Ford Motor Company Supply Chain

Executive Summary

My decision is that Takai should extend Ford’s E-business strategy attempt with customers and suppliers and take a partial move towards virtual integration. The Internet would serve as a primary tool for dealing with suppliers and allow for customization of automobiles by consumers. This strategy incorporates many of Dell’s supply chain activities like direct sales, customization, and information sharing over the Web. There would also be IT initiatives taken to reduce Order-To-Delivery time and inventory, share production data with suppliers, and track materials throughout the supply chain. Dealers would still play a role with distribution, and core processes at Ford would remain the same.

Key Assumptions

It is anticipated that the battle for advantage in the automotive industry will remain globally and will continue to grow more competitive.

As competition in the automotive industry grows, many companies will continue to look for good strategic alternatives to best respond on global market challenges.

Statement of Issues

The differences between the automobile and computer industry present the main challenges for Ford to implement a virtually integrated supply chain like Dell. Such a major change to Ford’s supply chain structure could also be very costly if not properly managed.

A major issue is in the supplier base. Ford has a complex network of suppliers to deal with, and much of their supplier base does not have the IT knowledge or capabilities of Dell’s suppliers. This difference could be a problem because virtually integrated supply chains require considerable IT capability for sharing information. Also, cars require more components to build than a computer does and cannot be easily shipped in a box. This makes coordinating the supply chain effort more challenging.

Another issue is that Ford has traditionally kept purchasing activities somewhat secretive because it provides...