Ford Motor Company is one of the renowned automotive manufacturers globally. With the use of six sigma, Penske has a reputation of providing highly valuable logistics. They often give processes that ensure elimination of unnecessary errors with the use of specific tools to increase productivity. The partnership between Penske and Ford has elicited positive growth, especially in logistical operations; therefore, fostering smooth functions.
Overview Ford Motor Company
Briefly, Ford was established in 1903 by Henry Ford. The company works to produce and sell automobiles. The brand of Ford and the majority of luxury cars are sold under Lincoln. Others include Mercury, Land Rover, Volvo, and Aston Martin-most of which are alliances ( Sheffi, 2013) . Ford has joint ventures globally in countries such as China, Brazil, United Kingdom, and Russia. However, the list of the countries in which it has ownership is vast and extends beyond the nations above. Ford is ranked second after General Motors Company as the largest firm dealing in automobile in the US.
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Why Ford Would Have Needed to Hire Penske Logistics
One of the major reasons that intrigued Ford to hire Penske is that Penske is famous for producing procedures that eradicate faults effectively to increase productivity. Also, Ford required a party that can be tasked with offering supply and carrier operations to ensure smooth performance and accountability in the system ( Christopher, 2016) . Moreover, before hiring, the company sourced from different logistical companies-around 20 different firms. Therefore, there was a need to avoid confusion, improve turnover, and centralize all operations.
Challenges Penske Had to Overcome
There were many challenges that Penske had to overcome. They had to develop and implement and run a centralized logistical network system, streamline carrier and supplier duties to enhance performance, and offer real-time supply chain as well as financial visibility. Also, they had to perform some decentralized network logistics such as establishing ten distribution centers and operating 1200 trailers ship in distribution centers ( Stanley, 2015) . Specifically, Penske had to control the decentralization mess which was arising in North America. The control over daily activities was a disaster as there was a loss of funds. Notably, the twenty different logistical firms confused the operations-sourcing Ford was a strategy to centralize all the operations and improve visibility and velocity in the entire network system.
How did Penske Improve Performance?
Penske improved the performance of Ford through training over 1500 suppliers with use of specific logistical procedures and created carrier necessities for the production. Secondly, they established stringent procedures of accountability for real-time delivery visibility as well as routing status. Thirdly, concerning financial profile, they came up with a freight billing system to organize and capture costs’ logistics. Notably, Penske strives to be the leading logistics provider to Ford and be renowned as one of the best firms establishing a long-lasting joint venture with Ford.
Successful Integration of Penske into Ford’s Operation
The link between Ford and Penske was a success and essential for both parties. In eighteen month or less, they had collaborated and done a massive job that competitors could not match in the automotive industry ( Ausherman, 2015) . The use of six sigma is crucial, a concept characteristic of Penske. Also, it is notable that it is difficult to transport cars overseas without proper logistical operations such as tracking, and efficient communication-something that Penske ensured.
Penske Company with use of six sigma initiatives has assisted Ford in many fronts. It has aided in ensuring centralized system to reduce confusion and enhance efficiency in all operations. Initially, Ford had a logistical operations nightmare because there were around twenty involved firms-a situations which have been solved since Penske was involved. In a nutshell, logistical requirements are helpful in fostering smooth operations and minimizing losses in various departments of a company.
References
Ausherman, N. (2015). Recruiting the Next Generation on Manufacturing Day.
Sheffi, Y. (2013). Logistics-intensive clusters: global competitiveness and regional growth. In
Handbook of global logistics (pp. 463-500). Springer, New York, NY.
Christopher, M. (2016). Logistics & supply chain management . Pearson UK.
Stanley, M. (2015). Autos & Auto-Related. Morgan Stanley Research .
