This is the Ford Network. The lavender triangles represent the plants Light blue squares are the current mixing centers. Green and Red Diamonds represent origin and destination ramps respectively. The yellow stars are Ford Dealerships.
Pulling from the cost model data optimum sourcing lanes were developed. This would show which ramp should source which dealership.
Under the old system dealerships could be fed from multiple destination ramps. This proved to be costly and more difficult to manage.
As you can see the new design is much cleaner and eliminates the delivery overlap from various ramps.
This is how the entire U.S. looks. Again, no overlapping areas.
To run the cost model the demand for each type of vehicle delivered to each dealership was input. A dealership would have a demand from each plant that produced a vehicle they ordered. The production volume from each plant was assigned to a mixing center. The number of vehicles per rail car and the number of rail cars in each rail lane also had to be placed into the model. Essentially, we funneled volume into different lanes and allowed the model cost each option.
The model concentrated allocated volume in fewer lanes reducing the amount of destinations built by each plant.
While we have touched upon the benefits, let’s review them in greater detail. There are 5 primary beneficiaries that we will address.
1. The Autogistics network supports the “On Time Delivery” initiative and increases its chances for success. 2. For the first time the supply chain can be accurately analyzed by segment and activity. Core problems can be analyzed and solved in less time and with much greater accuracy. The potential for reducing system variation is a reality. 3. The manufacturer that can produce a reliable finished goods network can obtain a competitive edge in multiple ways. Increase customer satisfaction Reduce the total cost of a vehicle for manufacturer and dealer 4. Allows Ford a single source for finished vehicle logistics. 5. Car Trackers ability to measure and produce reports improves accountability throughout the supply chain and eliminates the continuous finger pointing. Key to successful systems of any type is an accurate feedback loop. That is now in place. More importantly, it allows more time to be expended solving the problem. 6. Where does this improve the cost picture? Shortened supply chain reduces the amount of assets in the chain and reduces the inventory carrying cost. A shortened and reliable chain will increase the potential for custom orders and internet orders and reduce build for inventory. Also stops additional expense of shipping diversions due to equipment shortages.
Inventories are maintained to provide cars for the buying public. When the source is not reliable higher inventories are maintained to ensure that stock is available and sales are not lost. The improved visibility and precision in the network allows a leaner inventory while not sacrificing sales. The ability to provide a customer an arrival date and meet that date enhances the buying experience thus increasing customer satisfaction Dealerships will be better able to plan car preparation functions due information on Car Tracker.
1. If velocity of the inventory increases, as it will, then the automotive rail cars will more quickly travel through the system. Reducing the amount of equipment needed will decrease the amount of future capital expenditures. 2. Using Car Tracker will enable the rail carriers to better plan and respond to the needs of Ford. 3. By combining existing UPS intermodal traffic with automotive traffic more dedicated trains can be created easing scheduling of crews and equipment. 4. The improved visibility promotes cooperation between the carriers.
1. Allows haulers to reduce equipment and maintain lot sizes. 2. Haulers will no longer have to respond with no notice. 3. Without having to deliver in a narrow window the car hauler can run multiple shifts and use the same equipment. Knowledge of what is in the supply chain enables them to increase routing effectiveness. 4. The system is no stronger than the weakest link. Getting away from optimizing sub systems through Car Tracker will force cooperation.
Ford Motor Company’s Finished Vehicle Distribution System April 2001 Ellen Ewing Project Director UPS Logistics Dr. John Vande Vate Exec. Director EMIL ISyE Georgia Tech
Ford Distribution Network Mixing Center Origin Plant Groupings Destination Ramp Planned Ramp Closure Edison Norfolk Atlanta Kentucky Ohio St Louis Canada St Paul Michigan Chicago Kansas City 15% of all vehicles go Haulaway Direct to Dealer within 200-300 Miles of the Assembly Plant 85% of all Vehicles go via Rail to a Hub (Mixing Center or Destination Ramp)
Final Outbound Rail Network with Carriers Mixing Centers Destination Ramps Union Pacific CSXT FEC BNSF Canadian Pacific Car Haul to Ramp Norfolk Southern Canadian National Edison Norfolk Atlanta Kentucky Ohio St Louis Canada St Paul Michigan Chicago Kansas City