an initiative to include certified women- owned businesses in its supplier diversity program and announced the establishment of a formal Women’s Business Enterprise (WBE) Program in 2004. Ford directly purchased $825 million in goods and services from women-owned businesses in 2005.
“The success of the Women’s Business Enterprise Program is another indicator of the way Ford seeks to include businesses that reflect the demographics of our customer base,” said Brown.
To optimize the use of technology, Ford developed a patented, Internet- based system, the M-Tier Diversity Reporting System, to capture tier two purchases with minority and women-owned suppliers and to verify their MBE and WBE certifications on a real-time basis. Equally as important, M-Tier provides Ford with credible data to assess its impact on diverse supplier sourcing at all levels of the value chain. In 2005, suppliers in Ford’s value chain generated a combined total of over $13 billion of business with diverse suppliers.
Ford also conducts training for their suppliers on how to start their own tier two programs and provides access to M-Tier for management of these programs. By acting as a catalyst for the creation of new programs within the value chain, Ford believes that use of the M-Tier system will result in increased sourcing opportunities for diverse suppliers throughout the automotive industry.
“The M-Tier program is one example of how Ford Motor Company applies innovation and technology to assess the effectiveness of our supplier diversity efforts across the broad spectrum of our supply chain,” said Armando Ojeda, director, Supplier Diversity Development, Global Purchasing. “This technology demonstrates the importance of the diverse supplier community to the auto industry and the Michigan economy,” Ojeda added.