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Write 2 pages thesis on the topic db 3. Ford Motor Company Research Paper, Computer sciences and Information technology-DB 3 Ford Motor Company: Supply Chain Strategy and the Power of Virtual Integration

The discussion on automation

Introduction

Automation here refers to the different control systems used on operating equipment like machinery, in this case vehicles with reduced or minimal human intervention. From the video showing a narration of the newest of the International Ford Plants in Brazil, it is quite evident that Ford is making use of technological processes in its supply chain in South America to take a competitive advantage in the industry. In fact, it has recently conducted supplier training opportunities in Brazil, Turkey, Romania, and Mexico to enhance its supply strategies (Gereffi, 1999). On the other hand, the power of virtual integration is the use of the internet or general technology to replace physical elements of a company with specific information. Ford Motor Company recorded 5.7 million motor sales worldwide last year, using a huge network of suppliers.

“Ties” and expansions on the topic

As part of its objectives to create a competitive supply chain, the firm makes use of Six Sigma procedures through collaborating with Penske Logistics to improve and streamline supply chain activities. Before Ford sided with Penske Corp, its assembly plants in South America each took care of its logistics, an initiative that led to unexpected costs in transport and supplying materials as suppliers used to pick up light loads, carrying them from plant to plant. In an effort to solve this, the company established various Order Dispatch Centers (ODC) to merge shipments to plants (Chopra & Sodhi, 2012). Within a short time, it was noted that the majority of trucks have increased the capacity to 95% when distributing shipments to and from the ODC as well as a reduced plant inventory by 15%.

New technology has been put in place to help in streamlining performance. Ford Motors has used Logistics Management System, order tracing software, and metric reporting system based on the internet to achieve this goal. This shows how technology can be used to enhance competitiveness as drivers in the company now carry an electronic log and PDA scanners to offer real-time updates and ensure that all carriers have satellite communications. Meanwhile, the supply chain is stabilized through scanners that are utilized in monitoring plants delivery (Austin, 1999).

A vital facet of the strategies used in the supply chain is Ford’s emphasis on accountability at every level of supply. In order to reduce expenses and boost services, the company strengthened the car manufacturer’s bidding procedure for carriers, initiating higher specifications on technology, driver certification, safety, time management, and equipment. Fifteen-minute delivery windows and pick-up were established to guarantee adherence on performance standards. In addition, carriers also are modified in such a way that they oversee loading as well as unloading to confirm that orders are filled appropriately and to record any damage on freight (Wee & Wu, 2009)

Conclusion

The above technological advances at Ford Motor Company have seen it move to centralized network, resulting in a reduction in inventory, enhanced distribution, cost savings, and delivery procedures. To further confirm the logic of how the company’s technology has been used to strategize competition, Ford was honored in 2012 by the European Award for Logistics Excellence for its expansions in the auto industry’s spare-parts in Europe’s supply chain.

References

Austin, R. D. (1999). Ford motor company: Supply chain strategy. Harvard Business School Case Services.

Chopra, S., & Sodhi, M. S. (2012). Managing risk to avoid supply-chain breakdown. MIT Sloan Management Review (Fall 2004).

Dos Santos, B. L., Peffers, K., & Mauer, D. C. (1993). The impact of information technology investment announcements on the market value of the firm. Information Systems Research, 4(1), 1-23.

Gereffi, G. (1999). A commodity chains framework for analyzing global industries. Institute of Development Studies.

Wee, H. M., & Wu, S. (2009). Lean supply chain and its effect on product cost and quality: a case study on Ford Motor Company. Supply Chain Management: An International Journal, 14(5), 335-341.