Analysis of Ford's Operations, Logistics, and Supply Chain Management

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Understanding Operations, Logistics and Supply Chain
Management
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TOC
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Introduction
Different organisations adopt different methods for the management of their logistics and supply
chain management of the business operations. The methods employed by the organisation
depend on the business type and objective of the organisations. However, organisations also face
issues in effective management of logistics and supply of products and services. Business
organisations need to adopt strategic and systematic ways to overcome these logistics and supply
chain management issues to ensure smooth and uninterrupted business operations. The methods
adopted for devising the solutions should align with the business operations and methods so
prevent any kind of conflicts in the process. These aspects are analysed in the assignment with
reference to Ford to understand the key operations of the organisation and understand the
logistics and supply chain management issues faced by the company.
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Discussion
Ford is car-manufacturing company based in the United Kingdom. It is a subunit of Blue Oval
Holdings, where Blue Oval Holdings is a subordinate of Ford International Capital LLC. Ford
International Capital LLC is a subordinate of Ford Motor Company. The organization is 110
years old as it was established in 1909. In 1960, the name of the organization changed to Ford of
Britain. The headquarters of Ford is situated in Brentwood, United Kingdom. It has
approximately 14000 employees and is a brand name in the car-manufacturing industry
(Ford.co.uk, 2019). The products of the organization are popular among people and are
recognised well. The organization has branches in other countries as well and is a multinational
organization.
The organization makes investment on innovation such that it can improve the services that it
provides to its customers. The management of the organization has always encouraged or
motivated innovation such that it can attract more customers and make a stronger position in the
market. A new car model named Ford Mondeo Hybrid is expected to release in March 2019.
The organization has innovated and added features in the new model. Ford has incorporated and
advanced version of engine that will make the car more fuel-efficient. It will aid the consumers
or the customers to carry more load as the capacity of the car has been increased. The car has an
electric motor in order to hold on the unique Atkinson sequence gasoline engine (capacity-2
litre). The new model of the car also has a generator that enables 1.4 kWh recyclable battery
(lithium-ion and air-cooled) to be charged (regenerative). The new model also uses regenerative
technology of brakes that prevents the loss of energy by 90% when the brakes are applied. It
assists to refill the battery (Greencarcongress.com, 2019).
The car can be driven in fully electric mode. The fuel efficiency of the car is further enhanced by
the power train (hybrid) that conveys 187 PS. It supports incessant variable mechanical
transmission in order to increase the fuel efficiency of the car. The safety features of the car have
also been enhanced by the incorporation of Vigorous Park Assist and Adaptive Face Lighting
system (LED headlights). The other features of safety that have been incorporated are Vigorous
City Stop, inflatable seat belts (rear) and voice-controlled connectivity. The hybrid model of
Ford has an engine that can support both gasoline and diesel (Greencarcongress.com, 2019).
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Logistic management is a subpart of supply chain management. Logistics management devises
strategies, incorporates and manages the efficiency of the organization. It manages the forward
flow as well as the reverse flow of goods along with the storage of products. It controls or
manages the information or data that links the tip of origin and consumption such that the
requirements of the customers or consumers can be met effectively. While supply chain
management is the process of managing the flow of products and services that includes the
motion along with the storage of unprocessed materials or resources (Heizer and Render, 2008).
However, logistics is different from supply chain management since logistics is a miniature
portion or part of SCM. Supply chain management is wide term that emphasizes on the linkage
between the suppliers and the customers.
Supply chain management plays a key role in any organization as it is related to the operations
department, which is the most vital part of an organization. It aids an organization to gain
competitive advantage over its rivals in the industry (Slack et al., 2015). It assists an
organization to reduce its risk when the organization is about to buy unprocessed resources or
about to sell its products or services. Ford has always been successful in management of its
operation department and has adopted such strategies that have led it to success. Ford Motor
Company has made several collaborations such that the world can be made a better place to live
and reduce environmental degradation. The organization supports Partnership for a Cleaner
Environment (PACE) such that pollution can be reduced and apt measures can be taken to
prevent the deterioration of environment (Supplychaindive.com, 2017). The operation
department is taking several measures to improve the quality of the products and the services that
it provides to the customers. It is working in order to reduce the emission of carbon dioxide and
wastes. It has taken several measures in order to improve the efficiency of usage of water and the
consumption of energy.
Ford selects its vendors based on the basis of Carbon Disclosure Project (CDP), that is, the
quantity of greenhouse gases emitted and the amount of water that is used for the purpose of
production. The organization has engaged itself in sustainability programs such that the
degradation of the environment can be reduced (Supplychaindive.com, 2017). Ford has become a
part of Suppliers Partnerships for Environment such that the deterioration of the environment can
be prevented. However, over the past few years the organization has faced difficulties in
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maintaining its financial stability. It faced problems in its efficiency of supply chain
management. There were cases when the organization had to shut several of its plants and
creating facilities of manufacturing that are flexible. It had to sign contracts with fresh logistics
entities.
