Ford Company Sci

Ford is faced with some issues that have been difficult to fix due to their large size and diverse product line. These include high costs of inventory and manufacturing facilities, and forecasting. Building a car requires many more components then a computer and therefore the Dell model does not fully work for Ford, but because any reduction in ford is magnified due to their volume adapting some of Dell’s methods of supply chain strategy would be extremely beneficial.

During the design stage is when cost reductions would be most effective. Having a purchaser with the design team talking to vendors and communicating pricing and method of ordering would help to pick the best part and supplier to deal with. Ford does have lots of leverage due to their size but if the right part is not chosen in the design part there is only so much that can be done.

The decision to move to virtual integration would be ideal for Ford because their volume of production is much higher then Dell which should help them in leveraging their suppliers into a partnership. Ford’s automotive revenue is is ten times higer then Dell, but their return on sales is 3.8% compare to Dell’s 7.8%. This leverage should not only be used for partner’s but also tier 2 suppliers . JITD strongly relies on forecast which is not very strong in this industry. We would like to have our vendors to have a kanban system in our facilities. This means they fill bins with a number that is pre determined by suppliers and purchasers. Once the product is out the supplier must replenish the bin or box and Ford does not pay until they use the parts. The bins would be at Fords facility and once the system shows only 50 left they ship out enough to get to the max level and would then bill for what product has been used. This system could be utilized to lower inventory and ensure there is always stock available on hand without having a high inventory cost. There are many parts to a car and this would work for all smaller...