Six Sigma Initiatives Streamline Operations

As its lead logistics provider (LLP), Penske’s quality team of associates are trained in Six Sigma practices and work closely with Ford to streamline operations and create and maintain a more centralized logistics network.

Together, they uncovered several areas for real cost savings as a result of reducing inbound carrier discrepancies, eliminating unnecessary premium costs and reducing shipment overages.

Plus, Penske implemented accountability procedures and advanced logistics management technologies to gain more visibility of its overall supply network.

Challenges

• To develop, implement and operate a centralized logistics network for Ford

• To streamline supplier and carrier operations for improved performance and accountability

• To provide Ford with real-time supply chain and financial visibility

Solutions

• Penske established 10 Order Dispatch Centers (ODCs) and consolidated shipments to plants. Approximately 1,200 trailers now ship to and from Ford’s ODCs per day, with most trucks at 95 percent capacity. Penske has reduced plant inventory by 15 percent.

• Penske trained more than 1,500 suppliers on a uniform set of procedures and logistics technologies. Stringent carrier requirements and a Carrier Rating System were implemented to measure carrier performance.

• Penske implemented strict accountability procedures and advanced logistics management technologies to gain real-time visibility of delivery status, routing schedules and productivity. A new freight billing system was designed to immediately capture logistics costs.