Ford Case Study Group 3

Ford Supply Chain Strategy Group 3:

Bhaskar Jain, 105  Abhimanyu Maheshwari, Maheshwari, 109 Prannoy Pillai, 114 Pranjal Saiwal, 115

Q1: What are your experiences of buying any product online vis a vis buying it from a shop or a dealer? Ans1: There are many experiences that differentiates both the kinds of sales both from customer and seller’s perspective: perspective:-

Online sales, in my personal experience, generally results into a considerable savings in terms of  money, i.e. saving in the travelling expenses, general trend of discount while opting for eshopping etc.

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-n- feel”   feel” that one generally gets while The main disadvantages lies in the lack of primitive “look -nshopping directly from shop.

-n- feel”   feel” factor plays a very crucial role in Challenge lies in the hands of service industry, where “look -nsales. This feature is very hard to replicate while opting for online sales.

Q2: What advantages does Dell derive from virtual integration? How important are these advantages in the automotive automotive business? Ans2: Virtual Integration has enabled Dell to aggressively reduce working capital and greatly reduce obsolete inventory. Correct Correct forecasting, a product of virtual integration has led to considerable preplanning of inventory of inventory and finished product manufacturing. Dell’s virtual integration integr ation has enabled them to implement a more “direct business model” , which eliminates and significantly reduces the cost of thirdparty distribution. Direct personalized personalized dealing of the customer with the company has helped in creating a “24/7 reachable” image with the customer. Automotive industry, though, cannot directly implement and incorporate most of the strategies of  virtual integration, integration, as it relies heavily on third party suppliers and retailers. All the points stated above, are very crucial for any industry, i.e. loyal customer, heightened customer satisfaction, minimizing middle level suppliers and distributors etc.

By implementing indirect form of virtual integration, any automobile industry may hope to have a better flexibility in its supply chain and dependency on suppliers. Virtual integration integration will enable having faster communication between suppliers, manufacturers and customers in the value chain.

Q3: What challenges does Ford face that are not faced by Dell? How should Ford deal with such changes? Ans3: The challenges faced by Ford while implementing “virtual integration”  like Dell are:

Cost of automobile being very high relative to computers, computers, thus exponentially exponentially reducing chances of customer buying an automobile online!!!

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Significantly Significantly larger amount of components in automobile automobile thus increased dependency dependency on third party suppliers.

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“touch-n- feel”   feel” in e-selling, which is essential while buying an automobile. No “touch-n-

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Ford and Dell being of o f two different contrasting domains, so same replication of  “virtual 

integration”  integration” is not suggestible.

Ford should not directly “replicate” Dell’s model of virtual integration integration to bask in high sales and profit glory, as it would not be possible for the automobile giant to implement and maintain an exact replica on the Dell’s direct selling model. A much more complex multi -tier architecture of  Ford needs a “customized” “customized” approach.    

FPS (Ford Production System) OTD (Order to Delivery) FRN (Ford Retail Network) Implementing JIT, TQM

Q4: If you were Teri Tekai, what would you recommend to the senior Executives? To what degree should Ford emulate Dell’s business Model? (Time Frame: 1999-2000, as given in case study) Ans4: There is no doubt that Ford has to make changes in its supply chain with the changing environment environment of the informational Technology. Incorporating the basic structure of “Virtual Integration” with customized tiers while taking into considerations the complex supply chain of Ford. Different points can be summarized as below:  

Customer Intimacy:- Demand to delivery/ FRN Demand Pull:- FPS/OTD Virtual Integration:- Fixed to variable Cost shift/Modular Assembly/Extended Enterprise