Speaker: Andy Eggleston
Title: Vice president of Consumer Connect Europe, Ford Motor Co.
Build-to-order won't only speed delivery of new cars to customers - it will also help reduce warranty costs, said Andy Eggleston, vice president of Consumer Connect Europe at Ford Motor Co.
'To mend a warranty problem, you have to know about it,' Eggleston said.
A customer who receives a new car within 15 days of ordering it can provide fast feedback on quality issues, said Eggleston.
'That's better than hearing about problems from someone who has bought a car out of 120 days of stock,' he said.
'We will be able to react quickly to reduce the number of cars produced with a given fault.'
Eggleston said build-to-order would bring 'quantum leaps' in consumer satisfaction. 'Inventory is only a response to having poor knowledge,' he said.
Eggleston said Ford has so far conducted 65 online reverse auctions with suppliers. They have resulted in savings of $48 million (E57 million) on purchases of $200 million.
As examples, Eggleston cited savings of 33 percent on Ford-brand gear kinds, 18.5 percent on Land Rover seat covers, and 14 percent on Volvo flange nuts.
Eggleston said he did not believe the move to e-business would reduce the number of suppliers.
'The reason why you rationalize your supply base is because you can't handle [the size of] it,' he said. 'Handling suppliers is now less difficult. Now some of the smaller suppliers, if they have a good niche product, will get access to a bigger global market.'