Anallize Ford's Supply Chain

Topics: Automotive industry, Supply chain management, Ford Motor Company Pages: 2 (729 words) Published: March 16, 2013
Q: Are there any detrimental effects of Ford’s legacy (existing) systems (supply chain, facilities, dealer networks, etc) in adapting IT technologies and supply chain processes? How do you overcome these effects? There were many detrimental effects and the old way Ford was conducting business most of which was based on the old attitudes of “what you see is what you get” and “that’s the way we have always done it”. The information network was very simplistic, the infrastructure was huge, the supply chain was massive, and the number and layers of suppliers was almost unbelievable. Ford Motors was based in Michigan in 1903 by Henry Ford and grew to reach revenues of $144 billion and employed more than 370,000. It was one of three automotive manufacturing companies in the United States and operations spanned 200 countries. Since the company was incorporated it had produced over 260 million vehicles. After World War II things were going along pretty good, Ford was (living fat, dumb, and happy) enjoying large market shares and very good profit margins. However, in the 1970's, the automobile market for the “Big 3” got a wakeup call in the form of competition from foreign manufactures such as Toyota and Honda. Like a smack in the face, of a sudden there too many cars (excess capacity and inventory) and not enough customers to buy them. The foreign auto makers were increasing exports and more Americans were buying them. Ford realized it had to do something quickly of get left behind wondering “why”. In 1995, Ford took a stab at reducing costs and increasing efficiency, with a restructuring plan called “Ford 2000”. It was going to look into going global with corporate organizations and taking advantage of the widespread economies of scale in purchasing and manufacturing. It also called for a complete reengineering of several key company processes including Order to Delivery (OTD) and Ford Production System (FPS). One of the primary strategic goals was to decrease OTD from...
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