Ford Introduces Chunk Management

In the summer of 1997, Ford announced to its suppliers that it was establishing a "chunk" management system. All new vehicle metal structures would be divided into three or four major portions with each chosen supplier (i.e., chunk manager) responsible for all components within that portion of the vehicle. To reduce lead time at Ford and to gain supplier commitment, Ford announced that advanced placement of new work (i.e., chunk managers) would take place without competitive bidding. Target agreements on piece price, tooling cost, and lead time would be established and equitably negotiated later with value engineering work acknowledged.

Chunk managers would be selected based upon superior project management ca-

♦Fictitious case. Reprinted from H. Kerzner, Applied Project Management: Best Practices on Implementation. New York: John Wiley, 2GGG, pp. 424-425.

pability, including program management skills, coordination responsibility, design feasibility, prototypes, tooling, testing, process sampling, and start of production for components and subassemblies. Chunk managers would function as the second tier component suppliers and coordinate vehicle build for multiple, different vehicle projects at varied stages in the development-tool-launch process.

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