case study of ford company

Topics: Ford Motor Company, Supply chain management, Supply chain Pages: 10 (2955 words) Published: October 1, 2014

Case Study

Ford Motor Company

Marcelo, Joey Roi S.
BSBA-MM 3-2s

Table of Contents

Point of view ……………………………………………………………………………….. 1

Time Context ………………………………………………………………………………….. 2

Background of the Study……………………………………………………………………… 3

Statement of the Problem …………………………………………………………………….. 4

S.W.O.T Analysis …………………………………………………………………………….. 5

Alternative Course of Action ……………………………………………………………..…. 7

Conclusion and Recommendation ………………………………………………………….. 8

Point of view:
The case deals with the hurdles, implications and the extent of virtual integration in one of the world’s largest automobile manufacturing company. ‘Ford Motor Company: Supply Chain Strategy’ case focuses on the viability of implementing a supply chain strategy following Dell’s model.

There are several factors which affect how an auto industry is managed and the way Important decisions in regard to the company are taken. Ford was established by a visionary Henry Ford in 1903 and it has been in business ever since. Its main competition till 1970’s was With General Motors and Chrysler. However with the entry of Japanese companies like Honda, Toyota and Nissan the firm faced stiffer competition with the auto market being over capacitated. 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. Ford aimed at reducing the number of suppliers which had grown to several thousands of different suppliers over the years as the company grew. Rather than focusing on selecting suppliers based on costs they wanted to develop close long-term relations with the Tier 1 suppliers who in turn managed and handled Tier 2 and Tier 3 suppliers. The aim was to create a more cost effective supply chain. Ford provided its suppliers with its expertise and techniques to help them better manage their operations. Another important initiative taken by ford was the Ford Retail Network (FRN) to reduce competition among its dealerships in the same locality by having only one unified dealer who provides the best possible level of customer experience. The director of supply chain system, Takai has to take an informed and well thought decision if they should implement the Dell’s integrated supply chain or not. After carefully analyzing Ford’s existing supply chain I immediately became aware of its highly complex nature. This high level of complexity combined with other internal and external factors have pushed Ford to search for solutions in order to overcome the costly supply chain challenges that they are facing and may continue to face in the future. Ford’s major difficulty in their present system is: the inefficient control of their large data base and complex network of suppliers, the existence of independent distributors and their inability to communicate and serve their customers directly. Realizing an urgent need to modify their supply chain in order to make it more cost effective and more profitable, and after careful analysis of the whole situation, I have recommended the partial implementation and execution of the virtual integration direct business model that has been used by Dell. Through this model, Ford will use the emerging information technologies and internet as well as new ideas from high tech industries in order to interact and transact with their suppliers and end users. Furthermore, Ford can boost its sales by providing better customer service and by having faster communication between suppliers, manufacturers, and customers in the value chain. This proposed system will have to run concurrently with the existing supply chain so that Ford will cover both market segments at the same time. Since Dell and Ford are two different...
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