As per reports, in 2012 Ford faced several issues in Australia and was forced to close several of
its manufacturing units in Australia. It was affected by the shortfall of resin after an explosion
that took place in a chemical factory based in Germany. The accident had adverse consequences
as it resulted in the demise of two employees and led to the deficiency of PA-12, which is a resin
that is used for manufacturing fuel lines and brake lines (mhlnews.com, 2013). The auto-
suppliers of the organization put in sincere efforts in order to address the scarcity of resins
through different materials. The supply chain management of Ford in Australia suffered through
crisis, which was slowly dealt by negotiating with the employees in order to reduce its effect on
the workforce.
The issues that Ford faced highlighted the adversities that an organization can face in case it
deals with a single vendor and when it uses the services at the time of manufacturing. It is
necessary the organizations must always develop supply chain risk management strategies such
that any kind of disaster or accident cannot prevent the manufacturing operation of the
organization and cannot decrease its profit margin (B2B.com, 2019). The organization must deal
with several suppliers or vendors such that any kind of disturbance cannot affect its operation
and that it can operate smoothly. It must make sure that the suppliers it deals with, uses latest
technologies and provides a safe environment to its workers.
Ford uses virgin steel and petroleum-based goods like vinyls and plastics as raw materials. It has
aided the organization to reduce the weight of its models by thirty percent. As the price of fuels
has been increasing, the organization is emphasizing on the use of technologies and vehicles that
are fuel-efficient. However, it takes approximately 3 to 5 years in order to introduce or launch a
new model of a car from its commencement to assembly (Madehow.com, 2019). Ford has
always encouraged innovation and creativity such that it can improve the quality of its products
and services and can meet the needs as well as the preferences of the customers.
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Ford has about 4000 vendors and it has its own parts as well which are fetched simultaneously
for its assembly. Railroads or trucks generally fetch the components together. The parts that have
to used in chassis are delivered or transported in one area whereas the parts that will aid to make
the body are transported in a different area. Firstly, the chassis is constructed and secondly, the
body is manufactured. Following the above two process, the car is painted and finally the
interior parts of the car are assembled. The last part of the manufacturing process is mating in
which assembly of chassis or framework meets the shell of the body conveyor (Madehow.com,
2019). Once, the last part is over new components like tires, gasoline and batteries are attached
to the car.
Lastly, each part of the manufactured car is tested such that the quality of services that it
provides can be crosschecked. Each component that makes up the car is texted thoroughly before
it is assembled to manufacture the car. It is required because if any of its part fails or
malfunctions then it would adversely affect the reputation of the organization in the market that
will result the organization to lose its customers. The main purpose of quality control is to make
sure that the products of the organization do not have any kind of defects. Nowadays, the quality
of any product is perceived as the process of building or creating a product or vehicle that has apt
design and that the procedure of assembly is appropriate.
The process of manufacturing that Ford follows aids it to serve its customers in the right way
such that the customers are satisfied with the services they get from the organization. Each of the
components that are used for manufacturing a car are tested before its assembly and once all the
parts or components are assembled the car as a whole is tested again. The procedures that Ford
follows aids it to provide the best quality services to the customers and it always encourages
innovation such that the quality of the services it provides can be improved and it supports PACE
so that the emission of carbon dioxide can be reduced which will assist in the preservation of
environment (Supplychaindive.com, 2017). It has made the position of Ford stronger in the
market and it has emphasized on the use of renewable sources of energy like electricity or solar
power other diesel or petrol in order to prevent the deterioration of environment.
However, in order to reduce the atrocities that Ford faced in its supply chain management in
Australia it is recommended that it must have more than one dealer such that any accident cannot
affect its operation or profitability. It must ensure that its suppliers are particular about the safety
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of its employees and in case the supplier has plant, which is situated in disaster prone area, then
it must keep additional stocks (B2B.com, 2019). It must have more than one supplier so that if
one supplier is not able to provide a product then Ford can have another option for the supply of
that product. It must also have different delivery routes if any kinds of issues arise in
transportation. These strategies will aid the organization to minimise risk.
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Conclusion
In spite of being a huge organisation, Ford faced many difficulties and issues in the successful
management of logistics and supply chain. The company faced financial crisis due to which the
business operations became instable for a certain period of time. It further reduced the efficiency
of the organisation slowing down the business of the company. The organisation had to close
many business units in Australia but the organisation adopted measures that will enable the
organisation to make their business stable and sustain competition in the industry. The
organisation improved their strategies for logistics and supply chain management to ensure that
the business does not face any further any loss and is able to recover the losses. It helped the
organisation to function smoothly and lead to the development of the organisation.
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Reference List
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