[Joxster]

Came across this article on how the President of Ford's global markets saved the company $6 million with a simple change. Some out of the box thinking there, and a lesson to be learnt. There's always room for more efficiency.

Ever spend too much money on clothes? Jim Farley can relate.

Farley became Ford Motor Co.'s president of global markets in June after a two-year stint in Germany, where he oversaw the end of an aggressive restructuring of the company's money-losing European operations. That turnaround had included painful plant closures and thousands of layoffs, as well as a refocusing of Ford's portfolio on profit-rich commercial vehicles and popular performance variants.

But Farley was able to wring some extra cash from an unlikely place: workers' closets.

"When I got to Europe things were pretty tough," Farley told Automotive News Publisher Jason Stein in a Q&A at last month's NADA/J.D. Power Automotive Forum in New York. "Someone said, 'Hey Jim, we've restructured about 10 times. There's no more money you can save.' "

That person was wrong.

While sitting in the cafeteria on just his second day on the job, Farley said he was told that Ford bought T-shirts for thousands of employees across roughly 50 facilities in the region. But certain countries were paying vastly more than others.

Workers in Germany, for example, got fancy shirts with big, sewn-on Blue Oval logos that were meant to withstand washes every day. Meanwhile, workers in Romania got much cheaper shirts, Farley said, that would often wear out in less than a week.

In a follow-up meeting, he had a colleague lay out every shirt Ford bought for workers, and chose a single provider.

"We picked a really good T-shirt and saved $6 million," Farley recalled. "And this was an operation where people said there was no more money you could save."

He said he's taken that lesson back in his new role in the U.S., where CEO Jim Hackett is hyperfocused on attacking costs and improving Ford's "operational fitness."

"What I learned was to ask questions," Farley said. "There is always room for efficiency."

Source

Cheers

[Technocrat]

I am really trying to figure out why is this a big deal for a company like Ford, not the money saving part but the fact that no one thought of this in a company like Ford?

This is your basic vendor/supplier management 101.

Enthusiastic reporting or paid propoganda by Jim Farley ?

[roamer012]

Originally Posted by Technocrat

I am really trying to figure out why is this a big deal for a company like Ford, not the money saving part but the fact that no one thought of this in a company like Ford?

This is your basic vendor/supplier management 101.

Enthusiastic reporting or paid propoganda by Jim Farley ?

I would like to differ. Different corporations operate on different principles. Depending on your size and scale sometimes the suppliers and vendors are hoses more on geographical level rather than central level. And yes this also leads to goof ups many a times because someone was just lazy to take responsibility at central level hence delegates to different geographic centres.

[pinin]

Originally Posted by roamer012

I would like to differ. Different corporations operate on different principles. Depending on your size and scale sometimes the suppliers and vendors are hoses more on geographical level rather than central level. And yes this also leads to goof ups many a times because someone was just lazy to take responsibility at central level hence delegates to different geographic centres.

+1

Time and again I come across examples of a global player with very very local practices.

PS: This is an observation and am not sure how Ford functions.

Regards,
Pinin