OPERATIONAL MANAGEMENT OF

FORD MOTORS CORPORATION

HAZARA UNI HARIPUR
SUBMITED TO:SIR SHERAZ AHMED
SUBMITED BY:MUHAMMAD HASSAN Roll No 1872

DEDICATION
Our work is dedicated to our beloved
Parents, teachers, brothers, sisters and all
of our well wishers.

Acknowledgements
BISMILLAHHIR RAHMANIR RAHIM.
First of all we would like to great thank our ALMIGHTY ALLAH for
His Blessing, which gave us patience to do this important research
successfully.
Secondly we want to thank our respective course teacher Mr. Sheraz
Ahmed for his co-operation. Despite his busy schedule, he has
helped us a lot to prepare the assignment. Our whole research was
based on his proper guidance and framework. This study gave us a
chance to look into the operation of a globally successful companyFord Motors
Corporation.
We also like to thank those web developers who develop the web
sites which help us to make our concern.

Contents Table
1. Executive SummaryPage:1-2
2. Operational Management..Page:3-4
3. Operational Managers..Page:4-5
4. Issues for Operational Management ...Page:-6
5. Ford Motor Company ..Page: 7
6. Operational Strategy Page:7
a. Introduction to Field .Page:7-15
7. Operational Strategy and Managing Change.Page:15
a.

Operational Strategy and Competitiveness Page: 15-

b.

Product Design and Process Selection. Page: 16-

16

20
c.

Process

Analysis.Page:20-24
d.

Process Analysis and Process Selection Manufacturing..:

e.

Product Development............................................Page:

f.

Total Quality ManagementPage:31-

g.

Business Re engineering...Page:33-

24-28

28-31

32

35

8. Supply Chain Management..Page:3536

a.

Supply Chain Strategy.Page:35-

b.

Just In Time (JIT)..Page:36-

36

41
9. Planning and Controlling Supply Chain DesignPage: 41
a.

Strategic Planning of Ford Motors.Page:41-

b.

Customization or Synchronization and Ford...Page:

c.

Aggregate Sale and Sales ForecastingPage: 47-

42

42-47

48
10. Conclusions....Page:4849
11. Recommendations..Page: 4950
12. References.....Page: 50

While a turnaround at the Ford Credit subsidiary bolstered the company's

income, automotive operations, especially the international arm, continued to
struggle. James J. Padilla, elected chief operating officer in 2004, and William
Clay Ford, Jr., indeed faced a long road ahead. Restoring Ford's image and
getting the company back on a successful financial path.

Ford Model A (190304)

The original Ford Model A is the first car produced by Ford,

beginning production in 1903. Ernest Pfennig, a Chicago
dentist, became the first owner of a Model A on July 23,
1903. The car came as a two-seater runabout for $800 or the
$900 [4] four-seater tonneau model with an option to add a
top. The horizontal-mounted flat-2, situated amidships of the
car, produced 8 hp (6 kW). A planetary transmission was
fitted with two forward speeds and reverse, a Ford signature
later seen on the Ford Model T.

The car on the left is owned by Norm & Bernice Bunko,

The car on the right is owned by Buzz and Shirley Philips
The 51 Ford is featured below but the one on the right is a
creation of Buzz Philips. For years he has been installing
new stuff on old Ford and Chevys, I The looks of a 50 Ford
but a1995 T Bird running gear & amenities without all the
modifications

1929 Ford Model A Station Wagon

This "Woody" is a 1929 Ford Model

Station Wagon.
These bodies were assembled by other
companies using Ford supplied parts.
The wood body was made of maple and
birch.

2015 Ford Mustang

The Ford Mustang is an American automobile

manufactured by Ford. It was originally based on
the platform of the second generation North
American Ford Falcon, a compact car.
The original 1962 Ford Mustang I two-seater
concept car had evolved into the 1963 Mustang
II four-seater concept car which Ford used to
pretest how the public would take interest in the
first production Mustang.

OPERATION STRATEGY AND

MANAGING CHANGING
Operation Strategy and
Competitiveness
Global Manufacturing Strategy Gives Ford Competitive
Advantage
Ford Motor Company is the only automotive manufacturer executing a truly
global power train strategy. Beginning with the launch of the new Ford F-150, we
are building a network of flexible engine and transmission plants that can
respond quickly to changing market needs, while improving quality and
manufacturing efficiency. This is the most dramatic change in power train
manufacturing since the introduction of the assembly l Operations

Three main elements are

Fords flexible manufacturing strategy for power trains:

Common engine architectures; commonized manufacturing facilities;

Modern, flexible, numerically controlled machine tools (CNC machines)

that can be easily retooled and reprogrammed to perform new tasks with
minimal disruption to production.

Product Design and Process Selection

Product Design

Design

Technology

Safety

Environment

Quality

Design
Our world-class designers and engineers create groundbreaking cars, trucks,
SUVs and performance vehicles all over the world.
Technology
Ford's technology and manufacturing advances have reduced injuries, improved
vehicle quality and brought vehicles to market more quickly.
Safety
Vehicle safety is integral to our heritage. Ford is pioneering new frontiers in
safety with

Environment
We are committed to delivering a more sustainable planet through best-in-class
fuel efficiency.
Quality
We have a global set of disciplined, standardized processes aimed at making us
the worlds leader in automotive quality.
ENVOIRMENT AND INNOVATION

Toyota Motor Corporation All-new Ford Focus Electric is the first fuel-free,
rechargeable passenger car from Ford and one of five new electrified
vehicles Ford will deliver by 2013 in North America and Europe

Focus Electric will offer a mile-per-gallon equivalent better than Chevrolet

Volt and competitive with other battery electric vehicles

The all-electric Focus is capable of fully recharging in three to four hours

at home using the available wall-mounted 240-volt charge station
charging in half the time of the Nissan Leaf

The new Focus Electric offers value charging, powered by Microsoft, to

help owners in the U.S. charge their vehicles at the cheapest utility rates,
lowering the cost of ownership

