A new supplier park next to Ford Motor Co.'s Chicago assembly plant could set a standard for just-in-time parts deliveries in North America.
At least nine suppliers will share six buildings near the 78-year-old assembly plant, which is expected to produce the CrossTrainer sport wagon in May 2004 and the Five Hundred sedan later that year.
A Ford joint venture is spending $250 million on the complex and will lease space to the suppliers. More than half of the parts purchased for the plant from outside suppliers, in terms of dollar volume, will come from the supplier campus. That will reduce the average shipping distance from 450 miles to 125 miles.
Nissan is setting up a supplier park next to its new assembly plant in Mississippi. But Ford's complex could become an important model for the Big 3 automakers in North America.
Until now, the Big 3 hesitated to set up industrial parks for suppliers because they did not want to anger the UAW. The union previously resisted any efforts to transfer work from assembly plants to suppliers.
The supplier park in Chicago will give Ford greater flexibility, streamlined logistics, lower inventory costs and improved quality. It also will allow Ford to move some assembly work - such as instrument panels - to suppliers.
But it won't allow Ford to cut jobs. The Chicago plant will retain all hourly workers for the vehicle introduction - a pledge that gained the support of the UAW. Moreover, Ford will allow the UAW to unionize suppliers in the park. That's a big incentive for the union, which has had trouble organizing parts makers.
If the Chicago experiment succeeds, Ford could set up other supplier parks, said Roman Krygier, Ford's group vice president of manufacturing and quality.
Key suppliers already have agreed to use the industrial park, including Visteon Corp. and Tower Automotive .
Supplier parks are common in Europe and South America. In some plants, suppliers help build vehicles.
Ford does not plan to do anything that radical in Chicago. Suppliers will ship sequenced parts to the assembly plant by truck, and no supplier will work on the assembly floor.
Ford also will not transfer much work from the assembly plant to suppliers. Visteon's cockpit is an exception. Currently, instrument panels for the Ford Taurus and Mercury Sable are delivered to the plant and completed by Ford workers on a subassembly line. Thirty workers now doing that task will be used elsewhere.