Dell Case
The sales can’t be completely virtual like the DELL model. The customer will needto have the feel of the car he is going to buy. The Retail Outlets can be done awaywith.TQM is a must as the cars have to go thru stringent certification process. UnlikeDELL which had decided to test the SONY screens. One can have a return policyfor defective computers; however, one’s life will not come back from defective car.Ford can’t completely outsource to its suppliers. There is some component that hasto be manufactured by Ford itself (Like the Ford Engine).Also DELL was huge on customization. This was not too much of cost incurrence byDELL. However Ford will not be in a position to afford the customization cost. Ithas to roll out standard models.DELL hardly invested in physical assets and Ford can’t afford to go lean in thatarea specifically.IN case of DELL most of its customers were corporate customers. Auto industry’smainstay is retail customers and it can’t afford to be taking its time to penetrate inthis market (DELL took its own time).
Ford Motor Company has achieved great success as one of the largest industrial corporations in the world. The automotive industry has grown more and more competitive over the last 2-3 decades with global competitors fighting for a larger part of the automobile market. With this in mind, it is of strategic importance that Ford exploit any opportunity to gain competitive advantages over its competitors to maintain and increase its market share and profitability. The recent discussions about adopting some of the supply chain techniques that have made Dell Computers so successful are a great opportunity for Ford to gain this advantage.
We recommend Ford undertake a 5 year plan to implement some key portions of Dell’s model to increase information flow, reduce order-to-delivery cycle times and reduce inventory throughout the supply chain. With 180 manufacturing facilities