F. Best Solution &
Implementation Plan – on the Ford Motor Company Supply Chain Strategy
Page 348 of the “Corporate Information Strategy Management
8th edition by: Lynda Applegate, Robert Austin, and Deborah Soule
*Please use
only the book above*
*Please write a paper in 400 words or less and include a
chart (bar, web, or any thing you like) on the best solution and implementation plan on the Ford Motor company supply
chain strategy. I have provided some context below.
Facts:
- Company Background: Ford Motor Company, based in
Dearborn, Michigan, is a major global automaker with operations in 200
countries, generating significant revenues from its core business of
designing and manufacturing automobiles. - Industry Dynamics: The automotive industry has
become highly competitive, with challenges such as foreign competition,
overcapacity, and a shift towards global markets. - Globalization and Consolidation: Ford has been pursuing
globalization and consolidation efforts, including the Ford 2000
initiative, aiming to achieve cost reductions and economies of scale by
consolidating operations globally. - Technological Initiatives: Ford has embraced information
technology (IT) as a critical enabler for its reengineering efforts,
including the Ford 2000 initiative. The company has adopted Internet
technologies, launched an intranet, and engaged in business-to-business
(B2B) initiatives like the Automotive Network Exchange (ANX). - Leadership Transition: In 1999, Jac Nasser took over as
CEO, emphasizing shareholder value and studying successful models like
Cisco and Dell to understand how newer companies achieve market
capitalization. - Supply Chain Initiatives: Ford has implemented strategic
initiatives such as the Ford Production System (FPS) and Order to Delivery
(OTD) projects to enhance manufacturing efficiency, reduce cycle times,
and improve customer satisfaction. - Retail Network: Ford has launched the Ford
Retail Network (FRN) to adapt to changes in retail vehicle distribution,
aiming to create a consistent and customer-focused experience.
Challenges:
- Supplier Network Complexity: Ford’s existing supply base is
complex, with a history of several thousand suppliers. The shift towards
longer-term relationships with tier-one suppliers poses challenges in
terms of managing relationships and achieving cost reductions. - Organizational Structure: Unlike Dell, Ford’s purchasing
activities are independent of product development, and purchasing has
historically played a significant role in decision-making. Integrating
purchasing into a more virtually integrated system may be challenging. - Technology Disparities in the
Supply Chain: While first-tier suppliers have well-developed IT capabilities,
lower-tier suppliers may lack the resources to invest in new technologies
at the same rate as Ford. This technology maturity gap in the supply chain
could hinder seamless integration. - Differences in Supplier Networks: The comparison with Dell
highlights differences in supplier network layers and organizational
independence. Ford’s supplier network complexity may present challenges in
implementing a virtual integration strategy modeled after companies like
Dell. - Global Collaboration: Ford’s move towards global
operations necessitates effective collaboration across teams and
continents. The need for technology to overcome geographical constraints
implies potential challenges in ensuring seamless information flow and
collaboration. - Integration of Retail Network: The implementation of the Ford
Retail Network introduces challenges in terms of ownership variations,
competition dynamics, and the need for consistent customer experiences
across different markets. - Technology Adoption in a
Traditional Industry: The automotive industry’s inherent complexity and historical nature
pose challenges in adopting and adapting to emerging technologies. The
question of whether methods successful for newer companies like Dell can
deliver similar results for Ford remains uncertain.
Symptoms & Problems:
Include Decision Criteria
·
The industry was also
facing increasing overcapacity (estimated at 20 million vehicles) as developing
and industrialized nations, recognizing the wealth and job-producing effects of
automobile manufacturing, encouraged development and expansion of their own
export-oriented auto industries.
·
Although manufacturers
varied in their degree of market presence in different geographical regions,
the battle for advantage in the industry was fast becoming global. Faced with
the need to continue to improve quality and reduce cycle times while dramatically
lowering the costs of
·
One element of the
effort to achieve advantage in size and scale was a movement toward industry
consolidation. In the summer of 1998, Chrysler merged with Daimler-Benz to form
a more global automaker. In early 1999, Ford announced that it would acquire Sweden’s
Volvo, and there were rumors of other deals in the works.
·
Previously, in 1995,
Ford had embarked on an ambitious restructuring plan called Ford 2000, which
included merging its North American, European, and International automotive
operations into a single global organization.