Supply Chain

To achieve our sustainability goals – from cutting the greenhouse gas emissions of our products and operations to protecting human rights – Ford needs the active support and leadership of its suppliers. Within Ford's Purchasing Department, a Supply Chain Sustainability Group develops and implements strategy for engaging with suppliers on sustainability issues. The group also helps build capability within the Purchasing function to address sustainability issues through routine business processes.

During 2009, for example, the Supply Chain Sustainability Group held in-person training workshops that directly reached more than 250 Ford Purchasing personnel and quality engineers globally. These sessions focused on Ford's working conditions requirements and also informed sustainability processes, to help ensure that they are designed for integration into the business. In addition, Ford will launch in 2010 an e-learning training and awareness module on Ford's working conditions program that will be available to all global Purchasing employees.

The organizational structure of Ford's Supply Chain Sustainability Group is directed at further integrating capability within the Purchasing function to address sustainability issues. The group consists of four full-time employees located at headquarters in Dearborn and four regional leads based within the regional business units in Brazil, Germany, India and China. With the exception of the China-based position, all the regional leads are on rotation and come from traditional business positions such as buyers, quality engineers and program managers. Within a reasonable period of time in which they build competency and experience, these individuals rotate back into a traditional purchasing role, taking their new expertise with them to further apply within the context of the business.

Since 2005, Ford has been taking steps to rationalize and streamline our supply base through a strategic supplier strategy called the Aligned Business Framework (ABF). The strategy is designed to create a sustainable business model to increase mutual profitability, improve quality and drive innovation. What it means in practice is that we are working more closely and collaboratively with a smaller number of global strategic suppliers. Ford has approved a total of 82 ABF suppliers, 14 of which are owned by minorities or women.

We are working closely with our ABF suppliers to align our respective approaches to providing sound working conditions, as described in the Human Rights section. We are also working with ABF suppliers to address environmental issues such as carbon management and the use of sustainable materials.

Currently, ISO 14001 certification is expected of all "Q1," or preferred, production suppliers as well as nonproduction supplier facilities if the supplier has a manufacturing site or a nonmanufacturing site with significant environmental impacts that ships products to Ford.

In 2006, we attained our goal of having 100 percent of our Q1 production suppliers gain ISO 14001 environmental management system certification for facilities supplying Ford. We also encourage our suppliers to extend the benefits of improved environmental performance by implementing similar requirements for environmental management systems in their own supply base.