Ford Motor Company: Supply Chain Strategy Essay

3076 Words Nov 19th, 2013 13 Pages
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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, customer service and support and suppliers’ management. The redesign of the process must include design not only of the supply chain but also of fulfillment, forecasting, purchasing, and a variety of other functions that historically been considered independently within the Ford hierarchy. Teri
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Virtual Integration not only elevates Dell’s speed and efficiency in meeting customer’s needs, but also allows it to achieve market capitalization greater than Ford’s with fewer assets and lower revenues and profits.
Dell applied virtual integration in four main areas: organizational simplification, inventory management, customer service and support, and suppliers’ management. Ford’s supply base is complex in nature when compared with the DELL supply base—many more layers and many more companies. This is one area that would be difficult to apply the same degree of virtual integration. Although there are several key differences between the companies, the restructuring initiatives of Ford 2000 have set a viable foundation to implement Dell’s virtual integration strategy in inventory management, customer service and support and suppliers’ management. In order to successfully implement the virtual integration, the problems existing in the current supply chain will be identified and addressed.

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Issues Identification
After closely examining Dell’s “virtual integration”, Teri realizes the differences between Ford’s purchasing organization and that of Dell’s pose complications. The redesign of the process must