Ford aims to improve supply chain efficiency with overhaul of manufacturing plant

Less than two years have passed since Ford Motor Co. almost shuttered its doors amidst lackluster sales and massive losses. This week, the car maker, the only member of the "Big Three" that did not receive government assistance, announced that it will invest $600 million to overhaul a factory in Louisville, Kentucky.

Currently, the plant is responsible for the production of the Ford Explorer, but after its extensive renovations, it will be used to build a newly redesigned version of the popular Escape compact SUV. Upon completion, the plant not only will operate two shifts instead of one, but also will employ 1,800 more workers - from 1,100 to 2,900. The factory will change into Ford's most versatile manufacturing outfit, producing small cars, SUVs and wagons in a move that mirrors the successful supply chain strategies of Japanese companies like Honda and Toyota.

As Ford has recovered to become the world's most profitable car maker, it has focused heavily on how it could improve its supply chain. Michael Robinet, an analyst at IHS Automotive, affirms that while the company used to "overbuild and then tape money to the hood" through its discounts, it now nimbly adjusts its manufacturing to increase efficiency and augment revenue.

Ford spokeswoman Marcey Evans declared that plant changes will represent a "pretty major overhaul." With the improved supply chain efficiency, Ford hopes to further the success it has seen this year: U.S. sales have risen 21 percent and it has earned $6.37 billion in the first nine months alone.