FORD Motor Co. has significantly updated its supplier network Web system to get all its suppliers - Tier 1, Tier 2 and Tier 3 - online. Ford wants its purchasing operation to be paperless by 2003.
Although 1,600 suppliers and 16,000 users have already been enrolled on the global online system, up to 200,000 users are envisaged when the program is complete.
The Ford supplier network Web system is like an entrance hall leading to many doorways. Depending on which keys a supplier receives through security clearances, it can open a number of virtual doorways leading into the heart of Ford's purchasing operation.
Although the project is global, Ford of Europe's base for the purchasing operation will be at Basildon, near London. Getting European suppliers online is expected to be more difficult than US suppliers, where there is a single language and currency.
The stakes for Ford are potentially enormous. If the company eliminates cumbersome paper purchase orders, invoices and catalogs, it can cut its own staff costs. It can also minimize telephone time, supplier hand-holding and paperwork bottlenecks.
Ford expects the network to be a success because suppliers have much to gain too. It will quickly answer questions such as how many components were produced last month, when payment is due, and who has won a bid for a key contract.
There's another vital benefit for suppliers. Participants don't need special computer installations or proprietary Ford software. To make contact, they can use an ordinary personal computer equipped with standard Web browser software.
'The Ford supplier network is going to be the way to work with Ford and to access Ford, so we don't have 15 different Web sites and 15 different security profiles out there,' said Robert Bykowicz, manager for purchasing process leadership in Ford's global purchasing department.
The purchasing department launched the first Ford supplier network in 1997. That first Web site consisted primarily of a point-and-click set of 44 links that let users quickly locate Ford component data they wanted to see. Now the re-tooled Web site has been made more interactive.
It will also allow Ford to purchase such things as office supplies. 'This is going to be a Web-based procurement system with select suppliers,' said Bykowicz. 'We basically take their catalog - Ford negotiates a discount - and our plants order using their information.'
The procurement system eliminates the need to track paperwork for requisitions. Previously, simply keeping up with suppliers' catalog numbers required hours of purchasing staff time. Ford also wants to offer suppliers precise production forecasts.
'One of our objectives was to improve communications between Ford and the suppliers and hopefully share more information,' said Alan Berry, supervisor for quality and process leadership for the network. 'It is hard to put a collective face on Ford, but we are really trying hard to do that.'
Ford is not the only automaker with a supplier network site. In fact, Ford's Web site offers links to both General Motors' and DaimlerChrysler's supplier sites.
Bykowicz said Ford did not mind showing its competitors' sites because the company gains from both the access and the comparison.
The site also has an interactive feature showing how a supplier starts doing business with Ford.
The automaker also wants to upgrade its electronic payment system so a vendor can find out exactly when payments will be made.
The Ford supplier network requires suppliers to take an active role. The supplier is expected to appoint a security staffer to issue passwords and moderate the company's online interactions with Ford.
Among the most sought-after functions is one that allows suppliers to enter a commodity name or a description. Ford's site then lists its key buyers.
'I have had access to 70 suppliers, and every single one is excited about the network,' said Bykowicz.