Focus Electric provides a special version of MyFord Touch driver connect

technology especially for electric customers and introduces MyFord Mobile, a
smart phone app and website for monitoring key vehicle functions and charge
settings while mobile
Electric Vehicles will bring about new ways of refueling. Instead of topping off the
tank with gasoline, customers will plug in, and Ford is working with its supplier
partner, Yazaki, to make this a natural and

comfortable experience.
The two companies used internal ergonomic studies to design the convenience
cord, drawing inspiration from hockey sticks, curling irons and tennis racket
handles. While most owners are expected to recharge the zero-emissions, gasfree Focus Electric at home with an optional wall-mounted 240V charging station,
they also will have the ability to recharge at remote locations with a standard
120V convenience cord. Both types of connectors will use an industry-standard
five-point plug fitted with an ergonomic Ford-branded handle specially designed
for comfort and durable daily use. Owners of Focus Electric will recharge the
cars onboard lithium-ion battery pack by plugging the convenience plug or
charge station plug into the vehicles charge port.

The Ford Focus Electric, which debuts in late 2011, will bring enhanced
recharging flexibility with a 120V convenience cord to allow users to recharge the
all-electric vehicle at remote locations; the convenience cord will serve as a
backup to an optional 240V home charging station. Focus Electric is one of five
new electric vehicles Ford will deliver over the next three years in North America
and Europe; it will be built at the Ford Michigan Assembly Plant.

When plugged in, the vehicles onboard charger converts the AC power from the
electric grid to DC power to charge the liquid-cooled battery pack. A full recharge
is expected to take six to eight hours with a 240V charge station or more than 12
hours with a 120V convenience cord set. When fully charged, Focus Electric is
expected to deliver up to 100 miles of gas-free driving more than enough for
most U.S. commuters, who average 40 miles per day.

Like most household electrical plugs, Focus Electrics cord set connector has
three pins at the end that plug into a standard outlet.

But the similarities stop there. The end that connects with the car has five pins,
including one that communicates with the vehicle about the type of electrical
current (120V or 240V) it is requesting and another pin that deactivates the
current when the user disconnects the plug from the charge port.

Focus Electrics convenience cord will be 25 feet long, making it long enough to
reach the nearest outlet, eliminating the need for an extension cord. When not in
use, the user can spool the cord around a special oval-shaped holder that also
accommodates the cords control box. The spooled cord will have a designated
spot in the vehicles trunk.

Between plugging in and unplugging at home, work or other places, Focus

Electric owners are likely to recharge their vehicles two to four times each day
(nearly 1,500 times a year) compared to once a week for gassing up (52 times a
year). With a Focus Electric owner in contact with the connector so many times,
Ford conducted an ergonomic study to help determine plug handle design, as
well as charge port height and insertion angle. Study participants who ranged
from petite adult females to larger adult males, ages 21 to 61 tested a variety of
plug handle prototypes.

Ford supplier partner Yazaki conducted extensive and durability tests on Focus
Electrics cord set connector, including an insertion/extraction study of 10,000
cycles to assess the durability of the interaction between the handle and plug.
For every thousand insertions, testers dunked the plug into a sandy salt water
solution to add grit to the connectors and they repeatedly dropped the handle
and rolled over it with a car tire to test its durability. Testers also subjected the
cord set connector to ambient extreme temperature increases.

Process Analysis
Ford Engine Architectures Are the Building Blocks
Fords new I-4 family represents a good example of the companys approach to
modularly designed engine architectures, and shows how a modern engine can
be designed in advance to meet many needs.
Changes in cylinder bore and cylinder head configuration can produce more than
100 variants of the I-4, each suited to a specific vehicles characteristics. The 2.3liter engine built at the Dearborn. Engine Plant is optimized for low-speed torque
for the Ford Ranger compact pickup. Another variation, optimized for quick
acceleration and small-car performance feel, powers the new Mazda6 sedan.

At the upper range, Fords modular V-8 and V-10 family of engines is well
established. The modular engine family includes the 4.6-liter and 5.4-liter V-8
engines in both single- and dual-overhead-cam versions, as well as the 6.8-liter
V-10.
Built in both cast iron and all-aluminum versions, redesigned modular V-8
engines are being introduced this year for six new products: the all-new 2003
Lincoln Aviator, 2003 Lincoln Navigator, 2003 Mercury Marauder, 2003 Ford
Mustang Cobra, 2003 Mustang Mach I and 2003 Ford Expedition. The newest
addition to the V-8 modular family will be

the 3-valve, 5.4-liter Triton engine for the all-new Ford F-150 pickup.
Standardized Facilities Maximize Best Practices, Reduce Costs
Common plant layouts and manufacturing practices are key enablers for the
flexible manufacturing strategy. Ford Motor Company is the only automotive
manufacturer executing a truly global power train strategy, in which engine plants
thousands of miles apart are getting the same floor plans the same
manufacturing machinery in the same layouts in order to standardize
production.
New flexible manufacturing process is completed engine plants at Cleveland,
Ohio, and Dagenham and Bridgend in the United Kingdom will be nearly
identical.
Fords new global I-4 engine, which just launched production, is being built at
four plants globally, on three continents, and serves as a baseline for successive
manufacturing programs.
Commonality to this level of detail means that Fords engineers can apply best
practices from previous installations to each new engine plant. Commonality also
brings plant launches into full production much more quickly.

Ford Motor Companys newest flexible CNC machine-based processes can react
quickly to changing production needs. The new CNC machining processes have
been installed at the Windsor plant to manufacture cylinder heads. They also are
scheduled for installation at Fords Cleveland Engine Plant No. 1 and Dagenham
and Bridgend engine plants in the UK, in late 2003.

Rather than requiring a complicated process of removing old-style dedicated

milling or boring machines and installing new ones which can interrupt

production for months the new machines can be retooled and reprogrammed
internally, with little or no interruption in production. In many cases, this
reprogramming can be accomplished over a weekend.

