Analysis of Ford Motors Supply Chain

This report analyzes the supply chain of Ford Motors, focusing on managing quality and new product development. It discusses the challenges faced by the company and provides recommendations for improvement. The analysis covers the concepts and functions of supply chain management.

Ford Motor Company

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Contents
Introduction...........................................................................................................................................2
Literature Review..................................................................................................................................3
Analysis of Ford Motors Supply Chain.................................................................................................4
Supply Chain of Ford........................................................................................................................4
Managing Quality..............................................................................................................................6
New Product Development................................................................................................................7
Conclusion and Recommendation.........................................................................................................9
References...........................................................................................................................................11

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Introduction
Supply Chain Management is the broad range of activities that required planning, controlling
and executing a product’s flow. An organisation acquires the raw material in order to
distribute the finished product to consumers. Supply chain management is an expensive
process that relies on the partners from suppliers to manufacturer. It is essential for the
organisation to maintain its supply chain in the context to attain the objective. Supply chain
management of the company boost the customer services, reduce the operating costs and
improve the financial cost as well. It is a fact that the organisation survives efficiently when it
has enough funds to survive in the market. It is a process that maintains all activities and
functions of operation that helps to operate effectively in the market. An organisation faces
the challenges and risk in order to create the network between all the entities. It is required
for the organisation to analyse the supply chain network in order to maintain supply chain.
The main purpose of this report is to understand the concepts and functions of supply chain
management. Ford Company has been taken into consideration to analyse its supply chain.
Ford Motor Company is a multinational automaker that offers the services of sells
automobiles and commercial vehicles. The organisation operates under the industry of
automotive. It manufactures one of the most luxurious cars under the Linclon brand. It also
owns Brazilian SUV manufacturer troller, 8% of stake in Aston Martin, and 32% of stake in
Jangling Motors. The company is listed under the New York Stock Exchange and it analysed
that it is a second largest automaker in US and the fifth largest operator in the world. It has
213000 employees in the world around 90 plants and facilities in the world. The company
earned the revenue of $156.776 million and operating income $4.813 billion. It introduced
the different methods for large-scale manufacturing of cars and scale management of an
industrial workforce.

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At the beginning of the report, the literature review will be done on the operation, and supply
chain management theories. After that, analysis will be done on the supply chain of Ford
Motors. At the end of the report, the recommendation will be mentioned in order to achieve
the success.
Literature Review
According to Christopher 2016, Supply chain management is a network of facilities and
distribution options that performs the different functions of supply chain such as
procurement, transformation of material and many others. It involves all stages which directly
or indirectly include the prices of satisfying the customer request. It is process of chain
management influences the operations management, distribution management, marketing,
logistics and transportation in order to perform the activities of all stages. There are different
task that involves in the process of supply chain such as flow of goods and services and
storage of raw material, work in progress and finished goods. But as per the opinion of
Stadtler, 2015, supply chain management is a concerned of sustainability and risk
management. It is a process of supply chain maintains the activities that help to reduce the
environmental risk. This definition defines the different areas of systems engineering,
procurement, information technology, industrial engineering, and marketing. The opinions of
both the authors are contrast and it can be said that it is a process of designing, planning, and
execution, monitoring and controlling the activities of supply chain with the purpose of
creating the net profit.
Operation defines the process of action of facts of being active and effective. Operation
management is an area of designing and controlling the process of development of business
operation in the production of goods and service. According to Heizer, Render, Munson,
2017, it is the primary concerned with the organising, supervision and planning in the terms

