Supply Excellence has closely followed the proposed alliance between General Motors, Nissan, and Renault and the potential benefits it would have for GM’s supply management operations. In previous posts, I assesed the likelihood that these suggested synergies would materialize. I also examined the advanced supply management approaches GM is using to shave an additional $2 billion from its procurement costs this year.

Now Ford Motor Company is revving up its own overhaul — and may throw a wrench in GM’s plans in the process. Recently toppled by Toyota from its long-held post as the world’s second-largest automaker, Ford is undergoing some drastic restructuring and cost-cutting. In January, the embattled automaker announced plans to shutter 14 factories and eliminate 30,000 jobs through 2012. Unfortunately, expected benefits from these efforts may be too little too late.

Evidence: Just last week, Ford reduced its second-half production plans and announced plans to shut 10 North American plants for extended periods for the remainder of the year, reducing its purchase of key assemblies and raw materials, such as steel, electronic components, and plastics. Ford is expected to unveil details of a broader cost-cutting plan next month.

Ford is now investigating potential alliances of its own. Just yesterday, the New York Times reported that, as part of his recruiting effort Ford CEO William Clay Ford Jr. had entered into preliminary alliance discussions with Carlos Ghosn, the CEO of both Nissan and Renault. (A separate article this morning reported that Ford execs may take the embattled automaker private.) While details are sketchy, a Ford-Nissan-Renault union would likely tout similar synergies as those expressed by GM. Much of the savings would come from a consolidation of manufacturing capacity, platform and system standardization across vehicle models, and significant reductions in supplier numbers and supply costs.

Years of tracking the supply management approaches (and blunders) of major automotive companies lead me to believe that supply savings yielded from a Ford-Nissan-Renault alliance would be muted by Ford’s previous efforts to rationalize and cut costs from its supply base. Just last year, Ford announced plans to cut the number of suppliers from whom it buys its key assemblies and parts — such as seats tires, and bumpers – by more than 60%. Ford did not reveal how much it would save by the move, but a 1% to 3% reduction in its $90 billion annual supply bill is not out of the question, particularly considering the above mentioned plans to cut production and reduce consumption of major commodities.

(Interesing sidebar, a recent Purchasing Magazine article suggests that Ford’s production slowdown might be good news for other buyers as it will free up supply of steel, aluminum, plastics, copper wiring, electronic components, and other production materials. I’m sure Honda and Toyota will be more than happy to pick up the slack at favorable prices.)

However, comments in a recent post from Procurement Central master Dave Stephens questions whether Ford has the skills to make supply management job one. Dave tells the following story of his experience with Ford’s procurement team in the late 1990s: “I remember and have shared many of the Ford successes. Ironically, and tellingly, one of the biggest savings areas were tires. Ford buyers, for years, thought 4 tires cost around $100. Nope. Try $40.”

Despite such horror stories, Ford has overhauled its supply management engine in recent years, incorporating advanced features, such as parts standardization and reuse and co-sourcing with suppliers. One example: Ford has used its commodity expertise and buying clout to negotiate favored trading terms with material and part suppliers. The automaker shares its preferred pricing and availability with Tier One and sub-tier supply partners to lower costs and ensure supply availability across the supply chain.

Innovative supply management approaches like these should drive some big benefits and savings both for Ford and its suppliers. The question is whether supply management improvements alone are enough to save the company.