...Ford vs Dell Executive Summary FORDs current method of controlling all aspects of the manufacturing is outdated and is limiting the corporation’s annual results. In order to stay competitive and become efficient again, FORD needs to re-evaluate their current supply chain and implement key portions of DELLs vertically integrated supply chain model. A proper implementation will increase information flow between suppliers, departments and dealers resulting in a reduction of redundant inventory and focus towards just in time inventory. All of these factors will further drive up the already US industry leading profit margin per vehicle. In order to accomplish these goals FORD needs to refocus the Purchasing department’s responsibilities, consolidate and develop suppliers that deliver finished high level components and increase the information flow across all points of the supply chain. These steps will help to introduce a more pull-based system. Contents Issue identification 1 Environmental and root cause analysis 2 Alternatives/Options 3 Recommendations 4 Implementation 5 Monitor & Control 6 Issue identification • Current order to delivery (OTD) is more than 60 days. • Management of large supplier network. • Utilization of IT is lacking. • Purchasing isn’t integrated into Product development. • Independent dealership network has resulted in FORDs loss of control over customer service experiences. This network also...
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...Ford Motor Company – Case Study Jason Austin Denine Rood Jeanne Sands Like apple pie and a summer baseball game, Ford Motor Company has come to symbolize America, the land of opportunity. This America is a place where a person with scarcely any means can take little more than an idea and transform it into one of the most successful companies in the world. This is the story of Henry Ford and the Ford Motor Company. Consider the following quote from the Ford Web site. Ford Motor Company entered the business world on June 16, 1903, when Henry Ford and 11 business associates signed the company's articles of incorporation. With $28,000 in cash, the pioneering industrialists gave birth to what was to become one of the world's largest corporations. Few companies are as closely identified with the history and development of industry and society throughout the 20th century as Ford Motor Company. Henry Ford and his business partners where true entrepreneurs. Today, when we think about Ford, we think about innovation. From Henry Ford’s revolutionary idea of the assembly line to the new vehicles that Ford introduces every day, innovation has always been a cornerstone of Ford’s business. One little known fact is that Ford embraced QFD (Quality Function Deployment) , a Japanese quality methodology, into their product design process significantly earlier than most companies in the United States. This embracing of new ideology has led Ford to offer products...
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...SCMP MODULE 1, SESSION 9 FORD MOTOR COMPANY CASE STUDY Prepared by: Christine Godby, Accreditation Candidate Table of Contents Executive Summary Page 2 Issue Identification Page 3 Environmental and Root Cause Analysis Page 5 Alternatives and/or Options Page 9 Recommendations and Implementation Page 10 Monitor and Control Page 11 1|Page Session 9, Ford Case Study by Christine Godby Executive Summary As Director of Supply Chain Systems, I have reviewed the analysis by my esteemed colleagues of our current supply chain and our recently implemented strategies to date. We have made significant changes to our supply chain through Ford 2000 and we should be proud of our achievements! Our use of information technology (IT) has enabled us to work together as a global team, even though we are on different continents. We have successfully reduced our supplier network which and work as a team with our current suppliers as well as enjoy cost savings and a more reliable supplier network. Our development of the Ford Production System (FPS) has resulted in a leaner more responsive and efficient manufacturing operation and our Order to Delivery (OTD) initiative has reduced our order to delivery time from 45-65 days to just 15 days! This being said, the global market is extremely competitive and I believe is challenging us in ways we have not seen before. With emerging technology and the ability to reach global audiences through the...
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...The Topic of interest in this essay is “Supply Chain” Definition: A supply chain is a network of suppliers, manufacturer and distributors which helps in transformation of raw materials into valuable products and delivering them to the customers at right price, right place and right time. The concept of supply chain applies not only to the physical products but also to services. In the case of services, suppliers become service supporter, manufacturer becomes service creator and the distributors become service provider. The aim of the supply chain is to create value by providing the customer with products and services efficiently. The supply chain is not a simple series of connections, rather it’s a complex chain of people and organizations connected to each other and interacting to create value. The various components of a supply chain are explained below: 1. Suppliers/Service Supporter: It refers to person(s), firm(s) or organization(s) that supply raw materials that can be used to manufacture the final product. For example in case of manufacturing car as final product, someone who provides tyres, engines, car chassis or any other part would be called a supplier. In case of a service, it refers to someone who provides the support in the creation of the service to the customer. For example in case of creating hotel services for customer the catering, the laundry etc. act as service supporter. In a supply chain there do not exist a single supplier, rather there...
