A Study On The Cost Structure Of Variable Logistics In Ford Auto Parts

Now days, Logistics is a necessary and basic activity in an Automobile Manufacturer. Organizing the logistics activity scientifically and reasonably, controlling the expense effectively in logistics operations, which includes the packaging, transportation, inventory, loading&unloading, delivery cost, etc. and cost management, is the key to reduce the total logistics cost in an Automobile manufacturer, thus to improve the product competitiveness. This paper is focusing on the discussion of the variable logistics cost of Auto production parts in Ford Motor Company, to find the solutions to reduce the variable logistics costs in Ford Motor Company.Ford is one of the biggest global automobile manufactures in the world. It has44assembly plants and37powertrain manufacturing plants around the world. And it has thousands suppliers in America, Europe, Asia Pacific and Africa, etc., which cover most countries and regions in the world and supplying thousands parts to Ford plants. Ford logistics system is very complex. It includes the production parts logistics system, non-production parts logistics system and vehicle logistics system. And total logistics cost consists of the variable logistics cost and fixed logistics cost. Currently, production parts variable logistics cost has a big proportion in the total logistics cost, hence reducing the production parts inbound variable logistics cost is one of the key objectives of Ford Motor Company. In order to reduce the parts inbound logistics cost and improve the Ford product competitiveness and the profit of the company, the purpose of this paper is to research Ford logistics cost management and control based on its current logistics network strategy and cost structures.There are five chapters in this paper. In the first and second chapters, it briefly introduces the background and purposes of this research, as well as the concept of logistics cost management&control. In the third chapter, it analyzes the Ford Motor company variable logistics cost analysis and the cost control challenges that the company is facing. Based on the outcomes of this research, I give some personal views and suggestions of how to reduce Ford production parts variable logistics cost and improve the cost management process.