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Ford Motor Company: Supply Chain Strategy

Autor:   •  September 12, 2017  •  1,515 Words (7 Pages)  •  919 Views

Page 1 of 7

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Recommendations

“No change” alternative does not require any investments other than those planned for Ford 200o Initiative projects. However, fast development of information technologies, including the Internet, cannot be ignored and the company will need to address it later again.

Complete virtual integration is not suitable for Ford Motor due to vehicle manufacturing complexity, high individual transportation cost and strict industry safety standards. Moreover, it would require high investments and company reorganization, including large-scale dismissals.

Partial virtual integration will improve simplify communication with suppliers, stabilize material flow and reduce OTD lead time without disturbing end users and forcing them to change their way of buying vehicles. Instead, For Motor will be able to control distribution channels and provide end users with superior car buying / selling experience. Implementation of the Internet will provide better access to end users feedback.

Based on the detailed analysis, I recommend implementing partial virtual integration.

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Implementation

ACTIVITY

IN CHARGE

Supply chain (SCH)

IT Dept. (IT)

Human Resources

(HR)

Administrative (A)

Finance (F)

Legal (L)

SUPPORT

Supply chain (SCh)

IT Dept. (IT)

Human Resources

(HR)

Administrative (A)

Finance (F)

Legal (L)

TIMELINES

Short term (ST)

Medium term (MT)

Long term (LT)

Review company strategies and supplier management policies

SCH

A

ST

Create a new IT group for virtual integration

IT

HR

ST

Meet with Dell to discuss potential cooperation in IT

IT

SCH, L

ST

Organize meetings with key suppliers to discuss virtual integration project

SCH

L, IT, A

ST

Analyze the Internet providers market and negotiate service agreement

IT

L

MT

Buy and set-up IT hardware and software

IT

A, F

MT

Train supply chain personnel and supplier representatives

IT

SCH

MT

Develop transportation network in cooperation with key suppliers

SCH

F

MT

Implement virtual integration for internal suppliers and manufacturing facilities

SCH

IT

MT

Implement virtual integration for key suppliers and transportation companies

SCH

IT, L

LT

Evaluate virtual integration efficiency after six months, one year

F

SCH

MT, LT

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Monitor and Control

The below listed aspects are required to be monitored and measured in order to evaluate partial virtual integration implementation progress and result. All of them should be measured before virtual integration implementation, six months after its implementation for internal suppliers and manufacturing facilities, and six months after it implementation for key suppliers.

- OTD lead time;

- Inventory levels;

- Inventory turnover;

- Transportation expenses;

- Soft- and hardware expenses;

- Cost expenses per unit.

It is very important to keep virtual integration performance results with internal suppliers open for key external suppliers as information transparency will establish supplier trust and will persuade them to sign-in for virtual integration and develop their IT infrastructure.

Information flow improvement in medium and long term can be measured by lead time reduction and number of on-time deliveries vs. delayed ones.

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Exhibit

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