Ford Case Study
Executive Summary
Ford is one of the leading companies in the auto industry. The director of Supply Chain Systems at Ford was put in a tough position to make recommendations with regards to the company’s supply chain strategy. There are two groups within Ford that have two different opinions on how Ford should be using emerging information technologies and ideas from high tech industries, such as Dell, to change the way it interacts with suppliers.
The first group argued that Ford should adopt Dell’s business model to improve efficiency and increase profits. This group emphasizes that Ford’s virtual integration should be the blueprint for what ford should attempt. On the other end, the second group believes that Ford and Dell operate in two different industries and it is not feasible to adopt Dell’s business model.
This case study will demonstrate the toot causes of the problem and will present the reason why Ford should pursue with the mixed approach. Some of the solutions in the mixed approach are based on Dell’s business model, while the rest are not. These solutions are costly and time consuming, but Ford will eventually harvest the benefits of this approach.
Issue Identification
Teri Takai, Director of Supply Chain Systems, is about to make critical recommendations to senior executives on Ford’s usage of emerging information technologies and ideas from high tech industries to alter the methods Ford interacted with suppliers. There are two different views on this matter. The first view, which is in favor of virtual integration, argues that technology became a major player in supply chain, and Ford needs to redesign its supply chain by adopting new technologies to prosper. Supporters of this view used Dell as an example of virtual integration. Dell utilized new technologies to cut down working capital and risk of inventory obsolescence. The other view was more conservative. Supporters of this view argued that the auto
Ford is one of the leading companies in the auto industry. The director of Supply Chain Systems at Ford was put in a tough position to make recommendations with regards to the company’s supply chain strategy. There are two groups within Ford that have two different opinions on how Ford should be using emerging information technologies and ideas from high tech industries, such as Dell, to change the way it interacts with suppliers.
The first group argued that Ford should adopt Dell’s business model to improve efficiency and increase profits. This group emphasizes that Ford’s virtual integration should be the blueprint for what ford should attempt. On the other end, the second group believes that Ford and Dell operate in two different industries and it is not feasible to adopt Dell’s business model.
This case study will demonstrate the toot causes of the problem and will present the reason why Ford should pursue with the mixed approach. Some of the solutions in the mixed approach are based on Dell’s business model, while the rest are not. These solutions are costly and time consuming, but Ford will eventually harvest the benefits of this approach.
Issue Identification
Teri Takai, Director of Supply Chain Systems, is about to make critical recommendations to senior executives on Ford’s usage of emerging information technologies and ideas from high tech industries to alter the methods Ford interacted with suppliers. There are two different views on this matter. The first view, which is in favor of virtual integration, argues that technology became a major player in supply chain, and Ford needs to redesign its supply chain by adopting new technologies to prosper. Supporters of this view used Dell as an example of virtual integration. Dell utilized new technologies to cut down working capital and risk of inventory obsolescence. The other view was more conservative. Supporters of this view argued that the auto