Introduction
Ford Motor Company is a world leader in the automotive industry and in the production of related products and services, as well as in new industries such as astronautics, financial services, and communications. The company’s paramount mission is to constantly enhance its products and services to meet the needs of its customers, which allows its business to thrive. This paper will focus on the Ford Escape, Edge, and F-150 to examine the company’s portfolio, including its supply chain management, competitive advantages, quality and excellence, inventory methodologies, and other issues that are critical for understanding Ford’s performance and potential.
The organization, Types of Goods Sold, and Industry
Ford Motors Company is one of the largest American and world automakers. Named after its founder Henry Ford, the company is known for its innovative and dynamic approach to production. Henry Ford was the first in the industry to use such principles as standardization and assembly lines, which became known as Fordism. The workers received a living wage that allowed them to buy the products they manufactured.
The Ford Escape, Edge, and F-150 are the latest representatives of Ford Motors sold worldwide. The first two models can be characterized as highly competitive and comfortable due to several built-in high tech innovations. While the Escape is sporty and has an increased cargo capacity, the Edge is larger and has car-like handling. In turn, the Ford F-150 is a full-size pickup with best-in-class towing as well as high capability and efficiency. Concerning Ford’s role in the global automotive industry, it is clear that the company is engaged in the production and sale of cars and trucks of different brands for different segments of the domestic market and for the world market.
The company takes fourth place in the list of the most valued automotive brands, as noted by a statistics portal (“Ford – statistics & facts,” 2016). The list is based on an evaluation of global companies. In general, the global automotive industry is highly competitive, especially due to such brands as Toyota, General Motors, Mercedes-Benz, etc. There are possibilities for improvements to make Ford more competitive.
Organization’s Supply Chain Characteristics
Ford’s Supply Chain Management (SCM) involves the organization, planning, control, and implementation of the flow of goods from design and procurement through production and distribution to users in accordance with market requirements and cost-effectiveness. The company uses a direct type of supply chain that consists of a focal company, suppliers, and customers participating in an external and/or the internal flow of products, services, finance, and information.
In this type of supply chain, as a rule, the focus company determines the structure of the supply chain and how relationships with counterparties in business are managed (Simchi-Levi, Schmidt, & Wei, 2014). At the same time, the Ford Escape, Edge, and F-150 supply chain are based on vertical integration, which implies the creation of subsidiaries to ensure pivotal inputs of resources. As a result, the company prevents the emergence of a situation where suppliers might gain control over it.
As for negotiation strategies, Ford representatives apply the principles of strategic interaction. Cooperation and conflict prevention are considered the key elements of this approach. For the performance of the supply chain, Ford utilizes the Aligned Business Framework (ABF). The company signs ABF agreements only with those rare partners that, in terms of technology and global activity, are distinguished by particularly high productivity and competitiveness.
The ABF agreement contains rules and methods for determining further cooperation between Ford and its ABF partners: for example, agreements on the timing of advance payment for engineering services and development, or the possibility of expanding equipment supplies or providing more transparent data (Simchi-Levi et al., 2014). Today Ford counts more than 65 ABF partners from different countries, as an ABF agreement is an important step in cooperation with Ford, and it opens up additional global business opportunities.
It might be noted that virtual integration is an area for improvement due to its high potential for embracing modern technology and implementing it in the production process (Heizer, Render, & Munson, 2017). This decision is likely to allow Ford to make use of worldwide platforms that would provide it with higher quality at lower costs and guarantee a vast range of sustainable parts and systems. One option for improvement lies in the company’s accumulated experience, which should play a decisive role in the choice of suppliers, especially with regard to cost issues, supply quality, and the ability to innovate.
Approach Used To Maintain a Competitive Advantage and the Global Business Operations Strategy
Previously, Ford developed its production in stages: the product planners developed a general concept, which was then organized as a team of designers. After that, technological specifications were developed, from which prototypes emerged. When representatives of this technology chain united to form competing teams for joint work, benchmarking allowed structural and technological miscalculations to be eliminated immediately, rather than at the end of the process (Flamholtz & Randle, 2012).
Component suppliers were also involved in the development process. As a result, a drop in the models’ cost and the consolidation of a high level of quality was achieved already at the development stage. Changes have also affected the production process. Benchmarking found a high cost of assembly processes in comparison with competitors. To solve this problem, some ideas were borrowed from competitors, but attention was primarily paid to the recommendations of the workers themselves by utilizing circles of quality.
The One Ford initiative introduced by Alan Mulally, the former president and CEO of Ford Motor Company, eventually became the corporation’s official strategy, thus creating a unified global strategy (Gallo, 2014). This endeavor involved both a technical approach entailing the maximum unification of the model range and the formation of a vision for Ford employees and potential customers. According to Mulally, these points are incredibly important for all aspects of the business, from the development of new cars to their sale and maintenance (Flamholtz & Randle, 2012).
