Case Analysis of Ford Motor Company: Supply Chain Strategy

Table of Contents

Introduction2

Decision Makers3

Problem Statement3

Alternative Strategies4

Analysis of Alternatives7

Actions8

Implementation and Evaluation9

Implementation9

Evaluation10

Possible Criticism11

Generalizations12

References13

Case Analysis of Ford Motor Company: Supply Chain Strategy

Introduction

Ford motors had been enjoying a leading market share in the United States and overseas. The increased competition by the Japanese auto manufacturers and their mastering of supply chain processes has lead to the decline in the sales of the Ford Motors vehicles. Nations realized the economic prosperity resulting from auto manufacturing industry and fostered the development of their own auto industries which has further declined the market share of Ford motors globally. Ford unlike Toyota, had been a vertically integrated company and after witnessing the benefits of Japanese automakers who work closely with their suppliers have, restructured their supply chain to keep the core operations in house and procuring other components (Park, 2007) . The business operations of the organization are spread across the globe with 180 manufacturing plants in different parts of the world. The spread of the supply chain posses numerous problems for the company and Ford took several initiatives for the integration of supply chain (Mcadam, & McCormack, 2001). Ford started to focus beyond price and developed suppliers which can provide entire vehicle subsystems. They rationalized the number of suppliers, revamped their production process, order management and distribution systems. The current issue concerning Ford is the return on investment resulting from its business operations as compared to other companies with similar market capitalization like Dell. Ford studied the supply chain processes of Dell and is considering the use of technology for virtual integration of the supply chain to benefit from the cost savings it can provide. We will be evaluating the possibility of implementing the virtual integration through appropriate strategies. In order to successfully implement the virtual integration, the problems existing in the current supply chain will be identified and catered.

Decision Makers

The decision making in Ford involves a number of departments, the type of product required is decided by engineers and all the purchasing decisions are taken by the purchasing department. While the final authority rests with CEO, Mr. Jac Nasser, the director of supply chain systems, Teri Takai, is responsible for making decisions regarding the supply chain.

In order to make the virtual integration work, all stakeholders will be required involve in the development of virtual communication s system which can improve the operational efficiency, reduce the working capital required, increase customer satisfaction and increase share holder value (Mula et al., 2004). From suppliers, to supply chain department, purchasing, engineering, distributors, professionals from Ford Retail Network, and most importantly product development department will have to be involved in an integrated decision making process.

Problem Statement

Due to increase in market competition, supply chain superiority of competitors, high profitability of financially equal companies, Ford is facing pressure to provide high shareholder value to keep the investors interested in the company and increase customer satisfaction. We have identified three problems which may hinder in the implementation of virtual ...