Ford Motor Company Case Report

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FORD MOTOR COMPANY Written Case Report F.B. EXECUTIVE SUMMARY As director of Supply Chain Systems, I have decided to implement the new supply chain strategy of Virtual Integration, and model its supply chain after companies like Dell. Although there are several key differences between the companies, Dell’s direct business approach can be applied to every facet of Ford’s operation. Special care will need to be taken to address the unique dependency of our custom “tier- one” suppliers. A modification of the virtual integration system currently used by Dell could be applied to Ford’s dependent supplier base, while the management of lower tier suppliers of general or generic components would be more effectively suited by the standard…show more content…
The process begins with the customer specifying exactly which features are to be included in the desired computer. Dell then buys components from several different suppliers via Internet-based JIT ordering. By using Dell’s process of JIT ordering, misallocation of company resources is avoided and unnecessary inventory is limited resulting in core competency and considerable cost reductions. By substituting information for inventory, Dell’s lean business structure offers mass customized machines that are ordered, assembled and delivered with reduced lead times without sacrificing margins or maintaining inventory. Although the direct business model of Dell is very attractive, there are several key differences between the computer and auto industries which cause barriers to Ford implementing a this virtual supply chain scenario. Ford’s similarities to Dell are summarized below: • suppliers are close with nearby ship points • external logistics supplier is used to manage inbound supply chain • customers are encourages to use PC’s to balance supply and demand • both companies are focused on strategic partnerships with its suppliers. Differences include: • Dell supplies its own inventory until it is used in production and Ford does not. • Dell forecasts its demand regularly with
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