The system of benchmarking is distributed throughout the company far beyond the development of one model. The recommendation is to reconsider the firm’s corporate culture, as the current agenda item is a new stage of benchmarking: to move from copying technology or racing for a leading position in the industry to widen the gap between Ford and other competitors.
Organization’s Production Processes, the Customer Interaction with Those Processes, and the Technologies Used in Production
By developing its assembly line, Ford focuses on innovation and expands its manufacturing capabilities. The use of groundbreaking technologies helps to renovate the production processes that were first suggested by Henry Ford at the corporation’s outset. Material Planning and Logistics (MP&L) coordinates the production of the models that were mentioned earlier in this paper. According to this approach, the synchronous information sent to different plants is the key to success. It also manages the organization of communication between the company’s departments and plants, thus enabling and optimizing a global supply chain based on the proper level of collaboration.
Vehicle Operations Manufacturing Engineering (VOME) is responsible for the procurement, installation, design, and implementation of projects. In turn, Powertrain Manufacturing Engineering (PTME) prepares and introduces state-of-the-art manufacturing practices in the production of power trains. The Plant Operations unit serves to promote engineers’ continuous learning and the distribution of Ford models.
An advanced manufacturing technology, namely Ford Freeform Fabrication Technology (F3T), was developed to preserve energy and promote environmentally friendly production. The company’s Research and Innovation Center developed this technology, focusing on a 3-D shape and CAD data to revolutionize stamping processes. This innovation appears to be quite relevant to today’s requirements in the field of production and in view of widespread environmental consciousness. a review of recent literature and official sources revealed no customer interaction with Ford’s production processes or technologies, however. This represents an area ripe for enhancement through communication with customers.
Organization’s Commitment to Quality and Excellence, as well as the Processes Used for Measuring Quality
Ford, and more precisely, the production of the Ford Escape, Edge, and F-150, is directly associated with quality and excellence. As stated on the company’s official website, “quality is responsible for driving continuous improvement to deliver top quality products and services to delight customers” (“Strategy and governance,” 2016, para. 11). The commitment to quality is expressed via processes known as Product Development Quality Functions and Programs, Manufacturing Quality, Global Product Development System, Failure Mode Avoidance, and so on.
All of these approaches and models utilize processes, methods, and templates accepted for the operation of Ford Motors. The company also applies lean analysis processes and other measurement tools to evaluate design along with deployment. In general, Ford employs an integrated approach to quality measurement, thus ensuring commitment to excellence in all areas of production and performance.
To achieve success, Ford’s leadership considers constant improvement extremely important. They strive for better results in everything they do, including products, reliability and value, services, and people, as well as competitiveness and profits. Employee involvement is another essential point that should be noted (Heizer et al., 2017). The company perceives its employees as a team and promotes mutual trust and respect between them. Dealers and suppliers are viewed as partners. Ford maintains mutually beneficial relations with its dealers, suppliers, and other business associates. A possible suggestion would be for a more comprehensive measurement tool to be developed in order to meet modern market requirements.
Organization’s Inventory Methodologies and Model(s) along with Areas for Improvement
Just-in-Time (JIT) Inventory Control can be identified as the company’s inventory model. Its primary feature is a division of labor and specializations, the reduction of large processes into minute operations, and mass production with a forced labor rhythm on the basis of a conveyor (Stadtler, Kilger, & Meyr, 2015). An equally important element of Fordism is the organization of designing and testing machines to improve the production facility.
Henry Ford was not the first to discover the principle of sales volume advantage, but he was the first to apply this principle with high efficiency. To produce with minimal expenditure of materials and human strength, and to sell with minimal profit, is the guiding principle of the company. The methodology used by Ford Motors involves straight-line depreciation, assets, and investments. In sum, it integrates the company’s initiatives aimed at enhancing the company’s position in the global market in the face of ever-changing requirements.
One of the areas for improvement is an increase in the efficiency of the supply chain through the application of modern integrated logistics management technologies as a key to further development and increased competitiveness for the company. Both of these elements play a significant role in building a reliable supply chain that can ensure the maximum satisfaction of customers’ needs. The optimization of the supply chain is, first of all, a reduction in losses (Heizer et al., 2017).
To this end, the supply chain should respond quickly to changing circumstances, ensure rapid movement of goods, be transparent in terms of information, and facilitate close integration of the company with its suppliers and counterparties. The primary emphasis must be put on improving the flow of products and services throughout the supply chain, thus allowing the company to achieve a high level of transparency in the supply chain, which will result in reduced processing times for orders, quicker provision of services, and effective management of material resources. In analyzing these points in more detail, it is clear that the strategic and holistic management of the supply chain must be continuously improved.
