To: Devdariani Seit
From: Aleksandr Vavulo(A12028) Group M112
Ford Motors Company: Supply Chain Strategy case.
Ford Motors was established in 1903. The company has successfully led business and competed throughout his life with local competitors. Ford's main competitors in the second half of the 20th century were Chrysler and GM. However with the entry of Japanese companies like Honda,
Toyota and others the firm faced tuff competition. The market has become overcompensated and it is time to improve business performance. In 1995 Ford initiated the Ford 2000 plan aimed to restructure many of their key processes like Order to Delivery (OTD) and Ford Production System (FPS). They wanted to reduce the OTD from 60 or more to 15 or less days. FPS was created to convert the supply chain from a push type to a pull type. Ford aimed at reducing the number of suppliers which had grown to several thousands of different suppliers over the years as the company grew. Rather than focusing on selecting suppliers based on costs they wanted to develop close long-term relations with the Tier 1 suppliers who in turn managed and handled Tier 2 and Tier 3 suppliers.
The aim was to create a more cost effective supply chain. Ford provided its suppliers with its expertise and techniques to help them better manage their operations. Another important initiative taken by ford was the Ford Retail Network (FRN) to reduce competition among its dealerships in the same locality by having only one unified dealer who provides the best possible level of customer experience. The director of supply chain system, Takai has to take an informed and well thought decision if they should implement the Dell’s integrated supply chain or not.
1. What advantages does Dell derive from virtual integration? How important are these advantages in auto business?
There are several advantages that Dell derives:
The enhancing of customer value. By allowing their customers to configure PC’s...