Ford Motor Company Supply Chain Strategy Essay - 1397 Words

Ford Motor Company Supply Chain Strategy Background In 1913, Henry Ford revolutionized product manufacturing by introducing the first assembly line to the automotive industry. Ford’s hallmark of achievement proved to be a key competence for the motor company as the low cost of the Model T attracted a broader, new range of prospective car-owners. However, after many decades of success, customers have become harder to find. Due to relatively new threats to the industry, increasing numbers of cars and trucks are parked in dealer lots and showrooms creating an alarming trend of stagnation and profit erosion. Foreign-based automakers, such as Toyota and Honda, have expanded operations onto domestic shores and, in turn, have wrestled†¦show more content†¦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. Ford’s Challenge Although the direct business model of Dell is most attractive, there are several key differences between the computer and auto industries which serve as barriers to Ford‘s implementation of uniform, supply chain virtual integration. Ford must tackle many diverse obstacles that were, simply, not a factor with Dell‘s implementation. These obstacles range down the delivery chain from the supplier to the manufacturer to the dealer and, ultimately, to the customer. Overall, the intricate and historic process of manufacturing and selling automobiles contradicts the technological innovation necessary for a true virtually integrated system to exist. First, product complexity and supply channel constraints are key limiting factors of lean manufacturing that must be addressed. Due to the generic nature of computer parts, Dell possesses the ability to negotiate and procure necessary items for plant assembly from several independent purveyors. Therefore, Business-To-Business (B2B) transactions are accomplished with relative ease and minimal cost. Although generic items, such as spark plugs and windshield wipers, are provided to Ford by lower tier suppliers, wholly-dependent, â€Å"tier one† partnersShow MoreRelatedFord Motor Company: Supply Chain Strategy Essay3076 Words   |  13 Pagesof 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 integra tion strategy in inventory management, customer service and support and suppliers’ management. 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