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SynQuest, Ford Deliver a Novel Application for Inbound Logistics

Written By: Steve McVey
Published On: May 8 2000

SynQuest, Ford Deliver a Novel Application for Inbound Logistics
S. McVey - May 8, 2000

Event Summary

SynQuest, Inc. recently announced plans to commercialize a strategic tool for inbound logistics optimization. SynQuest Inbound Logistics Planning Engine is the product of a joint development venture with Ford Global Technologies, Inc., a subsidiary of Ford Motor Company. The planning engine is designed to help companies validate the efficiency of their inbound supply networks by finding an optimum delivery plan based on user-defined sets of parameters. A total of five modules are planned, including:

Logistics Configuration - determines the best transportation routes to ship products or components from suppliers to point of completion.

Rotation and Routing - turns routes into actual schedules that consider day-to-day logistics constraints such as needed shipment frequency and loading dock schedules. Returnable Containers (packaging)

Assignment - minimizes the cost of reverse logistics for returnable containers and pallets.

Mode Selection - determines the ideal transportation mode for each part and warehouse/plant/supplier combination.

Stowage - provides detailed loading configuration of part containers inside a vehicle to maximize shipment efficiency.

The first two modules, for logistics configuration and rotation/routing have been completed and the others are due before the end of calendar 2000.

Market Impact

Something worthy of mention that did not appear in the press announcement is the history behind the new solution. In 1996, Ford executives approached consultant Paul Bender with a request for help in sorting out their inbound logistics problems.

Like other automobile manufacturers, Ford routinely navigates through large numbers of parts and suppliers in order to satisfy its production needs. Ninety percent of the total cost of an automobile is determined by the series of assembly, delivery, and sourcing operations that occur before it rolls off the assembly line. Thus, relatively few cost-saving opportunities are afforded by the outbound transportation activities that deliver cars to consumers.

In late 1998, supply chain management vendor SynQuest bought Bender's consultancy and began joint development with Ford on a software application that would encapsulate Bender's insights on the inbound logistics problems. During the course of development, Ford outsourced its inbound logistics planning and operations to Penske Logistics and now uses the application to validate Penske's activities and suggest alternative plans.

SynQuest's planning engine offers users a potential boon in savings by allowing them to find the optimum combination of shipments, suppliers, sourcing locations, delivery frequencies, and parts according to parameters they define. Though many vendors offer logistics solutions, most of these either focus primarily on getting finished goods to customers and take the inbound portion for granted or merely manage existing inbound networks at an operational level and perpetuate cost inefficiencies.

With the commercialization of its planning engine, SynQuest enters the transportation planning software market with a distinct product that offers a competitive advantage over more tactical products, such as Descartes System Group's DeliverNet.LOG and Manhattan Associates' PkMS.

User Recommendations

Automotive manufacturers and logistics outsourcing companies stand to benefit from the new application and should include it among other options in a selection engagement. Concerns over the nascency of the product and lack of implementations are mitigated somewhat by years of expertise brought to the development of the application by Bender and Ford. Users who acquire the solutions can apply them as a tool to validate internal or outsourced inbound logistics planning departments as Ford has done and integrate them to legacy or third party logistics execution systems.

 
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