Ford Motor Co. Case Report
r [Type the company name] | Ford Motor Company: Supply Chain Strategy | [Type the document subtitle] |
NICOLE |
Table of Contents
Page 3. Executive Summary
Page 4. Identification Issues
Page 5. Identification Issues, Environmental and Root Cause Analysis
Page 6. Alternatives
Page 7. Recommendation, Implementation, Control
Page 8. Conclusions, References
Executive Summary
This case report addresses the challenges to implement virtual integration in Ford Motor Company, one of the largest automobile manufacturing companies in the world. It focuses on the viability of implementing a supply chain strategy following Dell’s “Direct Business model”
Dell’s direct business model used information and technology to revolutionize the PC industry; it focused on developing effective supplier partnerships and JIT manufacturing becoming a highly horizontal or “virtual integrated” company. Dell skipped the intermediate retailers, selling to customers directly eliminating the reseller’s markup and the cost and risk associated with carrying large inventories. All this combined gave Dell a leading position in a very competitive market in only a 13 year period time.
In 1970’s Ford’s main competition was with General Motors and Chrysler. However with the entry of Japanese companies like Honda, Toyota and Nissan the American firm faced a harder competition.
In order to maintain its leading position, in 1995 Ford initiated the Ford 2000 plan; aimed to restructure many of their key processes like Order to Delivery (OTD) and Ford Production System (FPS). They wanted to reduce the OTD from 60 or more to 15 or less days. FPS was created to convert the supply chain from a push type to a pull type basing their forecast, production and inventory decisions on real market demands. The decision to radically redesign Ford’s supply chain infrastructure may significantly affect in a positive way the growth and competitiveness of Ford Motor Company
NICOLE |
Table of Contents
Page 3. Executive Summary
Page 4. Identification Issues
Page 5. Identification Issues, Environmental and Root Cause Analysis
Page 6. Alternatives
Page 7. Recommendation, Implementation, Control
Page 8. Conclusions, References
Executive Summary
This case report addresses the challenges to implement virtual integration in Ford Motor Company, one of the largest automobile manufacturing companies in the world. It focuses on the viability of implementing a supply chain strategy following Dell’s “Direct Business model”
Dell’s direct business model used information and technology to revolutionize the PC industry; it focused on developing effective supplier partnerships and JIT manufacturing becoming a highly horizontal or “virtual integrated” company. Dell skipped the intermediate retailers, selling to customers directly eliminating the reseller’s markup and the cost and risk associated with carrying large inventories. All this combined gave Dell a leading position in a very competitive market in only a 13 year period time.
In 1970’s Ford’s main competition was with General Motors and Chrysler. However with the entry of Japanese companies like Honda, Toyota and Nissan the American firm faced a harder competition.
In order to maintain its leading position, in 1995 Ford initiated the Ford 2000 plan; aimed to restructure many of their key processes like Order to Delivery (OTD) and Ford Production System (FPS). They wanted to reduce the OTD from 60 or more to 15 or less days. FPS was created to convert the supply chain from a push type to a pull type basing their forecast, production and inventory decisions on real market demands. The decision to radically redesign Ford’s supply chain infrastructure may significantly affect in a positive way the growth and competitiveness of Ford Motor Company
References: Ford Motor Company: SC Strategy Case Study Harvard Business School by Robert D. Austin The Power of Virtual Integration: An Interview with Dell Computer’s Michael Dell by Joan Magretta.