An examination of the report focused on the objectives of the Ford Motor Company and General Motors and their strategic approaches to cost reductions.
This paper discusses how, in today’s ever competitive global economy, auto manufacturers like the Ford Motor Company and General Motors are always looking for new and unique opportunities to strategically reduce costs without interfering with the revenue-generating functions of the process. It looks at how, in the recent past, reducing labor was the methodology of choice and how, today, labor is at a premium. It analyzes how they have found ways to cut costs while helping improve quality for their new emerging markets by stopping the internal manufacture of component parts and fulfilling component needs from outside of the organizations.
Currently, there are over three hundred platforms globally available to Ford. Ford has a long-term strategy in place that will eventually reduce that number to approximately 250 by 2008. Ford will be able to produce a greater number of vehicles on fewer platforms. General Motors has similar plans. Platform commonization has influenced a similar strategy for parts suppliers. Several vehicle manufacturers are sharing components across multiple vehicles and platforms. Automakers, for example, realized 23 different batteries or 18 unique cigarette lighters across their model ranges was too costly and complex. In some cases there were legitimate technical or commercial reasons for such complexity. But for the vast majority of applications, it could no longer be justified. ”