Logistics Partnership Saves Ford $1 Billion

ByMichael A. Verespej Your company may not be the size of Ford Motor Co., but you may want to evaluate the logistics system you use to assess the potential savings of doing things a different way. Ford says that its year-old partnership with UPS Logistics Group, a subsidiary of United Parcel Service, has cut the average transit time of new Ford, Lincoln, and Mercury vehicles by four days -- or 26%. It also has reduced annual vehicle inventory costs by $1 billion and trimmed annual inventory-carrying costs by more than $125 million. And that's just the savings so far in North America. Also, before the system becomes fully operational in April, Ford anticipates at least another two- to two-and-half-day reduction in transit time. Ford also says it will expand the program to include shipping of its Volvo, Mazda, and Jaguar car lines.