Ford to move supply chain to e-business

In the US, Ford has teamed up with Oracle Corporation to form a joint venture aimed at streamlining the car company's $80 bn annual purchasing operation.

In what is set to be the world's largest business-to-business network, Ford plans to move more than 30,000 suppliers on to Internet technology. Payback is expected to come in the form of dramatically reduced purchasing costs and increased operating efficiency. Electronic integration of the supply chain will also cut the administrative burden and reduce time to market, says Ford.

Though final details of the venture remain to be negotiated, the system is expected to go live in the first quarter of next year. At that point, the company says, its purchasing professionals will gain more time to focus on product quality and supplier performance.

According to Oracle's president, Ray Lane, companies like Ford can spend more than 50% of their revenue on goods and services. "A reduction in total purchase costs," Lane notes, "has a direct, positive impact on increased profitability."

Ford's great rival, General Motors, has already started down the same track. Closer to home, as reported in i-FM last month, BT is working to move its 1000 suppliers to an internet-based network, and Barclays Bank is trialling its own procurement package in the NHS.

Elliott Chase