Read the case study below and answer the following questions. Ford Motor Company announces its intention of a strategic collaboration with its major supplier GlobalFoundries to address the automotive semiconductor supply shortage.

The entire automotive supply chain, from OEMs to lower-tier suppliers, is in need of a fundamental restructuring because the relationship between cost and risk has gone out of balance. With supply lines that stretch across oceans and continents, and an extraordinary level of interdependency, there is simply not enough resiliency to absordb climate, political or health disruptions. The relentless drive to remove costs and increase speed has left the supply chain too brittle, with cracks everywhere.

In hopes of addressing the continuing shortage of semiconductors in the automotive industry, Ford Motor Company has announced its intention in forming a new strategic collaboration with its major supplier, GlobalFoundries. With this collaboration, the two aim to boost semiconductor supplies for Ford and the US automotive industry. "It's critical that we create new ways of working with suppliers to give Ford - and America - greater independence in delivering the technologies and features our customers will most value in the future. This agreement is just the beginning, and a key part of our plan to vertically integrate key technologies and capabilities that will differentiate Ford far into the future," said Jim Farley, Ford president and CEO.

Details of the agreement between Ford Motor Company and GlobalFoundries

The non-binding agreement which will signed by the two companies will open doors for GlobalFoundries to expand its semiconductor supply for Ford's current lineup, as well as see the two conduct joint research and development to address the growing demand in the industry, including semiconductor solutions for ADAS, battery management systems, and in-vehicle networking.

GlobalFoundries and Ford Motor Group also plan to explore expanded semiconductor manufacturing opportunities. "GF is committed to building innovative alliances with the world's leading companies to enable the features in products that are pervasive throughout people's lives. Our agreement with Ford is a key step forward in strengthening our cooperation and partnership with automakers to spur innovation, bring new features to market faster, and ensure long-term, supply- demand balance," added Tom Caulfield, GF CEO.

This new collaboration between GlobalFoundries and Ford Motor Company aligns with their joint commitments to building innovative business relationships to balance the supply and demand for semiconductors in the automotive industry. The collaboration also aligns with their efforts to fur the technological innovation in the US.

The two companies hopes to leverage their strengths to better compete, innovate and serve customers, but does not involve cross-ownership between the two. These companies need to find a way to cooperate on design, procurement, logistics, manufacturing processes and quality throughout the duration of the contract.

The case study was adapted from: https://www.forbes.com/sites/forbesbusinesscouncil/2021/09/22/overcoming-supply-chain-issues-automotive- oems-and-suppliers-must-work-together/?sh=ff3226c4a223 Accessed on 11th December 2021.

1. Suggest the possible areas or conditions that Ford Motor Company to focus during their procurement agreement negotiation with Global Foundries.