Ford Gears Up To Use Covisint For B-To-B Collaboration

Ford Motor Co. will become the first automaker to move a major part of its collaborative business-to-business supply chain onto Covisint LLC, the auto exchange Ford unveiled with DaimlerChrysler AG and General Motors Corp. more than 18 months ago. Covisint will host an enhanced version of the automaker's Supplier Network, a private extranet used to manage more than $90 billion in procurement annually.

The move boosts Covisint's status as a model for industry-specific supply-chain exchanges, a role that's been called into question as automakers have been slow to adopt the exchange for key business processes. Industry sources say GM and DaimlerChrysler are close to signing similar agreements with Covisint.

Ford will launch a pilot in February with 200 of its largest suppliers; it expects to bring all 4,200 suppliers onto the exchange by the end of 2002. Covisint will handle a wide range of collaborative business, including the exchange of engineering information, real-time demand and inventory data, and details on orders and shipment requirements for highly engineered parts and raw materials.

Suppliers have been reluctant to commit to Covisint until automakers clarified their own intentions for the exchange. Dan Holland, E-business technology director for Delphi Automotive Systems Corp., says Ford's move validates his company's decision to use Covisint to manage supplier relationships. Sue Kobet, Ford director of value chain for B-to-B, wouldn't comment on the savings Ford expects from the exchange.