Ford Motor Company Supply Chain Strategy

Analysis of Ford Motor Company Supply Chain Strategy The Situation Teri Takai, Director of Supply Chain Systems for Ford Motor Company, is looking at ways to improve supply chain management to meet the company-wide goals of improving shareholder value and customer responsiveness. As part of the Ford 2000 initiative, internal manufacturing has been reengineered to remove bottlenecks in the supply chain, allowing delivery of finished products within 15 days, well under the current delivery time of 45 -65 days, through the use of ongoing demand forecasting, minimum work in process inventories, product mixing centers, and order processing. Now, she must look to manage other aspects of the supply chain to meet the companys goals. She has specifically been looking at Dells virtual integration model to determine if their success can be translated into success for Ford. The Supply Chain Ford is currently operating under a standard supply chain model where it develops the product,obtains parts from suppliers, manufactures the goods, and then sends them through the distribution channel to the customers. Fords supplier network is complex with most suppliers selected for individual cost considerations not total supply chain costs. Supplier relationships are managed by a purchasing department that is independent from product development. Fords distribution channel is made up of mostly independent dealerships which interact with the consumer and send orders back through the chain. Dell has created a supply chain that allows it to customize each item for the end user and deliver i t in a timely manner by using the direct model and virtual integration. The distribution channels have been removed, Dell ships directly to the consumer, which has reduced middleman costs and delivery times. Dell has also integrated the purchasing and product development activities so it can maintain greater control over supplier activities. These efficiencies were gained due to...