Ford's management of supply chain?

[Rover72]

I ran across this write up below on a Jeep Forum and it provides a clearer picture of a large part of the problem with getting a Bronco (Covid not withstanding).
Covid has a lot to do with the delay of Bronco and all auto orders from any manufacturer. That being said I have a friend who recently purchased a Tesla Model Y and received it in 3 months as promised and Tesla has a backlog of orders. I myself placed an order for a Rubicon 40 days ago, while I wait for my Bronco, 1 year away best guessimate. The Tesla and the Rubicon use chips and many other components like Bronco, Tesla arrived in 3 months and I just got word the Rubicon is being built now 40 days after order and expected to arrive in 3 weeks with delivery involved. Tesla & Jeep supply chain companies still function fairly well even in these Covid times.

On top of supply chain woes having over 100k orders makes getting a vehicle quickly impossible for many. Just through sheer numbers many should expect to wait. The allocation change (totally wrong to change the deal, bad on Ford) is a fly in the ointment and totally screwed up the heads of waiting order holders.
What can you do? Buckle up and wait is all you can do.

Below in quotes is the cut and paste summation of the supply chain overview. Many sub-contractor companies organized by the manufacturer needing to all deliver in concert, think Webasto to understand the impact of supply chain choices. If you have a well chosen & managed supply chain you get product delivered. Until Ford gets it supply chain working properly expect delays.

"Competition is no longer company versus company rather it is supply chain versus supply chain. That is true whether it is the automotive industry, the personal computer industry, or the communications industry. The production, marketing, and delivery of product are a team effort. When customers buy a product, customers choose the output of the entire supply chain and pay all of the participants. To be successful, the lead company must be able to design, organize, and execute supply chain activities. That does not mean ownership or even direct control, but it does imply actions and mechanisms that influence decision-making and impact performance. A key to understanding this change is reconciling the statement: When customers buy the final product, customers choose the output of the entire supply chain and pays all of the participants. Customers want the best value from the supply chain. Therefore, this is a system wide rather than a company specific process. Many times businesses in a supply chain are concerned about which firm holds inventory or which company absorbs a cost. Final customers are not concerned with either who hold the inventory or who bears the costs; they care when total inventory or total cost in the supply chain are too high because these extras drive final costs and prices paid higher. The final customer is concerned when any unnecessary action is taken in the supply chain regardless of which company takes it. From this perspective, it makes sense for manufacturer and the suppliers to focus efforts on reducing the amount of inventory in the supply chain rather than creating mechanisms that shift inventory to lower the cost of one supply chain participant. This systemic view also implies that it would be wise for companies to share not only information, but to share capabilities with other organizations." End quote!

On the bright side, supply chain issues should only get better with all the future income Ford has on the line with Bronco reservationists in the waiting.
Time will tell!

Sponsored

 

[Silver-Bolt]

In a dream world you can reduce the amount of inventory in a supply chain(Toyota came up with "Lead Manufacturing"). It works to a degree but somewhere within the chain there has to be inventory available to cover lead times and production volume changes. You can't make a single "bolt" each time a "bolt" is needed. Not practical or cost effective. So the bean counters determine that 1000 is the most cost effective quantity of "bolts" to produce. Production at this time still only needs 1. That puts 999 in a warehouse within the supply chain. Times that by the number of parts needed to make a vehicle.

 

[Nellman]

This is not a great comparison. You are comparing a new product that has not been produced in a long time to two products that have been produced for years or decades. You did say that Tesla has a back order which Jeep does not have. Tesla is definitely the better comparison. But don't compare current Tesla to current Bronco. Compare Tesla 3 release to current Bronco. Comparing apples to oranges is what you are doing here. They are both fruits (automobiles) but are not the same. Also Tesla is very high on micro chip needs in comparison to Ford vehicles so Tesla should have more on hand. Tesla recently had to shut down because of a lack of chips.

