New Ford CPO – why appoint a non-purchasing man?

We wrote yesterday about Ford’s appointment of Hau Thai-Tang as group vice president for global purchasing to succeed Tony Brown. Thai-Tang is a product development and engineering man, with no prior purchasing experience. Is that a vote of no confidence in the purchasing profession and a sign that there were no internal candidates in Ford’s purchasing team ready to step up to the top role?

Well, there are signs that Ford appreciate the sensitivity of this within the purchasing function. At the same time as Thai-Tang’s appointment was announced,  Birgit Behrendt was named vice president of global programs and purchasing operations, and Burt Jordan was been appointed vice president for global vehicle and powertrain purchasing and supplier diversity. They will both report to Thai-Tang.

These two executives are long-serving Ford purchasing leaders, and have effectively been promoted (to “corporate officer and VP” roles) whilst remaining in their same jobs. Now that may reflect the importance Ford places on Purchasing , but it is also clearly a vote of confidence in these two personally – it certainly looks like a “we really want you to stay, even though you didn’t get the CPO role” message.

And nothing wrong with that. They both have impressive cvs, and are industry figures in their own right – Jordan has been honoured several times as one of the industry’s most influential African-American automotive business leaders, and Behrendt was named "Woman of the Year" by Automotive News Europe magazine in 2008.

But returning to Thai-Tang, why move someone without purchasing experience into the CPO role? Well, it may in a sense actually be a sign of the importance of the function rather than the opposite. Everything in Thai-Tang’s cv (see yesterday’s post) marks him out as not just a star but probably a superstar. He’s only 46, yet has incredible global experience and has that motor racing link as well, which gives him an extra bit of motor geek credibility.

So this move may achieve two goals. Firstly, it brings engineering and procurement closer together, two functions that can clash in any organisation. Engineers want the best of everything, purchasing want to save money!  And secondly, if Thai-Tang is going to be a corporate leader in Ford, a main Board level guy, which look very likely,this move fills a gap in his cv, giving him experience of purchasing, which is so important in the automotive industry.

Along with the promotions of Behrendt and Jordan, moving Thai-Tang into purchasing may in fact simply emphasise how Ford perceive purchasing – as a central and critical function, and one that their top business leaders of the future need to understand well.

Voices (3)

  1. Chris C:

    One of the fundamentals in Rover/Honda days was that engineers “owned” the cost, ie were responsible for ensuring cost targets were sustained during development. Bringing Purchasing and Engineering together ensures that the job is done right in the first place and Purchasing are not left to pick up the pieces (or “meddle”!) once the vehicle is in volume production.

    I suspect Ford has tied itself up in knots with its Purchasing/Quality procedures and a fresh face is needed at the top to question fundamentals.

  2. Graham Smith:

    Back in the early 90’s during my formative years in procurement I worked at IBM in Havant one of the global manufacturing sites. Products were always design lead but with a very close focus on cost. IBM employed buyers and purchasing engineers in the same purchasing team to ensure both areas had appropriate focus and balance. An early example of what procurement should focus on which is value rather than chasing piece part cost to the detriment of other areas.

  3. Dan:

    Another benefit – with his engineering background, he’s probably better placed to tease out any innovation that they can get out of the supply chain. The motor industry is so developed (i.e. cut throat) that differentiation of their products is probably more important than a small saving on the bottom line.

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