Ford Motor Company is an American multinational automaker with its headquarters in Dearborn, Michigan. It was founded by Henry Ford and incorporated on June 16, 1903.
The case deals with the hurdles, implications and the extent of virtual integration in one of the world’s largest automobile manufacturing company. ‘Ford Motor Company: Supply Chain Strategy’ case focuses on the viability of implementing a supply chain strategy following Dell’s model.
There are several factors which affect how an auto industry is managed and the way important decisions in regard to the company are taken. Its main competition till 1970’s was with General Motors and Chrysler. However with the entry of Japanese companies like Honda, Toyota and Nissan the firm faced stiffer competition with the auto market being over capacitated. Teri Takai, Director of supply chain systems contemplated recommendations to senior executives. The questions asked extremely important to Ford’s future:
How should the company use:
Emerging information technologies (i.e. Internet technologies)?
Ideas from new high-tech industries to change the way it interacted with suppliers?
In 1995 Ford initiated the” Ford 2000” plan aimed to restructure many of their key processes like Order to Delivery (OTD) and Ford Production System (FPS). They wanted to reduce the OTD from 60 or more to 15 or less days. FPS was created to convert the supply chain from a push type to a pull type. Ford aimed at reducing the number of suppliers which had grown to several thousands of different suppliers over the years as the company grew. Rather than focusing on selecting suppliers based on costs they wanted to develop close long-term relations with the Tier 1 suppliers who in turn managed and