Ford Motor Firm - Case Examine

Background (normal information)

Ford Motors is considered one of three main automakers within the US. Based in 1903 by Henry Ford of Michigan, it grew to $ 150 billion in income by 1996 and employs greater than 370,000 individuals [1], Within the 1970s, the car marketplace for main automakers - Common Motors (GM), Ford and Chrysler - was adversely affected by competitors from overseas producers equivalent to Toyota and Honda. In 1999, Ford acquired the Swedish Volvo mannequin to compete within the overseas market and develop into different areas. As well as, Ford has launched a complete group plan to revamp the group, known as Ford 2000, to revive the corporate's infrastructure. The method meant a discount of the Automobile Facilities (VCs) to solely 5, referring to the operations of 200 international locations. It additionally meant to scale back redundancy and demand data know-how (IT) because the driving pressure and hyperlink between the Ford Facilities worldwide.

In constructing Ford's IT infrastructure, the corporate centered on implementing a setup that supported the TCP / IP communication protocol based mostly on the necessities of the US Division of Protection. At the moment, Ford's inner community was designed to switch recordsdata, not like most firms that used the community primarily for e-mail communication. Within the 1990s, Ford developed an economical World Enterprise Community Integration (GENI) course of to attach all areas that made compromises by way of connectivity and cabling in favor of full protection. On the identical time, Ford started constructing its Internet Farm, a {hardware} and software program group managed by a Ford Public Web site Creation Staff. The work started with the publication of technical reference paperwork and was postponed to extra superior photographs by an computerized dwell present. Because of this, the positioning obtained 1 million visits a day in lower than two years from its official launch. Within the late 1990s, Ford constructed up its Internet companies by rising the quantity of revealed data, constructing smarter and standardized Internet purposes inside 12 weeks, shopping for extra Netscape browsers for setup on its customers' computer systems, and making a B2B server for the provider present safe entry to the Ford intranet.

Ford has labored intently with its rivals within the US market to scale back service prices and improve its enterprise by the Web. GM and Chrysler based the so-called "Automotive Community Alternate" (ANX) certificates. The protocols purpose to supply a typical customary of communication over the Web, permitting suppliers to supply frequent know-how for all producers. As well as, Ford centered on making data on its web site extra accessible and helpful by using a staff that manages the method of including and updating data based mostly on an evaluation of the habits of individuals with data. A closing side of Ford's efforts was to attempt to construct a mannequin throughout its infrastructure that capitalized on the mannequin applied by Dell computer systems to enhance their provide chain and supply course of. The direct mannequin wouldn't work as nicely on vehicles as on computer systems. Because of this, Ford labored to restructure its retail community and found what would finally give it the additional benefit of supply.

Issues with the enterprise structure

  • Ford's regional enlargement to compete for market share demanded value administration for infrastructure modernization

  • The IT infrastructure limits the kind of utility growth that's based mostly on the platforms

  • Quick access to data and the immediate provision of significant information to key individuals require acceptable information administration. A reorganization of the group and course of transformation is required as new applied sciences are tailored to take care of prices and improve effectivity

  • Provide chain failures and delays can considerably influence the enterprise and market worth of the enterprise


Infrastructure Improve

For the reason that founding of the Web within the 1960s, nice efforts have been made to standardize the connection between computer systems and computer systems. In 1982, the Worldwide Group for Requirements (ISO) acknowledged that many ad-hoc community methods have been already utilizing the TCP / IP protocol for communication throughout that point, and thus adopted it as the usual of their mannequin for the Web community [2], At the moment, the primary driver for IP convergence was the expansion of WANs (Large Space Networks) visitors from native companies. As well as, the Web was open for business use in 1991. This required a discount within the complete value of possession of the community to deal with 1 million Web hosts in only one 12 months. Telecommunications firms equivalent to AT & T acknowledged the potential and labored to standardize the community that provided voice companies over IP networks that managed the separation between voice and information transmission [3],

On the identical time, Ford had launched its infrastructure improve plan and seized the chance that resulted from the worldwide transfer in the direction of voice, fax transmission and information transmission integration, and prolonged the WAN to its places of work in Europe and elsewhere. The monetary advantages additionally got here from the truth that Ford tailored the TCP / IP protocol from the start and ensured that every one technical upgrades to the technical infrastructure met the requirements. This made the transition of his system to the Web as value efficient as potential.

