FORD Motor Co_Group H

8/3/2019 FORD Motor Co_Group H

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FORD Motor Co. Supply Chain

Strategy

Analysis by Group-HGSN Aditya Prateek Jaiswal Neeraj Panghal Nidhi Agrawal Rishi Gupta Silpa R Kamath Tarun Gupta


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CURRENT SCENARIO : 1995Encroachment by foreign players

Over capacity (20 million vehicles)

Divide within the company: virtualintegration

Proposal for FORD 2000


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Dilemma about Virtual Integration

For Against

Differences betweenAutomobile and

computer

manufacturing

Multiple layers ofsupplier network

Independent

purchasing organization

High Complexity in

Automotive sector

Risk of being overtakenby competitors

Reduction in working

capital

Reduction in inventory

obsolescence

Insights from Dell, Cisco


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Existing Supply Base

Suppliers were pickedprimarily based onpart cost with littleregard to overallsupply chain costs

Complexity due to alarge network ofsuppliers

Decrease thenumber of

suppliers the

company dealt

with directly

Shift towardlonger-term

relationships

with tier-1

suppliers

Extension ofFORDs

expertise to

suppliers Ex:

JIT, TQM, SPC

Proposed Supply Base


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Supply chain flexibility

Improvement in quality


Reduction in working capital

Reduction in scrap

Larger impact in case of default by one ormore Tier-1 supplier

Percolation of IT investment across thesupplier levels

Decreasing IT maturity along lower tiers ofthe supply chain

Deterioration of relations within existingsu lier base

Proposed Supply Chain

ISSUES

BENEFITS


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Ford Production System

Transition to a pull based system

Synchronous material flow

Reduction in buffer stock by inline vehicle sequencing and intimation of

order quantity and time to suppliers


Responsive and efficient supply chain

Reduction of variability

Material supply planning duringproduction disruption or change of

production plan

BEN

EFITS

ISSUES


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Current order to delivery system

Current orderdelivery periodbetween 45-65days

Low customerresponsiveness

Decrease thenumber of

suppliers thecompany

dealt with

directly

Shift towardlonger-term

relationshipswith tier-1

suppliers

Extension ofFORDs

expertise tosuppliers Ex:

JIT, TQM, SPC

Proposed order to delivery system


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Responsive supply chain

Reduction in FG inventory

Reduction in obsolescence cost

Reduction in time to take changes(quality improvement & cost saving) tomarket

Higher sales to production ratio

Stock out in case of supply chain disruption

Implementation challenges across thesupply chain IS

SUES

BENEFITS

Proposed Supply Chain


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Ford Retail Network

Test best retailing practices to implement across the retailer network

To compete with large automobile retailing chain like AUTONATION

Highest level of treatment to the consumers to make Ford preferred choice

Improved customer contact and feedback

Increase in business of used cars & new cars along with service parts, body shop

operation and Ford credit

Increased cooperation among retailers to take on competition


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Supplier Process Integration

Teamed with Chrysler, GM to form Automotive Network Exchange (ANX)

Consistent technology standard and process in supplier network

Improvement in quality

Economies of scale by common part supplier

Standardization of industry wide qualitystandards

Sharing of Ford best practices withsuppliers of the competitors

Possibility of sharing of trade secrets, newproduct under development

BENEFITS

ISSUES


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FORD : Way Forward

Learning of industry wide best practices

Implementation of strategies with constraint automotive sector

Increased use of Information system for integration across supply chain

Shift towards over-all supply chain profitability to cut down cost

Increased customer responsiveness and improved buying experience

Sharing of best practices across the supply chain


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FORD Motor Co_Group H

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