FRAMINGHAM (02/04/2000) - Ford Motor Co. and Atlanta-based United Parcel Service of America Inc. have teamed up to build a system designed to slash the time it takes to deliver a vehicle from the factory floor to dealerships by as much as 40%.
It currently takes the Dearborn, Mich., automaker 14 to 15 days to deliver vehicles from its factories to customers, company officials said.
The companies said 150 employees from UPS Logistics Group and 40 employees from Ford would work together on the project. However, company officials wouldn't release any details on the financial aspects or the information systems the team will be creating.
Frank Taylor, Ford's vice president of materials, planning and logistics, said the alliance would boost customer satisfaction, in part by providing more precise vehicle delivery information while also trimming distribution and inventory costs. As part of the project, Ford plans to "re-engineer its transportation network of rail and road carriers to optimize speed, precision and reliability," Taylor said.
New IT and More
"We are introducing new management practices, eliminating bottlenecks, minimizing delays and providing information technology systems that greatly improve the monitoring of vehicles across the entire journey to the customer," said Dan DiMaggio, CEO of UPS Logistics Group.
Greg Burns, an analyst at Lazard Freres & Co. in New York, said the deal could help cut Ford's distribution costs associated with online procurements.
"It's extremely important to streamline supplier distribution costs," Burns said. "You can have the best online exchange, but there are trade-offs on warehousing, transportation and inventory-carrying costs, and unless you can make decisions in real time, you lose against that trade-off."
Real-time, supply-chain optimization technology will also help keep costs down, said Burns.
DiMaggio said UPS Logistics Group will provide Ford dealers, and ultimately their customers, with the capability to track vehicles throughout the journey from production to delivery via the Internet.
Scheduled to be launched next month, the network will be phased in over a 12-month period, Taylor said. The first phase of the project will focus on the Western and Southwestern regions of the U.S. before the project expands through the country and into Canada.
The network is expected to be fully operational next year, with dealer online systems completed later this year and customer online systems finished soon after.
DiMaggio said that after the first year, UPS may team with other automakers to create similar information systems.
Computerworld reporter Lee Copeland contributed to this article.