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Presentation

&Distribution supply Chain Managementof Ford Motors

Automobile

Industry

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eamMembers Abha Yadav P57 LeenaSingh P19

AvinashNair P59

Kavita Shetty P16

Smita Kamble C33

Pralhad Walve P56

Group E-AutomotiveIndustry

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Automotive Industry Current Status

Company Sep 2010 Sep 2009 % ChangeMaruti 95,148 71,594 33

Hyundai 31,751 27,803 14

Tata 23,877 18,176 31

Mahindra 16,537 15,296 8GM 8,617 7,654 13

Ford 8,380 3,405 146

Honda 6,164 4,281 44

Mercedes 663 414 60

*Source Top Gear, Times Business, TOI issue 2nd Oct

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The Ford Motor Company

American Multinational Corporation

Headquarters : Dearborn, Michigan, USA

Founded by : Henry Ford

Incorporated on: June 16, 1903 Net income : US$ 2.717 billion.

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Introduction . continued

Ford Motor Company designs, develops,

manufactures, and services cars and trucksworldwide.

It operates in two sectors, Automotive and Financial Services.

Ford Mercury

Lincoln

Volvo

The Financial Services sector offers a variousautomotive financing products to and throughautomotive dealers.

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Ford

Ford also owns a small stake in Mazda inJapan and Aston Martin in the UK.

Ford's former UK subsidiaries Jaguar and

Land Rover were sold to Tata Motors ofIndia in March 2008.

In 2010 Ford sold Volvo to Geely

Automobile.

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Fact File

Henry Ford's methods came to be known

around the world as Fordism by 1914 Ford is currently the second largest

automaker in the U.S.

Fourth-largest in the world based onnumber of vehicles sold annually,directly behind Volkswagen Group.

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Fact File

Ford received more

initial quality surveyawards from J. D.Power andAssociates than

any otherautomaker.

Five of Ford'svehicles ranked atthe top of theircategories

Fourteen vehicles

ranked in the topthree.

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Last Two Decades(Industry Grew more Competitive )

Big Three U.S. automakersGeneralmotors (GM), Ford, and Chrysler

Foreign-based auto manufactures (i.e.,Toyota and Honda)

Facing increasing overcapacity

Advantage in the industry was fast

becoming global

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Ford Motors-SWOT

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Ford Motors-SWOT

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Fords Traditional Supply

chain

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THE FLASHBACK1980s

As Ford Motors grew, so did its supply base

Thousands of Suppliers

Dealing with a large network of suppliers

became cumbersome Criteria governing supplier selection

Purely based on cost

Absolutely no importance given to overall

supply chain costs Complexity of operating such a large supply

chain was never considered

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The Need for a change

Necessity to reduce cycle time

Supply chain costs had to be cut down

Costs incurred in developing & buildingcars had to be reduced dramatically

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The Ford 2000-An Ambitious

Restructuring PlanCreating new possibilities for

reengineering processes within and

between enterprises

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Ford Production System(FPS)

FPS is an integrated system aimed atmaking operational activities More lean

More responsive More efficient

To transform into a more pull based

system FPS SMF ILVS

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FPS-Key Features

Ensured continuous flow of materials

Built an ordered sequence system

Supplied parts only when needed

Significantly reduced buffer stocks

Forecasting became simpler

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Order To Delivery(OTD) OTD Vision

To create a lean, flexible and predictable process whichprovides the consumers the right product at the rightplace at the right time

A Holistic approach to re-engineering Reduce delivery time from 45 days to 15days

Indentify bottlenecks in Marketing Material planning Manufacturing Transportation

Involved dealers in the forecasting process Study of historical buying patterns to fill gaps in demand and

supply

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Launch of Ford Retail

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Launch of Ford RetailNetwork(FRN)

1st July1998,Oklahoma

Under the Ford Investment EnterpriseCompany(FIECO)

Key Objectives To test the best practices in retail

distribution

To drive selected practices throughout the

retail network To create an alternate distribution channel

which would compete against the publiclyowned retail chains

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Core Principles of FRN

Buy out all Ford dealers To ensure that dealers were competing

against the real competition (Toyota, Honda)

A consistent look for all Ford Showrooms consolidated showrooms to create a superior

selling experience Increased number of service outlets near

customer population centers

Increased business opportunity in terms ofspare parts, services, body shop operationsand Ford Credit

E t i M d l

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Enterprise ModelComparison

OrderMgmt

Dealers

Customers

Bill of Material

OutboundLogistics

Plan/SiteOperations

InboundLogistics

Suppliers

Ford Retail Network

Supply chainLeadership

OTD

FPS

FPS

FordBreakthrough Objectives/Key Initiatives

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10/04/10 Ford Supply Chain 31

Inbound logistics Responsive

Synchronous material flow ILVS

Forecasting

Inventory reduction JIT Manufacturing

FPS TPS

Streamlining manufacturing operations

Lean manufacturing

Forecasting

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After Sales Service

Launch of The New Figo March 2010

New fuel efficient petrol engine

Regular service is important

Competitive parts pricing The Figo will carry a two year/1,00,000 km

warranty

The vehicle also comes with two-year Road SideAssistance, a programme that Ford pioneeredin India.

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Roadside Assistance provides

qFree 24-hour service

qTwo years

qNational toll-free numberqProvides on-site assistance for minor repairs

including fuel delivery, jumpstart, vehicleunlocking and towing on flatbed trucks.

qQuick Service bays - cabinet

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