New Database Improves Engine Quality

During production, each engine builds a sophisticated birth history that allows
plant engineers to track every stage of production starting even before major
components such as cylinder heads arrive at the engine plant.

This birth history is recorded on a microchip that travels with the engine, or data
is maintained in a database related to a bar code. Such

data include hundreds of metrics, including torque levels for specific bolts; crank
journal clearances; pressure test results; and the amount of torque it takes to turn
the crankshaft after all parts are bolted together.

If engineers learn that a small run of bolts from a supplier was substandard, for
example, it can track those bolts to the exact engines in which they were
installed, and call for repairs on those individual vehicles, rather than issuing a
broad recall, as was sometimes necessary in the past. Its not a needle in a
haystack anymore, new programs leader at the Windsor cylinder-head operation.
This has potential to save thousands of unnecessary replacements, and spare
customers considerable inconvenience.

Standardization Leads to Efficiencies

At the Windsor cylinder-head facility, each production module has 43 CNC
machines arranged in cells of up to six machines. Cell operators monitor
production at a computer workstation. Another benefit of this standardization is
that each operator knows how to run all of the machines theyre all the same
and not only can step in to other roles, but can trade information, concerns and
best practices with coworkers.

These identical CNC machines can perform any of a number of functions,

depending on need. That means diesel engine cylinder

heads could be manufactured at the same time as two-valve or multi-valve

gasoline engine heads, and each type would route itself to the machine that was
equipped with the proper tooling and programs.
Every new or reworked cutting tool is measured before it is put into service, and
that measurement is recorded in its memory chip. The computer-controlled
machine reads this data as it loads the tool, and automatically compensates for
any minor variation in tool sizes. A laser in each CNC verifies tool length every
time the tool is used in production. This assures that if the tool breaks or goes out
of adjustment, the machine doesnt continue to produce parts.

The degree of quality control that were is second-to-none verifying the quality of
build throughout the process. Faults cant pass down the line. With this degree of
integrity, we can target 100-percent right, first time.

Ford Motor Company

Process Analysis and Process Selection
Manufacturing
(Al Ver, Vice President of Advanced and Manufacturing Engineering,
Ford Motor Company)
By implementing VIMS, we can now locate exactly which vehicle we want or
need in a matter of seconds. Before we began using VIMS, the same process
could easily take hours. Knowing what you have and where it is within the
supply chain at any given time should be

straightforward. After all, it doesn't require sophisticated technology solutions to

see when a box is empty or when its full.

To meet these challenges, Ford Motor Company has adopted a wireless Real
Time Locating System (RTLS), which has been implemented at several of its
plants throughout North America and Europe. The system, from Where Net
Corp., the leader of wireless supply chain visibility solutions, is driven by wireless
tags, fixed position antennas, and Web-enabled software. This industrial
information system locates and tracks inventory using extremely low-power radio
frequency tags and a communications network. Antennas positioned inside and
outside the factory receive tag transmissions and deliver tracking information to a
computer. The system then identifies the location of the tag within 10 feet of its
exact position.

Ford initially implemented its Where Net system in February of 1998, to track
materials within a 250,000 square foot area of its Van Dyke facility in Sterling
Heights, Mich., which produces more than nine million components annually for
Ford cars and trucks. Utilizing the same local infrastructure of antennas, Ford
and Where Net then co-developed a wireless "call" system known as Where Call
to bring parts to the line as needed. To date, roughly 35 Ford Motor Company

manufacturing plants have begun to use the Where Call technology. Most
recently, Ford implemented a third application of Where Nets real-time locating
technologythe Vehicle Inventory Management System (VIMS). The use of
VIMS began as a pilot project in June 2000, at Ford's Michigan Truck Plant,
which assembles thousands of vehicles daily. The pilot was completed in
February 2001, and a version of the technology called Quick VIMS has been
rolled out to all manufacturing plants in North America.
Where Net Identifies any Specific Automobile Parked in a Lot of
Thousands
Finding your car in a crowded parking lot can be time-consuming and frustrating
even if you parked it there yourself. Imagine trying to locate a particular car in a
vast lot filled with two to three thousand nearly identical vehicles, and you can
understand the impetus behind the development of Where Soft Vehicle, a Where
Net-based Vehicle Inventory Management System (VIMS). This application
provides constant visibility and management of vehicles from final assembly to
shipping, making it easy to instantly locate specific vehicles to fulfill dealers'
custom orders or to identify any automobiles on hold for quality control.

"By implementing VIMS, we can now locate exactly which vehicle we want or
need in a matter of seconds," said Al Ver, Ford Motor Company vice president of
Advanced and Manufacturing Engineering. Before we began using VIMS, the
same process could easily take hours."
A single vehicle manufacturer may spend more than $1 million dollars each year
locating and managing inventory within its delivery chains. It is estimated that the
integration of VIMS will reduce the time that vehicles sit on the lot by at least one
day.
Where

Net

RTLS

Automates

Parts

Replenishments

Where Net and a Ford subsidiary, Ford Global Technologies, jointly developed a
special call functionality that has greatly improved the efficiency of traditional
material replenishment processes and has enhanced the capabilities of the
locating system. Ford now places
Where Call devices at assembly stations. When supply of a specific part reaches
a pre-determined replenishment level, the line worker presses the Where Call
button that sends a signal to re-stock that particular part so that the line will never
run out of parts. This process eliminates the need for replenishment workers to
travel routes to pick up Kanban cards. The system also eliminates some lag time
from the process, further minimizing line-side inventories.

When the Where Call button is pressed by an operator, a light on the unit flashes
10 times to confirm the transmission and the timer begins counting. With multiple
parts at some assembly stations, the timer helps remind workers which tags have
been activated and how much time has elapsed since each call was made.
During shift changes, this is extremely beneficial as it eliminates confusion and
potential overstocking of parts.

