Ford Motor Company Case

Executive Summary

Memorandum

To: Jac Nasser

CEO, Ford Motor Company

From: Teri Takai

Director Supply Chain Systems

Subject: Utilization of IT for Interaction with Suppliers

In the recent past, we have seen companies with fewer physical assets and lower revenues and profits than out company, capitalize market much more than our company. With the advent and progression of information technology, it is now time for our company to evaluate and change our supply chain strategy.

According to our Ford 2000 plan, we should be restructuring and reengineering our business towards cost reduction. Information accuracy and its real-time availability can be key elements to achieve that.

There is general consensus among various stakeholders in our company that IT can be incorporated in to our business to reduce Order-to-Delivery (OTD) periods, increase the speed at which the inventory moves and subsequently achieve smaller costs for maintaining inventory.

We are already on track, where we have cut down on the number of our suppliers and nurtured long term, cost saving relationships with our first tier suppliers. Moreover, our first tier of suppliers is fairly mature as far as technology is concerned.

My recommendation is to have a virtually integrated platform, where our first tier suppliers are able to view information related to our inventory levels, orders from our customers and order forecasts. This will help us in moving from our current “push” to a “pull” process as for as inventory is concerned.

Since our company has suppliers the world over and since our first tier suppliers have several layers of suppliers up-stream from them, I would not recommend implementing the ‘direct’ model that has been successfully implemented at Dell. It should take the strength of virtual integration from that model.

Teri Takai

Director Supply Chain Systems

Ford Motor Company

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I. Process Elements

Executive Summary...