Ford Motor Co.: Supply Chain Strategy Harvard Case Solution & Analysis

Ford Supply Chain Strategy

Background

There are several operations that are accounted for in Ford’s current strategy that needs to be evaluated in order to lay groundwork. Ford motor is present in a dynamic and complex automotive industry that accounts for various levels of suppliers as well as other partnering firms; which complicates the operations and therefore calls for strategic restructuring. Ford management is evaluating strategic options for its utilization of internet resources in order to capitalize on the current operations so that it can stay ahead of their competition. It is primarily important as other competitors pose serious threat in regional level due to their long history of presence as well as marginally lower level of competitors merging together in order to gain position in market. Ford has been utilizing the internet technology in its recent operational management, which is evident in its suppliers using external data interchange to access Ford however it is not applicable to all of the suppliers due to lack of resources. Another instance where Ford undertaken the usage of technology is its production system which has made it possible to marginally reduce the delivery time to 15 days from a 60+ time frame. This leads to possible implications for further operational efficiencies in supply chain strategy to remain productive and leads the market position through useful implementation of internet technology.

Problem identification

The management is evaluating strategic consideration on implementing ‘virtual integration in supply chain’.  The virtual integration accounts for integrating the various supplier bases with the management production as well as procurement department in order to tactfully reduce the operational load on procurement and production units in terms of maintaining the inventory and accounting for the inventory required for assembly and production. The presence of virtually integrated mechanism will entail retail network as well as high number of suppliers that form the basis of production of Ford’s various lines of vehicles. This accounts for the problems associated with collaborating various levels of partners into single system as the complications and level of operations are highly complicated as that of Dell which is being compared to the firm mentioned in the given case. Therefore the problem for management is to evaluate the implementation of virtual integration system in its supply chain.

Analysis

The implementation decision has to be backed by supporting conclusion from the various associated factors. A strategic evaluation will account for the conclusion to implement the decision; which will be suitable for Ford in maintaining its position in market.

There are multiple layers of suppliers which are in control of providing the sub-units to Ford. These suppliers make-up the last layer of supplier base which is followed by more extensive layers of sub suppliers, these goes up to as extensive as 8 layers of sub-suppliers which are responsible for delivering the raw material or the sub-units to Ford for its production (Corporate Ford, 2014).  The suppliers in Ford’s case are crucial players as this firm is operating in the automotive industry. The suppliers account for a strategic role due to the complex units involved in production and the position of Ford in market makes it important for the management to keep in track their suppliers and sub-supplier’s performance in order to prevent any possible blow to the process; which may result in financial loss as well as losing the market position (Brehm, 2013). These factors present the need to identify potential measures in order to induce the suppliers to a par level; through which information flow will enable the management from both sides to access the desired information in order to conduct the activities.

The process of virtually integrating these suppliers in extensive manner remain a pressing issue as the current IT system will eventually be obsolete therefore; raising the needs of introducing a more advanced IT solution that will encompass various levels and activities of the firm in order to maintain the market position. There are certain options available for the management. These are as follows....................

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Ford describes the examination of its supply chain, to assess whether the company has "virtually integrated" model Dell Computers. "Hide
by Robert D. Austin Source: HBS Premier Case Collection 9 pages. Publication Date: Mar 03, 1999. Prod. #: 699198-PDF-ENG

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