I am not going to disagree that supply chain issues are the issue. I do however say that comparing a company with no backlog to the Bronco is very off and comparing a backlog of a product in production for years while skipping the release is not a proper comparison.

Tesla model 3 was released in May 2016 for reservations with the first vehicle being delivered on July 28, 2017 a total of 30 vehicles. Not at all a fair comparison because this was a huge undertaking of Tesla which was barely making vehicles at the time in comparison. There was also a huge amount of issues with these vehicles on the quality control side. But looking at this Ford looks like a rock star compared to Tesla. Where your information makes Ford look like they are incompetent. Apples to Oranges.

Yes I have received my Bronco and love it I would gladly have waited another year for it. The issues with the vehicle have been addressed quickly.

Could Ford have done a better job? Yes. Did Ford have any idea of how Covid was going to effect everything? No, nobody did. Yes we were in Covid already but there is still a lot of unknowns with Covid. Could Ford have seen the issues with the hard top? I doubt they did but should have seen the issues in a company that doesn't produce this number of tops and having a new top created.

 

[PrepVet]

That is not a great comparison.

I work in manufacturing for a large company (over $1 billion) and we adopted the Lean Manufacturing approach a while ago. It was before I came to work here and it has never worked perfectly because it shifts too much of a burden on outside forces. Right now it is two component types that are killing us. We simply cannot get them.

Even if we decided today we were going to abandon Lean for these components and just order as many as we could get. It still wouldn’t help. We simply cannot get them because or supplier cannot get their components for them.

And these are things we have been using for decades.

We were also getting a new product line off the ground, but only a variation of an existing product, about the same time Ford wanted to launch the Bronco originally. And we still are struggling to get it moving and only, at at best, 1/3 of where we wanted to be at this point.

 

[Rover72]

This is not a great comparison. You are comparing a new product that has not been produced in a long time to two products that have been produced for years or decades. You did say that Tesla has a back order which Jeep does not have. Tesla is definitely the better comparison. But don't compare current Tesla to current Bronco. Compare Tesla 3 release to current Bronco. Comparing apples to oranges is what you are doing here. They are both fruits (automobiles) but are not the same. Also Tesla is very high on micro chip needs in comparison to Ford vehicles so Tesla should have more on hand. Tesla recently had to shut down because of a lack of chips.

I am not going to disagree that supply chain issues are the issue. I do however say that comparing a company with no backlog to the Bronco is very off and comparing a backlog of a product in production for years while skipping the release is not a proper comparison.

Tesla model 3 was released in May 2016 for reservations with the first vehicle being delivered on July 28, 2017 a total of 30 vehicles. Not at all a fair comparison because this was a huge undertaking of Tesla which was barely making vehicles at the time in comparison. There was also a huge amount of issues with these vehicles on the quality control side. But looking at this Ford looks like a rock star compared to Tesla. Where your information makes Ford look like they are incompetent. Apples to Oranges.

Yes I have received my Bronco and love it I would gladly have waited another year for it. The issues with the vehicle have been addressed quickly.

Could Ford have done a better job? Yes. Did Ford have any idea of how Covid was going to effect everything? No, nobody did. Yes we were in Covid already but there is still a lot of unknowns with Covid. Could Ford have seen the issues with the hard top? I doubt they did but should have seen the issues in a company that doesn't produce this number of tops and having a new top created.

I agree with your idea of the Bronco being a new model and the Tesla Y or Rubicon are not. However, shouldn't Ford have known the following of the Bronco was huge with pent up demand and had the supply chain ready accordingly?
Most of the constrained items are basic items and nothing unique or proprietary to the Bronco except the MIC top and it appears the supply chain was not ready appropriately.

