Tuesday, March 26, 2013

Ford Motors: The supply chain and logistics




Ford Motors: The supply chain and logistics
Introduction:
Over the period, the global regime has witnessed significant advancement in development and this can be suggested by the advancement in technological capacities. Additionally, globalization has enhanced the aspect of development because it has necessitated the capacities of development and regional integration of national economies. In the wake of all these developments in the national economies, the establishment of the various companies has been conceptualized and one of the significant companies that have undergone significant transition is the consideration of Ford automobile company (Banham, R. (2002)). The company was funded by Henry Ford in 1903 and it has since grown and developed to e one of the leading automobile companies around the globe, with headquarters at Dearbon, Michigan. The company is characterized with a total of 370,000 employees globally and with revenues to the span of about 144 billion. The operations of the company are also diversified in over 200 countries so as to facilitate the ability of the company to obtain immense revenues and profits from the services of its subsidiaries and to maintain the core business of the company as far as the design and manufacture of the automobiles is concerned in relation to the consumer market demands.
The logistics and supply chain operations of the company
The establishment of the organizational structure is extremely critical for enhancing understanding of the company. This aspect is critical because it enhances participation of the leaders and the employees of the organization. Normally, the employees of the organization are charged with the duties that are critical in enhancement of the goals and objectives of the organization and the consideration of establishing the performance of the organization. The leadership aspect is important in the consideration of organizational structure and this has revealed that ford motor company has effective leadership that integrates information and policies to the junior employees (Banham, R. (2002)). The critical decisions in the organization are initiated by the chief executive offices and the other staffs conducts the duties of implementing the policies drafted because this translates into the realization of organizational goals. 
 Since the establishment, the venture has grown and developed to specialize in the manufacturing of heavy tracks, tractors and luxury cars. In addition, the venture has acquired other franchises like Mazda in Japan and Aston Martin, with a production capacity of 260 million vehicles so far. The attributes of development of the organization can be ascertained to mean realization of the organizations goals and objectives and this denotes success in the industry. The vision of the organization is to continue improving on their products and services to enhance satisfaction of the consumers (Banham,2002)). Analysis of the records has shown that the organization has continued to value stakeholders and customers because they form a formidable strength in the organization and their activities leads to the establishment of organizational performance. Since the establishment of the corporation in the United States, the organization has employed measures that have enabled expansion to the other territories like the Australian establishment. The establishment of ford automobile in Australia has been of immense benefit because it has significantly enhanced organizational performance. Analysis of the background information about the company has revealed that the organization has continued to experience significant loss in market share since the period of 1987.
In order to provide end to end service parts supply chain solutions, the company has devoted its operations to the use of the Sap software. This has helped the company to incorporate the areas of service planning parts in the European continent with the first Sap warehouse managed system currently running at to ensure full production of the company’s products especially in France. The company is also considering integrating the use of the software in its operations based in the United States so that they can also implement the use of the software in operations such as service planning. In order for the company to also be totally informed on the partner logistics activities especially in the upstream supply chain, the company has also come up with a SAP supplier network collaborator that will help in managing the supply chain events.
In order to ensure that its supply chain processes were effective and efficient so that the company would be able to enjoy better profits, the company underwent an overly ambitious restructuring of all the company processes that was began in the year 1995.The company chose to undergo various mergers which took place in the North American, European an other regions of he globe that majorly dealt with the company’s automotive operations in order for the company to become one single operation globally. This way, the company was able to integrate process like reengineering and globalization in order to ensure that the corporate structure of the company was focused on being more cost saving(Coyle et al, 2008). The supply chain of the company also was intensified to make sure that the product development processes were consolidated to constitute five vehicle centers with each center being responsible for the development of cars and vehicles that would suit and apply a certain consumer market and not just develop general vehicles. The supply chain structure also involved the idea of making the operation process of the company and the products consequently a common occurrence to the global world. This way the company was able to eliminate redundancies and be able to realize the economies of scale that accrue to companies that are geared towards large scale productions since this meant that all the processes were uniform and what was produced was only what was needed by the consumers. Through the issue of economies of scale as created by the company, the company was able to enjoy lower marginal production costs with the firm’s increased production processes. The global approach that was also implemented and enforced by use by the company also ensure d that the company was able to overcome the limitations that are imposed to the operations of the company as a result of the geographical location. In the same way also the teams of the different countries in the country had to work together regardless of their location and this therefore made the company more effective in meeting the set targets and also in the issue of managing the supplies and logistics of the company (Coyle et al, 2008).
