Ford Essay

1474 Words 6 Pages
CASE STUDY

Ford Motor Company
Ford Motor Company, one of the world’s largest automotive manufacturers, has worked with Penske on several Six Sigma initiatives. As its lead logistics provider (LLP), Penske’s quality team of associates are trained in Six Sigma practices and work closely with Ford to streamline operations and create and maintain a more centralized logistics network. Together, they uncovered several areas for real cost savings as a result of reducing inbound carrier discrepancies, eliminating unnecessary premium costs and reducing shipment overages. Plus, Penske implemented accountability procedures and advanced logistics management technologies to gain more visibility of its overall supply network.

Six Sigma
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Penske would provide Ford with a single point of contact for all logistics operations. By working with individual plants and corporate management, Penske established a baseline of current operations and outlined the proposed solutions. The new logistics program would establish a Penske Logistics Center that included the following core functions: Network Design Optimization – implement a more efficient inbound materials strategy through order dispatching centers (ODC) Carrier and Premium Freight Management – manage all carriers and logistics companies, while reducing premium freight costs Information Technology System Integration – achieve realtime visibility of supply chain shipments, schedules and orders Finance Management – improve freight bill payment, claim processing and resolution throughout the supply chain Upon development of this new plan, the Penske/Ford team began evaluating Ford’s existing network design. Under the plant-centric approach, suppliers would make multiple deliveries of the same parts to different plants. A supplier would pick up a small load, deliver it to one plant, pick-up another small load

Solutions
• Penske established 10 Order Dispatch Centers (ODCs) and consolidated shipments to plants. Approximately 1,200 trailers now ship to and from Ford’s ODCs per day, with most trucks at 95 percent capacity. Penske has reduced plant inventory by 15 percent. • Penske trained more

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