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Lead time reduction and, consequently, cost efficiency are hard to achieve without smooth information flow. Recommended partial implementation of Dell direct model, i. Introduction In the era of rapidly changing information technologies Ford Motor faces the challenge of changing its supply chain network.
Supply chain team has split down the middle on the issue. Some insist on virtual integration following Dell model in order to reduce working capital and exposure to inventory obsolescence without risking being left behind.
Issue Identification Ford Motor strategy puts emphasis on shareholder value and customer responsiveness. Virtual integration introduced by Dell has delivered on those dimensions. Implementation of emerging information technologies, including the Internet, and ideas from Dell executive summary essay high-tech industries into supply chain management is inevitable and vital for the future business development.
Degree of virtual integration is evaluated by addressing the following issues: Supplier management; Lack of up to date IT infrastructure; Direct contact with end users.
Environment and Root Cause Analysis Ford Motor is a global organization with operations spanning countries with over manufacturing facilities. In these conditions efficient data exchange, both internal and external is crucial for success.
Direct model introduced by Dell Computer Corporation proved to be the best contemporary solution of the matter. Please refer to Exhibit 1. Main strategic issue for Ford is control and management of the numerous links of the supply chain.
To produce a single unit Dell needs under a hundred parts, whereas Ford requires over a thousand. Unlike Dell which has less than 50 suppliers, Ford has several hundreds of tier-one suppliers.
The shift toward long-term relationships with very capable suppliers who would provide entire vehicle sub-systems has significantly reduced the number of tier-one suppliers. They were provided with a range of techniques, e.
Tier-one suppliers are in charge of managing lower tier suppliers who usually do not have developed IT capabilities, which slows down the process.
Please refer to Exhibit 2. All of them are aimed at cost reduction and improving customer service.
In order to evaluate current business environment and identify the best opportunities for development and growth, SWOT analysis was performed. Please refer to exhibit 3.
Alternatives A number of alternatives were analyzed regarding implementation of vertical integration.Free Essay: FINANCIAL ANALYSIS OF DELL AND HP Executive Summary 2 This financial analysis report examines two high profile competitors, Dell and Hewlett. Dell Executive Summary Essay Sample.
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