Ford Motor Company Case Study

1680 Words 7 Pages
Register to read the introduction… 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 on line 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 …show more content…
Ford was established by a visionary Henry Ford in 1903 and it has been in business ever since. Ford’s core business is the production and distribution of cars and trucks. In addition to that, Ford earned substantial revenues and profits from its financial subsidiaries that operated mainly in North America with limited operations in Europe and everywhere else. In its 1997 financial statement, Ford reported close to $ 7 billion in net income and a 5-year average revenue growth rate of %6. These positive financial statement figures were an indication of Ford’s strong market and financial positions. 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 order to take advantage of their global presence and deal with the increasing global competition, Ford along with General Motors and Chrysler saw an urgent need to consolidate their industry and started merging with other automakers around the globe. Such swift action had enabled these giant firms to achieve better quality products at a reduced cycle time and lower costs due to the economies of …show more content…
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

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