Organization’s Operational Planning Policies, Job Designs, and Work Environment Issues
Among the factors that affect Ford’s operational planning policies are economic, political, ecological, and technological factors. For example, global crises and global warming significantly impact the decisions Ford makes in the course of its operations. The company’s Operations Management (OM) focuses on several areas, such as the appropriate design of goods and services, location strategy, quality management, and so on. The company considers global consistency as the target it seeks to achieve and sustain.
In order to attract and retain employees, Ford Motor Company seeks to create adequate working conditions and job designs. Every level of the company offers good perspectives for work and professional growth while also focusing on diversity awareness. The company accepts equal opportunity, mutual trust and respect, and value recognition as important elements of its attitude toward employees in an affirmative action framework. As for work environment issues, Ford strives to ensure comfortable and engaging conditions for its employees by promoting cooperation, communication, respect, and work-life balance. Greater attention to employees’ concerns may improve work environment issues.
Organization’s Movements Toward Lean Processes and the Effects of Those Processes on Culture, Efficiency, and Success
Ford is a company known for its commitment to a high quality by using innovative products and implementing Total Quality Management (TQM) to achieve its goals. This company has a reputation as one of the leading high-end automakers, but it did not always enjoy this reputation, and the long journey to its present status is several decades old. There are four major factors that prompted Ford to begin implementing a Lean System and Six Sigma approach.
The first lean process entailed a price drop since Ford’s former production process was surprisingly expensive. Having implemented the Six Sigma methodology, the company refused to use resources that were not needed. The second issue concerns the improvement of quality (Evans & Lindsay, (2013). Ford has always been known for the high quality of its products, and the company’s performance standards are regularly revised. While for many companies, a quality level of 99 percent is considered acceptable, Ford aims to achieve the Six Sigma quality level, which is 99.99966 percent and higher (Stadtler et al., 2015). Therefore Ford exerts considerable effort toward improving quality through Six Sigma methods.
Customer satisfaction is another factor that drives efficiency and the culture of Ford’s employees and employers. The satisfaction of consumers with each product is as important for success as the product itself. It goes without saying that there is an inextricable link between defects and customer satisfaction. Defects inevitably lead to consumer dissatisfaction, so the company has implemented the principles of Six Sigma to optimize their processes and eliminate production problems.
All these innovations, in combination, lead to the company working more productively and to higher indicators of customer satisfaction primarily by reducing environmental impact through the limited use of hazardous chemicals. In the philosophy of Six Sigma, there is a quite careful attitude to the environment, and Ford closely monitors the results of activities that can have a negative impact on the environment. By switching to a green work culture with the help of Six Sigma, the company was able to cut costs for treatment plants, improve their quality, and increase the level of customer satisfaction by demonstrating its attitude toward the environment.
Despite these difficulties, Ford has managed to achieve significant savings by optimizing processes and eliminating losses associated with them over recent decades. It solved the problem of defects by applying the methods of Lean and Six Sigma. The company should become more customer-oriented and expand its awareness of organizational culture and factors affecting efficiency, thus leading to increased success.
Conclusion
To conclude, it should be emphasized that Ford Motors is a successful company operating in the automotive industry worldwide. This report found that Ford takes a leading position due to production and management principles introduced by Henry Ford and then revolutionized by the company’s CEOs. In particular, Ford is known for its effective supply chain, Aligned Business Framework (ABF), lean management, Total Quality Management (TQM) initiatives, and other tools, allowing the company’s commitment to quality and excellence to be maintained. In sum, Ford Motors utilizes past principles and modern technology and approaches to remain highly competitive and meet customers’ expectations.
References
Evans, J. R., & Lindsay, W. M. (2013). Managing for quality and performance excellence. New York, NY: Cengage Learning.
Flamholtz, E. G., & Randle, Y. (2012). Corporate culture, business models, competitive advantage, strategic assets and the bottom line: Theoretical and measurement issues. Journal of Human Resource Costing & Accounting, 16(2), 76-94.
Ford – statistics & facts. (2016). Web.
Gallo, C. (2014). Steve Jobs and Alan Mulally unleashed innovation with two simple words. Forbes. Web.
Heizer, J., Render, B., & Munson, C. (2017). Operations management: Sustainability and supply chain management (12th ed.). New York, NY: Pearson.
Simchi-Levi, D., Schmidt, W., & Wei, Y. (2014). From superstorms to factory fires: Managing unpredictable supply chain disruptions. Harvard Business Review, 92(1), 96-101.
Stadtler, H., Kilger, C., & Meyr, H. (2015). Supply chain management and advanced planning: Concepts, models, software, and case studies (5th ed.). Berlin, Germany: Springer.
Strategy and governance. (2016). Web.