 

[Heffe66413]

I ran across this write up below on a Jeep Forum and it provides a clearer picture of a large part of the problem with getting a Bronco (Covid not withstanding).
Covid has a lot to do with the delay of Bronco and all auto orders from any manufacturer. That being said I have a friend who recently purchased a Tesla Model Y and received it in 3 months as promised and Tesla has a backlog of orders. I myself placed an order for a Rubicon 40 days ago, while I wait for my Bronco, 1 year away best guessimate. The Tesla and the Rubicon use chips and many other components like Bronco, Tesla arrived in 3 months and I just got word the Rubicon is being built now 40 days after order and expected to arrive in 3 weeks with delivery involved. Tesla & Jeep supply chain companies still function fairly well even in these Covid times.

On top of supply chain woes having over 100k orders makes getting a vehicle quickly impossible for many. Just through sheer numbers many should expect to wait. The allocation change (totally wrong to change the deal, bad on Ford) is a fly in the ointment and totally screwed up the heads of waiting order holders.
What can you do? Buckle up and wait is all you can do.

Below in quotes is the cut and paste summation of the supply chain overview. Many sub-contractor companies organized by the manufacturer needing to all deliver in concert, think Webasto to understand the impact of supply chain choices. If you have a well chosen & managed supply chain you get product delivered. Until Ford gets it supply chain working properly expect delays.

"Competition is no longer company versus company rather it is supply chain versus supply chain. That is true whether it is the automotive industry, the personal computer industry, or the communications industry. The production, marketing, and delivery of product are a team effort. When customers buy a product, customers choose the output of the entire supply chain and pay all of the participants. To be successful, the lead company must be able to design, organize, and execute supply chain activities. That does not mean ownership or even direct control, but it does imply actions and mechanisms that influence decision-making and impact performance. A key to understanding this change is reconciling the statement: When customers buy the final product, customers choose the output of the entire supply chain and pays all of the participants. Customers want the best value from the supply chain. Therefore, this is a system wide rather than a company specific process. Many times businesses in a supply chain are concerned about which firm holds inventory or which company absorbs a cost. Final customers are not concerned with either who hold the inventory or who bears the costs; they care when total inventory or total cost in the supply chain are too high because these extras drive final costs and prices paid higher. The final customer is concerned when any unnecessary action is taken in the supply chain regardless of which company takes it. From this perspective, it makes sense for manufacturer and the suppliers to focus efforts on reducing the amount of inventory in the supply chain rather than creating mechanisms that shift inventory to lower the cost of one supply chain participant. This systemic view also implies that it would be wise for companies to share not only information, but to share capabilities with other organizations." End quote!

On the bright side, supply chain issues should only get better with all the future income Ford has on the line with Bronco reservationists in the waiting.
Time will tell!

Well written!

 

[Nellman]

I agree with your idea of the Bronco being a new model and the Tesla Y or Rubicon are not. However, shouldn't Ford have known the following of the Bronco was huge with pent up demand and had the supply chain ready accordingly?
Most of the constrained items are basic items and nothing unique or proprietary to the Bronco except the MIC top and it appears the supply chain was not ready appropriately.

The demand was not exactly known by Ford. Ford didn't think the Badlands would be the top seller. The hard top is the biggest sticking point hence Ford pushing for people to drop hard top for soft top and no dual top option.

The chip shortage was and still is not fixed. Anything made overseas is an issue. I would think almost all the components are proprietary to the Bronco. I think naming parts not proprietary would be a short list. Hell the tires are proprietary to the Bronco.

 

[Exomodo]

Not only did Ford fumble their original forecasting, the crowd sourced forecasting (reservations) and the realization and management that the MIC top demand was 300+% beyond their plan, but they failed to manage everything between then and now beyond hiring a trinket crisis management entity in some farcical insulting effort to buy our patience while they fail to do anything to resolve the MIC top choke point. It is simply unbelievable how horribly managed this entire fiasco is and shows zero signs of abating for years to come, if ever.

 

[SASProbie]

Lean manufacturing, FIFO, POS, Kaizen and many more... All are in their own unique ways trying to match lowest cost with max profit while reasonably controlling supply and demand.

There is no method during any pandemic that is going to prevail beyond sourcing all the raw materials and manufacturing in house. And we all know that is unreasonable and not cost effective.

