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Ford motor final presentation

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This is a case study analysis that was done by a group of Management Information Students (from UIC). The case on Ford discussed how it could adopt the business model of Dell to achieve economies of scale.

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Ford motor final presentation

  1. 1. Ford Motor Company:Supply Chain Strategy Adithya Sridhar Praveen Venkatraman Melroy Rodrigues Thanyalat Chaleunsouk Sivasankari Santhanakrishnan
  2. 2. Agenda Ford Motor Company’s Goals Company Background and its Supply Chain Management System Current Problems Direct Model and Virtual Integration Comparison of Ford’s Business v/s Dell’s Business Recommendations
  3. 3. Prime Goals of Ford Motors Increase shareholder Improve customer values responsivenessIncrease revenue/decrease Using IT to improve operating cost customer satisfactionIdentify bottlenecks in the SCM and solve it
  4. 4. Ford Motors Background Ford Motor Company - Headquartered in Dearborn, MI - Second largest industrial corporation in the world Core Business: Design and Manufacture of Automobiles Until 1995, Ford SCM was a Push System - Made To Stock (MTS)
  5. 5. Ford Value Chain
  6. 6. FORD 2000 Ford 2000: A restructuring plan started in 1995- aimed at dramatic cost reduction and increasing overall efficiency Merged international automotive operations into a single global organization Reduced Vehicle Centers (VCs) to only five Teamed up with Chrysler and GM to work on the Automotive Network Exchange (ANX) Reduce the number of suppliers Place IT within the process reengineering organization
  7. 7. FORD 2000 Ford Production System  Aimed at making Ford manufacturing operations leaner, more responsive and efficient  Synchronous Material Flow (SMF): Produced continuous flow of materials and products  In-Line Vehicle Sequencing (ILVS): Used ASRS and computer software in assembling
  8. 8. FORD 2000 Ford Retail Network  Ford Investment Enterprise Company (FIECo): Aimed at an alternate distribution channel to compete with publicly owned retail chains.  Better face-off with real competition (i.e. GM, Toyota, etc.).  Increase service outlets and business not just in new and used vehicles but also in parts and service, body shop operations.
  9. 9. Shift towards a Pull System-Order To Delivery
  10. 10. MTS – OTD Compared
  11. 11. Current Problems No Direct feedback from the customers Managing vast supplier network Not using IT to its full capability Issues in forecasting High OTD time
  12. 12. Ford v/s Dell Dell FordProduct complexity High: 30,000+ parts Low: 300+Product cost and life span High / long term Low / shorter termNo of suppliers / sub- Large (1000+) Multi tiers Small (50) singlesuppliers tierDistributors/ Dealers many None - direct to customers
  13. 13. Dell’s direct business model and virtual integration
  14. 14. How Dell applied VI to theirbusiness In four main areas:  Organization Simplification  Reduce the working capital by outsourcing  Inventory Management  JIT via information management and flow  Build to order, reducing the cost of storing finished goods  Customer service and support  Finer customer segmentation, more tailored solutions  Faster response time  Supplier Collaboration  Information and feed back sharing  Product development, R&D
  15. 15. How VI could work in Ford Dells VI Ford Possibility Organization Simplifying ✗ Inventory Management ✓ Customer Service and Support ✓ Suppliers management ✓
  16. 16. Recommendation 1:Inventory Management Shift the ownership of raw materials to suppliers:  By using EDI with suppliers and the existing advantage of nearby ship points.
  17. 17. Recommendation 2:Customer Service and Support Allow product customization both online and offline Collect customer data from dealers to  Segment customers  Accurately forecast demand by individually work with local dealers Implement a support network where parts can be exchanged and delivered in a short time.
  18. 18. Recommendation 3:Supplier Management Invest in IT for supplier, in order to bring the same level of IT knowledge among suppliers and Ford Sharing design with supplier in order to speed time to market Involve supplier in R&D

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