Ford's e-Business Strategy
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Case Details:
Case Code : ITSY002
Case Length : 09 Pages
Period : 1999-2002
Pub Date : 2002
Teaching Note : Available
Organization : Ford
Industry : Automobiles
Countries : USA
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Excerpts
Improving Supply Chain Efficiency
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Ford believed that using the Internet improved the efficiency
of its supply chain. In mid 1999, the company created AutoXchange, a joint
venture with Oracle that allowed online business-to-business (B2B) transactions
with its suppliers. AutoXchange helped Ford and its suppliers swap information
and bids on an estimated $300 billion worth of goods and services. Ford was able
to reduce suppliers' inventories and eliminate billions of dollars in excess
stock by getting accurate information to suppliers about short-term demand, with
the help of the real-time orders entering its system. According to Kelley2,
Ford expected to reduce its $80 billion purchasing bill by 10% within the next
few years, through AutoXchange. However, cost savings on purchases was just one
of the benefits... |
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Focussing on the Demand Chain
In 1999, Ford started its online initiatives for managing the demand chain by
entering into a partnership with Microsoft for developing CarPoint, an auto
buying website. Retail customers could order Ford cars through CarPoint...
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The Future
According to Kelley, the major objectives of Ford's
e-business strategy were to bring speed, convenience, and information to
customers rather than just focusing on cost cutting. The Internet played
a crucial role in helping Ford boost the satisfaction levels of its
consumers. Kelley said: "The consumer is king.
And the Internet is accelerating the speed at which they get what they
want. Using the Net to zap customer orders directly to factories and
parts suppliers will eventually allow Ford to deliver cars to consumers
within days of ordering"... |
Exhibits
Exhibit I: Chronology of E-Business Initiatives at Ford
Exhibit II: Ford Before and after Transformation
Annexure I: Ford's Income Statements
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