SynQuest, Ford Deliver a Novel Application for Inbound Logistics
McVey - May 8, 2000
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:
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)
- minimizes the cost of reverse logistics for returnable containers and
Selection - determines the ideal transportation mode for each part
and warehouse/plant/supplier combination.
- provides detailed loading configuration of part containers inside a
vehicle to maximize shipment efficiency.
first two modules, for logistics configuration and rotation/routing have
been completed and the others are due before the end of calendar 2000.
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
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.
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.
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.
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.