Using the same local infrastructure of antennas mounted in the plant ceiling that
pick up the Where Tag pings, the Where Calls message for parts is conveyed to
the Where Net server, which determines the location of the call and the part that
needs to be replenished. The data is then passed onto Ford's SMART System,
which in turn displays a message on a touch-screen

computer. The system ensures that drivers never have to leave the cabs of their
lift trucks as they receive the order, pull parts from inventory, and deliver them to
the exact location of the line-side operator who initiated the Where Call just a few
minutes before.
The wireless nature of Where Call offers tremendous flexibility and helps assure
that the line is reliably stocked with materials as needed, ensuring smooth
operation. Ford has achieved some impressive results through its use of Where
Net technology: More efficient use of labor, implementation cost savings of
approximately $200,000 to $500,000 per facility over hardwired systems, faster
installation that allows a facility to be online with the call system in a matter of
weeks, and proven reliability with performance approaching six sigma ratings.

As a testimony to this technological breakthrough, Ford Motor Co. awarded the

co-development team from Where Net and Ford with the Henry Ford Technology
Award in October 2000. Developing the call system application has helped Ford
engineers to leverage the benefits of the container locating system in new ways
with little additional investment, because the systems share the same
transmitting and receiving infrastructure. As Ford adds more applications, the
costs per application come down and the savings increase dramatically.

FORD FURTHER ACCELERATES PRODUCT

DEVELOPMENT WITH INDUSTRY-LEADING
TECHNOLOGY TO SPEED DESIGN PROCESS
Ford designers have been using computer imaging technology to digitally create
vehicles, cutting back on the time it takes to create new designs...
- High-resolution animations, life-size presentation screens and virtual cars that
come to life with a click of a mouse.

Faster, sharper and with higher quality, the latest digital design tools are being
utilized by Ford designers to further accelerate future product development - and
reduce costs.
The capability of the advanced design technology has transformed the Ford team
into a powerhouse of digital designers, helping expedite Ford's product
development
That's been a passion - and a vision - of in part, because digital tools bring more
flexibility to the design process. Designers, engineers and executives around the
globe can simultaneously review many different high-resolution product design
iterations - in any color, lighting condition or setting - without having to invest
weeks developing many clay models.

Ford designers have dramatically decreased development time to approximately

two weeks to complete the same process - a savings of nearly 70 percent.

The digital design revolution began in 2005 integrating new software to

revolutionize the process from the largely traditional hand modeling to a more
efficient digital process. Although extensive progress has been made with the
new digital procedures, this isn't a story about the elimination of clay modeling,
it's about creating a more cooperative relationship between traditional and digital
design methods.
Beyond Flat Screens
Forget the flat screens; Ford designers are using impressive digital highdefinition (HD) screens, known as powerwalls, to view life-size digital vehicles
with extreme detail.
Several screens have been installed in Ford design studios around the globe,
accelerating the globalization of product development at Ford Motor Company.

Power walls use HD rear-screen projection to enable review and refinement of

full-scale computer-rendered vehicle designs prior to fabricating physical
properties in foam, clay and fiberglass.
The technology also has made the review process more compelling and detailoriented. The photo-realistic computer-rendered images rotate and show driving
dynamics in realistic lighting, from any angle and in lifelike detail. Colors and
reflective surface textures in vehicle interiors can be changed with a click and
exterior views are equally eye-popping with close-ups.

Early implementation of the current technology was used in the development of

Ford's 2009 model year vehicles including the new Lincoln MKS luxury sedan.

The centerpiece of Ford's new power wall facilities is the Electronic Design
Presentation Room at Product Development Center in Dearborn, which features
a 60-foot-wide wall that accommodates three 20-foot-wide vehicle or technology
projections simultaneously.
"The Electronic Design Presentation Room is the pinnacle of power wall
technology," said Jeff Nowak, chief designer, Digital Core Team. "The facility
provides an effective forum for group discussions and executive reviews that are
difficult to do over a 20-inch computer monitor. The reviews are more thorough,
and we're able to deliver even better designs as a result."

Bringing Design to Life

Ford's modeling team now includes digital sculptors as well, bringing sketches
from ideation to full-size models using some of the most advanced software.

To animate designs and allow vehicles to be imported into a variety of

environments, simulating natural sunlight, reflections and real-life

locations, Ford Design uses the software program called Udrive developed by
Bunk speed. This software is unique because with just a few clicks of the mouse
it allows designers to review one of the most crucial viewpoints of a vehicle seeing it in motion, with light and shadow playing across the simulated sheet
metal.
One of the newest software programs, Hyper Shot, produces real-time
renderings that instantly replicate the effect of light rays on the vehicle. Using
high-dynamic range image technologies to gather lighting, reflection and shadow
properties, Hyper Shot produces images that look as precise as a photograph.
This dramatically speeds up the rendering process by having the designer focus
on the materials and position of the product, instead of all the technical aspects,
such as lighting it.

Smarter Research
The new digital technology is not only accelerating the design process but also
the way Ford is conducting market research. During the past year, Ford's market
research group has began moving away from using physical models when
conducting consumer clinics and instead utilizing the precise, high-quality
renderings for consumer reviews.
This new process saves time and resources in producing, transporting and
conducting research while offering the added capability to review more data with
consumers. Although physical models are still necessary for some market
research, digital presentations allow designers to modify designs on-site adapting
instantaneously to consumers' feedback.

Total Quality Management (TQM)

TQM functions on the premise that the quality of the products and processes is
the responsibility of everyone who is involved with the creation or consumption of
the products or services offered by the organization. In other words, TQM
capitalizes on the involvement of management, workforce, suppliers, and even
customers, in order to meet or exceed customer expectations. Considering the
practices of TQM as discussed in six empirical studies, Cua, McKone, and
Schroeder (2001) identified the nine common TQM practices as cross-functional
product design, process management, supplier quality management, customer
involvement, information and feedback, committed leadership, strategic planning,
cross-functional training, and employee involvement.

