This is the solution of famous Penske case study on Ford Motor Company. The case describe how Penske streamlined logistics operation using a single set of procedures for all logistics operations. Earlier, Ford was suffering from inefficient complicated logistics and very little financial control over it. At the same time Ford's logistics was not real time. Penske implemented a centralized approach along with Information System Integration ensuring proper financial control. They succeeded, huge cost saving, 15 percent inventory minimize, no half empty trucks for inbound and outbound supply.

1. Six Sigma initiatives streamline
operations
A FORD MOTOR AND PENSKE CASE ON LOGISTICS OPERATIONS

2. Team C
Asad
Tanzina

3. Contents
 Introducing Ford and Penske
 Understanding the case- The Logistics Challenges.
 Six Sigma- More Efficient Operations
 Ford and Penske- Streamline Logistics Operations
 The Solutions- Consolidating Logistics Operation
 Single set of procedure for all logistic operations
 Achievements

4. Ford Motor Company
 One of the world’s largest automotive
manufacturer
 Established by Henry Ford on June 16, 1903
 Headquarters is in Dearborn, Michigan, U.S.A;
operating worldwide
 Products- Automobiles, Luxury Vehicles,
Commercial Vehicles, Automotive parts
 Major brands: Ford, Lincoln, Mercury, Mazda,
Land Rover, Aston Martin and Volvo
 Number of Employees- 201,00 (2016)

5. Penske Corporation
 Penske Corporation is an privately held, diversified transportation services
company
 It’s headquarters is in Bloomfield Township, Michigan, America
 Established in 1969
 Products- Automotive, Truck Leasing, Motor Group, Logistics
 Numbers of Employees- above 5000
 Penske's subsidiaries include: Team Penske, Penske Motor Group, Penske Truck
Leasing, Penske Automotive Group, Detroit Diesel

6. Understanding the case- the logistics
challenges
 Decentralized logistics- half-empty trucks
 Less financial control over logistics operations
 Not real time operation- lack of velocity and visibility

7. Six Sigma-More Efficient Operations
Six Sigma represents an ideology that
focuses on statistical improvements to a
business process. Therefore, practitioners of
Six Sigma are those business people who use
statistics, financial analysis and project
management to achieve improved business
functionality. Finally, it's a philosophy that
promotes the idea that all business processes
can be measured and optimized.

8. Ford and Penske- Streamline
Logistics Operations
Penske Logistics began its relationship with Ford as lead logistics provider
(LLP) for Ford’s assembly plant in Norfolk, Va. Ford dreams the solutions of
the challenges and streamline logistics operations.

9. The Solutions- Consolidating Logistics
Operation
Penske would provide Ford with a single point of contact for all logistics
operations with the following core functions:
 Network Design Optimization
 Carrier and Premium Freight Management
 Information Technology System Integration
 Finance Management

10. Consolidating Logistics Operation
Network Design Optimization
10 Order Dispatch Centers (ODCs)
Cross-docking of shipments at ODCs
scheduled basis loads to reduce milk
runs and LTL shipments
1,500 suppliers were trained
Carrier and Premium Freight
Management
Stringent carrier requirements
Scheduled pick up and delivery
Implementing Carrier Rating System
Verify order accuracy, adequate
packaging, labeling, and freight damage

11. Consolidating Logistics Operation
Information Technology System
Integration
Logistics Management System and RouteAssist
Web-based metric reporting system and order
tracking software
Electronic driver log
Real time carrier management system
Financial Management
Simple billing system
Plant wise cost allocation
Proper Financial control

12. Achievements
 No half-empty trucks, huge cost savings
 Cross-dock, 15 percent inventory minimize
 Real time logistics operations
 Proper financial control on logistics operation
 Single set of procedure for all logistics operation

13. Single set of procedure for all logistic
operations
 Trained 1500 suppliers
 Implemented several information systems
 Trucks, driver were maintained technological
requirements
 ODCs were also maintained such requirement
“Having a single point of contact delivers more
than cost benefits. Penske allows us to clearly
understand how our logistics operations impact
the entire company. From the assembly line to the
end consumer, the efficiencies provided by Penske
are realized at virtually every level throughout
Ford.”
Grant Belanger, Director of Material Planning and
Logistics,
Ford Motor Company