Ford Motors Co – case study
By: George Abosuawan
1
Table of Contents
Executive Summary ………………………………………………………………………. Page 3
Issue Identication ………………………………………………………………………. Page 4
Root Cause Analysis ……….. …………………………………………………………… Page 5
Alternatives and Options ……………………………………………………………………… Page 8
Recommendations ……………………………………………………………………… Page 9
Monitor and Control ……………………………………………………………………… Page 10
Exhibits ……………………………………………………………………… Page 12
2
Executive Summary
As the director of supply chain system, I’m faced with a challenge of making a decision
with what to do with the current state of our supply chain. Since 1903, we have prided ourselves
in providing top quality vehicles while ensuring that we continued to innovate and meet with the
customer demand
We looked at Dell’s “direct business modle” and used a number of their methods while
still maintaining certain business specific needs. We feel that virtual integration should be used
in our organization to help stich together the customer, supplier, and business. By implementing
this, we see vast areas that will improve throughout our supply chain and further enhance our
ability to understand what the customer needs. Although we wouldn’t be able to fully align with
that module due to differences in business such as the complexity of the units, the cost, the
lifespan, and the way it is purchased by the consumer there are other business similarities that
can give us something to benchmark. We can look at what they have successfully done in
regards to organization simplification, Inventory management, customer service, supplier
collaboration, and the way they use customer and sales information and we feel those are areas
we can leverage.
Our current state offers a complex situation in regards to inventory optimization as we
carry lots of inventory and need to maintain 180 manufacturing plants. By offering a shift in the
raw material, we feel that we can reduce that inventory and increase the amount of time the
inventory cycles through the line. We look at the customer service/support and see an untapped
market full of information that can be vital to our success. We need access to actual data from
our dealerships and have sales teams on the floor trying to understand the customer needs.
Overall customer satisfaction can be significantly higher in the span of a year once they see that
their voices are heard and features they required are provided. This grass root level data can
increase forecasting accuracy and reduce the idle inventory. We will require investing in IT
systems and networks for ourselves and our suppliers. This is crucial to ensure that we are
accessing real time data and use this to identify bottlenecks. This can process can allow us to
maintain a delivery time of 15 days from order time. Having this information will allow us to
become closer with our suppliers and build stronger relationships with them. Once the external
processes are executed we will then look into our SC and begin with the implantation of JIT,
TQM, and SPC. These 3 design changes will build the basis of what is needed to minimize
inventory, ensure that the highest level of quality and service is being delivered to the customer
and the proper software is out there for customer’s real needs to be captured.
As a team we have identified the issues we currently face (including short term and long
term), we’ve look at the root causes of these issues, built a detailed quantitative SWOT analysis
and feel that the hybrid model consisting of our existing model along with the DBM of Dell is the
best plan moving forward. We see this project connecting and addressing all of our challenges
as well as having a sufficient way to monitor and control what we are implementing. We are very
enthusiastic about our plan and look forward to documenting the success of our company world-
wide.
3
Issue Identification
Strategic Issues – Long Term
1. Supply Chain bottlenecks
This is the primary focus of our report; we as a company are experiencing
bottlenecks throughout our complex supply chain and this is leading to excess
inventory, longer lead times and overall strains.
2. Absence in accurate forecasting tools and lack of feedback from
customers
We are finding that that we don’t have the most accurate forecasting tools
needed to properly asses the existing market. We only use historical sales and
take very little data from customers. We don’t use enough information from our
dealerships – the ones that actually exchange dialog with our customers.
3. Managing a large supplier network
As a company, the supply chain is not at its desired efficiency due to excess
number of tier 3 suppliers. We currently hold a large number of these suppliers
and use our leverage to obtain the best available price. This sometimes leads to
redundancy or unnecessary steps to get our suppliers or manufactured goods.
4. Lack of IT systems between Customer, supplier, and Ford
We are currently not using IT systems to their full capacity. There is a
communication gap between these 3 sources and that is leading to unknown