And let us not forget about logistics! A lot of small things must go great together or the entire process fails.

Call it what you want. Any time a "Global" event happens. We all pay the price. Now if we could just learn from history instead of being determined to repeat it... LOL!

 

[FastAndLight]

I was about to start a new thread right along these lines; its good to see some others identifying Ford's ability to manage its supply chain as its critical leadership failure. Ford, as a company, demonstrated spectacularly poor ability to plan and execute its core business: building, selling, and delivering vehicles because it has lacked the leadership necessary to properly manage its suppliers and operational requirements.

For those who work in industrial manufacturing and say this is hard, I hear you (@PrepVet ). However, for the reasons I will lay out below, I think Ford failed and, for the reasons @Rover72 pointed out in his original post, we shouldn't expect Ford to magically start doing any better any time soon. The rot inside of Ford's senior leadership will take a long time to excise (if it ever will).

Looking at the numbers, Ford generally produces about 2.5 million vehicles, including 700k to 800k F-150s, a year. A Bronco reservation pool of 100k or 200k reservations, while big numbers to us, should have been both reasonably predictable and manageable for a company like Ford. Our reservations are maybe 8 - 10% of Ford's annual vehicle production. Or I should say, if Ford was able to produce every reservation in a single year, which I have been repeatedly told is an unreasonable expectation.

We all (unless you work at Ford and are reading this, which, if so, get back to work) have to guess at Ford's supply chain complexity, but the management team that gave the green light to the product launch knew a bunch of things much better than any of us.

1. Condition of internal suppliers and their logistical challenges with the ongoing pandemic.

Ford knew what their supply lines looked like, what their supplier relationships were, and how things were going. Or they should have. The fiasco with Webasto shows how behind the curve Ford's supply chain management team is, which has now become painfully clear. How did they never have any issues with any of the MIC tops during testing? How did they not know about the terrible management team at the Webasto factory (have we all forgotten about this? https://www.bronco6g.com/forum/thre...o-help-resolve-bronco-top-supply-issue.17179/ when that topic hit it seemed clear to me that @PREMiERdrum knew that there was a mess over at Webasto. Ford's leadership should have known too.) The management team responsible for providing externally supplied parts for the Bronco allowed the launch to go forward, either because they had no idea what was going on at the companies they manage relationships with, or because they lacked the courage to call out a possible problem and probably get torn apart by senior execs who generally engage in the worst forms of back slapping and groupthink imaginable.

2. Market research indicating overall excitement for the new Bronco and general feature preferences.

Of course Covid may have shifted preferences and desires for vehicles, but all during the multi-year development process for Bronco, Ford should have been tracking market demand for features, etc. And if they weren't, again, executive management is to blame for allowing the company to launch a product into a market where they didn't have a clear estimates on the take rate of hard top vs soft top, the big tire and suspension packages, etc. Hell, even lacking a decent cold weather package (as if none of the development team live in Michigan). These misses all speak to the failures of the marketing teams who did not do the basics of their job (Covid or not). Ford may have been caught off-guard by the demand on days 1 -3, but by the first week, they should have assembled their executive teams to determine if they could reasonably produce the vehicles that were being reserved when they were so far above plan (if that is to be believed).

After 3 or 4 days of reservations, Ford had some amazing market data and should have turned around and quickly aligned that against their operations / manufacturing / supply capabilities. If there were large gaps then the responsible thing to do would have been to stop taking reservations for vehicles that were going to end up having massive supply shortages. By 7/20 I should have probably never been allowed to reserve my original Sasquatch Badlands with the hard top and tow package.

Of course, senior executive leadership was not going to stop taking reservations, despite probably hearing concerns about the ability to execute that many vehicle deliveries in any reasonable timeline from any employee or manager with a spine who cared about doing the right thing. Investors were thrilled to see Ford having a desirable product and the stock price shot up. No way any of the senior execs were going to mess with that. Their stock options were buying them boats. As I see it, the executive leadership team would have been only interested in addressing problems that were bad enough to cause large numbers of reservation holders to not convert to orders and that they couldn't plausibly wipe away with a swipe of the "Covid" excuse.

