...Executive Summary Ford is one of the leading companies in the auto industry. The director of Supply Chain Systems at Ford was put in a tough position to make recommendations with regards to the company’s supply chain strategy. There are two groups within Ford that have two different opinions on how Ford should be using emerging information technologies and ideas from high tech industries, such as Dell, to change the way it interacts with suppliers. The first group argued that Ford should adopt Dell’s business model to improve efficiency and increase profits. This group emphasizes that Ford’s virtual integration should be the blueprint for what ford should attempt. On the other end, the second group believes that Ford and Dell operate in two different industries and it is not feasible to adopt Dell’s business model. This case study will demonstrate the toot causes of the problem and will present the reason why Ford should pursue with the mixed approach. Some of the solutions in the mixed approach are based on Dell’s business model, while the rest are not. These solutions are costly and time consuming, but Ford will eventually harvest the benefits of this approach. Issue Identification Teri Takai, Director of Supply Chain Systems, is about to make critical recommendations to senior executives on Ford’s usage of emerging information technologies and ideas from high tech industries to alter the methods...
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...What are your experiences of buying any product online viz a viz buying it from a shop or a dealer? The experience of online shopping can be classified into its advantages as well as disadvantages. They are given as follows. Advantages More convenient Better deals Less time consuming Information and reviews Price and selection Disadvantages Fraud and security concerns Lack of full cost disclosure Privacy Lack of hands-on inspection What advantages does Dell derive from virtual integration? How important are these advantages in the auto business? Virtual integration and its benefits A way of capturing the advantage of vertical integration without actually vertically integrating Vertical integration solves production problems related to communications, coordination, and control but at a cost of the increased overhead needed to arrange production organization Virtual integration therefore is the ability to achieve the advantage of vertical integration without incurring the overhead. Communication and coordination Vertical integration leads to efficient and effective coordination, through a number of mechanisms that include likelihood of physical proximity, established patterns of communications, and greater willingness to cooperate with other members of the same group. “Stitching together a business with partners that are treated as if they’re inside the company” Michael Dell Control The prospect of improved control over the actions of suppliers is another...
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...virtual integration strategies from companies like Dell to portions of Ford’s supply chain strategy. Although there are several key differences between the companies, the restructuring plans of Ford 2000 have set a viable foundation to implement Dell’s virtual integration strategy in inventory management, customer service and support and suppliers’ management. The redesign of the process must include design not only of the supply chain but also of fulfillment, forecasting, purchasing, and a variety of other functions that historically been considered independently within the Ford hierarchy. Teri believes that implementing virtual integration by building on Ford’s key initiatives and projects including Ford Production Systems (FPS), Order to Delivery (OTD) and Ford Retail Network (FRN) that are currently underway will make their supply chain run more smoothly with less bottlenecking, reduced inventory, and better overall performance. Managers could overcome the complex and inaccurate manual process of forecasting and procuring parts which would result in reduced OTD lessen costs and enhance customer satisfaction. Further improved Supply Chain management will improve Supply Chain responsiveness and increase shareholder value to keep investors interested in the company. Ford Motor Company...
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...integration strategies from companies like Dell to portions of Ford’s supply chain strategy. Although there are several key differences between the companies, the restructuring plans of Ford 2000 have set a viable foundation to implement Dell’s virtual integration strategy in inventory management, customer service and support and suppliers’ management. The redesign of the process must include design not only of the supply chain but also of fulfillment, forecasting, purchasing, and a variety of other functions that historically been considered independently within the Ford hierarchy. Teri believes that implementing virtual integration by building on Ford’s key initiatives and projects including Ford Production Systems (FPS), Order to Delivery (OTD) and Ford Retail Network (FRN) that are currently underway will make their supply chain run more smoothly with less bottlenecking, reduced inventory, and better overall performance. Managers could overcome the complex and inaccurate manual process of forecasting and procuring parts which would result in reduced OTD lessen costs and enhance customer satisfaction. Further improved Supply Chain management will improve Supply Chain responsiveness and increase shareholder value to keep investors interested in the company. ------------------------------------------------- Introduction Due to increase in market competition, supply chain superiority of competitors, high profitability of financially equal companies, Ford’s CEO, Jac Nasser...
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...chain in order to be more cost effective and more profitable for its shareholders. Since Dell and Ford are two different types of markets, one is in the computer manufacturing/distribution business and the other is in the automobile business, it does not seem right for Ford to implement the exact “virtual integration model” deployed by Dell. The fact the car buyer usually wants to touch and feel the car before they make a purchase of a car would put Ford at risk of losing their customers to the competitors. On the other hand when customers buy computers on-line they don’t have to worry about touching and testing the computers and they require a better price than the other retail avenues to buy computers. Some other considerations in this case are the consideration of the buying frequency of cars versus computers and financing requirements for a car versus a computer. Another consideration would be the number of suppliers to support Ford manufacturing versus Dell’s computer manufacturing. Although the model deployed by Dell seems to be a stretch there are certain aspects of the model Ford can fully adopt or partial implement to place them in a better position to grow and realize more profit for the shareholders....