To ensure that the supply processes were consequently monitored and executed as per the desirable company standards, the company also instituted the use of information technology for the effective management of all the company’s processes. The technology that was implemented was meant to supervise and control or the reengineering process (Coyle et al, 2008). Through this means, the company was able to effectively mange the inventories that were need in the manufacturing processes since the technology made it easier for the authorities to enhance the flow of the company materials and subsequently reduce the amount of inventories that were held at a time. This way the inventory that would have otherwise been held by the company was substituted by the valuable information as relayed in the system.
Further more, for the company to be able to create consistency in its operations, it also teamed up with two other companies in the industry, which are the Chrysler and the General motors company so as to be able to combine the efforts while working on the Automotive Network Exchange. Not only was this a way of creating collaboration in the supply chain networks, but was also enforcing collaborative relationships in the industry where the company operated. This was very important for the company in the sense that it enabled the company to be able to create consistent standards of technology in regards to the process of the supplier networks. On the other hand also the company was also able to ensure that interaction among the suppliers and the company would remain as a positive aspect for the company especially in regards to pressing for lower costs in regards to the core supplies that are needed in the company’s processes. Through the improvement of the above process in its supply chain and logistics, the company was able to attain a sum  total of 6.9 billion profits by the end of the year 1998.This also made the company the world leader regards to the manufacture of trucks was concerned taking over the lead from the Chrysler us company(Coyle et al, 2008). This also subsequently increased the profit of the company with a 3.9% return on the total sales that the company had made by the close of the financial year 1997.The process that were adopted by the company also made the company to acquire the title of the most improved automaker as far as the 1997 J.D power study on initial quality was concerned.
The supply base of the company had also grown with the growth of the company over the period of years. In order to improve the existing supply base of the company, it was mandatory for the management of the company to develop long-lasting relationships with the first tier and second tier suppliers of the company, as well as other suppliers that came after the first and the second tier (Ford motor company, 2012). Through this relationship and developments in the company’s supply chin strategy, the company was able to effectively improve the production operations by implementing the use of just in time inventory techniques, use of the total quality management strategy and statistical process controls. The use oaf the supply chain strategies enabled the company to become leaner, responsive and efficient in its production process.The same processes also led to the company’s ability to produce the major corporation wide projects in the areas of reengineering with one of them being the ford production system. This aspired the whole production process of the company enabling it to be able to move from the level type of production into the pull based system that allowed the processes of the company to be more synchronized in terms of production with a continuous flow in the processes and stability.
The ford production system made it possible for the company to be able ot produce a continuous flow of materials and the products of the company as driven by a fixed and orderly vehicle leveling schedule that allowed the company to become more flexible so as to accommodate the lean concepts of production (Ford motor company, 2012). This propagated the use of the inline vehicle sequencing system that allowed and ensure that the vehicles to be assembled underwent the order sequence process. The order to deliver strategy that the company had also adopted also made the process of the company more effective as far as meting the needs of the consumers was concerned with the reduction of the number of days before an order could be processed and consequently delivered from 65 days to 15 days. The order to deliver system was implemented so as to cater for the bottle necks that the company was exposed to interns of marketing, planning of the materials, production of the vehicles and the processes of transportation. In general, the system was better reengineered in order to forecast the demand so that customers from the dealers with a reduction in the number of days through which a vehicle would require to be assembled so as to increase the company’s ability in manufacturing (Coyle et al, 2008). This way, the regional mixing centre that had been established would aid in the optimization of the company’s schedules as far as delivery of the finished vehicles was concerned.
Areas for improvement
However, results of the five year period have revealed that the performance of the company is declining and the management of the organization should consider implication of measures that will establish performance of the organization. Some of the process deployed by the management of the organization to enhance change in to the organization is the establishment of TQM. This is a policy aimed at detecting and implementing usable action plan from the sets of objectives for the company (Ford motor company (2012)). Analysis has shown that the management of ford automobiles has always strived to choose ideal strategies that will enhance development and change of the organization. The records have stated that the failure of the organization can be attributed to the advents of operations of the organization. It has been proven that the management of the organization has engaged in the consideration of setting up goals and objectives but the company employs limited efforts towards the realization of the goals and objectives. The organization has informal planning process that occurs in all the departments and consistency has proven to a critical problem in the development of the organization.  With the development of global corporate strategy, the aspects of consistency are extremely beneficial and the management of the organization has not enacted measures that will ensure that the processes in the organization are consistent and unique to the organization.
Conclusion
In general the processes and the activities of the company are effectively coordinated right form the supply department in order to ensure that the process of the company are profitable and time conscious as possible. However, to ensure that the processes of the company are effectively integrated to reduce the decline in the sales of the company, the managers should be focused and geared on the strategic operations of the firm with more emphasis being placed on the formalization of the processes.
           

Referenecs
Banham, R. (2002). Ford Motor Company and the Innovations. The Ford Century: , 200.
Ford motor company (2012): Evolving Technology; retrieved from: http://www.ford.com/green/technology/
Coyle, J, J, Langely, J, and Gibson,J, B,(2008),Supply chain management: A logistics perspective, New jersey, New cengage learning.