This website uses cookies to ensure you have the best experience. Learn more

Ford Virtual Integration Essay

2486 words - 10 pages

FORD MOTOR COMPANY’S
|
SUPPLY CHAIN STRATEGY |
|
|
11/13/2012 |

*The Virtual Integration Model Analysis at Ford Motor Company, to Companies like Dell*

EXECUTIVE SUMMARY
As director of Supply Chain Systems, I have decided to implement portions of the new supply chain strategy of Virtual Integration and strategies from companies like Dell.   Although there are several key differences between the companies, Dell’s virtual integration strategy can be applied to Ford’s supply chain operation. A modification of the virtual integration system currently used by Dell could be applied to Ford’s dependent supplier base, distribution system, dealerships and divisions. Special ...view middle of the document...

  We must find ways to improve the Supply Chain management and to increase shareholder value and Supply Chain responsiveness.   More specifically we are looking at how Dell manages their Supply Chain and incorporates the virtual integration strategy.   A decision is required before the next meeting with the VP of Quality and Process Leadership.   
Environmental and Root Cause Analysis
Current Supply Base
Certain Groups believed that the differences between Ford and Dell are too large, and how would I be able to compare a computer manufacturing company with that of a large automotive manufacturer?  The Ford supply base in itself is much larger and more complex with that of Dell's.  The existing supply base was a product of history and up until the late 1980’s was over inflated with thousands of suppliers across all of the business units.  Purchasing selected suppliers based on lowest cost, and over looked other important aspects of the supply chain, such as logistics, and quality.  With the ever growing competitive automotive market, it was important to improve on processes that would give us an advantage in the market place.  Also we recently decreased our supplier base to have a closer and more long-term relationship with fewer suppliers called ‘Tier 1’ suppliers. These suppliers provide Ford with complete vehicle subsystems. The Tier 1 suppliers work with multiple Tier 2 suppliers who provide the components that make up the vehicle subsystems. The Tier 1 suppliers do not have the capital to invest in the new technologies that Ford seeks to get into. However, the Tier 1 suppliers do have fairly solid IT capabilities, but these capabilities severely drop when dealing with the Tier 2 suppliers.
 
Push System
Currently Ford is also using a Push type system, where producing as many vehicles as possible, and as many models as possible is the standard. This has resulted in massive over producing, which resulted in high inventory levels, and a very low turnover.  The production schedule is consistent and easy to manage, but it does not align with the demands of the customer. The battle for advantages in the auto industry increases the need to be innovative, in our procedures and thinking.
Global Competition
With increasing competition globally, Ford’s new approach required that technology be employed to overcome the constraints imposed by geography on information flow. We find it advantageous to include our IT group to aid in major reengineering projects. Ford Teams need to continue to find ways to work together as if they were all in the same room.
Similarities & Differences between the 2 Companies
To begin our comparison of Dell Computer and Ford Motor Company, let’s begin by discussing the similarities between the companies. The main similarity is in their operating principles. As stated, all of the principles that led to Dell’s success are in place in some form at Ford. It should be noted that most of these operating...

Other Papers Like Ford Virtual Integration

Ford Motor Company: Supply Chain Strategy

3125 words - 13 pages ------------------------------------------------- Executive Summary As director of Supply Chain Systems, Teri Takai recommends implementing virtual integration strategies from companies like Dell to portions of Ford’s supply chain strategy. Although there are several key differences between the companies, the restructuring plans of Ford 2000 have set a viable foundation to implement Dell’s virtual integration strategy in inventory management

Ford Motor Company Case Study

1714 words - 7 pages look at ways to improve profitability. The company has implemented various programs and processes to create a lean, responsive system with better consumer forecasting. Their challenge is to continue to research ways to stay viable in current market and industry conditions. Dell Computers has been very successful with a direct model and virtual integration that may or not work well for Ford. CONTENTS * ISSUE 3 * ANALYSIS 4

Ford Motor Case

1964 words - 8 pages alternatives for its supply chain, such as Virtual integration. With all of these changes going on in the automobile industry, it is imperative Ford needs to make some changes within its organization to compete. Issues Identification: The main area of emphasis for Ford Motor Company currently, is to increase its customer responsiveness and shareholder value. In order to do so, we need to determine if we need to redesign our supply chain activities

De Havilland Case

1697 words - 7 pages requiring information technology to be the driving force and the link between the various company divisions. In doing so, Ford was trying to build a model similar to the one adopted by Dell computers to improve supply chain and delivery times. Dell launched the "direct business model" or "virtual integration" where Dell contracted with reliable suppliers to produce and assemble hardware and software for its computers and note books and tried to sell

