Ford Motor Company and UPS Logistics Group
Ahead of Schedule In Vehicle Delivery Improvements
DEARBORN, Mich., Feb. 21 Ford Motor Company
today announced that its 12-month-old alliance with UPS Logistics Group, a
subsidiary of United Parcel Service , has successfully sliced
vehicle transport time by 26 percent, or four days. The initiative is six
months ahead of schedule and winning praise from Ford dealers.
"We exceeded even our own high expectations of how soon we would realize
tangible results from the supply chain innovations Ford and UPS Logistics
Group have implemented," said Frank Taylor, vice president, Material, Planning
and Logistics, Ford Motor Company. "With the results we've already achieved,
we expect to meet our goal of decreasing delivery time by up to 40 percent.
The real winners are our dealers and ultimately our customers, who now have
greater confidence that once a Ford, Lincoln, or Mercury vehicle leaves the
factory, it will arrive when promised."
By shaving four days off the delivery cycle and re-engineering the
network, Ford is realizing a $1 billion dollar reduction in vehicle inventory
and more than $125 million in inventory carrying cost reductions on an
annualized basis. "The savings will continue to grow as our precision, web-
enabled system reaches maturity and we surface and eliminate more non-value-
added activities," said Taylor.
Ford and UPS Logistics Group launched the alliance a year ago to
reengineer Ford's vehicle delivery system amid rising consumer demand for on
time vehicle delivery. UPS Logistics Group created UPS Autogistics as a
business unit to manage the project.
"With a single network manager in place to analyze any potential problems
before they occur, we've managed to avoid bottlenecks, reduce the amount of
assets in the supply chain and cut inventory carrying costs," said Tom
Kolakowski, manager of Ford North American Vehicle Logistics.
Ford executives said the Autogistics network is running well ahead of
schedule, even with record vehicle volumes in 2000. By the end of the first
quarter 2001, the newly reengineered network will be fully operational in the
US, Canada and Mexico. UPS Autogistics will ultimately oversee the
distribution network dedicated to serving 21 Ford Motor Company assembly
plants, 4 rail centers and 55 destination ramps, providing delivery to more
than 6,000 Ford, Lincoln and Mercury dealers throughout North America.
"We have added the same reliability and speed to the Ford delivery network
that we have within the UPS package network," said Denny Barts, vice
president, UPS Autogistics. "We are truly setting a new standard of delivery
for the automotive industry."
Order fulfillment is not just about quick turnaround but customer
satisfaction. UPS Autogistics is working with a vehicle delivery subcommittee
comprised of dealer council members from Ford and Lincoln Mercury that serve
as an advisory board. Subcommittee member and dealer Chuck Spaeth notes that
the initiative has been successful on a number of fronts. "There is less
damage to the vehicle when it arrives -- such as dents and scratches," said
Spaeth, who owns two Ford dealerships in southwestern Minnesota. "Since
customers don't have to wait as long for vehicles, we make the sale sooner,
our inventory turn is better and we get the trade-in vehicle earlier. So when
you start adding it up, this venture is really beginning to make a difference
to our bottom line."
Ford's distribution network is based on a disciplined hub-and-spoke system
utilizing both rail and ground transportation. The newly re-engineered
network improved reliability and speed to dealers by considering vehicle
demand, assigning production volumes from each plant to the appropriate rail
and truck haul-away carriers in line with this demand and then, determining
the optimum sourcing lanes, loads and delivery schedule for each of the 6,000
dealers. Previously, carriers worked independently on their own lane
optimization, rather than working together with others to maximize loads and
schedules for the entire network.
One of the initiative's early achievements has been the ability to
integrate the entire supply chain and provide Autogistics operators complete
visibility to track the journey of each vehicle along the transport route via
a web enabled system. The new system, developed by UPS Autogistics, will
provide Ford the latest information on vehicle transit status. This data can
be rapidly communicated to update dealers on a vehicle's progress en route.
About UPS Logistics Group
UPS Logistics Group, a subsidiary of United Parcel Service, offers global
supply chain management solutions. Its key services are: supply chain
management, transportation services, logistics technologies and service parts
logistics. More information is available at http://www.upslogistics.com .
Ford Motor Company & UPS Autogistics
Media Fact Sheet
February 21, 2001
Background
UPS Logistic Group, through its UPS Autogistics unit, assumed management
of Ford Motor Company's North American finished vehicle delivery network on
March 1, 2000. A year later, average transit times for Ford, Lincoln and
Mercury vehicles have been cut by 26%. Dealers now have more reliability and
predictability in their vehicle delivery dates. Ford also experienced a 29%
reduction in average daily vehicle inventory in its distribution "pipeline."
Long-Term (2003) Goals
* Reliability 95 percent on time delivery within a day of scheduled
delivery
* Speed 8-day maximum delivery within North America
* Visibility Latest data on vehicle transit status from the UPS
Autogistics-managed delivery system
Facts
* Ford, Lincoln & Mercury vehicles shipped in 2000......4.5 million
* Average vehicle delivery days January 1999............15.5
* Year-end 2000 average delivery days goal..............12.0
* Actual year-end 2000 vehicle delivery days............11.5
* Ford, Lincoln & Mercury dealers in U.S................6,300
For More Information:
Dealer Resources
Jerry Reynolds Pete Greiner Jerry Zoeller Bob Cerame
Prestige Ford Greiner Ford Zoeller-Davidson Ford Cerame Lincoln-
Mercury
Garland, TX Casper, WY Weatherford, OK St. Louis, MO
972-864-3673 307-266-1680 580-772-3319 314-831-0200
Vehicle Carrier Resources
John Richter Brian Daley Paul White Andrew Gonta
VP Operations VP-Marketing Asst. VP-Automotive VP-
Automotive Allied BNSF Railway Canadian
Hadley Auto Automotive National
Transport Group Railroad
714-556-2701 248-263-2503 248-594-6172 248-740-6087