TQM at Ford Motor Company

Today at Ford Motor Company, their most popular slogan is Ford Has a Better
Idea. Back in the 1980s when Ford Motor Company total quality management
practices were vast, the slogan of Quality Is Job 1 made more sense.
Ford wanted to produce better quality products, a stable work environment for
the workforce, effective management, and profitability; all by the 1990s, Quality
is Job 1 became Quality People, Quality Products.

What Changed TQM at Ford?

Waste and lack of quality on many levels. This is true especially

when you look at the far superior Ford Warranty claim system. As of 2008,
the warranty repair rate for Ford by utilizing Six Sigma decreased by 60%.

The design and engineering analysis process makes it possible for

problems that previously may not have surfaced until (product) launch, to
be caught and corrected in the virtual world through the DMAIC process.

The DMAIC process, or define, measure, analyze, improve, and control

has built an overall strategy for consistency in our teams.

Business Re-engineering
In the area of organization's re-engineering process innovation is the set of
activities that achieve substantial business improvements. Companies seeking to
benefit from process innovation go through the regime of identifying the
processes, the factors for change, developing the vision, understanding the
current process, and building a prototype for the new organization. History shows
that organizations who define their processes properly will not have problems
managing the issues and developing the change factors. When introducing
technology, business redesign is necessary. The industrial fields have been using
Information Technology to remodel processes, control production, and manage
material for generations. However, it is only recently that companies recognized
that the fusion of IT and business would go beyond automation to fundamentally
reshaping how business processes are undertaken.

When foreign companies were allowed to compete in the U.S. market, Ford
understood that to succeed in business in a competitive arena it needed to
implement strategies that competitors find difficult to imitate. As a result, Ford
bought Sweden Volvo to enter the European market, and partially owned Mazda
to have a competitive edge with

Japanese cars1. To achieve that it re-engineered its production development

activities and global corporate organization and processes for dramatic cost
reduction. Furthermore, it understood that expansion requires collaboration and
alignment, and thus planned to establish the IT infrastructure through a WAN that
connected all the offices. In the process of innovation and re-engineering, Ford
has set policies to manage the cost of establishing the network, built models for
continuous implementation, and organized global meetings to align all parties
with the process. Adding to that, when it came to managing the website, Ford
facilitated an awareness campaign for all the branches to understand that Ford is
using the web to collaborate and research and adapting information technology
as a way to maximize its business value. The goal for Ford was to maintain its
leadership in the market and to do that in the most efficient and cost effective
method that is there.

Operation consulting and Business Re-engineering

In the area of organization's re-engineering process innovation is the set of
activities that achieve substantial business improvements. Companies seeking to
benefit from process innovation go through the regime of identifying the
processes, the factors for change, developing the vision, understanding the
current process, and building a prototype for the new organization. History shows
that organizations who define their processes properly will not have problems
managing the issues and developing the change factors. When introducing
technology, business redesign is necessary. The industrial fields have been using
Information Technology to remodel processes, control production, and manage
material for generations. However, it is only recently that companies recognized
that the fusion of IT and business would go beyond automation to fundamentally
reshaping how business processes are undertaken.

When foreign companies were allowed to compete in the U.S. market, Ford
understood that to succeed in business in a competitive arena it needed to
implement strategies that competitors find difficult to imitate. As a result, Ford
bought Sweden Volvo to enter the European market, and partially owned Mazda
to have a competitive edge with Japanese cars1. To achieve that it re-engineered
its production development activities and global corporate organization and
processes for dramatic cost reduction. Furthermore, it understood that expansion
requires collaboration and alignment, and thus planned to establish the IT
infrastructure through a WAN that connected all the offices. In the process of
innovation and re-engineering, Ford has set policies to manage the cost of
establishing the network, built models for continuous implementation, and
organized global meetings to align all parties with the process. Adding to that,
when it came to managing the website, Ford facilitated an awareness campaign
for all the branches to understand that Ford is using the web to collaborate and
research and adapting information technology as a way to maximize its business
value. The goal for Ford was to maintain its leadership in the market and to do
that in the most efficient and cost effective method that is there.

Supply chain management

Supply chain management (SCM) is about coordinating between suppliers,
manufactures, distributors, retailers, and customers. The basic idea that SCM
applications revolve around is providing information to all those who are involved
in making decisions about the product or goods to manage delivery from the
supplier to the consumer. Studies show that reducing errors in supply chain
distribution, increases revenue, enhances productivity, and reduces the order-tofulfillment period.

Ford often compared its supply chain process to that of Dell's, in an attempt to
close the gaps in its own process and reach the level of success Dell has
reached. The difference in the distribution model between Dell and Ford lies in
the middle link of using retail shops. Since Ford cannot skip retail as a focal
distribution point, it worked on establishing a network of retail shops that it
owned. Ford made sure shops are not affecting each other in terms of sales, and
gave them all a standard look and feel to establish itself in the consumer's market
as a prestigious cars sales retail company. Furthermore, extensive reengineering initiatives were undertaken to enhance Ford external network by
eliminating the correlation with smaller suppliers. In that way, Ford made sure
that key suppliers have access to forecasting data from customers' purchasing
trends and production information to enable a faster order-to-delivery cycle. Ford
vision was to create a model that allowed flexibility, predicable processes and
delivered the product at the right time to the right consumer.

Just-in-time (JIT)
JIT is one of the examples of early-landed future manufacturing idealism requires
continuous collaborated refinements throughout its supply chain elements. It has
been used since 1950s by Japanese automotive industries and yet none of the
most developed countries would have even considered this methodology until
early 1980s. Researchers tried really hard to explain JIT concept in a short
descriptive sentence and none of them were able to come up with a single
answer that represents everyones definitions. Those who were trying to bring
them together were ended up with another new more complex definition. JIT
goes beyond ordinary management theory or a companys manufacturing
procedures; it comprises production planning, HRM, material management,
distribution, customer services

not only involving individual organization furthermore requires collaborated crosscompanies dedication to continuously refine the business process of one and
another.
Just-in-time manufacturing is a strategy used in the business manufacturing
process to reduce costs by reducing the in-process inventory level. It is driven
by a series of signals that tell the production line to make the next piece for the
product as and when it is needed. The signals used are usually simple visual
signals, such as the absence or presence of a piece needed in the
manufacturing process.

