Ford said it will team with a unit of UPS to track the millions of cars and trucks it produces annually, using bar codes and the Internet. The companies expect the new system to reduce by up to 40 percent the time required to deliver vehicles to dealers and customers. Ford said it can take up to 12 days to deliver a vehicle from the factory to a dealer.
The UPS Logistics Group will re-engineer Ford's transportation network of rail and vehicle carriers to increase speed, precision and reliability of delivering Ford, Lincoln and Mercury brands in the United States, Canada and Mexico, Ford said. After the program is fully implemented, the auto maker will look at including its other vehicle brands.
With the new service, company executives said dealers will be able to log onto an Internet site to find out exactly where the vehicles they have ordered are in the distribution system, similar to the way consumers already can track UPS packages on the Internet using a tracking number.
In time, Ford said it hopes to extend the service to their customers who use the Web so they can follow their ordered vehicles through the distribution process.
"We are re-engineering the Ford delivery network--introducing new management practices, eliminating bottlenecks, minimizing delays, and providing information technology systems that greatly improve the monitoring of vehicles across the entire journey to the customer," UPS Logistics Group chief executive Dan DiMaggio said during a press conference this morning. "This will make it possible to watch the journey of the vehicle over the Web."
The companies didn't go into specific details of the deal, though UPS said it expects to commit 100 to 150 employees to the project. The program will launch in March and will be phased in over the following 12 to 15 months. Dealer online systems are expected to be complete later this year, with consumer systems online soon after.
The deal marks the third major Internet partnership for UPS's logistics unit. Athletic gear maker Nike uses UPS to handle its online orders, and DaimlerChrysler recently brought in UPS to help revamp a system used by dealers to order spare parts.
The e-commerce deals have gained UPS respect on Wall Street. The Atlanta-based company this week posted a 37.1 percent jump in fourth-quarter profits to $661 million, helped by surging international and Internet deals.
All the major auto makers are engaged in speeding up their delivery times to reduce the cost in vehicle inventory and meet dealer and customer demands.
Ford has embraced the Internet as a means to boost its total distribution model. In November, the company launched a joint business-to-business venture with database giant Oracle. AutoXchange, as it is called, is meant to help Ford make its $80 billion in purchases from more than 30,000 suppliers, the companies said. The business is intended to make it easier and cheaper for Ford to obtain parts and services needed to build autos by using the Internet to bring together the companies involved.
Based on the success of the venture, Ford announced in December it would spin off AutoXchange later this year.