Sustainability Problems with Sustainability in the Ford Motor Company

Abstract

Supply chain management is a key element of corporate activity aimed at delivering the maximum possible customer satisfaction in terms of quality and price. It involves questions of market transparency, global access to the latest technologies and top suppliers, and maximizing economies of scale by consolidating group purchasing volumes. The Volkswagen Group spent some 90 billion euros on production components in 2010. With its "Sustainability in Supplier Relationships" concept launched in 2006, the Volkswagen Group has introduced standards, structures, and processes aimed at integrating environmental and social requirements more closely into its procurement processes (Koplin/Seuring/Mesterharm, 2007).

The concept comprises four elements: (1) requirements in relation to supplier sustainability; (2) early detection of risks; (3) integration into procurement processes; and (4) supplier improvement and development processes. The integration of sustainability aspects into procurement processes pursues two key goals: First, potential risks and problem areas can be identified at an early stage. Secondly, an additional competitive edge can be developed through the company's relations with its suppliers over the medium to long term. This approach is based on the idea that an environmentally aware and socially committed supplier will also be an outstandingly good and reliable partner in a commercial sense too, delivering performance from which the company can profit as a customer over the long term. Simply safeguarding the company against external criticism is not enough to ensure the long-term, future-oriented sustainability of supply chain management. Rather, policies must be focused on the development capability of the supply chain based on reciprocal learning processes from "win-win situations," both for the supplier and for the customer. For example, improvements to a supplier's environmental management system can lead to increases in productivity thanks to the elimination of defects and mistakes, thereby enhancing delivery performance.

Sustainability Problems with Sustainability in the Ford Motor Company

The automobile industry is responsible for approximately one-fifth of the pollution in the United States (Car Emissions and Global Warming, 2018). As one of the largest automobile manufacturers in the United States, Ford Motor Company has a major responsibility in setting the standard for sustainable and ecologically friendly companies. Ford's flagship vehicle is the Ford "F" series. The Ford F series consists of several different kinds of trucks that are not exactly environmentally friendly. They also run on any kind of fuel and do not need to run on energy-efficient fuel. Ford also focuses on SUVs, which are also not fuel-efficient. In 1998, Ford was ordered to pay a 7.8 million-dollar settlement under the allegations that it violated EPA guidelines (Ford Motor Company Clean Air Settlement, 2016). The Ford Motor Company illegally planted a device in vans that resulted in 60,000 vans being recalled. The device was meant to increase the fuel efficiency of the vans but instead increased the release of cancer-causing smog into the atmosphere. This event was a financial and public relations failure for the Ford Motor Company. After this event, the Ford Motor Company decided to revamp its environmental efforts in the year 2000.

When Henry Ford created the Ford Motor Company, he set a goal for the company to produce no waste for landfills (Ford and Hackett 2018). This was revolutionary for the time, as there was not even a term for someone who cared about the environment. In the twenty-first century, interest in a more environmentally friendly world has increased more than ever. People are starting to become more aware of the damage done to the Earth by pollution. Ford has been traditionally known for the trucks they create, such as the Ford F150 pick-up truck, which was the most popular vehicle of 2017 (Zhang, 2018).

Ford has also stated that they would like to create a lot more environmentally friendly vehicles. "In addition, at Ford, we believe we must deliver on CO2 reductions consistent with the Paris Climate Accord. We already have charted a course for our future that includes investing $11 billion to put 40 hybrid and fully electric vehicle models on the road by 2022, as well as responsible development of the self-driving car" (Ford and Hackett, 2018). Ford realizes that sustainable cars are the future. Ford tries to use a lot of recycled materials in its cars. For instance, the Ford Escape, which is their most popular SUV, uses approximately 25 recycled bottles to make the carpeting. There has also been a big interest in self-driving cars. Because of this, Ford has invested substantially in this part of the industry, even though their prime moneymakers are trucks and SUVs.

This diagram demonstrates Ford's recent sustainability efforts.

Ford has been trying to be more open about its suppliers. They now audit suppliers to determine exactly where they get their raw materials from (Transparency Throughout the Supply Chain 2018). Every year, Ford publishes a transparency report in order to be open with their investors and customers. This report details the findings of Ford's sustainability audits and determines any issues that are found. Ford also issues an annual human rights report. Ford, as a company, does its best to ensure that the human rights of all of its workers are not violated. They do this by offering diversity training to all employees and by also holding seminars regarding the importance of fairness and civility. The company's official statement regarding human rights is as follows: "Ford is committed to respecting human rights everywhere we operate and throughout our entire supply chain.

"We aim to ensure that everything we make or that others make for us complies with both local law and our commitment to human rights protection" (Transparency Throughout the Supply Chain, 2018). The statement shows that Ford is willing to do whatever it takes to ensure that the company does the right thing.

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