hly cost an estimated $100 billion per annum. This will include costs like:Setting up the Internet site.Outsourcing the software company who will provide services like database managementPartnering with Internet service Providers.Purchasing new hardware required. Training the existing staffHiring new employees.This will be offset against savings like:Administrative cost savingsReductions in procurement costsReduction in inventory costs.(parts inventory and finished automobile inventory)Quicker delivery of finished goodsReduction in excess inventory (pull mode, built to order cars)Reduction in storage costsFurthermore Ford will receive hefty income from transaction fees and access fees from users of its site.TIMINGThe network will be launched in phases over 15 to 24 months. The first phase will include getting all the suppliers online. The network should be fully operational 12 months from commencement. Dealers should be able to access soon thereafter. The dealer’s online tracking service should take 13-15months from commencement. Consumers will be able to access the net once the supplier and the dealers have full access to the site and it the glitches have been solved. Customers get last access, because once the supplier and dealer networks are in place Ford will be in a position to supply at lower costs and provide faster delivery to the customer. Approximately, the entire purchasing function will be carried out on the within 3 years of implementation. This means the 76.5 billion dollars of annual procurement spend will be put online!MONITORINGThe main monitors that will indicate the success of the site are: 1.Reduction in the annual procurement spend: The amount reduced from the current $ 76.5 billion 2.Reduction in order to delivery time: from the current 60 days. 3.Reduction in finished and parts inventory:4.Customer feedback: This alternative should provide better information to customer like availability of cars, tracking o...
