Ford Motor Company: Supply Chain Strategy
Teri Takai, Director of Supply Chain Systems, has been asked what sounds like a relatively narrow question by the company’s most senior executives: How should Ford use Internet technologies to improve the way it interacts with suppliers? Students quickly realize, however, that the question requires broad discussion and is surprisingly difficult. To answer it, Ford needs to think about relationships not only with suppliers but also with dealers and customers. As Supply Chain Systems staff members study the Dell model in particular, they come to appreciate that “virtual integration” must include design of fulfillment, forecasting, purchasing, and a variety of other functions that had long been considered separately within the Ford hierarchy. The question is in fact explosive in its implications, because it inevitably leads to fundamental questions about the way Ford has historically operated internally and how it has interacted with important partner constituencies (including dealers). Takai’s staff is divided on what the recommendations should be. Members of one group are enthusiastic about the possibilities and think the only appropriate way to answer the question is to consider, evaluate and recommend radical changes to Ford’s overall business model; this group considers Dell a serious model for Ford’s business. Another group is more cautious and believes that the fundamental differences between Dell’s industry and Ford’s industry necessitate significant differences in business models. Takai must consider the inputs of her staff (provided as case exhibits) and decide what to recommend to her senior managers, including the CEO, who has taken a special interest. Students are asked to consider Takai’s choices and recommend a way for her (and Ford) to move forward. Background Reading
This case is intended to be used in combination with “The Power of Virtual Integration: An...