Ford Vs Dell Vertical Integration

Ford vs Dell Vertical Integration

Automotive industry has created a more fierce competition than ever before. Each player in the competition has been attempting to adopt innovative business practices to improve their competitive edge in all sectors including production operations. Improvement in this segment of the business can result in revenue increase. As a consequence, automobile company can enjoy higher profitability which should reflect in the increase of its stock's price. Not only employee and executives are satisfied with the condition, but also the shareholders can enjoy higher return in their investments.

A new supply chain management called vertical integration was brought to Ford Motor Company by its Director of Supply Chain Systems, Teri Takai. This system is well-proven by many companies in electronic/information system industry, notably by computer giant Dell. However, it created a dilemma within the company because the idea's opponents argued that Dell had far less complex organization compared to Ford. From supplier, manufacturer, customer, and product, Ford had completely different challenges than Dell. This group had a concern if the implementation would be very
difficult.

Throughout its life, Ford has continuously developed its own supply chain management by applying new techniques and technologies. Five already established supply chain systems at Ford from Ford Production System (FPS) to Ford Retail Network (FRN) have been implemented throughout the nation to improve revenue. However, these systems have not been able to match the performance of its competitors especially those originated from Japan like Honda, Toyota, and Nissan. Teri Takai wanted to understand the uncertainty and risk of the application of Dell's vertical integration at Ford.

Implementation of vertical integration at Ford can create controversy in the company. Using Dell as an analog from different industry may not be the proper way to follow the vertical integration. However, this model should be a universal technique for any types of company who needs to improve efficiency from production, operations, to sales. Tweak and adjustment of the system may take place in order to create a hybrid model of vertical integration. Ford can benefit by better position itself in the marketplace. Therefore, modified system of vertical integration can eventually assist Ford to achieve its goal in meeting customer and stakeholder's satisfaction.

Ford vs Dell

This essay will compare and contrast Ford's supply chain management model with Dell's, including challenges and issues surrounding the 2 approaches, areas of compatibility, and ways in which Ford can leverage directly from Dell's SCM success.

In efforts to cope with fluctuations in market demands and supply chain uncertainties, both Ford