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...Company: Supply Chain Strategy Attn: Jac Nasser, CEO Dear Mr. Nasser Please find attached the report as requested Yours Truly, Teri Takai Ford Motor Company: Supply Chain Strategy ------------------------------------------------- Case Study Response Executive Summary As Director of Supply Chain Systems and decision maker on if we should proceed with the Virtual Integration Model I have carefully analysed all aspects of this model to see if it could work within Ford and the Automobile industry. We have a rich history of success and working through difficult challenges and I have no doubt that we will do so again with the right decision on this model. The Automobile industry is a complex one with many suppliers, parts, dealerships, competitors and all this is now happening in a global market. This complexity makes efficiencies difficult to implement and drives up the costs our supply chain. Many efficiencies would require the cooperation of both internal and external parties and would require significant investment. Ford’s main problem with their current system is the inefficient usage of their huge data base, the complex network of suppliers, the presence of many independent distributors who are making forecasting difficult and the lack of direct communication with customers. Through my review I have come to the conclusion that the full implementation of the Dell Model would not work; the way customers buy cars and computers in this day and age is to different...
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...value and customer responsiveness so they were looking into reengineering some of their processes which can help improve their current forecasting model and reduce OTD cycle times substantially. With new business models prevailing, Ford did not want to be left behind; they were looking at high-tech industry’s growth in the recent years and thought if they could implement some these ideas to their business. Ford has always been a forerunner in employing technology to overcome its constraints of information flow between its global manufacturing sites, they wanted to implement a similar I.T solution to get the better of its suppliers. But having such a large supplier base was making it difficult to manage; then they looked at high tech industry’s leading player DELL who was not only growing phenomenally every year but was also successful in building proximity to both its suppliers and customers. A comparative analysis of Ford and Dell’s SCM operation helps understand the differences in their organizational models and find strategies that could be applied for Ford’s success. Different areas like supplier management, sales, inventory management and customer experience have been compared to identify the bottlenecks in Ford’s operation. Like Dell, Ford can utilize IT systems to leverage its supplier relationships and bring value to the customer The case derives to conclusion that Ford cannot adapt to virtual integration completely except for some key areas which can be supported by implementation...
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...Ford Hybrids Q1. The case indicates that several different product categories may provide suitable analogs for the diffusion of hybrid cars. a. Based on the case, explain why these product categories may provide as suitable analogs. b. Go to the “Dataset for Finding p and q Parameters” excel file. Using “Bass Forecasting Model ► Estimate parameters using analogy” find the analog product from the window and select the appropriate designated cells where the data will be placed. The software will insert the p&q parameters into the designated empty cells. Save this excel file and paste the complete “Forecasting Scenario” output to your report. A.) Based on the case, the four product categories we chose were “ABS, Diesel cars in Europe, Hybrid Corn, and Electronic Fuel Injection.” As read in the case, since 1976, purchases of diesel vehicles have increased steadily in Western Europe. This is good to keep in mind when forecasting for potential hybrid sales. The case also mentions “under the hood innovation” which would tie in with the product categories ABS and electronic fuel injection. Overall, the case is focusing on the production of hybrid vehicles, which supports the “hybrid corn” product category. With these four categories we were able to create a forecast model using p and q parameters as seen below in part B. B.) Q2. Go to the excel sheet titled “Ford Hybrid Car Sales Forecasts” and fill it out. Explain in detail how you come up with forecasts of “U.S. Total Number...
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...one-year budget planning document for the firm that is composed of all other budgets is called a master budget. Usually it is composed of two parts, the operating budget and the financial budget. Under the financial budget is what we call a cash budget. Cash Budget is the inflows and outflows of cash in a firm. It develops a summary of its operating, investing and financing activities. These activities will help us determine and observe how a firm creates their cash budget. This research aims to evaluate the cash budgeting process of JTU Marketing Auto Supply and to develop a recommendation, if necessary, for them to improve the said process. Most, if not all, small organizations do not have plans or budgets but still manages to survive and gain profit. This research could help organizations to realize and see that budgets would help them find out some problems in their organization. Also, the research could be used as a basis for an improved study regarding cash budgeting processes in different industries and larger firms since there are few studies than regarding the subject. Statement of the Problem This research aims to determine the effectiveness and efficiency of the cash budgeting process of JTU Marketing Auto Supply. The research aims to answer the following questions: 1. What is the cash budgeting process of JTU Marketing Auto Supply in terms of the following activities:...
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...Q1 2012 VIeTNAM AUTOS RepORT INCLUDES BMI'S FORECASTS ISSN 1749-0286 published by Business Monitor International Ltd. VIETNAM AUTOS REPORT Q1 2012 INCLUDING 5-YEAR FORECASTS TO 2016 Part of BMI’s Industry Report & Forecasts Series Published by: Business Monitor International Copy deadline: October 2011 Business Monitor International 85 Queen Victoria Street London, EC4V 4AB UK Tel: +44 (0) 20 7248 0468 Fax: +44 (0) 20 7248 0467 Email: subs@businessmonitor.com Web: http://www.businessmonitor.com © 2011 Business Monitor International. All rights reserved. All information contained in this publication is copyrighted in the name of Business Monitor International, and as such no part of this publication may be reproduced, repackaged, redistributed, resold in whole or in any part, or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written consent of the publisher. DISCLAIMER All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor International accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All...
