Ford Motor Corporation

Introduction:

As with any major corporation, Ford Motor Company is considering an investment into available technologies in an attempt to better communicate with other members of its supply chain. The Director of Supply Chain Systems has been hearing mixed opinions regarding this matter. Some within the company argue that the new technology has changed the industry and if Ford Motor Company doesn’t change soon, they will be left behind. Another group is much more cautious, and believes that it would be poor judgment to adopt the same types of technology as new companies, because they will not benefit those competing within the auto industry. One company, Dell computer, has adopted this new technology and now competes by way of “virtual integration.” The following paragraphs will further discuss the issues that Ford Motor company faces, as well as describe the details of virtual integration at Dell.

Virtual Integration:

When Dell Computers was founded, the CEO, Michael Dell, recognized a niche in which the company could compete. He recognized that many companies excelled at the production of components, and realized he could form relationships with these companies and convert them into Dell’s suppliers. He also decided that with the new internet technologies, he would be able to eliminate the distribution centers and have direct contact with consumers. By doing this he was able to eliminate links in the supply chain, reduce inventory levels, reduce costs, and decrease the production time allowing consumers to receive their orders much faster. These advantages were all gained by exploiting the new technology, and increasing communication throughout the supply chain. While some employees at Ford Motor Company expect this technology to transfer into other industries, they are ignoring a few important facts. Firstly, in the computer industry, new technology is constantly being developed. This allows Dell to strategically choose suppliers based on changes in the...