A New Deal At Ford - interview with Carlos Mazzorin - Interview

Automotive Industries,  August, 2000  by John McCormick

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Suppliers had better be able to keep up with Ford's quick-thinking, fast moving purchasing chief. Here's why.

One of the most passionate and hard working executives in the purchasing community, Ford's Carlos Mazzorin wields a $90 billion budget and a fervent belief in speed. As group vice president of global purchasing and South America, Mazzorin's task today is to deal with a fast expanding organization and even faster developments in the e-business world.

On top of that, the Buenos-Aires native is responsible for Ford South America, representing nine assembly, stamping and powertrain plants, and more than 8,000 employees.

With an emphasis on lean processes, as developed at his Total Cost Management Center (TCM) in Dearborn, and a focus on speeding up the purchasing system, the 28-year Ford veteran believes that he can meet the challenges ahead. We spoke with him recently at the TCM.

Question: Ford has expanded extensively and taken on new brands. How tightly are you integrating the company's North American and European purchasing operations?

Answer: "The process is, in away, simple and yet complex. The simplicity is that we have what we call global councils and that keeps the purchasing organization really tight. This gives us a global process -- so the same thing happens everywhere. Everyone that comes on board, like Volvo, goes to our system, and therefore uses a single system. You have sourcing teams for the commodities that are global. They are the owners of the commodities. We are very different from when we started -- we've improved dramatically. We've made a lot of mistakes that we corrected."

Q: Land Rover is using some cottage-industry-level suppliers in Britain. How are they going to fare now that you're integrating Land Rover?

A: "The first question from everyone is, should you be in the U.K? The pound has inflated and the question is whether or not they are competitive.

We have suppliers that are common within the three brands (Ford, Jaguar, Land Rover). We have a number of suppliers that are common with two brands, some suppliers are common to only one brand. For all of them, we're going to look at them not only for Jaguar and Land Rover, but for everyone. The answer to your question, how will they do? Well, we are in a continuing review of the British supply base because they're not competitive. The prices are big, by orders of magnitude. In some cases, double digit. So our objective is to take a very close look at how not competitive they are."

Q: So if you're exclusively a Land Rover supplier now, you should beworking very hard to see how you can serve other brands?

A: "It is similar to the task we executed with Volvo. In many instances, Volvo suppliers have become major players. Good suppliers always find their way. Suppliers who are stuck in the past will not find their way."

Q: What is Ford doing to reward suppliers who put a big effort into R&D?

A: "In many instances, we co-develop the technology and in some of the instances they develop the technology. If the technology is such that it will migrate to a lot of our product, then our agreement is we don't want one supplier for every product. Take, for example, adjustable pedals. It was an option. It became very popular with everyone. Everyone wants that. We don't want to have one supplier to have all the adjustable pedals in every car, but we want that guy who created the technology to benefit from it. We negotiate deals with the technology partner on providing the technology, setting it up so that he gets a big chunk of the business.

"Then we are working to be faster in technology applications. (Product development chief) Richard Parry-Jones is working very aggressively in coming up with a strategy to define the technology, how to define the application and implement it. That's a big change for Ford."

Q: What about non-traditional suppliers, like Intel, Microsoft and Yahoo. How are you dealing with these companies? Do you have the same strategies or expectations with them as you do with your traditional suppliers -- or you have a whole new mindset for these companies?

A: "The companies that you mention, they are a completely different product. But the expectations are no different than we have for any other supplier. Maybe the deals we cut are different, but still the same expectations."

Q: Are there lessons that traditional suppliers can gather from these new suppliers, in terms of methods and business practices?

A: "Many of the new suppliers are dealing with the consumer directly. Our traditional suppliers deal with a big manufacturer. There is a big difference. The consumer is less forgiving. The consumer needs instant gratification--I want it now, I want low cost and good service. I won't give you two chances to disappoint me. At Ford, we give them (suppliers) another chance. No matter what we say, we give each other too many chances and the consumer doesn't. When you deal with the outside consumer, you are fast or dead, and I think you see many of those companies are moving very fast because they are very consumer driven."