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Ford Motor Company

Essay by   •  May 3, 2018  •  Case Study  •  588 Words (3 Pages)  •  354 Views

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Case 2-3 Ford Motor Company.

1. This case basically shows us that Ford is going through a series of problems, mainly related to costs and its suppliers. Ford Motors along with General Motors and Chrysler were going through difficult times, this was due to the great global competition, high gas prices and the lack of discounts and rebates. Ford reported losses of $ 1.1 billion and the company was in deep debt. Tony Brown, the Senior Vice President of global sourcing, had in mind a solution: "Aligned Business Framework". This plan involved reducing the number of suppliers from 200 to 100 by the 2009 model year and reducing base production supply from 2,500 to 1,000. This plan also entailed great benefits in new product development and supplier innovation. With this plan that Mr. Brown had, most of those involved were not happy, because this plan involved too many changes in the supply chain. Due to the challenges that this new strategy involved, Tony stated that this type of business is not "as usual".

2. The problems generated at Ford Motors include the fatiguing relationship between the company and the large number of suppliers. Ford demanded a reduction of costs from its suppliers, which resulted in a delay in payments to suppliers, and this had a negative impact on communication and trust between them.

Confrontations took place with this delay in payments, because this caused financial difficulties to the suppliers and this in turn caused problems in the quality of the products. What the company considered a great strategy implied a disaster for its business development.

3. The basic problem from which a series was generated, was the inefficient supply chain strategy implemented by Ford. By having a large and unnecessary amount of suppliers the control went out of their hands. The quality of the products stopped being of high quality and communication between suppliers and the company became complicated and deteriorated. Likewise, the large number of suppliers implied a greater demand of work from Ford, his company, and with it his employees.

4. My strategy to improve the performance of the company would be to cut the number of suppliers and select those with the greatest strategic value, the most indispensable for the company and those who plan for the long term. Of course, it is also important to give preference to suppliers



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