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...Summary Ford is one of the leading companies in the auto industry. The director of Supply Chain Systems at Ford was put in a tough position to make recommendations with regards to the company’s supply chain strategy. There are two groups within Ford that have two different opinions on how Ford should be using emerging information technologies and ideas from high tech industries, such as Dell, to change the way it interacts with suppliers. The first group argued that Ford should adopt Dell’s business model to improve efficiency and increase profits. This group emphasizes that Ford’s virtual integration should be the blueprint for what ford should attempt. On the other end, the second group believes that Ford and Dell operate in two different industries and it is not feasible to adopt Dell’s business model. This case study will demonstrate the toot causes of the problem and will present the reason why Ford should pursue with the mixed approach. Some of the solutions in the mixed approach are based on Dell’s business model, while the rest are not. These solutions are costly and time consuming, but Ford will eventually harvest the benefits of this approach. Issue Identification Teri Takai, Director of Supply Chain Systems, is about to make critical recommendations to senior executives on Ford’s usage of emerging information technologies and ideas from high tech industries to alter the methods Ford interacted...
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...Case Study of Ford Motor Co. Executive Summary Ford Motor Co. was second largest automobile company in the word, with revenue $.144 billion and more than 370,000 employee (in 1996), with extended operations to 200 countries. Ford dealing with a huge number (thousands) of suppliers and dealers in daily basis, which create high level of complexity combined with other internal and external factors have 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 if they didn't find a proper solution . the main issues with their current system is: the inefficient control of their large data base and complex network of suppliers, the existence of independent distributors and their inability to communicate and serve their customers directly. Ford realized that they should modify their supply chain in order to make it more cost effective and more profitable, in order to solve this issue for launched a full organization re-structures business process plan called (FORD 2000), by segmenting their market to 5 Vehicles Centers (VCs) for product development activates, each (VC) was responsible about for developing of vehicles in a particular customer market, By partly adapting the virtual integration direct business model of Dell Co., Ford can use the emerging information technologies and internet as well as new ideas from high tech industries in order to interact and transact with their...
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...Executive Summary: Ford Motor Company was incorporated in 1903 in Michigan,USA by Henry Ford and 11 partners with a starting capital of 28000 US $ in cash. The company witnessed tremendous growth and became one of the top three car manufacturers in North America. Sales reached 150 billion $ in 1996 with a total of 370,000 work force worldwide. The company stayed innovative and progressive in its strategy and business model. In the 1970's, the car market became more competitive with the Japanese manufacturers like Toyota and Honda gaining grounds in the auto market worldwide by producing high quality vehicles with extended life time. In 1999 Ford acquired the Swedish company Volvo to establish a foot hold in Europe and launched a campaign called "Ford 2000"to reengineer the company infrastructure and IT strategy that aimed at reducing their vehicle centers to 5 worldwide and requiring information technology to be the driving force and the link between the various company divisions. In doing so, Ford was trying to build a model similar to the one adopted by Dell computers to improve supply chain and delivery times. Dell launched the "direct business model" or "virtual integration" where Dell contracted with reliable suppliers to produce and assemble hardware and software for its computers and note books and tried to sell its products directly to organizations and individuals through the internet by cancelling the role of the retailers or intermediaries. I recommend the implementation...
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...Ford Motor Company Case Study Executive Summary The Ford motor company has been a progressive leader throughout the history of the company. In order maintain this leadership, it has had to adapt to the ever changing business environment and market conditions. With the emergence of new information technologies and ideas from new high-tech industries, it must evaluate how these tools can be utilized to further the business. Recently, virtual integration has been proven very successful to companies like Dell and Cisco. However, this approach is best suited for companies that have very few layers of suppliers as well as more centralized production. The Ford motor company cannot simply change their entire supply chain to fit this model. That being said, some of these theories and practices can still be incorporated into Ford’s current supply chain. These must be calculated changes, involving various departments within Ford’s organization, collaborating with their most valued and dynamic suppliers. With Ford already moving somewhat toward this direction with suppliers who provide complete subsystems for their automobiles, further changes in these areas should prove feasible with limited risk. Issues • Determining whether or not to incorporate the virtual integration model used by other recently successful firms such as Cisco and Dell • Uncertainty on how to utilize emerging information technologies to interact with suppliers • Many...
