Essay on Ford Supply Chain

612 WordsNov 21, 20103 Pages
2) What advantages does Dell derive from virtual integration? How important are these advantages in the auto business? In terms of communication and coordination, vertical integration leads to efficient and effective collaboration between supplier and Dell, and between Dell and customer through the physical proximity, established patterns of communications, and greater willingness to cooperate with other members of the same group. Another rationale for vertical integration is real time responsiveness and inventory management. Dell has real-time updating of order status and is able to check order status regardless of where the order is in the fulfillment process, which provided Dell with differentiating capabilities. Improved inventory…show more content…
Ford should trim its supplier networks down to one- or two-tier and select the suppliers with advanced and compatible IT capabilities. In the meantime, Ford should pay more attention to building and strengthening the data linkages – like communicating inventory levels and replenishment needs regularly with vendors - to facilitate the sharing of information in real-time fashion. Ford also needs to encourage the dealers to improve their IT ability and much more involve them in forecasting demand. 4) If you were Teri Takai, what would you recommend to senior executives? To what degree should Ford emulate Dell’s business model? I will recommend the BOD to approach the Dell model with a prudent attitude, neither too aggressive nor too timid. Emulating the virtual integration should focus on developing the strategic partnerships with technologically advanced suppliers and eliminating the correlation with smaller ones. Ford would make sure that key suppliers have access to forecasting data from customers' purchasing trends and production information to enable a faster order-to-delivery cycle. The difference in the distribution model between Dell and Ford lies in the middle link of using retail shops. Since Ford cannot skip retail as a focal distribution point, it should work on establishing a network of retail shops that it owned. Ford make sure shops are not affecting
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