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of manufacturing. It maintains the activities of producing the products manage quality and
create services that help to supervise the services. Every sector follows the process of
operation such as hospitals, companies, banking systems, customers, working with suppliers,
and using technology. It is one of the main functions for an organisation along with the
supply chains, marketing, human resource and finance. But as per the opinion of Touboulic,
and Walker, 2015, the operation management functions require the management of day to
day and the strategic production of goods and services. The opinions of both the authors are
same that is why; it can be said that the activities of operation management requires the
capacity to analyse the current situation and identify the better solutions in terms of
improvement of the effectiveness.
Logistics is generally the detailed organisation and implementation of complex operations.
According to the Hayes, 2018, logistics is the flow of things between the points of
consumption to point of origin to satisfy the customer requirements. It includes the physical
item that helps to satisfy the customer requirement and usually it involves into the material
handling, integration of information flow, packaging, transportation, warehousing,
production, inventory, and often security. As per the opinion of Monczka, Handfield,
Giunipero, and Patterson, 2015, logistic is a part of process of supply chain management that
plans, implements and controls the activities of goods and services such as storage of goods
and delivering the services.
Analysis of Ford Motors Supply Chain
Supply Chain of Ford
Ford Motors Company grows over the years with the help of several thousand suppliers in
order to produce materials. It is difficult for the organisation to work with a complex network
of relationship. It is observed that the organisation picked the suppliers on the basis of cost

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and dealing network. It offers luxury cars and many other automobile services to consumers.
The company produces the five reengineering projects which are major in corporation-wide.
The production system of the organisation is more responsive, and efficient. The organisation
pulls the production system with stability, continuous flow and synchronized production. The
key process of the organisation is to deliver the order to the consumers. The purpose of the
order to deliver content the 15 days from the time of customers orders to deliver the finished
product. The company manufacture the product on the basis of demand of consumers in order
to achieve the objective (TechTarget, 2018). The supply chain process of Ford includes the
activities of marketing, material planning and the production of the vehicle. The organisation
improved its OTD process which is relied on the several elements such as current demand of
consumers from dealers, minimum 15 days vehicles in each assembly plant, open mixing
centres that develops the schedules to deliver the finished vehicles, allow vehicles to be
amended for minor colours and trim variations (Ford, 2017). The organisation improved OTD
process in order to create the lean, flexible and predictable process.
Ford launching the retail network in order to support the market in terms of effective
deliveries. The company also gained a high market share with the retail network by attracting
a large number of customers. It also opens the showrooms of cars in order to achieve success.
The retail operation of the organisation invested in 5 markets of the USA which helps in the
growth of the market. The investment helps the market to grow in terms of the economy.
Ford
Production complexity High: 30000+ parts
Production cost High
Life span Long term
Number of suppliers and sub-suppliers It has 1000 + suppliers
Number of workers 166000 people working

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Distributors and Dealers Many
The two areas have been selected to analyse the supply chain network of Ford Motors
Company and these are managing quality and new product development.
Managing Quality
Quality management is the process of analysing the activities in the context to maintain a
desired level of excellence. It is a process of maintaining the activities includes the quality
policy, creating, implementing and improvement of quality.
The poor planning of the company becomes a challenge for the organisation in economic
terms. It has been seen that the global economic market performing worse in the market and
expect in the prior planning. The company suffered from the loss amount of $34.3 billion in
debt that strains Ford’s already tight budget. The first step in supply chain management is to
plan the process and functions. It is necessary for the organisation to develop the plan in
order to deliver the demanded services to consumers. It is observed that the plan of the
organisation of investment is poor due to which it faces the challenges of loss and many
others. Worse performance of economic market affects the economic condition of the
organisation in terms of loss. The consumers are not able to purchase the product until the
market improves. It is observed that the low purchasing power of consumer affects the sale of
the product due to which the chance of facing loss is high. The opportunity of capitalisation is
also getting worse due to the poor economic situation of the global market. The poor
economic condition of the market affects the demand of the consumers that is why; the
opportunity to gain a competitive advantage and the investment is reduced. The less
opportunity for investment affects quality. It is required for the company to maintain the