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...Inbound freight takes center stage Ford Motor Company Case Study Inbound freight takes center stage Inbound freight takes center stage Contents Snapshot The challenge The solution The rollout Issues encountered Results Logistics finally catches up with ‘lean’ 1 2 3 4 4 5 5 Share this case study Tweet about this case study Follow Viewlocity on Twitter Share this on Linkedin Connect to Viewlocity on Linkedin Share via email Inbound freight takes center stage | Page 1 Snapshot Ford Motor Company Key challenge To balance inbound freight costs for thousands of parts across hundreds of suppliers with the high frequency of deliveries needed to support just-in-time (JIT) automobile manufacturing. Solution Ford deployed the Inbound Planning Engine from Viewlocity Technologies that considers multiple factors and constraints necessary to meet lean manufacturing requirements at the lowest possible cost. Factors considered included: • • • • • • • • Load sequencing across suppliers Quantities per load Trailer capacity Load configuration Dock schedules and capacities Production schedules Target plant inventory levels Return of part containers to suppliers Upon consideration of all of these factors, the Viewlocity Inbound Planning Engine was used to determine the plan for the right quantity and delivery frequency for every part at the lowest possible cost. The Viewlocity Inbound Planning Engine was first employed by Ford Materials Planning and Logistics Group...
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...Ford Motor Company: Supply Chain Strategy Attn: Jac Nasser, CEO Dear Mr. Nasser Please find attached the report as requested Yours Truly, Teri Takai Ford Motor Company: Supply Chain Strategy ------------------------------------------------- Case Study Response Executive Summary As Director of Supply Chain Systems and decision maker on if we should proceed with the Virtual Integration Model I have carefully analysed all aspects of this model to see if it could work within Ford and the Automobile industry. We have a rich history of success and working through difficult challenges and I have no doubt that we will do so again with the right decision on this model. The Automobile industry is a complex one with many suppliers, parts, dealerships, competitors and all this is now happening in a global market. This complexity makes efficiencies difficult to implement and drives up the costs our supply chain. Many efficiencies would require the cooperation of both internal and external parties and would require significant investment. Ford’s main problem with their current system is the inefficient usage of their huge data base, the complex network of suppliers, the presence of many independent distributors who are making forecasting difficult and the lack of direct communication with customers. Through my review I have come to the conclusion that the full implementation of the Dell Model would not work; the way customers buy cars and computers in this day and...
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...Makers? Kamrul Ahsan School of Management and Information Systems, Faculty of Business and Law Victoria University Australia Abstract Often automobile recalls are drawing media and public attention. Influenced by Toyota’s recent automobile recalls 2009-2010 this research conducts an empirical study on historical car recalls. The research uses secondary data from recall websites maintained by public and private organizations. For different car model year and manufacturer the study looks at frequency of recalls, recorded customer complaints, and yearly sales data. Analysis shows recalls are a common event with the majority of recalls initiated by only a few car makers. Though car makers use many eye catching and popular quality and customer care slogans and programs, many popular car makers still face valid customer complaints and consequently face many unwanted recalls. This study identifies that most recalls occur during the first five years of the car model year. This preliminary study of automobile recalls can be further extended at a later stage to identify key causes of recall. Keywords Product recalls, Reverse logistics, car recalls, product returns, closed loop supply chain 1. Introduction Though manufacturers use state-of-the-art operations philosophies, tools and techniques, it is difficult to make the perfect product and products often need to be recalled. Recalls occur when the customer or the manufacturer or the government safety ensuring authority identifies...
