Managerial Applications of Information Technology – MIS535
May 27, 2013

Proposal
Subject
This proposal discusses the mismanagement of inventory that causes the major business problem. Resolving the issue requires better management procedures for controlling inventory with efficient and effective use of the existing resources. Implementation of Just in Time System will eliminate inventory waste, production delays, and extra cost of storage and disposal. Resolving these kinds of inventory management challenges will lead to positive competitiveness and will ultimately result in higher profit.
Business problem
Ford Company wants to produce a new model known as 2013 Ford Explorer. It has set it a target of producing 1,100 cars each day for the first eight weeks. However, it faces several constraints that threaten to prevent it from attaining this target. The cost of materials that it would incur is higher due to the huge amount of raw materials required in the production of these cars. It also requires a lot of time to assemble these cars, and this threatened the company’s objective of meeting its production target (Sulivan, 2005). It previously received its supplies from various suppliers who had to manufacture all the components required for the production of this model, load them into containers and later schedule them for delivery. This process of inventory management model is not efficient, since employees do most of the handling of materials and thus the quality of these components is low (Sulivan, 2005). Most of the components become damaged when the production department retrieves them for usage. Most of them are delicate and fragile, especially airbags and electrical wiring systems. The management team knows that they are facing a huge risk if they do not change their inventory management system.
Company
The name of the company is Ford Motor, which was ranked the number eighth in the Fortune 500 list, since it had revenues of about $118.3 billion in the year of 2009 (Ford, 2012).

Proposed solution
Ford Co. may well incorporate JIT System in its inventory management in order to improve the quality of all its products and reduce production lead times. It aims to use aerial tunnels in an attempt of connecting with more suppliers in towns such as Valencia. These systems will help the company in its activities of transporting fuel tanks and seats that are usually too heavy. In order to use the JIT System, the company projects to spend about $6 million in an attempt to improve its delivery trucks. It also aims to achieve automation of about 80 percent in order to reduce waste, breaks and frauds in all of its production systems. It also wants to reduce the number of damages caused by poor packaging, handling and delivery systems. In addition, it will outsource production of small car components to companies that specialize in manufacturing these components. It will concentrate more on assembling these components in order to develop this model. Using this system, it will reduce the number of weeks required to achieve its full production capacity (Sulivan, 2005).
Benefits of Solving the Problem
If the company solves the problem of inventory management, it will achieve several benefits. It will reduce the costs involved in production of this car model. Furthermore, it will reduce the time required to reach the full production capacity of these cars. Yet, it will succeed in outsourcing its viable production activities to firms that manage these activities at a lower cost (Sulivan, 2005). This system will also allow for the automation of activities using the latest technological equipment and errors and frauds will decrease. These systems will also allow for the automation of battery placement and seats installation.
Audience
This proposal is presented to the executive management team; the President and Chief Executive Officer, the Executive Chairman. The members of the board, the Chief Financial Officer and Executive Vice President of Ford Company, and the Vice President of Engineering.

Reference
Ford (2012). Our Company. Retrieved from http://corporate.ford.com/
Sulivan, L. (2005, November 2). Ford Motor Enlists RFID Just-In-Time Delivery System. Information Week. New York: Information Week