InformationWeek

August 10, 1998

Ford Turns To Extranet

Automaker sees Netscape applications helping it expand Visteon parts business

By Gregory Dalton

ord Motor Co. is looking to use an extranet to expand the business of its $17 billion Visteon auto parts subsidiary.

Visteon recently signed a $17 million, 18-month deal with Netscape to build an extranet using the Internet vendor's line of E-commerce software, CommerceXpert. As part of the contract, which will be unveiled in several weeks, Web-services firm Internet Operations Center will manage the extranet and host the Netscape applications.

Visteon's client base-predominantly manufacturing units of Ford and, in the future, replacement-parts distributors-will use the extranet to search parts catalogs and place orders. Visteon also plans to use the extranet to communicate with component suppliers not on Ford's electronic data interchange system. Even those suppliers on EDI will be encouraged to migrate off relatively expensive value-added networks to the extranet. "It's for all customers, and at some point we'll push on the supply base," says Dave Bent, director of enterprise processes and systems.

Visteon has conducted a pilot of the extranet with several manufacturing units, and aims to have 100 customers and 400 suppliers operational by the end of next year. Visteon intends for those 100 customers to include car companies and distributors not in the Ford family. "We have a clear goal to grow our non-Ford business," Bent says.

The extranet is part of Visteon's strategy to distance itself from Ford to attract business from other automakers. That strategy also includes an implementation of the SAP R/3 enterprise suite, which Bent is negotiating, as a way to move off the Ford mainframe system. "They need a separate system to handle orders from non-Ford customers," says Michael Marquardt, president of Internet Operations Center, in Southfield, Mich.

Ford is not the first carmaker looking to expand its parts business. General Motors Corp. last week spun off its parts subsidiary, Delphi, as a separate company.

Bent says moving to the Internet will also give Visteon, which has 82,000 employees at 81 facilities worldwide, a unified communication system rather than the patchwork of EDI systems it now has. "We'll have a centralized global solution," he says. And the Web gives Visteon a chance to reinvent itself. "There's an opportunity to create a separate brand identity on the Internet," Bent says.

The move is the latest in a series by Ford to endorse the Internet as a viable platform for managing critical functions. In recent weeks, Ford inked deals with TNT Logistics and Ryder System to use the Internet to handle various aspects of its supply chain and distribution channels. It also recently hired Intelisys Electronic Commerce LLC to facilitate online purchasing of products that do not go directly into cars.

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