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...Ford Motor Case Study Table of Contents Executive Summary 3 Introduction 4 Issue Identification 5 Environmental and Root Cause Analysis 6 Alternatives and Options 8 Recommendations 10 Implementation 11 Monitor and Control 12 Exhibits 13 Executive Summary After reviewing Ford Motor supply chain, we became aware of its very complex nature. Due to this complexity we are forced to search for alternatives to overcome the costly supply chain challenges faced by our industry both now and in the future. The present system has an inefficient control of a large database and a vast and complex network of suppliers. We need to change our supply chain in order to make it more cost effective and profitable. After careful analysis we recommend the implementation of a partial virtual integration system, similar to the system used by Dell Computers. With this system, Ford will use information technology and the internet to interact and transact with both their suppliers and their customers. Ford can increase their sales by providing better customer service and faster communication from the supply end through to the manufacturing division and right on to their end user, the customer. This system will be implemented with their existing supply chain so Ford will cover both markets at the same time. If Ford concentrated only on the virtual system their competition would put them out of business, so...
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...Lean Supply Chain and its Effect on Product Cost and Quality: A Case Study on Ford Motor Company Summary: This paper mainly focuses on reviewing the implementation of lean supply chain (LSC) in manufacturing industries by using four-step problem solving process. Also, taking Ford Motor Company as a typical case to address how companies follow the Toyota steps to apply LSC in their daily management. First of all, the author introduces the background of how LSC developed in the Toyota Motor Corporation’s big success. Three presents perfect and develop the concept of eliminate wastes and reduce non-value added (NVA) operations, and improve the value added (VA). “ The VA activities are those that customers are willing to pay money for tangible goods or intangible functions.” Meanwhile, the NVS work mostly contains wastes. The author throws out a very critical method in LSC, which is Value Stream Mapping. VSM, as a tool to identify VA and NVA in the process, plays an important role in Lean Supply Chain. Since, it can provide a visual flow to decision making, highlight and expose wastes, explain the link between information and material flow, and finally come up with a plan that can reduce the wastes and benefit the future improvement. In the following part, the author uses four-steps problem solving process to label the problems, define the tasks, highlight the obstacles, and propose the solutions. During the whole process, there are some key factors to impact the decision-making...
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...CASE STUDY Ford Motor Company Ford Motor Company, one of the world’s largest automotive manufacturers, has worked with Penske on several Six Sigma initiatives. As its lead logistics provider (LLP), Penske’s quality team of associates are trained in Six Sigma practices and work closely with Ford to streamline operations and create and maintain a more centralized logistics network. Together, they uncovered several areas for real cost savings as a result of reducing inbound carrier discrepancies, eliminating unnecessary premium costs and reducing shipment overages. Plus, Penske implemented accountability procedures and advanced logistics management technologies to gain more visibility of its overall supply network. Six Sigma initiatives streamline operations Penske Logistics began its relationship with Ford as lead logistics provider (LLP) for Ford’s assembly plant in Norfolk, Va. At the time, each of Ford’s 20 North American assembly plants managed its own logistics operations. A decentralized approach provided total control of logistics at the plant level, but presented costly redundancies in materials handling and transportation. Ford conducted studies to determine the benefits of transitioning the company’s decentralized logistic operations to a centralized approach. The decision was quickly apparent – centralization of the company’s logistics operations would increase both velocity and visibility throughout the network, as well as reduce supply chain costs. Shortly thereafter...
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...CASE STUDY Ford Motor Company Ford Motor Company, one of the world’s largest automotive manufacturers, has worked with Penske on several Six Sigma initiatives. As its lead logistics provider (LLP), Penske’s quality team of associates are trained in Six Sigma practices and work closely with Ford to streamline operations and create and maintain a more centralized logistics network. Together, they uncovered several areas for real cost savings as a result of reducing inbound carrier discrepancies, eliminating unnecessary premium costs and reducing shipment overages. Plus, Penske implemented accountability procedures and advanced logistics management technologies to gain more visibility of its overall supply network. Six Sigma initiatives streamline operations Penske Logistics began its relationship with Ford as lead logistics provider (LLP) for Ford’s assembly plant in Norfolk, Va. At the time, each of Ford’s 20 North American assembly plants managed its own logistics operations. A decentralized approach provided total control of logistics at the plant level, but presented costly redundancies in materials handling and transportation. Ford conducted studies to determine the benefits of transitioning the company’s decentralized logistic operations to a centralized approach. The decision was quickly apparent – centralization of the company’s logistics operations would increase both velocity and visibility throughout the network, as well as reduce supply chain costs. Shortly thereafter...
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