Earlier this week, Ford Motor Company announced that it had recruited a former Apple and Tesla executive into the new role of advanced technology and embedded systems officer. This position reports directly to the auto maker’s CEO.

From our Supply Chain Matters lens, this appointment represents a further watershed development for the industry’s executive leadership that will have more positive supply chain implications down the road

Doug Field, who previously led Apple’s autonomous electric car development efforts, and before that, the development design of the Tesla Model 3 sedan, was appointed to this new executive leadership role. Field actually began his career at Ford in 1987 working on engineering and vehicle development. He then ventured out to the high-tech world at roles with people mover Segway, two separate roles at Apple, and then being recruited by Elon Musk in 2013 in product development for an EV sedan that would become Tesla’s Model 3 volume production car, designed to appeal to larger mainstream buyers.

Regarding this new appointment, Ford CEO Jim Farley indicated to reporters: “This is a monumental moment in time—a moment in time that I think we have now to really remake a 118-year-old company.” From our lens, that statement has significant meaning not only for Ford but the broader automotive sector as well.

Background

Ford’s goal is to not only convert the company’s product offerings to an eventual all-electric offering but also the ability to provide customers with a variety of digital services. The U.S. based auto maker has plans to invest upwards of $7 billion on autonomous vehicles over 10 years, $5 billion of that from 2021 forward. These efforts are part of the auto maker’s  Ford Mobility initiatives. In essence, this is the transformation of a classic U.S. automaker that has exhibited too much reliance on traditional industry practices.

In prior Supply Chain Matters commentaries focused specifically on automotive demand and supply networks, we have called industry participants attention to the challenges related to the coming together of automotive and high-tech supply networks.  As the global automotive industry continues to move toward product development and sales of vehicles that do not rely solely on fossil fuels, vehicle operation and composition will continue to be weighted toward added high-tech electronics including battery technologies. With that, the value-added supply network shares components similar to building personal computers and servers, smartphones or telecommunications devices.

As is now far more visible, the reality of this dependence is now manifested by the global wide shortage of discrete semiconductor devices that increasingly are part of the bill of material for today’s automotive vehicles. With software becoming more of a critical part of a vehicle’s operational and diagnostic system, embedded systems development morphs to be a critical product design consideration for auto makers. Further evidence of this reality is provided in the ongoing efforts of Foxconn. The globe’s largest high tech and electronics contract manufacturing services provider, has made strategic moves to become a contract manufacturing provider for start-up and mainstream auto makers focused on EV vehicles.

Broader Industry Perspective

In a prior glimpse of the future blog posting, we highlighted the appointment of a former semiconductor executive to now lead Ferrari, the globe’s most iconic luxury sport car and racing icon. Our perspective was that Ferrari’s CEO appointment can be a statement that the new leadership of the auto industry will be a far higher tech attuned and tech-savvy leadership style.

Production control systems predicated on Kanban and Just-in-Time inventory management work fine when there is reliable inventory availability. They are tested with conditions of supply network shortages and risks. Instead of command-and-control supply network bullying, the emphasis turns to collaborative product design and embedded systems integration, longer term supply network sourcing and joint production process management.

Under the current leadership of Jim Farley, Ford is already challenging traditional supply chain planning and inventory management thinking. In an August commentary, we highlighted the company’s decision to transform a set percentage of production to a make-to-order planning and production scheduling process to help reduce excessive finished goods inventory.

In the reporting of Ford’s new executive hire, The Wall Street Journal focused on what attracted Mr. Field back to Ford. His answer was rather revealing:

It’s awfully fashionable to start either autonomy companies or car companies. Many of them won’t have the staying power, the resources, the capabilities. Making vehicles is actually very hard.

We found the above statement rather candid and revealing, an acknowledgement that beyond all the high technology and services, an auto company’s core capabilities will continue to include proven manufacturing process and supply network scale.

Bob Ferrari

 

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