Just-in-time manufacturing can lead to huge improvements in quality and

efficiency. It can also lead to higher profits and a larger return in investment. A
reorder level is set and new stock is ordered when that level is reached. There is
no overstocking of parts. This saves on space in the warehouse. Most authors
agreed that successful JIT implementation requires five key elements to be
considered.

Waste reduction: this element is aimed to eliminate all non-value-added

tasks. The main problem with traditional production method is due to the
focus on producing large number of items. With level of competitiveness
and flexibility requirements, this is no longer an appropriate method to be
performed.

Value-adding production oriented: This element bring the terminology of

pull-system which allow customer order to trigger the production
process. Pull system requires immediate respond in order to satisfy
customer requirement therefore avoiding the goal of producing large
batches. By grouping products based on their production process
similarity, manufacturer may also add-value to the products by lessening

production complexity, shortening travel and idle time.

Customer participation in quality improvement: In every business,

customer will have the final say therefore the success of the business can
be determined based on customer satisfaction. This element heavily
emphasis the needs of customer involvement in product development and
delivery. Customer may also be included in development team to direct
them to the right manufacturing plan.

Employee empowerment: Empowering employees mean

dividing

problem solving and decision making responsibilities from management

level to its individual team directly related with the task. With careful
planning and adequate team work, this element will increase quality,
productivity and flexibility of the manufacturing process.

Vendor/supplier integration: Undoubtedly, specialized suppliers will

normally produce a better product since they can concentrate in a
particular thing. By outsourcing to those suppliers, a company will be able
to put all its time and resources in its core function which in turn will
improve the quality of the final products.

Just in time and ford

Just-in-time manufacturing was first used by Henry Ford of the Ford Motor
Company. Ford only bought materials for his immediate needs in the
manufacturing process. He bought only the amount of material needed to fit into
his plan of production. He planned transportation of materials so the flow of his
product would be smooth. This gave him a rapid turnover and decreased the
amount of money tied up in raw

materials.
Ford's just-in-time manufacturing process was adopted by many other car
manufacturers. Toyota in Japan used the process with very satisfactory results;
huge amounts of cash appeared as in-production inventory was built and then
sold. The response time on the factory floor fell to about a day. Customer
satisfaction was higher, as vehicles could usually be provided within a day or two.
Many vehicles were built to order, which reduced the threat that they would be
built and not sold, thus eliminating another risk to business.

With just-in-time manufacturing, assemblers no longer have a choice of which

parts to use; every part has to fit correctly. This means that multiple suppliers are
usually eliminated from the process and quality assurance is higher. The parts
used are all of the same quality, which means that line stops for quality checks
are almost eradicated, leading to higher productivity rates. The just-in-time
manufacturing philosophy has been applied to many industries and businesses
with very successful results.

Ford kA in just in time

Production of Ford latest small car, the Ford KA has been a dramatic
improvement compared to Ford previous product, Fiesta (Kochan, 1997). This is
a real example of successful JIT implementation with all its outsourcing
strategies. The production target of 1,100 KA cars per day has been reached
only within 8 weeks since the launch date, compared to 15 weeks required for
Fiesta. Ford found that the initial bottleneck was caused by material handling,
assembly time and inbound logistic. Some of the components in Fiesta are
supplied by various suppliers and these components had to be made, loaded in
the container and scheduled for delivery before finally delivered by trucks.

This common process is found to be inefficient as every part has to be

continuously handled by human and this causes big risks of damages, misplaced
and imperfection in quality, especially for cosmetically sensitive and fragile parts
such as instrument consoles, electrical wiring and airbags.

With the new developed JIT system supported with sophisticated aerial tunnels
connecting Ford with its suppliers, production lead times can be minimised,
product quality can be improved, responsiveness towards customer demands
can me boosted and the most important thing is inventory, space requirements,
handling and transportation cost can be dramatically reduced (Kochan, 1997).
Ford is now connected with more than 50 suppliers in Valencia with specifically
designed aerial tunnels. These tunnels are also very useful to transport bulky and
heavy items such as seats and fuel tank. The brain of this amazing system is
DAD (direct automated delivery) which will integrate the whole processes virtually
as one extended manufacturing warehouse. DAD will enable a smooth
manufacturing process by applying Ford scheduling system so that all the
supplied components being delivered right on time they are needed. In addition,
DAD and its tunnels enable the integration of manufacturing equipment so that
the component being delivered can be immediately installed with the main body
or other components in Ford factor Summary of Ford Valencia manufacturing
system prior JIT implementation:

Minimum of 15 weeks to reach full production capacity

Required at least 3,000 parts to be assembled for each car

Very small outsourcing involve for car components

All parts from suppliers are delivered on trucks

Stock must be kept at certain level to assure the continuity of production

Parts are often damaged during packaging, handling or delivery

Spent over $6 million for inefficient delivery system (250+trucks per

day)

80 per cent automation in overall

Manual seats and battery placement and this may cause injury for
employee

In a dynamic market trends, pre-JIT system clearly is not responsive enough as

an answer. There are minor inefficiencies throughout the system which
accumulate into serious problem that may cause Ford being less competitive in
the market.

FORD

FURTHER REDUCES ITS DEBT AND

STRENGTHENS

BALANCE

SHEET

THROUGH

CONVERSION OFFERS

Ford announced the results of conversion offers that will reduce the
companys outstanding Automotive debt by more than $1.9 billion,
lowering its annualized interest costs by about $180 million

Including the conversion offers, the recent $3.6 billion prepayment on

VEBA Note B, and net debt reductions over the first nine months, Ford has
reduced its automotive debt by $12.8 billion this year, lowering its
annualized interest costs by nearly

$1 billion. Ford expects to be net cash positive by the end of 2010.

