Financial Daily from THE HINDU group of publications
Friday, Nov 22, 2002
Standards & Benchmarks
Ford suppliers undergoing quality certification
CHENNAI, Nov. 21
FORD India's suppliers are going through a process of independent quality audit and certification. This worldwide certification, called Q1, entitles the component supplier to automatically become eligible to supply to Ford Motor Company's worldwide operations, according to Mr David E. Friedman, Managing Director and President, Ford India Ltd.
The certification indicates that the component manufacturer has clearly demonstrated its capability as a supplier to Ford India. It will cover aspects like the quality of the parts and their timely delivery, and timely problem resolution, according to him.
"Our supply base is in the process of getting Q1 certified. You either get certified or get replaced," he said here today. Ford India had 90 suppliers and all of them must go through this process. At present, over a dozen suppliers were going through the certification process.
He pointed out that Ford India itself had to go through this Q1 certification - both as a manufacturing location and also because it was a supplier for Ford's worldwide operations. Ford India was exporting components to Ford Motor Company's joint venture in China.
Mr Friedman said that three of Ford India's suppliers had begun supplying to Ford Motor Company's worldwide operations. These were Synergies Dooray for alloy wheels, Tata Auto Plastics for plastic housing and RICO Auto Industries for exhaust manifold. There were a few models in Ford Motor Company's stable that individually clocked higher numbers than the total car volumes of about 6 lakh units in India. A dozen more suppliers were under evaluation to supply to Ford's global operations, he said.
Ford globally had to look at the lowest cost supplier for it to remain competitive. Therefore, it would look for cost advantages of 10-20 per cent, net of logistics, to source components from India, Mr Friedman said.
Mr Friedman said that in the year since he took over as the chief executive of Ford India, the company was well on course to achieving its objectives. These were to grow the domestic market, increase exports and develop India as a component sourcing base for Ford Motor Company's global operations.
The powertrain indigenisation programme would commence in a phased manner from January 2003 with the Ikon being fitted with engines made at Hindustan Motors' facility first and the locally made gear boxes would follow a few months later. The powertrain programme would also help Ford India in its future launches.
He said that indigenising the powertrain would insulate it from exchange rate fluctuations and the consequent pressure on pricing. In the longer term it would enhance Ford India's ability to bring in new models.
"We will be looking at derivative engines. We have the ability to expand beyond the Ikon range and produce engines for subsequent models."
Mr Friedman said the past year had been one of behind the scenes activity and the company would come out with new products that would excite the market. He declined to divulge what the next product would be and when it would be launched.
The foundation had been built to introduce a number of new models and the next 12-24 months would see new products from Ford as well as continued upgradation of the Ikon.
To a question, Mr Friedman replied that Ford Motor Company could expect return on its investment in Ford India from 2003-04. The higher volumes that would come from the new models being planned and increased exports, with new markets being explored, would facilitate this. Any future investment would substantially be for tooling that would be unique for the new models being planned. "We can introduce new models with high investment efficiency because the facility is already there and the flexibility has been built in," he said.
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