Case study: Ford Motor Company : Supply Chain Strategy

1. Consider the experiences that you had in buying a car, compare these to the experience of buying a computer online. What do you think explains the differences?

It is striking how dell makes a computer customisable to the buyers' taste. Cars also are customisable; just think of all the possible options you can buy with a car. But at Dell you can buy your customised computer online, something I haven't seen for car manufacturers. People normally buy their new car via the dealer channel. Dell bypasses totally the dealer channel. Computers and cars are consumer items. Cars however, for many families, aren't "just another commodity". For many people it's quite a big investment that needs serious thinking. People like to test the car first, see it in reality and talk from person to person with the dealer. Safety is a major item for cars and not for computers, who are expected to fail now and then. A car also needs regular maintenance, something a computer needs less o

5. How might the auto industry work differently if it were designed in accordance with the Dell-model?

Virtual integration allows Dell to bypass the dealer channel through which personal computers normally are being sold. Dell has managed the blur the line between supplier, assembler, and customer, thereby increasing inventory velocity to the point where there is only eleven days of inventory on hand, leading to an inventory turnover rate of thirty times a year! Dell eliminates the costs and risks associated with carrying large inventories of finished goods.

2. What advantages does Dell derive from virtual integration? How important are these advantages in the auto business?

Also the suppliers are completely dependent on Ford while Dell is inconsequential to suppliers. Moreover Ford is one of the oldest and biggest companies in the world which make it more difficult to realise turnaround in its business processes and information systems. This is why I think Ford doesn't have an online buying system.

If the auto industry used a pull model rather than a push model the cars would look more like a mainstream customer wants. The vehicle combinations would be kept minimal. Already we see in automobile business that manufacturer use the same platform to build different models. For example Volkswagen also uses the Golf-platform to build Au

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Approximate Word count = 908
Approximate Pages = 4 (250 words per page double spaced)