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Supplier Diversity

Ford is growing autoland MBEs. EWIE is one of them

It's Ford's belief that diversity in the supply chain provides a competitive edge. In 2004, the company spent $3.7 billion with tier 1 diverse suppliers

 
 

Armando Ojeda: working with minority suppliers is a commitment to helping create wealth and jobs.

Armando Ojeda: working with minority suppliers is a commitment to helping create wealth and jobs.

Encouraging MBE and WBE participation in the Ford supply chain is a company commitment, notes Armando Ojeda, director of supplier diversity development at Ford Motor Co (Dearborn, MI).

Ford began fostering business relationships with MBEs in the early 1970's. The intent was to economically empower diverse communities; the effort began after the Detroit, MI riots in 1967, Ojeda explains. "Henry Ford II, who was then chairman of the Ford Motor Co board of directors, stood at the top of the company's twelve-story building. He saw that Detroit was burning, and made a commitment to do something about it."

Along with others in the domestic automotive industry, Ford took the lead in implementing affirmative action initiatives to diversify the workforce. The company was also an early leader in offering business opportunities for racial and ethnic minorities who wanted to become Ford dealers and suppliers.

The energetic effort has continued. In supplier diversity, Ojeda notes, Ford won the Billion Dollar Roundtable Vanguard award in 2001 for purchasing $3.5 billion worth of goods and services from MBEs the previous year. The company's then president and CEO, Jacques Nasser, explained the Ford philosophy: "Those who embrace diversity in their supply chain will have a competitive edge over those who do not."

In 2004, Ford spent $3.7 billion with diverse suppliers at the tier 1 level.

Developing companies
Working with minority suppliers is more than just willingness to purchase their products and services, Ojeda declares. It's a commitment to helping create wealth and jobs and improve the economy of the communities where Ford does business.

That, he says, is where supplier diversity development comes in. The development portion of the program he leads targets Ford M/WBE suppliers with the ambition and potential to grow their business within the auto industry. "We've grown a number of first-generation minority automotive suppliers, and I would say EWIE is certainly one of those companies," Ojeda notes.

Launching EWIE
In 1981, Dilip K. Mullick and Manoj K. Sachdeva exhibited abrasives and grinding tools from a company in India at an industrial products show. There was a lot of interest in the display, and since the show was held in Detroit, many of the responders had auto industry connections.

Mullick and Sachdeva decided to start an industrial distribution company to market the products. They launched East West Industrial Engineering Company (EWIE) with financial support from family and friends.

Mullick was a lawyer in India before he came to the U.S., and Sachdeva is an accountant. EWIE began as an outlet for abrasives and grinding tools using industrial diamonds supplied by Mullick's uncle's diamond factory.

Today, the EWIE group of companies is among the top fifty industrial distributors in the U.S. It focuses on supply-chain optimization for metalworking and industrial supply commodities, particularly in the auto industry, with emphasis on engineering and tech support. Its annual sales exceed $100 million.

First chance at Ford
Ojeda notes that Ford has very stringent requirements for suppliers. "You don't become a Ford supplier overnight. But it is possible for a very small, high- quality supplier to start with us and grow to become a strategic supplier, as EWIE did.

"In today's environment, you need to have scale if you're going to service an automotive industry company the size of Ford," he adds with a smile.

In 1984 EWIE was given an opportunity to test its industrial files at Ford's Saline, KS plastics plant. Plant managers liked the quality and price.

"The tools were good," Mullick remembers with pleasure. "Slowly I opened up opportunities in the corporate organization.

"It took time knocking on doors but finally one of the buying managers opened the door and said, 'All right, what do you want to sell; what do you want to do?'"

The move to a bigger blanket
Mullick worked hard at the opportunity he was given, and in time he was offered a "blanket order," which is essentially the company's authorization to offer a certain product line to a certain plant. "We need grinding wheels and we'll buy them from you," a buyer said. But Mullick felt that EWIE ought to display more technical knowledge about abrasives.

"We couldn't afford it but we hired an engineer, and now we were providing service as well as product," he says. "Within a year things started opening up and they were sending us to one plant after another to show more and more products."

In 1994 EWIE competed with larger companies and won an important maintenance and repair blanket order (MRO) for Ford's Monroe, MI facility. It was based on the MBE's engineering support and customer service as well as product.

Four companies
EWIE currently has about 170 employees in four companies: EWIE North America, EWIE Canada, Production Service Management Inc (PSMI), and EWIE de Mexico, which also sells in Brazil. They grew out of the need for confidentiality in an early-1990s application of the paperless order system.

