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FORD MOTOR

COMPANY:
SUPPLY CHAIN
STRATEGY

INTRODUCTION
Teri Takai, Direktur Pasokan Sistem Rantai
merenungkan rekomendasi untuk eksekutif senior.
Pertanyaan yang diajukan sangat penting untuk
masa depan Ford:
Bagaimana seharusnya perusahaan menggunakan:
Munculnya teknologi informasi (internet)
ide dari industri teknologi baru untuk mengubah cara
berinteraksi dengan pemasok

PERBEDAAN PENDAPAT
Beberapa berpendapat bahwa teknologi baru
membuatnya tak terelakkan bahwa model bisnis
yang baru akan menang
Ford perlu untuk mendesain ulang secara radikal
rantai pasokan dan kegiatan lain atau risiko yang
tertinggal
disukai "integrasi virtual"
pemodelan rantai pasokan Ford pada perusahaan seperti
Dell

EXHIBIT:
DELL AND FORD COMPARED

Traditional Model
Suppliers

Manufacturer

order

Distribution
Channel

Customers

delivery

Direct Model
order

Suppliers

Dell

Customers

delivery

PERBEDAAN PENDAPAT
Kelompok lain lebih berhati-hati, percaya
bahwa perbedaan antara bisnis mobil dan
bisnis yang relatif baru
(Yaitu, komputer manufaktur) yang penting
dan substantif
jaringan pemasok Ford memiliki lebih
banyak lapisan dan perusahaan
Pembelian organisasi memainkan peran
yang lebih menonjol dan independen dari
memiliki Dell

ENTERPRISE MODEL
COMPARISON
Dell
Operating Principles

Customer
Intimacy

Demand
Pull

Velocity

Virtual
Integration

Ford
Breakthrough Objectives/Key Initiatives

Demand to Delivery
Ford Retail Network
Ford Production System
Order to Delivery
Supply Chain Mgmt. Leadership

Order to Delivery
Ford Product Development System
Fixed to Variable Cost Shift
Modular Assemble
Extended Enterprise

DELL TELAH DISAMPAIKAN


PADA DIMENSI INI,
MENURUT ANDA METODE
YANG SAMA AKAN
MEMBERIKAN HASIL
UNTUK FORD?

COMPANY AND INDUSTRY


BACKGROUND
Based in Dearborn, Michigan,
Second largest industrial corporation in the world
Revenues of more than 144 billion
About 370,000 employees
Operations spanned 200 countries.

Memperoleh pendapatan dan laba yang signifikan dari


anak perusahaan jasa keuangan, bisnis inti tetap
membuat desain dan mobil untuk dijual di pasar
konsumen

Since Henry Ford had incorporated in 1903, the


company had produced over 260 million vehicles.

LAST TWO DECADES

(INDUSTRY GREW MORE


COMPETITIVE )
Big Three U.S. automakers
General motors (GM)
Ford
Chrysler

Foreign-based auto manufactures


Toyota
Honda

Mengalami peningkatkan kelebihan kapasitas


Keuntungan dalam industri ini cepat mendunia

BAGAIMANA FORD DAN


PERUSAHAAN LAINNYA
BISA MENINGKATKAN
KUALITAS DAN
MENGURANGI SIKLUS
WAKTU SEMENTARA
SECARA DRAMATIS
MENURUNKAN BIAYA
PENGEMBANGAN DAN
BANGUNAN MOBIL?

FORD 2000
Restrukturisasi ambisius, mulai tahun 1995
Termasuk menggabungkan Amerika Utara, Eropa, dan
operasi internasional otomotif untuk menjadi sebuah
organisasi global yang tunggal

Menyerukan pengurangan biaya dramatis untuk


organisasi perusahaan dan proses dengan cara:
Rekayasa ulang
Globalizing

FORD 2000
pengembangan produk dikonsolidasikan
ke dalam lima Vehicle Centers (VC)
masing-masing bertanggung jawab untuk
pengembangan kendaraan di segmen pasar konsumen
tertentu

Membuat proses dan produk umum


secara global
menghilangkan redudansi
Menyadari ekonomi skala

BAGAIMANA MEMBUAT
PROSES DAN PRODUK
GLOBAL UNTUK
MEMBANTU
MENINGKATKAN PRODUKSI
FORD, DAN APA ITU
ECONOMY OF SCALE ?