Ford Motor Company Supply Chain Strategy Case Report

3217 words - 13 pages dependent supplier base, distribution system, dealerships and divisions. Special care will need to be taken to address the unique dependency of our custom Tier 1 supplier. The management of lower tier suppliers of general or generic components would be more effectively suited by the standard procedures used by Dell. If we at Ford could find a solution to the obstacles of virtual integration, it could make our supply chain run smoothly with less

Ford Motor Supply Chain Strategy

2746 words - 11 pages consolidating the North America, European, and international automobile operations. Ford 2000 also called for a complete reengineering of several key company processes including Order to Delivery (OTD) and Ford Production System (FPS). One of the primary strategic goals of Ford 2000 was to decrease OTD from more than 60 days to within 15. As director of Supply Chain Systems, I have decided to implement the Virtual Integration System as the new supply

The Robot Revolution

1511 words - 7 pages company that was founded on the principle of cost savings and was once the prototype for efficiency had by 1986 become the auto industry's high cost producer. The average number of autos produced by each GM employee stood at 11.7, while the same metric at Ford was 16.1 and as high as 57.7 at Toyota. GM also earned 38% less than Ford and 26% less than Toyota on each vehicle they made. Research by Marvin Lieberman and Rajeev Dhawan of UCLA, who studied

Information Systems Journal

2663 words - 11 pages enabled smartphone (eg. Android Galaxy 3s and google wallet) or payment card (eg. Visa) with a NCR SelfServ Checkout at Dominion the process for the transaction is outlined below: Every card (even the "virtual" one used when paying with NFC enabled smartphone) has an account it is bound to. It could be a debit (bank) account, or it could be an anonymous account used with a prepaid card. When a customer or pays with the card, it authenticates

Is 535 Course Project

5488 words - 22 pages consumer base is the ultimate challenge, and provides opportunity for real progress. Firms often face shareholder pressure to behave in an expected manner. Corporations like GM, Ford and Texaco were forced to withdraw from the Global Climate Coalition at the request of their shareholders. The challenge is not only to educate senior corporate officers to the value of sustainability performance, it is also important to communicate the importance of

Organisational Structure

3563 words - 15 pages the 1900s until the Great Depression of the 1930s. Henry Ford's plants were typical of this Figure 1a Organizational Structure growth, as the emerging Ford Motor Company grew into the largest U.S. automaker by the 1920s. The Great Depression temporarily stifled U.S. economic growth, but organizations that survived emerged with their vertically-oriented, bureaucratic structures intact as public attention shifted to World War II. Postwar

RFID And EPC

4660 words - 19 pages more effective by enabling true visibility of information about any item and its location as well as transparently supplying this information to other companies in virtual organizations or supply chain networks.The network has five fundamental elements:•Electronic Product Code (EPC)•EPC-based tags and readers•Object Name Service (ONS)•Physical Markup Language (PML)•Savant (software system components) [3]In order to make

Related Essays

Ford Case Essay

287 words - 2 pages EXECUTIVE SUMMARY Ford Motor Company started in Michigan in 1903. They have focused on designing and manufacturing that had been successful, however with increasing competition globally and increase capacity it needs to look at ways to improve profitability. Ford Challenge is to continue to research ways to be viable in the market and industry conditions. Dell Computers had been very successful with their virtual integration. However

Ford Case Study

2087 words - 9 pages . In the same time period, with emerging of new technology; Dell had pioneered a new supply chain strategy called virtual integration which helped Dell created a 12 billion business in 12 years. Is virtual integration the right thing to do for Ford? Should Ford model Dell’s supply chain and become fully virtually integrated? If this is the right direction to go, how can Ford implement this throughout their supply chain successfully because Ford

Ford Case Study Supply Chain

4444 words - 18 pages experiencing significant over-capacity. In the face of the challenges presented to us, we must determine if Ford should embrace the direct business model which utilizes “virtual integration” that has driven Dell to become a clear leader in their industry. Further, if we chose to utilize “virtual integration” based on the Dell model, we will need to develop and implement significant changes in the some of our most fundamental supply chain operations

Ford Motor Company – Supply Chain Strategy

1752 words - 8 pages , manufacturers, and customers – but also keep current client that enjoy buying from dealerships. Since Dell and Ford are two different types of industries, a modification of the virtual integration system currently used by Dell will be applied. Aspects of the virtual integration system will be added concurrent to the current supply chain system, which will remain. This is critical since trying to introduce the full virtual integration business model