Ford F-150s are the United States’ best-selling vehicle and a serious financial boon for the carmaker. According to The Detroit Free Press, F-Series trucks contribute more than $100 million a day to Ford revenue. When a fire at a key supplier threatened production, Ford had to get creative to limit the disruption to only two weeks.
Ford’s team arrived within hours of the May 2 fire at Meridian Magnesium of America in Eaton Rapids, Michigan. “The blaze dramatically disrupted the North American auto industry by creating a parts shortage for Ford, General Motors, Fiat Chrysler and Mercedes,” wrote Phoebe Wall Howard for The Detroit Free Press.
Ford worked with Meridian and others to get the tools out of the damaged facility and find alternative production facilities, coordinating with partners and competitors in the U.S., Canada, the United Kingdom, Germany and China. After removing the tools from the Michigan site, Ford workers tested their integrity and sent them to new production locations worldwide.
In addition to relocating 19 stamping dies, Ford used one of the world’s largest cargo planes, an Antonov, to transport an 87,000-pound unit to Nottingham, England. Daily, Ford flies the finished parts from the U.K. back to the U.S. on a 747, Fox News reports.
Ford will not report how much these extraordinary efforts cost the company. However, Joe Hinrichs, president of global operations for Ford, said “the message is pretty clear. The F-Series is the foundation of our business at Ford and we’ll do whatever it takes to keep producing the best-selling vehicles in America.” He added that the capacity for magnesium products were Ford’s biggest concern because it’s a highly specialized metal.
Magnesium is a critical part of automakers’ lightweight and fuel efficiency strategy. It is lighter than aluminum, but experts say magnesium is also a more expensive and dangerous metal.
Ford reports that its production of the F-150 pickup resumed at its Dearborn Truck Plant last Friday. On Monday, production resumed for the Super Duty line of trucks at the Kentucky Truck Plant and the F-150 at the Kansas City Assembly Plant.
Supply chain risk
Ford reports that it leaned on its global supply partners as well as internal teams to overcome the unexpected supply challenge. This highlights the importance of supplier relationships. Consider the definition of supplier relationship management (SRM) from the APICS Dictionary: “A comprehensive approach to managing an enterprise’s interactions with the organizations that supply the goods and services the enterprise uses. The goal of SRM is to streamline and make more effective the processes between an enterprise and its suppliers …”
How strong are your critical supplier relationships? Are you working with your partners to prepare for risks – those you can anticipate and those you can’t? To succeed, businesses require an agile and educated supply chain team. Investing in their professional development ensures businesses are ready for what comes next. Find out how APICS helps corporations succeed by visiting apics.org.