Ford Motor Company, and e-Steel Corporation, the negotiation-based e-Commerce exchange for the global steel industry, have announced an initiative to e-enable complex procurement programs with the automaker’s global Tier 1 suppliers. This relationship includes an equity incentive program that will earn the carmaker a minority equity stake in e-Steel.
Ford selected e-Steel (www.e-steel.com) to provide the steel-specific knowledge and functionality required to launch a steel e-Commerce procurement system to maximise efficiency and operational savings. Approximately 4-5 million tons of steel and steel-related products will be purchased via e-Steel for metal stamping suppliers over the course of this contract.
The scope of the alliance covers the automaker’s steel order fulfilment processing, claims, financial controls, and audit reporting throughout its global manufacturing and assembly operations. ‘Ford Motor Company has confidence in e-Steel’s ability to deliver this Internet-based solution across its entire Tier 1 steel and metal stamping value chain, both in North America and Europe, within the next few months,’ said Andrew Hinkly, Director, Raw Material Purchasing, Ford Motor Company. The automaker expects the members of its steel supply chain to realise cost Ford anticipates the volumes of steel transacted through the program to grow significantly during the next 12 months. At present, the Ford/e-Steel alliance is limited in scope to this program for Ford’s purchases, and the millions of tons of steel products a year.
In addition to this alliance, e-Steel recently announced that it also secured strategic alliances with three of Ford’s major steel suppliers, and recent Ford World Excellence Award winners, US Steel, a subsidiary of USX, Dofasco Inc., and National Steel Corporation.
e-Steel also has strategic alliances with Ispat International and Worthington Steel. Currently, more than 2,300 companies from 85 countries representing the key segments of the steel industry are members of e-Steel.