Ford Case
FORD MOTOR COMPANY: SUPLY CHAIN STRATEGY
I. VIEWPOINT Teri Takai, Director of Supply Chain Systems at Ford Motor Company II. TIME CONTEXT Late 1990s III. STATEMENT OF THE PROBLEM How should the company use emerging information technologies (i.e. Internet technologies) and ideas from new high-tech industries to change the way it interacted with suppliers?
IV. OBJECTIVE To be able to make the supply chain run smoothly by eliminating bottlenecking, enhance inventory management and improving overall performance.
V. ENVIRONMENTAL SCAN (AREAS OF CONSIDERATION) Strengths • Second largest industrial corporation in the world • Revenues of more than 144 billion • About 370,000 employees • Operations spanned 200 countries • Strong relationship with suppliers Weaknesses Lengthy customer to delivery time (45-65 days) Opportunities Industry relying on technology is in the growth stage (Late 1990s) Threats • The car industry is facing increasing overcapacity • Advantage in the industry was fast becoming global • Non-parallel IT maturity especially with 1st tier suppliers who were not able to invest in new technologies at the rate Ford itself could VI. ON GOING IMPROVEMENTS Ford 2000 • Product development consolidated into five Vehicle Centers (VCs) – each responsible for the development of vehicles in a particular consumer market segment • Making processes and products globally common – Eliminate redundancies – Realize economy of scales
VII. TWO VIEWS BY THE TEAM Group favoring Virtual Integration • This group argued that the new technology made it inevitable that entirely new business models would prevail • Ford needed to radically redesign its supply chain
I. VIEWPOINT Teri Takai, Director of Supply Chain Systems at Ford Motor Company II. TIME CONTEXT Late 1990s III. STATEMENT OF THE PROBLEM How should the company use emerging information technologies (i.e. Internet technologies) and ideas from new high-tech industries to change the way it interacted with suppliers?
IV. OBJECTIVE To be able to make the supply chain run smoothly by eliminating bottlenecking, enhance inventory management and improving overall performance.
V. ENVIRONMENTAL SCAN (AREAS OF CONSIDERATION) Strengths • Second largest industrial corporation in the world • Revenues of more than 144 billion • About 370,000 employees • Operations spanned 200 countries • Strong relationship with suppliers Weaknesses Lengthy customer to delivery time (45-65 days) Opportunities Industry relying on technology is in the growth stage (Late 1990s) Threats • The car industry is facing increasing overcapacity • Advantage in the industry was fast becoming global • Non-parallel IT maturity especially with 1st tier suppliers who were not able to invest in new technologies at the rate Ford itself could VI. ON GOING IMPROVEMENTS Ford 2000 • Product development consolidated into five Vehicle Centers (VCs) – each responsible for the development of vehicles in a particular consumer market segment • Making processes and products globally common – Eliminate redundancies – Realize economy of scales
VII. TWO VIEWS BY THE TEAM Group favoring Virtual Integration • This group argued that the new technology made it inevitable that entirely new business models would prevail • Ford needed to radically redesign its supply chain