Ford and Its Outsourcing
Ford Motor Company and its Outsourcing
Company Overview:
Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, manufactures or distributes automobiles across six continents. It is a publicly traded company on the New York Stock Exchange. The Company has about 198,000 employees and 90 plants worldwide with the automotive brands include Ford and Lincoln. The Company also provides financial services through Ford Motor Credit Company. The revenue of the company is $136.26 billion with a net income of $20.21 billion by 2011.
Ford’s Virtual Integration Strategy:
From the last two decades auto industry is growing more competitive. Competition from the foreign automakers like Toyota and Honda is also high. In addition to the competition, there is a decrease in the profit margins and reduced sales due to overcapacity of about 20 million vehicles. In order to compete with the other automakers, Ford wants to make some changes within the organization. As a part of changes, Ford made some plans with ambitious framework called Ford 2000.
Merging of North American, European, and international automotive operations into a single global operation is the first part of this plan. This helps the Ford to save huge amounts of money by reengineering and globalizing corporate organizations and processes. Then the product development activities are consolidated into 5 Vehicle Centers (VCs), which are responsible for the development of vehicles in a particular market segment.
The major reengineering projects that were part of Ford 2000 were initiated around major company processes like, Order to Delivery (OTD), Ford Production System (FPS), and the Ford Retail Network (FRN). By these processes Ford developed the ability to deliver vehicles quickly, accuracy in production, reducing personnel costs and increase in business.
The traditional supply chain methods make it difficult for Ford to compete in the global automobile industry. The company changed
Company Overview:
Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, manufactures or distributes automobiles across six continents. It is a publicly traded company on the New York Stock Exchange. The Company has about 198,000 employees and 90 plants worldwide with the automotive brands include Ford and Lincoln. The Company also provides financial services through Ford Motor Credit Company. The revenue of the company is $136.26 billion with a net income of $20.21 billion by 2011.
Ford’s Virtual Integration Strategy:
From the last two decades auto industry is growing more competitive. Competition from the foreign automakers like Toyota and Honda is also high. In addition to the competition, there is a decrease in the profit margins and reduced sales due to overcapacity of about 20 million vehicles. In order to compete with the other automakers, Ford wants to make some changes within the organization. As a part of changes, Ford made some plans with ambitious framework called Ford 2000.
Merging of North American, European, and international automotive operations into a single global operation is the first part of this plan. This helps the Ford to save huge amounts of money by reengineering and globalizing corporate organizations and processes. Then the product development activities are consolidated into 5 Vehicle Centers (VCs), which are responsible for the development of vehicles in a particular market segment.
The major reengineering projects that were part of Ford 2000 were initiated around major company processes like, Order to Delivery (OTD), Ford Production System (FPS), and the Ford Retail Network (FRN). By these processes Ford developed the ability to deliver vehicles quickly, accuracy in production, reducing personnel costs and increase in business.
The traditional supply chain methods make it difficult for Ford to compete in the global automobile industry. The company changed
References: Ford Motor Company (2012) Press Releases Retrieved February 21, 2012 http://corporate.ford.com/news-center/press-releases-detail/pr-auction-results-for-uaw-32341 Ford Motor Company (2012) Tentative Agreement Retrieved March 05, 2012 http://corporate.ford.com/news-center/press-releases-detail/pr-uaw-ford-reach-tentative- agreement-35382 Ford Motor Company (2012) Preferred Suppliers Retrieved March 16, 2012 http://corporate.ford.com/news-center/press-releases-detail/pr-ford-adds-17-companies-to-list-of-34782 Ford Motor Company (2012) Global Expansion and Growth Retrieved March 28, 2012 http://corporate.ford.com/news-center/press-releases-detail/global_expansion_and_growth Ford Motor Company (2012) Global Operations Retrieved April 12, 2012 http://corporate.ford.com/our-company/operations-worldwide/global-operations-list Global Data (2011) Ford-Financial and Strategic Analysis Review Retrieved March 23, 2012 http://www.ford.com/ Thompson, A.A., Strickland, A.J. & Gamble, J.E. (2007) Strategic Management (15th Ed .)