Supply Chain Management in Ford, Toyota and HP

automotive

Supply chain management at Ford, Toyota, HP, and Dell is unique. Industries and companies work to perfect their supply chain models learning from each other supply chain and automotive case studies.

Supply chain management is an integral part of every business small or big. Supply chain management is crucial to Inventory management and a tool to manage costs and deliver on time. Supply chain management and logistics have reached higher degrees of management metrics and have evolved as a separate fields of expertise. With enormous potential for scientific research, and the application of mathematical and scientific theories, supply chain management is vital to every company in the manufacturing sector.

The Bloated Ford vs. The leaner Toyota

Although supply chain management traces its roots to the automobile industry, at a time when Ford’s vertically integrated supply chain system produced stereotypical cars, Toyota was able to produce a range of cars at cheaper prices only because they chose to separate themselves from the supply chain.

Ford’s vertical integration became a limiting factor in the world of changing customer preferences. The Japanese and Korean brands were stiff competitors with their price and range of models in the automobile sector. However, it is vital to consider Ford’s age in the industry, which does not allow it to make alterations in the business process or business model easily.

Toyota and the other Japanese brand’s perceived suppliers as smaller individual units capable of designing, innovating, and adding value to the supply chain. By disconnecting themselves from the supply chain, original equipment manufacturers aligned themselves to cost and profit management techniques, resulting in greater efficiency and capacity optimization. The supply chain in Ford lacked cost-center ownership.

The disconnected yet engaged HP

While disconnecting a supplier from the parent company, managing manufacturers and meeting benchmarks in terms of cost and quality is a challenge. Supply chain management is a still perfecting science. It is clearly industry-specific, and requires consistent and concentrated effort to plug loopholes, optimize production capacities and achieve profit margins. Let us take the example of HP, which works on a disconnected supply chain model.

HP was faced with problems at the data recording and handling levels. HP’s managers found flaws that led to unnecessary inventory pile up and a complete mismatch between demand and supply. HP revamped the process of data recording, which thereby yielded a better assembly and delivery line. Managers at HP also worked consistently with suppliers giving them feedback and inputs to ensure better quality and optimize production capacities. This reduced inventory pile-up, thus creating a seamless supply of spares that enabled a smooth transition to delivery.

Ford, Toyota, HP and DELL…………… Business-specific supply chain models.

Supply chain management is always a case of choosing the best model. Ford, Toyota, HP, or DELL opt for a model, which best fits their line of business and their business goals. It is a complex mix of various factors and takes into consideration a number of variables and constraints before the right model is decided. Nevertheless, a supply chain model must be subject to continuous monitoring, which aids in discovering alternate, more productive, and efficient solutions for the business as a whole.

Written by
Umar Saeed
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