Quality may be "job one" at Ford Motor Company, but managing the inbound flow of shipments from 4,000 global suppliers to nearly 100 plants worldwide has to be a close second. In fact, the goal at Ford has long been to devise a way to optimize its vast and complex global production network-and to use the internet to exchange and disseminate material movement and production planning data internally and with its suppliers and logistics service providers.
Earlier this year, Ford brought this goal to fruition with the help of Norcross, Ga.-based supply chain management solution provider, SynQuest. Called the Inbound Planning Engine (IPE), the optimization model developed by SynQuest and Ford now provides the mechanism to link together the inbound side of the automaker's production, supplier and service provider networks. Capable of simultaneously sifting through and evaluating a near-limitless assortment of factors to produce an optimized logistics plan, IPE gives Ford an alternative to the sequence-based decision-making processes on which managers of complex supply chain networks have depended for decades.
The IPE is essentially a supply chain decision-support tool. It takes material and production planning data and produces an optimized material flow in accordance with Ford's specified priorities. These priorities easily can be tweaked with each run of the model, which enables Ford to trade off elements and nuances within the supply chain network, thus providing the automaker with the luxury of playing "what if" with a high degree of reliability.
For example, certain production plant managers may want to apply specific policies and procedures for receiving and managing inventory and material at their locations, says Mary Jo Koenigbauer, manager of global logistics technologies at Ford.
"If we want to implement these specific business considerations, like having less than two hours of inventory on hand, we can plug in those constraints and see the change in logistics cost and the implications to the network," she says.
This scenario can be compared to the optimized and unconstrained logistics freight bill to support the plant.
"Now we can have a discussion," says Koenigbauer. "If it costs X to do that, is the new value greater than X? Is this the right business decision for the network?"
|"What excited us was solving the business problem holistically, simultaneously and optimally"|
-Mary Jo Koenigbauer,
Ford Motor Company
|"A company could use IPE to do tactical |
planning even down to the plant level."
-Paul Bender, SynQuest
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