"At that time it was very, very different to use that kind of system," Mullick remarks. "None of the other major auto companies had this kind of relationship with a supplier."

Complete integration
Gautom Bose

Gautom Bose

For the past four years, EWIE has been completely integrated with Ford's IT systems in the supply chain area. Gautom Bose, EWIE's CIO, has a post-grad degree in computer science and experience at Oracle and Microsoft. He explains that this integration helps "improve information flow between trading partners.

"We can access their systems from our end, and our people in Ford's plants can access the EWIE computer. We have network links between the two companies," Bose says. It's done through the automotive network exchange (ANX) system, a sort of secured private Internet, he explains. EWIE also utilizes electronic data interchange for the complete quote-to-cash business cycle.

Commodity management
ME Brian Peters formerly worked in engine manufacturing at Ford. Now he's EWIE's director of commodity management.

Peters notes that Ford decided to go to commodity management supply (CMS) in 1995. Each Ford manufacturing facility was divided into twenty-one different commodity areas.

All the cutting-tool orders, for example, went under one big blanket. The Ford facilities buyers sought companies that could manage these commodity blankets in specific plants.

EWIE was selected as the CMS supplier for Ford's Livonia plant, expanded into other Ford power-train plants, and was certified as a Ford Q-1 Supplier in 1995. EWIE was about a $2 million company at that point, but as Mullick and Ford worked together to build the commodity management supply base for the abrasive side of the business, EWIE grew. Today it's one of Ford's larger tier 1 industrial material suppliers.

"As you launch the CMS you have to bring two or three thousand manufacturers under your umbrella," Peters notes. "Ford helped us a great deal in setting up relationships with those manufacturers, and EWIE engineers partnered with Ford engineers in the plant, so we were all working toward the same objective."

Tech advice was key
A key focus in this CMS partnering was EWIE's continuing investment in engineering talent, Peters explains. "Ford combined abrasive cutting tools and other special tools into a level 3 commodity, and we offered supply engineers as a resource to manage that activity."

EWIE currently has fifty techies working on site in Ford facilities. "Our onsite engineers don't just help Ford by supplying products. They'll also examine the overall process for areas of improvement and enhanced product performance to drive down the total cost to Ford," Peters says.

Mentoring
From 1995 through 2003, EWIE worked with Ford to strategically launch cutting tool and abrasive supply throughout Ford.

"And all the time Ford was mentoring us on managing the business," Peters adds. "Roy Forbes, the supplier diversity development business manager for our commodity, got us working with the staff engineering group and the purchasing organization."

Later on, he says, Ford helped even more by sponsoring EWIE execs at an executive development program at the University of Michigan.

Ojeda explains that this help is a natural development of the relationship. "When we find a really good supplier, someone we believe is adding value to the Ford procurement system and to the facilities, then it's a lot easier to mentor them."

Getting certified
EWIE was an MBE from the start, of course, but Mullick didn't realize it for years. Finally one of his buying manager contacts asked why he wasn't presenting his company as a minority supplier.

"I said, 'What is that?' I didn't know anything about it." So the manager told him how to apply, and EWIE became NMSDC certified.

Certification and M-tier
Ojeda is the Ford rep on the boards of the Michigan Minority Business Development Council (MMBDC), NMSDC and WBENC, and on the procurement council of the U.S. Hispanic Chamber of Commerce. Ford accepts NMSDC and WBENC certifications, of course, and as a federal government contractor it accepts SBA certifications for historically underutilized or disadvantaged folks, women, veterans and disabled vets.

Then there's the Ford Q-1 quality rating, Ford's requirement for suppliers. To be a Q-1 you have to be ISO certified.

Last year Ford implemented its multiple tier (M-tier) initiative to encourage Ford's tier 1 suppliers to develop supplier diversity programs of their own. "We set a 6 percent goal for them to meet," Ojeda says.

As a Ford tier 1 supplier, MBE EWIE also has to meet the M-tier requirements. "Starting this year," Bose notes, "we are tracking our own vendors as minority- and women-owned, and will have our own monthly purchase report in the system."

More than 50,000 parts
Today, EWIE provides Ford with procurement efficiencies and inventory reduction, and is active in Ford's total value management initiative. It currently manages more than 50,000 parts, adding up to millions of dollars of inventory, at some forty customer locations.

EWIE's major customers now include GM, American Axle, Honda, Eaton and Metaldyne, but Ford is still the largest. "EWIE," Ford's Ojeda notes, "is a benchmark supplier."

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