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quality but it requires a huge amount of investment to introduce the new tools and techniques
(Ford Motor Company, 2018).
The other challenge which is faced by the company is its tight budget. The company have a
tight budget due to which bad debts is the result of poor planning. Tight budget develops the
difficulties for the company to maintain the quality of consumers. Tight budget restricts the
company to invest the large amount in maintaining the quality. The company take the raw
material from a large number of suppliers for production. It is a fact that the huge investment
helps to maintain the quality of the product.
New Product Development
It is a strategy which is used by the company to attract the customer or to expand the
business. It is observed that every organisation adopts the new product development strategy
to satisfy the demand of consumers. Poor design product does not meet the requirements of
the customer and the companies suffer from heavy loss.
Ford develops a new product for the expansion of the services. The company use the current
models that are not environmentally friendly, and sustainable. It is not just about the
environment of the organisation, it is also about the environment of the society. The company
introduced the model in society by keeping in the mind of innovation and ethical
responsibility (Ford, 2018).
It is observed that Ford uses less amount of hybrid technology as compared to Toyota. Hybrid
technology is used to develop electrical models. It consumes a large amount of fuel and lower
emission. The company uses the less amount of hybrid technology that is why; the
organisation product is not suitable for the environment in terms of sustainable. At the time of
launching the new product, it faces the challenge of approval as it is not sustainable for the

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environment. It has been founded that the organisation operates in different chemical
products that are harmful to the environment.
The unhealthy workplace also affects the health of employees. Employees are the main
resource of the organisation due to which the organisation attains the objective in the market.
It is observed that the uses of chemicals and the other material which spread the emission
harm the society and employees as well. It is difficult for the company to launch the new
product in the market without any help of the employees. It is the biggest internal challenge
for the organisation which affects the expansion of business by launching the new product in
the market.
(Source: Ford, 2017)
The product develops by the company affects the environment due to chemical emissions. It
is good and beneficial for a short period but not have a sustainable environment.
Ford also has some problem with the launches of new products to some extents. As per the
case, the new product of Ford has been founded as faulty products due to the fault of
suppliers. The issues are founded in the parts of all-new vehicles that affect the image of the
new product in the market. It is necessary for the organisation to maintain the relationship

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with the suppliers in order to introduce the new product in the market. The issues founded in
the new vehicles affect the social image of the organisation in the market. In the whole
scenario, buyers also face a lot of trouble with the new vehicles. As per the consumer report,
the consumer faces the safety issue (Ford, 2018).
Conclusion and Recommendation
From the above analysis, it has been recommended that the company has to adopt the same
techniques to improve performance such as:
Use hybrid technology
As discussed above, the company uses less amount of hybrid technology because it increases
the environmental challenges such as rejection of government. Hybrid technology is
beneficial for the environment because it consumes the fuel and spread less emission that
helps to maintain a healthy environment. It is observed that hybrid technology is also advance
in their nature that is why; each and every organisation can easily adopt to attract a large
number of consumers. The uses of less amount of hybrid also affect the organisation
environment as well as society. Employees face the issue during the manufacturing of the
product due to an unhealthy environment at the workplace. It is required for the company to
adopt hybrid technology (Formentini, and Taticchi, 2016).
Corporate social responsibility
Ford has to perform corporate social responsibility activity in order to build the strong social
image in the market. The new product of the organisation founded defaulted due to the fault
of suppliers. It is necessary to sustain the quality of the product in order to provide excellent
services to consumers so that their demand will satisfy. It is required to have a good image in
the market in order to introduce the new product. The value of an organisation is decreased

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due to supplier fault. The company has to maintain its relationship with suppliers to manage
quality and adopt the CSR activity to build the brand image in the market (Crowther, and
Seifi, 2018).
Proper Planning
It has been seen that the company was founded for their poor planning. It also suffers from
the loss in the tight budget. It has been recommended that the company has to develop a
proper plan in order to enhance the quality of the product. The current plan relies on the
global economic market which is getting worse. The performance of the market is getting
worse due to that the company suffered the loss due to its tight budget. The company is
restricted to invest more amounts to improve its quality of the product, especially in the
inflation period. It is recommended that the company has to analyse the environment before
developing an effective plan.

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