Ford Motor Company Case Report

Ford Motor Company Case Report

EXECUTIVE SUMMARY

As director of Supply Chain Systems, I have decided to implement the new supply chain strategy of Virtual Integration, and model its supply chain after companies like Dell. Although there are several key differences between the companies, Dell’s direct business approach can be applied to every facet of Ford’s operation. Special care will need to be taken to address the unique dependency of our custom “tier- one” suppliers. A modification of the virtual integration system currently used by Dell could be applied to Ford’s dependent supplier base, while the management of lower tier suppliers of general or generic components would be more effectively suited by the standard procedures used by Dell.

STATEMENT OF ISSUE:

In 1913, Henry Ford revolutionized product manufacturing by introducing the first assembly line to the automotive industry. In the 1980’s, Ford picked suppliers based on lowest cost and the overall costs of the supply chain were ignored. Dealing with so many suppliers led to a higher overall costs and a complexity that was difficult to control. In the 1990’s, Ford cut down on the number of suppliers drastically and shifted towards more long term relationships with a set of suppliers that would provide entire vehicle sub systems. Although the number of suppliers were lower, our supply base was different and more complex then the one used by Dell.

After many decades of success, customers have increasingly become harder to find. Due to relatively new threats to the industry, an increasing numbers of cars and trucks are parked in dealer lots and showrooms, creating an alarming trend of stagnation and profit loss. Foreign based automakers such as Toyota ...

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...tion of virtual integration initiatives allows supplier companies, which are performing only certain processes, to work together as one entity. Therefore operations become more efficient by reducing inventory delivery time. More importantly, the organization maintains the ability to thrive in a competitive marketplace by achieving increased customer satisfaction through unique and strategic core competencies.

My decision to proceed with virtual integration should help redefine Ford as a competitive, cost effective company, who perhaps can become a leader in the automobile industry by implementing a system not currently used elsewhere within the automobile industry. Rather than remaining static, Ford must seek change and model their systems after successful companies such as Dell. I feel we should proceed with the integration process here at Ford starting Monday.