$554 million principal amount of Fords 4.25% Senior Convertible Notes

due December 15, 2036 and $1.992 billion principal amount of its 4.25%
Senior Convertible Notes due November 15, 2016 were validly tendered
and accepted for conversion pursuant to Fords conversion offers

Ford will pay $534 million in cash premiums and issue 274 million shares
of Ford common stock to convertible note holders.
The shares of Ford common stock to be issued have been included in
Fords calculation of diluted earnings per share since the beginning of
2010

The conversion offers will result in a fourth quarter 2010 special item
charge of approximately $960million

Planning and Controlling Supply Chain

Design
Strategic Planning of Ford Motor
In just a span of a year the world economy came to a grinding halt and every
market shivered with terror in the wake of a global financial meltdown that many
feared may rival the financial collapse during the
Great Depression. Banking, airline and auto industries were struck. There were
no markets unaffected. In a way it was a good. It got everyone to rethink the
necessity of spending money. It was bad because global economic contracted
forcing massive layoffs, leading to
the

highest

US

unemployment

rate

since

1983.

Out of the wake the US auto industry was gasping its last breath. Competition
from foreign competitors and lucrative union bargaining packages had taken its
toll on the auto industry. The Big Three were operating in the red and collapse
was imminent unless something drastic changed. The government step in and
offered to help prop up the three US automakers. General Motors and Chrysler
were forced to accept the offer while Ford decided to go it alone. Fords position
may have been arrogant. It may have been fool hearted. It may have been a
strategy used to wrestle away some of the power held by the unions. In either
case, Ford was forced to restructure the company and made painful concessions
to ensure its future. At the same time

unions played a vital role by conceding to Fords insistence.

Ford has rebounded unlike GM or Chrysler. Ford recorded a $2B dollar profit in
the first quarter of the 2010. This is the highest profits seen in 6 years. A greater
emphasis on quality, a mixture of industry coincidences, as well as a savvy
marketing strategy has proven to be
recovery

map

for

the

auto

titan.

Ford has bucked the conventional and has hired a group of smooth media ad
agency to produce a campaign blitz that has made American rethink American
made. Ford is harnessing its new ad strategy that includes its four key pillars
-- quality, green, safe .

CUSTOMIZATION OR SYNCRONIZATION AND FORD

Ford Sync
Ford SYNC is a factory-installed, fully integrated in-vehicle communications and
entertainment system that allows users to make hands-free telephone calls and
control music and other functions using voice commands. The system consists of
applications and user interfaces developed by Ford and third-party developers
that run on the Microsoft Windows Embedded Automotive operating syFord
President and CEO Alan Mulally and Microsoft Chairman Bill Gates announced
the partnership between Ford and Microsoft stem.

Mobile phone integration

Voice-activated, hands-free calling
Using the "Push to Talk" button on the steering wheel allows the user to access
anyone on their mobile phone's contact list by voice command.

Automatic phone book transfer

SYNC will wirelessly transfer the names and numbers in a mobile phone book
automatically.
Uninterrupted connections
Pushing the "Telephone" button on the steering wheel will automatically transfer
a current telephone call to the SYNC system without having to hang up and call
again.
Support for advanced calling features
SYNC displays the same features as the mobile phone used, such as caller ID,
call waiting, conference calling, a caller log, a list of contacts, a signal strength
icon, and a phone battery charge icon.

Ring tone support

SYNC will play personal ring tones assigned to identify specific callers.
Audible SMS messages
SYNC can convert SMS messages to audio and read them out loud. This feature
is carrier dependent. Currently Sprint does not support this feature. Verizon sells
very few phones with this feature, but the feature is supported by the LG Cosmos
and Motorola Droid X.
Entertainment
Digital music player support
SYNC can connect to many popular digital music players via Bluetooth or USB
connection. Users can browse through music collections by genre, album, artist,
and song title using simple voice commands.
Instant voice recognition
Allows users to avoid programming or reading aloud of scripts for SYNC to
recognize their voice.
Multilingual intelligence
SYNC is fluent in American English, French, and Spanish.

Applications
911 Assist
The 911 Assist application places a direct call to a local 911 emergency operator
in the event of a serious accident with an air bag deployment. Before initiating the
emergency 911 call, SYNC will provide a 10-second window to allow the driver or
passenger to decide whether to cancel the call. If not manually cancelled within
the 10-second window, SYNC will place the emergency call. A pre-recorded
message will play when the call is answered, and occupants in the vehicle will
then be able to communicate directly with the 911 operator

AppLink
AppLink allows BlackBerry, iPhone, and Android based phones to run approved
applications using the car's steering wheel buttons, radiohead, and/or voice
commands. The first set of announced applications included Pandora, Stitcher
(podcast aggregator), and OpenBeak (twitter reader). AppLink will work only on
Generation II SYNC (Model Year 2011 and later). Traffic, Directions and
Information is a application that provides the user with traffic alerts, turn-by-turn
directions and information about topic such as weather, sports, news and 411
business search. Ford announced on May 27, 2009 that the Traffic, Directions
and Information application would be free for three years to the original owner of
2010 model year SYNC equipped vehicles.The information for Traffic Alerts and
Turn-By-Turn Directions are provided by Microsoft subsidiary INRIX.

Vehicle Health Reports

Vehicle Health Reports After setting their personal preferences online, users
can access free car reports at any time using SYNC. This feature will be released
with SYNC version 2.0. All current SYNC owners will have access to upgrade to
this version.
Ford Work Solutions
The Ford Work Solution is a collection of technologies debuted in April 2009.
Ford Work Solutions is marketed towards professionals who buy the Ford F150,
F-Series Super Duty, E-Series van and Transit Connect. Magnetti Marelli
developed the in-dash computer that enables and is unique to trucks equipped
with Ford Work Solutions. The applications included in the Ford Work Solution
are Crew Chief, Garmin Nav, Crew Chief, Mobile Office and Tool Link.