This whole exercise has shown simply how terrible Ford senior leadership is *at doing their jobs* (I have nothing but respect for the line workers trying their best to assemble vehicles from the parts they have available). Covid has had a uniquely interesting way of separating leaders who can execute and know what they are doing from those that do not. As others here have pointed out, other manufacturers are also experiencing some delays...but I'm not aware of anything coming close to the fail-fest that is this Bronco launch. The problem isn't Covid, its that Covid has exposed a weak organization that was only capable of functioning if the world around them was generally going well.

Let us not forget that Ford, fully knowing their own supply chain complexity, *chose* to launch the Bronco in July of 2020, when we all knew about Covid and could definitely see what it was doing to the world. They *chose* not to limit reservations when they saw demand higher than they anticipated for options / parts outside of their plan. Fundamentally I fault Ford leadership for their decisionmaking processes leading up to the launch, and in response to the demands and challenges that this launch has posed.

I'm disappointed to see one of our great industrial manufacturers have it's ass exposed in such an epic way in front of the world. I hope Ford's board cleans house and are able to find leaders capable of re-building Ford into a truly world-class manufacturing operation. Given the state of corporate governance currently I'm not expecting much.

Thanks for reading. It felt good to get that out. I'll show myself out.

 

[WRF3MD]

I was about to start a new thread right along these lines; its good to see some others identifying Ford's ability to manage its supply chain as its critical leadership failure. Ford, as a company, demonstrated spectacularly poor ability to plan and execute its core business: building, selling, and delivering vehicles because it has lacked the leadership necessary to properly manage its suppliers and operational requirements.

For those who work in industrial manufacturing and say this is hard, I hear you (@PrepVet ). However, for the reasons I will lay out below, I think Ford failed and, for the reasons @Rover72 pointed out in his original post, we shouldn't expect Ford to magically start doing any better any time soon. The rot inside of Ford's senior leadership will take a long time to excise (if it ever will).

Looking at the numbers, Ford generally produces about 2.5 million vehicles, including 700k to 800k F-150s, a year. A Bronco reservation pool of 100k or 200k reservations, while big numbers to us, should have been both reasonably predictable and manageable for a company like Ford. Our reservations are maybe 8 - 10% of Ford's annual vehicle production. Or I should say, if Ford was able to produce every reservation in a single year, which I have been repeatedly told is an unreasonable expectation.

We all (unless you work at Ford and are reading this, which, if so, get back to work) have to guess at Ford's supply chain complexity, but the management team that gave the green light to the product launch knew a bunch of things much better than any of us.

1. Condition of internal suppliers and their logistical challenges with the ongoing pandemic.

Ford knew what their supply lines looked like, what their supplier relationships were, and how things were going. Or they should have. The fiasco with Webasto shows how behind the curve Ford's supply chain management team is, which has now become painfully clear. How did they never have any issues with any of the MIC tops during testing? How did they not know about the terrible management team at the Webasto factory (have we all forgotten about this? https://www.bronco6g.com/forum/threads/-ford-effectively-assumes-operational-control-of-webastos-plymouth-plant-to-help-resolve-bronco-top-supply-issue.17179/ when that topic hit it seemed clear to me that @PREMiERdrum knew that there was a mess over at Webasto. Ford's leadership should have known too.) The management team responsible for providing externally supplied parts for the Bronco allowed the launch to go forward, either because they had no idea what was going on at the companies they manage relationships with, or because they lacked the courage to call out a possible problem and probably get torn apart by senior execs who generally engage in the worst forms of back slapping and groupthink imaginable.

