Dell Virtual Supply Chain vs Ford Vertical SC

Topics: Supply chain, Supply chain management, Customer Pages: 10 (2230 words) Published: December 14, 2013


Ford Motor Case

Table of Contents

Executive Summary 3 Issue Identification and Root Case Analysis 4 Alternatives and Options 7 Recommendations 8

Implementation Plan 9
Monitor and Control 10 Conclusion 11
Exhibits 12

Executive Summary

The first glance at Ford’s existing supply chain shows its highly complex nature. This high level of complexity includes different from Dell relationships not only with suppliers but also with dealers and customers. All these factors 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 difficulties in the present system include the inefficient control of the large database 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, my decision as Teri Takai is partial implementation and execution of the virtual integration direct business model invented by Dell. Through this model Ford will use the emerging information technologies and internet as well as new ideas from Hi Tech industry in order to interact and transact with their suppliers and end users. Furthermore, Ford can boost its sales by providing better customer service and improving communication between all tiers: suppliers, manufacturer, and customers. 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 types of industries, one is in computer manufacturing and the other is in auto industry, it does not seem right for Ford to implement exactly the same virtual integration model as Dell. In fact, if Ford implements the full direct business model alone and abolished its existing supply chain then Ford will certainly run into a high risk of losing their business to competitors due to the fact that customers want to test and feel the car before they buy it for a large amount of money. On the other hand, when customers buy computers online they don’t have to worry about touching and testing the computer, all they require is a better price than the retail shops and the product’s specs are according to their needs. To measure the performance of this model, Ford should schedule periodical review and evaluation meetings. Recommendations for improvements should be noted along the way in order to be evaluated. The improvement of customer service and shareholder value should be the main aim of the whole project.

Issue Identification

The following are a list of issues that must be addressed:

Complexity of relationships with suppliers and dealers

Lack of modern and common IT infrastructure

Real-time inventory management

Strong purchasing power

No control of end users

Dealers and suppliers concerns

Challenge of forecasting

Issue Identification including Root Case Analysis

Complexity of relationships with suppliers and dealers
The fundamental issue for Ford is the management and control of the large data base of their business partners, particularly suppliers and sub-suppliers. Unlike Dell, which has only about 50 suppliers, Ford has several thousand suppliers (Exhibit 2) and operates in a more complex network of business...
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