Ford Implements New Forecasting Methods to Accurately Meet Demand across its Inventory Mix

According to some top executives at Ford Motor Company, dealers have been having difficulties getting some versions of its 2010 Taurus including the SHO and SEL trims. They say the problems have resulted from the automaker’s misjudging which trim packages would be the most popular with new car buyers when the 2010 model-year Taurus went on sale this past August.

Speaking at a press event this past Friday, Ford’s group vice president of global marketing Jim Farley admitted, “It’s a problem for our dealers.”

One Ford dealer, who spoke on the condition of anonymity, claims he was forced to wait 80 days before taking delivery on a sold order. He also said that the problem isn’t confined to the Taurus model alone. He estimates that he only has a 30-day supply of inventory but says he has been able to trade with other local dealers in order to meet demand.

Since November, Ford has sold 38,361 Taurus sedans. Farley estimates Ford’s current inventory stock to be in the 60- to 70-day range. He said, “We’re definitely catching up on the demand.” He also says that the automaker underestimated the demand for its F-150 double-cab, which has led to short supply of the popular full size pickup truck.

In addition to being an inconvenience for dealers, Farley says such miscalculations directly affect the company’s bottom line at a critical time. Suppliers, he says, tool up to produce a particular mix of vehicle trim levels based on Ford’s projections. “If you don’t call it,” he says, “you miss that opportunity and customers don’t see what they want to buy.”

To avoid such problems in the future, he says Ford will do more “market acceptance research” for up to six months before new models are released.

He said that such research was a key component of Ford’s “Fiesta Movement” social media marketing campaign. In addition to increasing awareness of the Fiesta small car, the company also gleaned valuable information on consumer preferences that will allow it to adequately scale production prior to the vehicle’s U.S. launch next summer.

Ford’s Fiesta Movement campaign is scheduled to enter phase two in early 2010. In phase one, Ford lent European-spec Fiestas to 100 U.S. consumers who chronicled their experiences and posted their impressions of the vehicle using social media sites including YouTube, Facebook and Twitter.

Farley said, “We have 100 customers and they all have friends, and they told us exactly what they would buy.”

Ford has launched a reservation system which will provide information on which features and trim packages to build based on actual customer orders.

Farley said, “We get the information many months before we start production,” and added, “We can use that for our forecasting.”

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