Ford raises bar for China suppliers

By Alysha Webb, Automotive News

Beijing, China - Steven Hsieh is head of supplier technical assistance for Ford Motor Co.'s China sourcing operation. He finds suppliers of parts for Ford plants worldwide.

When Hsieh started his job three years ago, Ford sourced low-tech components that Ford designed. Now some Chinese suppliers have their own design and engineering capabilities. Those kinds of skills are becoming more important as sourcing demands grow more urgent, Hsieh says. He talked with AN's China Bureau Chief Alysha Webb about his job.

How much is Ford exporting now?

We source a lot of casting parts. We have migrated from build to print to more design-capable suppliers. We are beefing up (Chinese suppliers') engineering capabilities.

When we started three years ago to cultivate the suppliers, we started with low-tech, with mostly nonsafety-related suppliers. With the urgency in more mature markets (for components), we are doing more urgent sourcing now. We do have a work force in place working with suppliers to make sure they have in-house capability to do more advanced parts.

How do you find suppliers?

Referral, word-of-mouth, competitors' supply base. Quite often customers approach us at conferences.

What is the mix between foreign-invested companies and fully domestic?

More then 50 percent are indigenous suppliers. They are very competitive in terms of pricing.

Everyone is trying to source from China now. Does that make your job harder?

Harder and easier. Other companies (also) develop the suppliers, but that takes away capacity for us. It's all about timing. Once Chinese suppliers (reach our standard), there is pressure on us to give them enough business to use all their capacity.

What is the most challenging thing about your job?

Proving all the evidence. We spend a lot of time on the floor to witness, verify, validate. Paper reviews can't be done here. You have to understand the cultural side. There is a tendency not to give you the bad news too early.

What are the most common issues you face with Chinese suppliers?

Demonstration of what you see on the paper vs. what you see on the floor. Sustainability. How do you continuously improve? (Being awarded Ford's highest supplier status) means the supplier has met all of Ford's requirements, but it raises a different urgency for continuous improvement.

How has the Chinese supplier base improved - if it has - in the time you have worked here?

Improvement is not difficult to see in this sort of market. The difficult part is the cultural transformation from mass mind-set to lean manufacturing.

What is the most important thing a Chinese supplier should do if it wants to become a global supplier?

Strong cooperation, good attitude. We come to China because of the pricing. The Chinese supplier needs to be a visionary. If the customer says you need to invest in training, etc., they need to have that faith, to make the investment.

From Automotive News (A Crain publication)