2. Market research indicating overall excitement for the new Bronco and general feature preferences.

Of course Covid may have shifted preferences and desires for vehicles, but all during the multi-year development process for Bronco, Ford should have been tracking market demand for features, etc. And if they weren't, again, executive management is to blame for allowing the company to launch a product into a market where they didn't have a clear estimates on the take rate of hard top vs soft top, the big tire and suspension packages, etc. Hell, even lacking a decent cold weather package (as if none of the development team live in Michigan). These misses all speak to the failures of the marketing teams who did not do the basics of their job (Covid or not). Ford may have been caught off-guard by the demand on days 1 -3, but by the first week, they should have assembled their executive teams to determine if they could reasonably produce the vehicles that were being reserved when they were so far above plan (if that is to be believed).

After 3 or 4 days of reservations, Ford had some amazing market data and should have turned around and quickly aligned that against their operations / manufacturing / supply capabilities. If there were large gaps then the responsible thing to do would have been to stop taking reservations for vehicles that were going to end up having massive supply shortages. By 7/20 I should have probably never been allowed to reserve my original Sasquatch Badlands with the hard top and tow package.

Of course, senior executive leadership was not going to stop taking reservations, despite probably hearing concerns about the ability to execute that many vehicle deliveries in any reasonable timeline from any employee or manager with a spine who cared about doing the right thing. Investors were thrilled to see Ford having a desirable product and the stock price shot up. No way any of the senior execs were going to mess with that. Their stock options were buying them boats. As I see it, the executive leadership team would have been only interested in addressing problems that were bad enough to cause large numbers of reservation holders to not convert to orders and that they couldn't plausibly wipe away with a swipe of the "Covid" excuse.

This whole exercise has shown simply how terrible Ford senior leadership is *at doing their jobs* (I have nothing but respect for the line workers trying their best to assemble vehicles from the parts they have available). Covid has had a uniquely interesting way of separating leaders who can execute and know what they are doing from those that do not. As others here have pointed out, other manufacturers are also experiencing some delays...but I'm not aware of anything coming close to the fail-fest that is this Bronco launch. The problem isn't Covid, its that Covid has exposed a weak organization that was only capable of functioning if the world around them was generally going well.

Let us not forget that Ford, fully knowing their own supply chain complexity, *chose* to launch the Bronco in July of 2020, when we all knew about Covid and could definitely see what it was doing to the world. They *chose* not to limit reservations when they saw demand higher than they anticipated for options / parts outside of their plan. Fundamentally I fault Ford leadership for their decisionmaking processes leading up to the launch, and in response to the demands and challenges that this launch has posed.

I'm disappointed to see one of our great industrial manufacturers have it's ass exposed in such an epic way in front of the world. I hope Ford's board cleans house and are able to find leaders capable of re-building Ford into a truly world-class manufacturing operation. Given the state of corporate governance currently I'm not expecting much.

Thanks for reading. It felt good to get that out. I'll show myself out.

Long winded there but you're not wrong. It's not necessarily a supply issue, it's an "oh shit, we need these parts now" issue. Ford was forecasting 75-85% 4door soft top Big Bend/Outer banks. Completely caught off guard by the popularity of other trims, hard top, Sasquatch and 2 door. It's a management issue for not reading the room.

 

[Huntsetter1]

I think Ford offered too many choices out of the gate. Good, better, best would have simplified the build process and parts management. With the personalization of each version from the factory, it makes it difficult to manufacture with any reasonable consistency.

 

[rugbysecondrow]

Supply chain issues are real, but so is incompetence. Labor issues are real, and those issues have impacted supply chain. My work environment is much simpler, and my lead times have gone from 2 weeks to 16 weeks. I will order 1200 widgets, and 200 will arrive. Vendors don't get the goods to create the widget I need.

In my simple world, supply chain and inventory has gone from a monthly and weekly conversations to a daily or hourly management issue.

Ford seems to have mismanaged very significant problems. These mistakes would be hidden during normal times, but are magnified today. A group of 100,000 staring at you while you make your mistakes, that makes it more obvious as well. If it were some random Ford Edge issue, nobody would care, the mistakes wouldn't be noticed by anybody outside Ford.

Sponsored