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Ford Motor Company – Supply Chain Strategy

1752 words - 8 pages

Executive Summary
Ford’s existing supply chain is highly complex and there are several external factors that have contributed to the search for solutions to move past the costly supply chain challenges the company has been dealing with in recent years. The challenge in their current supply chain system revolves around the inefficient management of their large data base of suppliers, the existence of independent distributors and their inability to communicate and provide direct service to their customer base. Recognizing an immediate need to improve and enhance their supply chain, making it more cost effective and profitable, I have decided to implement portions of the supply chain ...view middle of the document...

Ford will have a division equipped to manage and maintain the new business practice. Investment in new high tech equipment will be part of implementation and training sessions will be provided prior to the launch of the new division. A B2B model will be implemented linking suppliers electronically to Ford’s computer network. Customers will learn of their new option to purchase a vehicle from Ford. To monitor this new model of business, performance reviews and evaluations will occur on a scheduled basis. Continuous improvement will occur following review and evaluation. Through this solution Ford would overcome the complex and unsuccessful manual process of forecasting which would decrease costs and increase customer satisfaction.

Table of Contents

Executive Summary………………………………………..Page 2
Issue Identification…………………………………………Page 4
Root Cause Analysis………………………………………Page 4
Alternative and Options……………………………………Page 6
Recommendations…………………………………………Page 8
Implementation……………………………………………..Page 8
Monitor and Control………………………………………..Page 8
Exhibits……………………………………………………...Page 9

Issue Identification
Strategic Issues – Long Term
The central issue for Ford is the management and control of their large data base of suppliers. In contrast to Dell which has a small amount of suppliers, Ford has thousand suppliers and operates in a more complex environment. In addition, Dell requires less than hundred parts to produce their product and they have fewer manufacturing facilities and employees, whereas Ford requires thousands of parts to product their product and have numerous manufacturing facilities and over 360,000 employees. Not only does Ford need to manage a large data base of suppliers, they also manage a large number of dealership networks who are spread out geographically areas around the world. (Exhibit One and Two)
The biggest issue Ford will face in the long term will be to manage both suppliers and customers efficiently.
Tactical Issues – Short Term
1. No updated IT technology: Some of Fords suppliers will not have the ability to stay current with IT technology, which in turn does not allow Ford to stay current on managing their production operations. This becomes a problem in the supply chain as communication cannot flow properly leading to long lead times, higher costs, and inconveniences.

2. No communication with their end customers: Ford uses many independent dealership networks and as a result, they lose communication with the end customers and the ability to control the level of customer service provided to their customers.

Root Cause Analysis
Strategic Perspective
The challenge in their current supply chain system revolves around the inefficient management of their large data base and complex network of suppliers, the existence of independent distributors and their inability to communicate and provide direct service to their customer base....

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