Ford Exec: IT Has Changed How Company Buyers Do Their Jobs

At the inaugural event in Detroit to kick off the R. Gene Richter scholarship fund for undergraduates pursing professions in procurement, Nick Scheele, president and chief operating officer at Ford Motor Co. told InformationWeek "IT has dramatically changed the nature of how buyers at companies do their job because software has given them commonality and consistency in communication across the board."

But packaged software isn't always appropriate for very large companies because many products can't scale to their size. "Large companies like Ford or GM tend to develop their own systems," he said Thursday night. "Ford has its own, which is a bit of a problem when you have to interface with packaged software."

Providing the opening remarks, Scheele said Richter, who passed away suddenly last year, had worked at Ford for more than 23 years in various purchasing management positions, as well as Black and Decker, Hewlett-Packard, and IBM. Scheele said Richter revolutionized the procurement profession, spearheading collaborative efforts between suppliers and original equipment makers and found innovative methods to provide quality, yet control costs.

Ford in 2003 achieved globally $3.2 billion in cost reductions through a team effort involving all employees. "Purchasing was absolutely critical in this," he said. "The cost savings managed to offset the $3.2 billion spent in the United States on health care, with about one-third related to prescription drugs." The money saved through prudent cost cutting was enough to secure health benefits for nearly 560,000 people.

Scheele said it's not clear whether Ford's IT infrastructure contributed to cost savings, but called software technology "a necessity requirement to conduct business today," and said, "You can't pin it down as IT being responsible for any one specific thing, but you know it works."

During the evening, six undergraduates from Arizona State University and Michigan State University were presented with $5,000 scholarships for tuition assistance. They also were given internship opportunities. The undergraduates include Michelle Jackson, Lindsey Vasilenko, Shawn Shackleford, Jami Coop, Andrea Vack, and Leslie Waggoner. Software sponsors included Ariba, i2 Technology, and SAS.