When Ford’s Customer Service Division decided it needed to redesign its distribution network, it turned to The Progress Group for a creative and cost-effective solution. As a result, Ford is restructuring its parts delivery network around a customer-centric model. This design will improve response time by segmenting parts for timely repairs at the dealership.
“This design strategy is unique because it uses decentralization and centralization of inventory simultaneously to yield optimal service and cost reductions,” says Ford’s implementation leader.
- The Low-Volume/ Low-Cube Center (LV/LCC) will distribute small, low-volume products such as moldings, clips and fasteners. The LV/LCC will be located in Memphis (near a major air carrier hub) to provide late order cutoff times and improved order fulfillment to dealers.
- High-Cube Centers (HCC) will concentrate large products, such as sheet metal and bumpers, in three strategic locations to improve delivery reliability in conjunction with dealer repair needs.
- High-Velocity Centers (HVC) will concentrate high-volume parts in 19 locations close to the dealers to provide daily delivery and improve dealer inventory performance, while improving parts availability for customers' repairs. Items distributed by these centers - such as filters and spark plugs -- account for more than 80 percent of dealers' needs for customer repairs.
Ford aims to achieve higher fill, faster response time, and lower costs while delivering higher customer satisfaction from this network redesign. The company expects the transition to be completed in 2004.
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