Ford Motor Company and Penske Logistics Case Study Essay

AbstractIn this shift study I would highlight the importance of Penske Logistics to Ford Motor Company, sensation of the worlds largest automotive manufacturers. Penske has a good reputation and ar highly valuable in the logistics field. They are very famous in using a process that identifies and removes errors efficiently with a station of tools that increases productiveness in the business called Six Sigma. Penske had many challenges to overcome standardised develop and implementing and drop dead a centralized logistics network, excessively streamline supplier and holder operations to improve performance and accountability, and finally provide a objective time furnish chain and financial visibility.Some of the solutions for the decentralized network, was to naturalized 10 dispersal centers, 1,200 trailers ship to and from the distribution centers per mean solar day with most trucks operate at 95% capacity and reduce plant line of descent by 15%. To improve performa nce Penske trained 1,500 suppliers on a limit of procedures in the logistic aspect, also they came up with mailman requirements for performance.Penske established hard accountability procedures for real time visibility of delivery status and routing agendas for the bring home the bacon chain procedures. For financial visibility, they created a bare-assed freight billing remains to capture logistics costs. In addition to all of this problems and solutions, Penske wants to be the leader supplier of logistics extinguishment to Ford Motor Company to be well k presently out there in the business and to create long perpetual alliances for their future benefit.Ford is an enormous corporation that owns diametrical car brands in todays market. Lincoln, Mercury, Land Rover, Aston Martin and Volvo make part of an alliance that is give-up the ghost by Ford. Ford was in big trouble with their decentralized logistic operations because they had 20 North Ameri female genitals assembly p lants run by 20 different logistic management operations. It was a complete atomic pile because aside from all the other important car brands joining they didnt cause any control over their daily operations lessen funds for material handling and transportation. Ford hired Penske to become a centralized operation run by only one company and not 20 different companies. This exit increase twain f number and visibility throughout the network and reduce supply chain products.Penske would manage all 19 assembly plants as well as heptad stamping pants. Penske develop a innovative logistics program called the Penske Logistics Center emphasizing in four different core components Establish incoming Origin dispersion Centers, reduce premium freight costs, real time visibility of shipments, schedule and positions and improve freight billing and claim processing. After this plan was reliable and processed Penske/Ford started working together to achieve the best for the return of the motor company.They started evaluating the current network design and find out that this plan required to be changed since it was being inefficient allowing excessive inventory change magnitude storage costs at plant level. To centralize transportation and distribution centers Penske created 10 ODCs for the purpose of having a central delivery point for suppliers. With this in core group shipments would now be cross-docked into trailers at the ODCs and loads would be delivered on a schedule basis instead of delivering half empty trucks. For carrier and premium freight management Penske goal was to maximize carrier expediency and minimize carrier costs.Since there were more strict requirements for carriers they would now have to meet safety, technological and equipment specifications, provide experience and certified drivers and most significantly show proven experience of on time delivery and pickups for the guest satisfaction. Carriers would now have a 15 minute window for on time delivery and pickup, also a manager will be on site for proper handling and order accuracy. Now with the new Carrier order System in effect all incidents would be recorded in the book and corrective actions for carriers would be in effect as well as carriers that have too many discrepancies in incidents would have a low carrier rate decreasing their chances on participating on future bids.Penske implemented new and advance nurture technology solutions, but one that caught my attention was the fact that drivers will now be provided with PDA scanners and an electronic driver log to process the claims meteoric and order receipts. Also every truck need to have planet communications and engine monitoring systems for load tracking, delivery of individual move is also scanned by using new innovative cross-dock scanners. With all of this new features developed and the centralized approach working the financial part needed to be clear as mud. Penske would provide drivers with an ea sy and simple set of procedures for accounting purposes.With the new Freight Billing System Ford can now tell which plant is producing less or which one is producing the most. 700 inbound and 500 outbound trailers move in and out Ford ODCs per day with most loads carrying at 95% capacity, unused docking outer space is being extremely high resulting in a 15% inventory reduction. The supply chain with the suppliers is now better and the new Carrier Rating System has put carriers in a dark spot by now increasing their service and getting better everyday so that they dont get a low carrier rating for future bids or future references for other Motor Companies.With ODCs monitoring shipments in and out Ford can now see the overall supply chain costs per plant in case they need to emerge expenses in the future they can shorten one plant and get out 19 more to generate revenue. The Penske Logistics center is also a achievement providing a single point of contact instead of 20 different po ints for logistics purposes. Penske not only work for their benefit to grow as a company but they have shorten expenses to Ford by trim back six ODCs and leaving four in full capacity so that new assembly plants can be created for production purposes. Ford has prestigious Penske with many awards like the Q1award which is the highest recognition of superior supplier quality.Recently in May 11, 2012 The European Logistics Association also honored this two companies for the European Logistics Award Excellence. I think that this case study was a expressed success not only for Ford Motor Company, but for Penske Logistics. They both worked together and in only 18 months they have done study improvements to the automotive industry that the competition would follow and perform effectively. Penske with 40+ geezerhood as a logistic provider would now be a prestigious company that not only the automotive industry will want but the industrial, retail, electrical and many more industries wi ll like to have on their side.I learned that the importance of the Six Sigma fantasy is really important for a company technological advancements in productivity and competency. Reducing errors to zero and making a complete and perfect order is crucial for centralized operations and to maintain streamline operations.I also learned that without logistics goods or in this case cars cant be transport it is almost impossible to send a car oversea without the proper tracking, communications and on time delivery and pickup. In a nut shell, I think that only leaving four diffuse for full capacity is a mistake because assembly plants will be more increasing the demand, but on the other hand it fall expenses and generate revenue.REFERENCESPenske Logistics Providers (2013, January).Ford Motor Company Six Sigma initiatives streamline operations. Retrieved from http// www.penskelogistics.com/casestudies/ford2.htmlSharonVille Organizations (2011, January).Penske Logistics applied science sup ply chains delivering business results. Retrieved from http//www.sharonville.org/econ/pdf/Presentation/Penske%20Logistics.pdf