Ford Motor Co.
Table of Contents
Executive Summary 3
Issue Identification 4
Operating Environment 5
Root Cause Analysis 7
Alternatives or Options 9
Implementation Plan 14
Monitor and Control 16
Ford’s core business is the design and manufacture of automobiles for sale on the consumer market. This market is highly competitive, there many options our there for customers. To remain competitive, Ford must continue to review its systems and processes and look for any efficiencies and cost saving measures.
One avenue of potential cost savings and process efficiencies is to review its supply chain model and compare it to other successful companies. A full review of this model has shown it to be an extremely complex system. The system is comprised of thousands of suppliers, an independent network of dealers, and very little communication flow between them. Because of this, Ford has no direct control on the end user experience.
Realizing these issues, I am recommending a migration from the existing supply chain model to one of a “Virtually Integrated” supply chain like the Dell model. This system has been extremely successful for Dell. Through this model, Ford will be able to use emerging information technologies and ideas from high tech companies to better interact its suppliers and end users. Ford should be able to boost sales, offer a greater end customer experience, shorten the order delivery time, and reduce costs in the process.
The proposed system will not be a direct copy of the Dell model however, it will have to be adapted to the automotive industry. The computer industry and automotive industry are completely different. Under a full “virtually integrated” supply chain, Ford would end up losing all its dealerships, thus having a way of allowing customers to “test drive” a vehicle before ordering. In the computer industry, this really isn’t an issue as customers are more focused on specifications and price rather than feel.
To implement the new system, Ford will have to invest in new hardware and software. It will also have to develop a new website capable of take orders from customers. Links from suppliers to Ford’s centralized IT network will have to be created. Training will have to occur for suppliers and dealerships before the official launch. A new advertising campaign will have to occur to make customers aware of the new buying experience.
After all of this is done, the new system will have to be monitored. Ford should schedule periodic review and overall evaluation meetings. Recommendations for improvements should be noted along the way. Customer service surveys will have to occur as well to obtain the necessary feedback on the overall customer experience.