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...government, businesses, and societies was the resulting ruining of several nuclear reactors in the region which supplied electricity for homes and industry. Located in the disaster expanse are a number of manufacturing facilities which are vital to the global motor vehicle supply chain. These areas took a big hit which was seemed to be preventive in resolution based off the imagery and cost factors of how the end result of the hurricane and earthquake effected those critical locations. These facilities include warehouses that assemble automobiles and many suppliers which build parts and sub-components for vehicles. The effects of these disasters has been first and foremost accepted by Japanese automakers, which closed many of their assembly plants for several weeks as they evaluated their supply chain issues and impact on their essential sub-tier suppliers. Japanese motor vehicle plants in other parts of the world have also been affected, including facilities owned by large brand names such as Toyota, Nissan, Honda, and other manufacturers in the Midwest and Southern areas of the United States. Foreign trade relations are a key network through which Japan's earthquake will affect the United States, in terms of transactions and resources. Japan's share of U.S....
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...is Operations Management / Productivity, Competitiveness & Strategy 3 Class Three: Forecasting, Aggregate Planning, MRP and ERP 4 Class Four: Product and Service Design 5 Class Five: Capacity Planning, Process Selection and Facility Layout 6 Class Six: Design of Work Systems and Learning Curves 7 Class Eight: Location Planning and Analysis 8 Class Nine: Management of Quality and Quality Control 9 Class Ten: Inventory Management 10 Class Eleven: JIT and Lean Operations 11 Class Twelve: Supply Chain Management 12 Conclusion 13 Tale of Things to Come I am going to take you on a whirlwind of wonder and learning all based around operations management. At least that is what I saw it as. Coming in to a class with no expectations, mainly because I have never heard of the topic, I was pleasantly surprised. Coming from a person who has hopes and dreams to own or at least run a successful company someday this class had a plethora of information that I will hopefully someday have the opportunity to use. I decided to break the class down week by week. The reason I chose to do this is partly because of the material and partly because of the teaching method. One thing I loved about the class is that as you go along you always continue to use the stuff you learned previously. When we were doing supply chain management during week 12 we were incorporating things like forecasting that we learned week 3. This was a great asset for me because it made me able to retain...
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...profit per vehicle ($1770) while total profit hit $6.9 billion. Ford Motor Company is the second largest industrial corporation in the world operating in 200 countries around the globe with 180 manufacturing plants. Issues Teri Takai, Director of Supply Chain Systems is contemplating recommendations on information technologies (e.g., Internet technologies) from new high-tech industries could alter how Ford interacts with suppliers. • One group favoring "virtual integration" like Dell. • Another group believes differences between the auto business and computer manufacturing is substantive. Relative to Dell, Ford’s supplier network has more layers and companies, and Ford’s purchasing organization was more prominent and independent than Dell's. Sub Issue • Company-wide emphasis on shareholder value and customer responsiveness. • Market share Environmental and Root Case Analysis There exist many similarities between Ford`s processes and Dell`s virtual integration. The pertinent requirements of vehicles and computers are similar upon examination. There exist many differences that require scrutinizing....
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... NU ID: 001190870 SCHM 6215 SUPPLY CHAIN MANAGEMENT IN IT APPLICATIONS SUMMER 2 2014 Case 1 Ford Motor Company: Supply Chain Strategy Assignment Questions: 1. Based on your reading of the Harvard Business Review interview with Michael Dell, CEO of Dell Computers, what is your conclusion about the advantages Dell derives from virtual integration? How important are these advantages in the auto business? Explanation: Michael Dell’s insight on innovative combination of customer focus, supplier partnership, mass customization and just in time manufacturing enabled the coordination across company’s boundaries to achieve new levels of efficiency and productivity as well ...
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...CASE Notes Case 5 – The Global Auto Industry 1: Analyze the competitive structure of the automobile industry in the United States. Is this attractive industry? (This question requires you to use Porter’s five forces to analyze the competitive structure of the US automobile market. Your analysis should include bullet points or detail under each of the following categories.) * Entry Conditions The barrier of entry for the automobile industry in the United States is extremely high for a brand new company. The industry is already ruled by highly competitive gigantic corporations from different countries that have been around for a long time and have been implementing market research, various car designs, quality control, efficient manufacturing and logistics strategies, etc. The production of a new car requires a high sales volume to return profits over the fixed costs of developing it. To achieve high sales volumes, customers have to trust or be interested in a new brand which is difficult to achieve where most of the demand is pleased by the current competitors. On top of that, a new company has to build expensive factories to be able to make enough cars to make a profit with the risk of not even selling them all, and losing more money by having to cut car prices to increase sales. Basically, economies of scale are extremely important in this industry, so a beginner needs huge capital to be able to start competing, then they have to battle...
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