Crew Chief
The Crew Chief application provides real time vehicle location and maintenance
tracking. Crew Chief can monitor numerous diagnostic functions including tire
pressure and the check engine light. Users can also create alerts to monitor
things like excessive idling, unauthorized vehicle usage or lack of seat belt
usage. Ford developed Crew Chief with partner Microlise.

Garmin Nav
The Garmin Nav application provides capabilities including destination routing
and locating points of interest.
LogMeIn
The LogMeIn application allows the user to remotely access an office computer
using a data connection provided by Sprint. The user can open applications on
the remote computer, make updates and print documents using a Ford-certified,
Bluetooth enabled keyboard and printer.

Tool Link
Tool Link is an application that enables a user to take physical inventory of
objects present in the truck bed using radio-frequency identification (RFID) tags.
A user attaches RFID tags to an object, allowing the SYNC system to detect the
object's presence or absence and noting the object's status on the in-dash
computer display.
Users can create "job lists" of objects to verify that tools needed for a certain job
are present in the truck before heading to a job site. At the end of the job, the
system can inventory items in the truck to ensure that no tools are left on the job
site.

Branding
"SYNC" is a registered trademark of Ford Motor Company. Normally Ford does
not apply the brand of its suppliers to the parts or systems the suppliers
manufacture for Ford. However, the vehicle interior badges for cars equipped
with the SYNC system include both the SYNC and Microsoft brands.

Exclusivity agreement with Microsoft

Ford had exclusive use of the Microsoft Auto embedded operating system that
powered the early versions of SYNC until the exclusivity agreement expired in
November, 2008. The Ford developed user interface elements and Ford
developed applications remain exclusive to Ford group vehicles and are not
available to other manufacturers using Windows Embedded Automotive for the
basis of their in-vehicle infotainment systems.

Aggregate Sales and Sales Forecosting

Ford Posts $2.1 Billion Profit, Boosts 2010
Outlook
Ford Motor Co. posted first-quarter earnings of $2.1 billion, beating analysts
estimates, and boosted its full-year outlook as it reaped the benefits of a
recovering auto market and higher prices for cars and trucks .

Ford Profit Rises to $2.6 Billion on Pricier Cars

Ford Motor Co. reported second- quarter net income of $2.6 billion, completing
its most profitable first half in more than a decade, as car buyers pay more for its
new models.
Ford earned $4.7 billion in the years first six months, its largest first-

half profit since 1998, and posted its fifth straight profitable quarter. Excluding
some items, profit was 68 cents a share, topping the 41-cent average estimate of
12 analysts compiled by Bloomberg. The second-largest U.S. automaker earned
$2.26 billion a year earlier, helped by an accounting gain.

Ford lifts production forecast due to increase in

demand for 2010 Fusion
While its nothing to get up and shout about, Ford said that it will be building more
vehicles in North America in the second quarter than it had originally planned.
The move comes as the Dearborn automaker sees an increase in demand for
the 2010 Ford Fusion. Pipas wouldnt disclose any actual figures but the
numbers are expected to be announced as a part of Fords first-quarter financial
report due tomorrow. Earlier last month, Ford said that it will produce 425,000
cars and trucks in North America from April through June. That is a 41.9 percent
drop for the same period in 2008.

Ford is forecast to take over Toyota's No. 2 ranking in

sales
18 Ford Motor Co. could replace Toyota Motor Corp. as the second-biggest
seller of autos in the United States this year as the string of massive
recalls for acceleration and braking problems starts to take its toll on the
Japanese automaker.
19 General Motors Co., Ford and Honda will pick up most of Toyota's lost
sales,
20 Toyota's "whole existence is based on the perception in the eyes of the
consumer of high quality, high reliability and safe vehicles.
If that goes away, they are like everyone else.
Conclusions

Ford is an example of how traditional organizations can mature to adapt what is

current and maximizes the business value. The process that Ford went through
necessitated the continuous support from management. In addition, it depended
on alignment between those involved as a key for success. The correlation was
not restricted to internal staff; it extended to cover competitors to reach mutual
benefits, to work with suppliers to maintain similar grounds and adequate
infrastructure, and to create training programs to educate all on the vision and
organization's objectives.

Ford technical progress came at a time where the Internet was yet to reach its
full potential. The introduction of Fiber-optic cables in the late 90's and the
substantial increase in bandwidth would have helped Ford and cut on the cost in
endured connecting its own offices. Furthermore, the ISP services that provided
hosting servers were limited to only few players, which explained why Ford
preferred to manage its own web server and maintain the overhead of the 24
hours uptime and backup.

From this case study, I understood the level of commitment large firms have to
maintaining their position in the market. These companies know the revolving
nature of business in the sense of how easy it is to fall back if they did not keep
up with the change. The Ford process also shows the need for quick and
resourceful thinking when faced with situations that might seem to be
unfavorable. The way Ford ventured into the foreign market by acquiring local
manufacturers was a strategic decision that did not only enabled Ford to merge
with different technologies, but it also saved it the additional cost of establishing
production centers in Japan and Europe.

Recommendations

Maintaining leadership in the market requires innovative

organizations willing to reengineer to succeed.

IT fusion with the business means restructuring and remodeling to

understand the role IT would play to meet the business objectives

Planning and modeling is vital when coordinating work with large teams.

Constructing websites is not about content; it is about understanding what

adds value and how humans interact with information.

Knowledge management is a plan that companies need to develop as part

of their initial business process modeling

It is not wrong for large firms to try to adapt to successful processes

implemented by other firms.

References

www.ford.com www.google.com
www.oppapers.com
www.easymba.com
www.wikipedia.com