ECONOMIES OF SCALE

Sebuah teori ekonomi yang menyatakan bahwa biaya marjinal


pabrik untuk produksi menurun karena operasi pabrik meningkat.
Semakin banyak Anda menghasilkan, semakin sedikit biaya untuk
setiap unit tambahan. Misalnya, pabrik yang memproduksi 1.000
mobil akan lebih efisien daripada memproduksi lima mobil.

FORDS NEW GLOBAL


APPROACH
Teknologi dipekerjakan untuk mengatasi kendala yang biasanya
disebabkan oleh geografi
Tim di benua yang berbeda diperlukan untuk dapat bekerja
sama seolah-olah mereka berada di gedung yang sama
Dalam setiap proyek rekayasa ulang, teknologi informasi (TI)
sangat penting dikerahkan untuk meningkatkan aliran material

APA SAJA PROSES YANG


DILAKUKAN PERUSAHAAN
BESAR SUPAYA PROYEK
REKAYASA ULANG YANG
BESAR DAPAT DIMULAI?

FORD 2000
Revolusi Internet:
menciptakan kemungkinan-kemungkinan baru untuk
rekayasa ulang proses antar perusahaan

Ford meluncurkan situs internet publik pada


pertengahan 1995
Pada pertengahan 1997< kunjungan lebih dari 1
juta per hari
Sebuah seluruh perusahaan Intranet pertengahan
1996
Januari 1997 business-to-business (B2B)
Potensi perpanjangan dari Extranet

CREATING CONSISTENCY
Ford bekerja sama dengan Chrysler dan General
Motors untuk bekerja di Automotive Jaringan
Exchange (ANX)
Mengapa penting?
Jaringan bertujuan untuk menciptakan konsistensi
dalam standar teknologi dan proses dalam jaringan
pemasok
Pemasok:
Ditekan untuk biaya yang lebih rendah
Interaksi akan sama

END OF 1998
Profits of 6.9 billion
Employees enjoyed record profit sharing
Return on sales (3.9 percent in 1997)
trending solidly upward

World leader in trucks


Taken over the U.S. industry lead
profit per vehicle ($1,770) from Chrysler

Most improved automaker on the 1997 J.D.


Power Initial Quality Study
(in fourth place overall behind Honda, Toyota and
Nissan).

FORDS EXISTING
SUPPLY CHAIN AND
CUSTOMER
RESPONSIVENESS
INITIATIVES

EXISTING SUPPLY BASE


As the company had grown over the years,
so had the supply base
In the late 1980s: there were several
thousand suppliers of production materials
in a complex network of business
relationships
Suppliers were picked primarily on the
basis of cost, little regard was given to:
overall supply chain costs
complexity of dealing with such a large network
of suppliers.

HOW COULD FORD


IMPROVE ITS EXISTING
SUPPLY BASE?

EXISTING SUPPLY BASE


Beginning in the early 1990s:
Shifted toward longer-term relationships
with a subset:
tier 1
tier 2
below suppliers.

Ford made its expertise available:


just-in-time (JIT) inventory
total quality management (TQM)
statistical process control (SPC)

FORD PRODUCTION
SYSTEM
Ford 2000 initiative produced five major,
corporationwide reengineering projects
One was Ford Production System (FPS)
Aimed at making Ford manufacturing operations:
Leaner
more responsive
more efficient

FORD PRODUCTION
SYSTEM
Aspired to level production and move to a more pullbased system, with:
synchronized production
continuous flow
Stability

throughout the process

WHAT WAS FORDS


INTENTIONS WHEN
REENGINEERING ITS
PRODUCTION SYSTEM,
AND HOW WERE THEY
GOING TO DO THIS?

