Ford’s E-Business Strategy

Topics: Supply chain, Ford Motor Company, Electronic commerce Pages: 3 (881 words) Published: May 30, 2011
Jacques Nasser, Ford Motor Company president and chief executive officer announced a new vision for the firm in the fall of 1999: to become the “world’s leading consumer company providing automotive products and services.” Key to that dream was the transformation of the business using Web technologies. Brian P. Kelly (Kelly), Ford’s e-business vice president, described Ford’s plan to rebuild itself as a move to “consumer-centric” from “dealer-centric,” and stated that Ford would transform itself from being a “manufacturer to dealers” into a “marketer to consumers.” Kelly explained that the main objectives of Ford’s e-business strategy were to bring speed, convenience, and information to customers rather than just focusing on cost cutting. The strategy was based around the principle “The consumer is King” and using the net, customer orders would be sent directly to factories and suppliers which will eventually allow Ford to deliver cars to consumers within days of ordering. Some of the e-business initiatives that Ford put in place to transform the company into an e-commerce company is mentioned below. Improving Efficiency in Supply Chain:

1.Ford believed that using the internet improved the efficiency of its supply chain, so in mid-1999, the company along with Oracle, created AutoXchange that allowed online B2B transactions with its suppliers. This e-commerce tool helped Ford and its suppliers swap information and bids on goods and services worth nearly USD 300 billion. The company expected to reduce its purchasing bill by 10% through the use of AutoXchange.

2.Until February 2000, the company followed the ‘push’ operations model, but by collaborating with GM and DaimlerChrysler, Ford set up an online marketplace cum private exchange – ‘Covisint’. This substantially reduced the operating costs and brought efficiency to the business. ‘Covisint’ followed the ‘pull’ model which allowed Ford to first take the order from a customer and then manufacture the car...
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