Ford Motor Company and Penske Logistics Case Study
FORD MOTOR COMPANY AND PENSKE LOGISTICS CASE STUDY
KEVIN BRAVO
EMBRY RIDDLE AERONAUTICAL UNIVERSITY
MARCH 4, 2012
Abstract
In this case study I would highlight the importance of Penske Logistics to Ford Motor Company, one of the world’s largest automotive manufacturers. Penske has a good reputation and are highly valuable in the logistics field. They are very famous in using a process that identifies and removes errors efficiently with a set of tools that increases productivity in the business called Six Sigma. Penske had many challenges to overcome like developing and implementing and operate a centralized logistics network, also streamline supplier and carrier operations to improve performance and accountability, and finally provide a real time supply chain and financial visibility. Some of the solutions for the decentralized network, was to established 10 distribution centers, 1,200 trailers ship to and from the distribution centers per day with most trucks operate at 95% capacity and reduce plant inventory by 15%. To improve performance Penske trained 1,500 suppliers on a set of procedures in the logistic aspect, also they came up with carrier requirements for performance. Penske established strict accountability procedures for real time visibility of delivery status and routing schedules for the supply chain procedures. For financial visibility, they created a new freight billing system to capture logistics costs. In addition to all of this problems and solutions, Penske wants to be the leader provider of logistics management to Ford Motor Company to be well known out there in the business and to create long lasting alliances for their future benefit.
Ford is an enormous company that owns different car brands in today’s market. Lincoln, Mercury, Land Rover, Aston Martin and Volvo make part of an alliance that is run by Ford. Ford was in big trouble with their decentralized logistic operations because they had 20 North American assembly plants
KEVIN BRAVO
EMBRY RIDDLE AERONAUTICAL UNIVERSITY
MARCH 4, 2012
Abstract
In this case study I would highlight the importance of Penske Logistics to Ford Motor Company, one of the world’s largest automotive manufacturers. Penske has a good reputation and are highly valuable in the logistics field. They are very famous in using a process that identifies and removes errors efficiently with a set of tools that increases productivity in the business called Six Sigma. Penske had many challenges to overcome like developing and implementing and operate a centralized logistics network, also streamline supplier and carrier operations to improve performance and accountability, and finally provide a real time supply chain and financial visibility. Some of the solutions for the decentralized network, was to established 10 distribution centers, 1,200 trailers ship to and from the distribution centers per day with most trucks operate at 95% capacity and reduce plant inventory by 15%. To improve performance Penske trained 1,500 suppliers on a set of procedures in the logistic aspect, also they came up with carrier requirements for performance. Penske established strict accountability procedures for real time visibility of delivery status and routing schedules for the supply chain procedures. For financial visibility, they created a new freight billing system to capture logistics costs. In addition to all of this problems and solutions, Penske wants to be the leader provider of logistics management to Ford Motor Company to be well known out there in the business and to create long lasting alliances for their future benefit.
Ford is an enormous company that owns different car brands in today’s market. Lincoln, Mercury, Land Rover, Aston Martin and Volvo make part of an alliance that is run by Ford. Ford was in big trouble with their decentralized logistic operations because they had 20 North American assembly plants
References: Penske Logistics Providers (2013, January). Ford Motor Company: Six Sigma initiatives streamline operations. Retrieved from http:// www.penskelogistics.com/casestudies/ford2.html SharonVille Organizations (2011, January). Penske Logistics engineering supply chains delivering business results. Retrieved from http://www.sharonville.org/econ/pdf/Presentation/Penske%20Logistics.pdf