EXHIBIT 2
MOVING FROM PUSH TO
PULL
Process

Design
Vehicle
combinations

Marketing

Push

Pull

Design strategyPlease everyone


Mainstream customer
More is better wants minimal

Pricing strategy Budget-driven Market-driven


Vehicle purchase

Higher

Lower

Incentives

Manufacturing

Capacity planning

Multiple material/

and supply

Market-driven and

capacity constraints,

(no constraints FPV/

Driven by program

CPV* + 10% for

Budget

vehicle, +15 for


components

Schedule and build

Maximize production

Schedule from

make whatever you

customer-driven order

can build

bank, build to
schedule

EXHIBIT 2
MOVING FROM PUSH TO
PULL
Process
Dealer network

Push

Pull

Dealer ordering

Orders based on
Allocations and
Capacity constraints

Orders based on
customer demand

Order to delivery
times

Longer (60 + days)

Shorter (15 days or


less)

Inventory

High with low


turnover

Low with rapid


turnover

Dealership model

Independent
dealerships,
negotiations with
company

Company-controlled
dealerships (Ford
Retail Network)

ONE IMPORTANT PART OF FPS


WAS SYNCHRONOUS MATERIAL
FLOW (SMF)
Ford defined as a process or system that
produces a continuous flow of material and
products driven by a fixed, sequenced, and
leveled vehicle schedule, utilizing flexibility
and lean manufacturing concepts.
One key to SMF was In-Line Vehicle
Sequencing (ILVS):
used vehicle in-process storage devices (such as
banks and ASRSs) and computer software to
assure that vehicles were assembled in order
sequence

ORDER TO DELIVERY
The purpose of OTD:
reduce to 15 days from 45 to 65 days

Pilot studies in 1997 and 1998 identified bottlenecks


throughout Fords supply chain:

Marketing
material planning
vehicle production
transportation processes

FORDS APPROACH TO
IMPLEMENTING AN IMPROVED
OTD PROCESS
(1) ongoing forecasting of customer
demand from dealers
(2) a minimum of 15 days of vehicles in
each assembly plants order bank
to increase manufacturing stability

(3) regional mixing centers that


optimize schedules and deliveries of
finished vehicles via rail transportation
(4) a robust order amendment process

to allow vehicles to be amended for minor color


and trim variations without the need to submit
new orders

FORD RETAIL NETWORK


July 1, 1998, launched first Ford Retail
Network (FRN) in Tulsa, Oklahoma
under the newly formed Ford Investment
Enterprises Company (FIECo).

Two primary goals:


(1) to be a test bed for best practices in retail
distribution and drive those practices
throughout the dealer network
(2) to create an alternative distribution
channel to compete with new, publicly owned
retail chains such as AutoNation.

COMPARATIVE METRICS
(LATEST FISCAL YEAR)
Ford
Dell

Automotive

Financial Services

Employees

16,100

363,892

Assets ($millions)

4,300

85,100

194,00

Revenue ($millions)

12,300

122,900

30,700

Net income ($millions)

944

4,7000

2,200

Return on sales

7.7%

3.8%

7.2%

Cash ($millions)

320

14,500

2,200

Manufacturing facilities

3 (Texas, Ireland, Malaysia) 180(in North and South


America, Europe,
Asia, Australia)

Market capitalization ($millions)

58,469

66,886

Price-earnings ratio

60

10*

5yr average revenue growth


5yr average stock price growth

55% per yr

6% per yr
133% per yr

33.4% per yr

DELL AND FORD


COMPARED
Dell Processes Ford
Suppliers own inventory until it is used in production
Suppliers maintain nearby ship points; delivery time 15 minutes to 1 hour

External logistics supplier used to manage inbound supply chain

Customers frequently steered to PCs with high availability to balance


supply and demand

Demand forecasting is criticalchanges are shared immediately within Dell


And with supply base
Demand pull throughout value chaininformation for inventory substitution
Focused on strategic partnerships: suppliers down from 200 to 47
Complexity is low: 50 components, 8 10 key, 100 permutations

ENTERPRISE MODEL
COMPARISON

Ford
Breakthrough Objectives/Key Initiatives

Dell
Operating Principles

Customers
Customers
order

Dealers
delivery

Sales

OT
D

Order
Mgmt

FPDS
Bill of
Material

R&D
Assembly

DTD
Outbound
Logistics

Commodity
Suppliers
Component
Suppliers

Ford Retail
Network

FP
S
FP
S
CFOP

Plan/Site
Operations
Inbound
Logistics
Suppliers

Supply
chain
Leadership

THE END
Any questions?