CHALLENGE: need for business process reengineering in Ford Motor Company Ford Motor Company is the world’s second largest manufacturer of cars and trucks with products sold in more than 200 markets. The company employs nearly 400,000 people worldwide, and has grown to offer consumers eight of the world’s most recognizable automotive brands. CHALLENGE With inherent large-scale growth issues, more demanding customers, and mounting cost pressures, Ford needed to transform from a linear, top-down bureaucratic business model to an Internet ready, nimble organization that engages and integrates customers, suppliers, and employees. SOLUTION Working with Cisco, Ford integrated and leveraged their supplier base by designing Covisint, an end-to-end infrastructure that enables an online, centralized marketplace connecting the automotive industry supply chain. Ford also enhanced the customer buying experience through redesigned and more user friendly Web sites. RESULTS Ford is enjoying an increase in customer satisfaction, sees huge revenue opportunities for developing and retaining loyal product advocates, and has taken both complexity and cost out of the supply chain. BUSINESS PROCESS REENGINEERING Business process reengineering (BPR) is a management approach aiming at improvements by means of elevating efficiency and effectiveness of the processes that exist within and across organizations. The key to BPR is for organizations to look at their business processes from a "clean slate" perspective and determine how they can best construct these processes to improve how they conduct business. Michael Hammer, the management expert who initiated the reengineering movement, defines reengineering as “the fundamental rethinking and redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed. It uses many of the tools just discussed to achieve these goals. It is a redesign and reorganization of business activities that results from questioning the status quo. It seeks to fulfill specific objectives and can lead to breakthrough improvement. It is often associated with significant cultural and technological changes. Methodology of reengineering 1. Envision new processes 1. Secure management support 2. Identify reengineering opportunities 3. Identify enabling technologies 4. Align with corporate strategy 2. Initiating change 1. Set up reengineering team 2. Outline performance goals 3. Process diagnosis 1. Describe existing processes 2. Uncover pathologies in existing processes 4. Process redesign 1. Develop alternative process scenarios 2. Develop new process design 3. Design HR architecture 4. Select IT platform 5. Develop overall blueprint and gather feedback 5. Reconstruction 1. Develop/install IT solution 2. Establish process changes 6. Process monitoring 1. Performance measurement, including time, quality, cost, IT performance 2. Link to continuous improvement In the early 1980s, when the American automotive industry was in a depression, Ford’s top management put accounts payable- along with many other departments- under the microscope in search of ways to cut costs.
It's no secret that Ford is one of the biggest brands on the market today, but are they really more reliable than the competition? Based in Texas City, Cook Ford is here to tell you why that answer is yes and what you can expect to get when you buy a Ford Truck.
Number of Suppliers and their IT capacity: Ford employs a tiered system of suppliers, whereby they order complete systems from the tier one suppliers. The tier one suppliers then manage the relationships with the tier two and tier three suppliers (who supply the parts for the tier one complete systems). Dell 's supplier base relatively small and have solid IT capacity as the vast majority of them are IT organizations. The size and scope of organization is too big and not easy to handle (suppliers, vendors, networks, geography).
Today the automobile industry is stronger than ever, selling millions of cars to eager consumers. Every year new models are released with newer features and technology to lure the purchaser. Every manufacturer today should thank Ford for what it has done in the past, whether it was the assembly line, interchangeable parts, strong quality of the Model T, it's undeniable what Ford has done for the industry, economy and transportation.
One essential factor that has allowed Ford to grow is the ability to franchise their brand worldwide. A franchise is defined as A license to sell another’s products or to use another’s name in business, or both.” (M: Business, 75) However, Ford does not allow just anyone to become a franchise owner they first require an educational course to be taken. The program is known as a Certificate for Automotive Entrepreneurs and Leaders are otherwise known as CAEL. The program is held at the W.P. Carey School of Business at Arizona State University. If one does pass the program, they then must work at an automotive dealership for at least a summer. In addition to the business training one must also attend a 45-week National Automotive dealership training. As all training commences Ford requires that a hopeful Franchisee serve as a manager at an existing Ford Dealership for at least one year. According to the website “After all of the training and work has been done a prospective owner needs to prove capital, liquid assets and financing in addition to the business plan. During each phase, there is still no guarantee that the prospective owner will become an owner. It is at the decision of the corporate level once each phase has been completed.” The process is a prime example that ford takes great pride in their product and who sells
Despite nearing bankruptcy on a few occasions, the company finally took off with the launch of their first car- the Model A, and by 1920 approximately 60% of all automobiles on the road were Ford. Today Ford is the largest truck maker and the number two manufacturer of cars in North America, producing an average of eight cars or trucks per minute. The Ford Motor Company employs 371 702 people at over 2400 branches in 33 countries and sells automobiles in over 200 markets.
Bjerke, Juel M. "Week 2 Lecture Notes - Achieving Business Process Excellence and Process Re-engineering." MFGO 601 - The Globally Integrated Manufacturing Company. 2 Nov. 2011.
“We live in an era of organizational reengineering. To become or remain competitive, leaders often must realize improvement through radical change, or reengineering.'; As defined by Jon R. Katzenbach, author of Real Change Leaders, radical changes are:
Ford Motor Company is an American multinational and second-largest U.S base automaker with headquarters in Dearborn, Michigan, manufacturing and distributing their products worldwide. The Ford Motor Company was founded by Henry Ford on June 16, 1903. Henry Ford succeeded in his mission to produce an affordable, efficient and reliable automobile for the masses when the company introduced its highly successful launch of the Model T. The success of the Model T and its high demand lead Ford Motor Company to develop innovative production methods including that standardized parts and, of course, the world’s first moving assembly line for cars. Today the company is a publicly traded company with the New York Stock Exchange and operates over sixty plants worldwide with over 171,000 employees. The company’s automotive products include a full family of
The New York Times Company. (2011, August 3). Ford motor company. Retrieved August 16, 2011, from The new york times: http://topics.nytimes.com/top/news/business/companies/ford_motor_company/index.html
Ford Motor Company current mission statement is “committed to provide personal mobility for people around the world”. With that in mind their vision is to become the world’s leading Consumer Company for automotive products and services. By improving everything they do, the company provide superior returns to their shareholders (Vision, Mission, Values).
In business, when we approach change, whether it is about cost reduction, merger or supporting a new technology we need to treat it as a seriously disruptive and stressful activity for all involved especially those leading the change.
The Ford Motor Company has been in business since the nineteenth century, and it has enjoyed a rather successful run as one of the top automobile-making industries in the United States. Ford Motor Company is a prosperous business because of strategic planning and changes that it was willing to take a risk on developing and implementing. Successful corporations have to adapt to the constantly changing environment or the company will be doomed to failure. In other words, customer shopping habits change as new products are introduced to the market or when other factors beyond Ford Motor Company’s control affect which vehicles are sold. For example, there is an increased demand for fuel efficient cars when the average price per gallon
Ford- focused differentiation, medium pricing, breadth of product line is high. A strength is their pick-up truck market share, a weakness is perceived reliability and styling on some of the lines.
Ford motor company offers a wealth of variety to the automotive consumer. As they start their second century of business, they are now in a position to appeal to the widest range of potential customers. Each of their automotive brands has a unique personality and holds a distinct place in the ford motor company family.
In past few years, companies and industries of various sizes have become aware that they need to improve business processes such as product development, order fulfilment, planning, distribution, and customer service. So everybody is now focusing on doing process improvement or redesigning.