Ford Motor Company
WANTED TO TRANSFORM FROM A VERY LINEAR , TOP DOWN
BUSINESS TO A
NET READY, NIMBLE ORGANIZATION THAT INVOLVES C ISCO
AND INTEGRATES CUSTOMERS , SUPPLIERS , AND EMPLOYEES .
HAD THE SOLUTION — AN END - TO - END INFRASTRUCTURE ABLE TO OPTIMIZE EVERYTHING FROM THE SUPPLY CHAIN , TO THE CUSTOMER PURCHASING EXPERIENCE , TO THE WAY EMPLOYEES WORK .
Background Henry Ford built his ﬁrst car, the Quadricycle Runabout, over a hundred years ago in the summer of 1896. It had a four-horsepower engine and could reach speeds of up to 20 miles per hour, an astonishing feat for the late 19th century. He sold that car for $200 to ﬁnance his second car, which was completed in early 1898. On June 16, 1903, he incorporated Ford Motor Company, which was capitalized for $100,000 with twelve stockholders. The company produced 1,708 cars that ﬁrst year. Today, Ford Motor Company is a US$160 billion corporation with some 350,000 employees in 200 countries around the world. In 1999, just over one hundred years after Henry Ford built the Runabout, Ford Motor Company manufactured 7.2 million vehicles worldwide. The Challenge Ford’s roots are grounded in harnessing the latest technology and innovative production techniques. In fact, Fortune Magazine recently named Henry Ford the “Businessman of the Century” and Ford’s Model T “Car of the Century.” However, as a 100-year-old company, Ford had developed some of the unfortunate characteristics of large-scale growth. With customers becoming more demanding and cost pressures mounting, the company wanted to transform from a very linear, top-down, E X E C U T I V E
bureaucratic business model to a Net Ready, nimble organization that involves and integrates customers, suppliers, and employees. “Ford’s overall vision is to become the leading consumer S U M M A R Y company for automotive products and services,” says Jim Yost, Ford vice president and CIO. “We believe one of the best ways to try and drive that is to connect everyone together in communities to best serve our customers worldwide.” Ford needed to integrate more closely with their many and diverse suppliers, to make information available to the entire supply chain simultaneously. In the current cascade process, this can take days, weeks, and sometimes even months. Another key initiative close to the executive team’s heart is Ford’s OTD (Order to delivery) process. OTD is the supply chain process that comprises product engineering through vehicle manufacturing and distribution. The goal of being more consumer oriented requires Ford to shorten the delivery cycle from the time a customer places an order to the time the vehicle is actually delivered to a dealer and the owner takes possession. Ford also wanted to improve communication to and among employees, to encourage a more open, collaborative working environment. From providing unﬁltered top-down communication to providing low-cost
BACKGROUND Ford Motor Company is the world’s second largest manufacturer of cars and trucks with products sold in more than 200 markets. The company employs nearly 400,000 people worldwide, and has grown to offer consumers eight of the world’s most recognizable automotive brands. CHALLENGE With inherent large-scale growth issues, more demanding customers, and mounting cost pressures, Ford needed to transform from a linear, top-down bureaucratic business model to an Internet ready, nimble organization that engages and integrates customers, suppliers, and employees. SOLUTION Working with Cisco, Ford integrated and leveraged their supplier base by designing Covisint, an end-to-end infrastructure that enables an online, centralized marketplace connecting the automotive industry supply chain. Ford also enhanced the customer buying experience through redesigned and more user friendly Web sites. RESULTS Ford is enjoying an increase in customer satisfaction, sees huge revenue opportunities for developing and retaining loyal product...
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