Nasser had a reputation of being a cost cutter, a capable leader, and a senior manager focused on increasing shareholder value. Ford unlike Toyota, had been a vertically integrated company and after witnessing the benefits of Japanese automakers who work closely with their suppliers have, restructured their supply chain to keep the core operations in house and procuring other components Park, Ford started to focus beyond price and developed suppliers which can provide entire vehicle subsystems.
By mid, Chrysler merged with Daimler-Benz.
As more and more developing and industrial nations encouraged development into the automobile industry, overcapacity in the automobile markets reached an estimated 20 million vehicles.
Environment and Root Cause Analysis Ford Motor is a global organization with operations spanning countries with over manufacturing facilities. In these conditions efficient data exchange, both internal and external is crucial for success. Nations realized the economic prosperity resulting from auto manufacturing industry and fostered the development of their own auto industries which has further declined the market share of Ford motors globally.
There are several reasons why this web-based supply chain would be beneficial. Some insist on virtual integration following Dell model in order to reduce working capital and exposure to inventory obsolescence without risking being left behind.
They rationalized the number of suppliers, revamped their production process, order management and distribution systems.
First, suppliers would be able to work off of a central design database in which Ford could control their level of access. In order to evaluate current business environment and identify the best opportunities for development and growth, SWOT analysis was performed.
With an eye on the global market, each automobile manufacturer was looking to expand their global reach. Problem Statement Due to increase in market competition, supply chain superiority of competitors, high profitability of financially equal companies, Ford is facing pressure to provide high shareholder value to keep the investors interested in the company and increase customer satisfaction.
Ford studied the supply chain processes of Dell and is considering the use of technology for virtual integration of the supply chain to benefit from the cost savings it can provide. The business operations of the organization are spread across the globe with manufacturing plants in different parts of the world.
Please refer to exhibit 3. Unlike Dell which has less than 50 suppliers, Ford has several hundreds of tier-one suppliers. The Tier 1 suppliers work with multiple Tier 2 suppliers who provide the components that make up the vehicle subsystems.
Direct model introduced by Dell Computer Corporation proved to be the best contemporary solution of the matter. Each supplier would have their access limited by functionality and need. While the final authority rests with CEO, Mr. Main strategic issue for Ford is control and management of the numerous links of the supply chain.
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We will be evaluating the possibility of implementing the virtual integration through appropriate strategies. These suppliers provide Ford with complete vehicle subsystems.
Lead time reduction and, consequently, cost efficiency are hard to achieve without smooth information flow. If something should happen with the Tier 1 supplier, Ford would essentially lose the relationship with all of the Tier 2 suppliers working under that one supplier.
Jenny Binsfeld and John P. Third, the initial investment for both sets of suppliers would be minimized. Decision Makers The decision making in Ford involves a number of departments, the type of product required is decided by engineers and all the purchasing decisions are taken by the purchasing department.
However, the Tier 1 suppliers do have fairly solid IT capabilities, but these capabilities severely drop when dealing with the Tier 2 suppliers. Recommended partial implementation of Dell direct model, i.
Tier-one suppliers are in charge of managing lower tier suppliers who usually do not have developed IT capabilities, which slows down the process.
All of them are aimed at cost reduction and improving customer service. Supply chain team has split down the middle on the issue. Ford will not have to be concerned about being too tied to one supplier because, afterall, product diversity will still be large enough to maintain several suppliers for components that would be used in a Ford Focus versus others used in a Land Rover or Jaguar.
Inin an effort to reduce cost and increase efficiency, Ford developed a restructuring plan called Ford that was to focus on globalizing corporate organizations and taking advantage of the economies of scale in purchasing and manufacturing by consolidating the North America, European, and international automobile operations.Bus Information Systems Management.
Case Presentation: Ford Motor Company – Supply Chain Strategy Submitted by: Jenny Binsfeld and John P. Williams April 6, History. Since the Ford Motor Company’s incorporation by Henry Ford inits strategic focus has remained on automobile design and manufacturing.
Main strategic issue for Ford is control and management of the numerous links of the supply chain.
To produce a single unit Dell needs under a hundred parts, whereas Ford requires over a thousand. Unlike Dell which has less than 50 suppliers, Ford has several hundreds of tier-one suppliers/5(1).
Ford Motor Company Billie Warren OMM Organizational Management Strategy Adrienne Osborne January 14, Executive Summary- Ford Motor Company (Ford) has been a leader in the auto industry, however, over the past few decades has continued to lose market share to foreign competition.
Ford Motor Company Supply Chain Strategy Background InHenry Ford revolutionized product manufacturing by introducing the first assembly line to the automotive industry.
Ford’s hallmark of achievement proved to be a key competence for the motor company as the low cost of the Model T attracted a broader, new range of. The spread of the supply chain posses numerous problems for the company and Ford took several initiatives for the integration of supply chain (Mcadam, & McCormack, ).
Ford started to focus beyond price and developed suppliers which can provide entire vehicle subsystems. So I would recommend Ford to extend its Virtual-business strategy by partially implementing the Dell’s model of supply chain (Alternative 1).
The part of the Dell’s model which does not fit with Ford need to be discarded.5/5(5).Download