Ford Motors Company Supply Chain Strategy Harvard Case Solution & Analysis

Introduction

The Ford Motor Company which is generally known as Ford Motors is a United States based multinational automaker which is headquartered in Dearborn, Michigan a suburb of Detroit. The company was founded way back in the year 1903, by Henry Ford. The major business of the company is to sell automobiles and commercial vehicles under the brand name of Ford Motors and the luxury cars under the Lincoln brand. The company has been one of the leading auto manufacturer in the world. The products that are offered by Ford Motors are cars, trucks, spare parts, etc.

The major competitors for Ford Motors in the United States market include the General Motors and the Chrysler. However, with the increasing competition in the market, Honda and Toyota Motors have also evolved as major auto manufacturers in the industry. The current situation in the auto market of United States have noticed an effort by all industry players to reduce the cost of manufacturing and increase efficiency. Ford Motors over the years have developed a restructuring plan which is called as Ford 2000. The basic purpose to introduce the plan is to focus on global corporate organizations and also taking the advantage of economies of scale in the purchasing of raw material and manufacturing.

The company has consolidated with European and North American along with International markets in the automobile operations. The idea of Ford 2000 plan has been to actually complete the engineering process of the major processes at Ford Motors. These include the Order to Delivery (OTD) and the Ford ProductionSystem (FPS). The idea or the primary goal of Ford 2000 was to reduce the Order Time Delivery (OTD) from a 60 days to less than 15 days. To actually overcome the informationconstraints in the auto manufacturing market, Ford Motors launched the Intranet in the year 1996.

Along with this, Ford Motors even expanded itself to business to business (B2B) model which even comprised of the Automotive Network Exchange (ANX). To further attract customers, Ford even launched its website in the year 1995. The website was an instant success where it got more than 1 million hits on each data. The company in the year 1997 was ranked at 4th behind Honda, Toyota and Nissan as the most improved car manufacturers globally. To increase or expand its product profile, Ford even acquired Sweden’s Volvo. This move was generally an after effect of the merger between Chrysler and Daimler Benz. Ford Motors however, in the year 1998 surpassed Chrysler as the most profitable auto manufacturer with a total profit of $6.9 billion.

Pertinent Facts & Assumptions

The pertinent facts and assumptions extracted from the case “Ford Motor Company: Supply Chain Strategy” are as follows. The number of employees at Ford Motors are 370,000 employees worldwide. The financials for the company are quite profitable with a revenue of more than $144 billion worldwide. The company stands or operates in almost 200 countries. The company manufactures or produces more than 260 million vehicles each year. Along with this, the auto manufacturing industry of United States has been quite intense with the three major players competing for the market share. The industry has been facing an increased over capacity of around 20 million vehicles. Companies in the region are fighting or competing with improved technology and improved quality. Auto manufacturers have been considering improving the quality and also to reduce cycle times as well as lower the cost of cars.

Problem Identification

Ford Motors has been facing quite a few issues with its supply chain model, therefore, the company is looking to follow the Dell Corporation supply chain model. Basically the company is  looking to determine the information technology strategy that will best serve for the interaction with suppliers with the existing engineering process at Ford Motors.

Strategic Issue

The major problem for Ford Motors has been the scattered and large database of the suppliers and sub suppliers for the company. Basically, the company has thousands of suppliers who have been operating for Ford with a complex and difficult network model and business relationship. However, Dell Corporation has only 50 suppliers. The company does not look to engage its operations with a large base of suppliers....................................

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