Ford is in denial if they believe the supply base is responsible for their pathetic quality performance, First they purge their tenured engineers from the team and they revel in lowest price globally and can’t provide reliable repairs for recall issues.
No one is drinking the Ford Kool-Aid on TVM.
From Ford Authority:
Ford has certainly dealt with its fair share of quality issues over the past few years, leading to soaring warranty costs and a record number of recalls being issued. However, many of these quality woes stem from supplier parts, and not anything made by The Blue Oval itself, though it's obviously dealing with the repercussions. As such, while Ford attempts to improve its relationships with suppliers, the automaker is also getting serious about improving the quality of parts it procures from them.
According to Crain's Detroit Business, Ford is cracking down on supplier quality and costs by placing companies that exhibit quality issues on a "no bid" list for future contracts, as well as requiring others to submit three-year cost savings plans to prevent a similar outcome. The Blue Oval is requiring certain suppliers to enter what's known as "total value management" plans (TVMs), which require a certain percentage of cost savings on the overall supplier business every year.
TVM programs are nothing new nor uncommon, as automakers generally bind suppliers to meet certain quality and cost savings targets in that manner. What makes Ford's TVMs unusual, however, is that it's stepping up the enforcement of its multi-year requirement, and even pulling business from suppliers that don't reach some sort of agreement with the company.
At the same time, Ford was quick to point out that this is not a new policy, and that enforcing TVM programs are part of its broader efforts to improve quality and reduce costs in order to better "compete in a rapidly changing and complex industry."
“We work with each of our suppliers to seek ongoing improvements to address gaps in quality, cost, delivery and resilience, which may take multiple years to implement,” Ford spokeswoman Ursula Muller said in a statement. “Sourcing is a multi-dimensional process that rewards suppliers who perform and bring the best enterprise value for Ford and our customers.”