Procurement

Topics: Vertical integration, Supply chain, Supply chain management Pages: 4 (833 words) Published: November 22, 2013

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FORDs current method of controlling all aspects of the manufacturing is outdated and is limiting the corporation’s annual results.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.

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 breeds FORD vs. FORD sales battles not a Global entity mindset.  
Environmental and root cause analysis
FORDs existing supplier base is a direct product of historical business practice. As the company has grown and demand has increased they have just increased the supplier base. Historically suppliers had been selected based on part/component price within little to no regard to overall supply chain costs. This narrow sighted selection process increased overall costs, presented high levels of redundant inventory, over complicated the flow of material all resulting in a misaligned of corporate gaols.

FORD initiated several projects in the 1990s to reduce overall suppliers, sharing...
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