Internet applied sciences

Intranets use the hypertext and multimedia know-how used on the Web. Earlier than 1989, when Tim Burners-Lee invented the Internet [4]Most purposes used customary growth languages ​​equivalent to C and C ++ to create desktop purposes that have been proprietary and platform-dependent. For instance, purposes operating on a command-based working system equivalent to UNIX won't run on Home windows, and purposes operating on PCs could not work on Apple computer systems and vice versa [5], With the invention of HTML (Hyper-Textual content Markup Language), a brand new mannequin has been launched for purposes that meet the requirements of a single program, the "Internet Browser". In contrast to customary purposes, the browser supplied a constant person interface with a really quick studying curve. Customers don't appear to want extra coaching to work with net browsers. As well as, system directors didn't should spend time putting in upgrades on customers' computer systems as a result of the intranet shopper / server structure enabled all updates by the connection to the Internet server [6],

For the reason that founding of Ford's intranet, net purposes have been created by the preliminary evaluation of "Mosaic," the early type of net browsers. The technical division of Ford used net languages ​​to create the primary web site in 1995. In 1996, the staff started growing purposes that used the unified "Netscape" browser put in on all the corporate's computer systems, and labored on a normal template to shorten the event lifecycle. The user-friendly interface of net purposes has considerably decreased coaching prices. As well as, the velocity of growth has made vital purposes obtainable to varied people within the enterprise. For instance, the B2B website allowed suppliers to remotely entry and safe entry to varied components of Ford's intranet. As well as, the event staff created a digital demolition utility on the Ford Site the place Ford engineers check components of competing automobiles and consider new applied sciences. The choice would have been an precise journey to a bodily location the place Ford disassembled automobiles to examine the components.

information administration

Whereas there are lots of definitions of information, every firm can adapt its personal information based mostly on the evaluation of information and data to amass information. The College of Kentucky, for instance, defines information as a "important organizational useful resource." It's the uncooked materials, the induction course of and the completed good for decision-making. Among the many several types of information which might be utilized by decision-makers embody data, procedures and procedures heuristics, amongst others ... " [7],

Organizations carry out numerous actions to handle the quantity of data they gather to construct the corporate's information base. Actions embody creating databases of greatest practices and market intelligence analytics, accumulating filter and classification information, inserting information into enterprise purposes utilized by staff, and growing focus areas to facilitate information circulation and construct Expertise [8],

Ford beloved the visitors on the positioning, and everybody posted all the fabric he had on his desk on the intranet. Nonetheless, there was rising concern in regards to the usability and utility of the fabric that individuals added. Because of this, Ford created a information area staff to construct full data in 9 areas that have been essential to the enterprise. Ford's course of was based mostly on surveys and professionals on how individuals understand data, what is taken into account vital, and what distracts the construction of Ford's web site. The purpose of the initiative was to scale back the time people spend looking for data by correctly indexing the content material of the web site, guaranteeing that the necessities could be accessed in the end, and that what's insignificant, the Researchers didn't overwhelm outcomes with 1000's of individuals.

Enterprise re-engineering

Within the space of ​​organizational reengineering, innovation is a set of actions that brings vital enterprise advantages. Companies that wish to profit from course of innovation undergo defining the processes, the components for change, the evolution of the imaginative and prescient, the understanding of the present course of, and constructing a prototype for the brand new group. Historical past exhibits that organizations that accurately outline their processes can have no issues managing the issues and growing the change components [9], The introduction of know-how requires a enterprise redesign. Info know-how has been utilized in business to revamp processes, management manufacturing, and handle materials for generations. Solely just lately have firms realized that the fusion of IT and enterprise goes past automation and basically transforms the best way enterprise processes run [10],

When overseas firms have been allowed to compete within the US market, Ford realized that it was obligatory for the success of a enterprise in a aggressive surroundings to implement methods that rivals discover it troublesome to mimic [11], Because of this, Ford purchased Sweden Volvo to achieve a foothold within the European market, and partially owned Mazda to have a aggressive benefit with Japanese cars1 [12], To realize this, the manufacturing growth actions in addition to the worldwide enterprise group and processes have been redesigned to drastically cut back prices. As well as, it understood that the extension required collaboration and alignment, and deliberate to deploy the IT infrastructure over a WAN that related all places of work. As a part of innovation and re-engineering, Ford has established tips for managing community prices, growing fashions for steady deployment, and organizing international conferences to assist align all events to the method. In managing the web site, Ford carried out a sensitization marketing campaign throughout all industries to grasp that Ford makes use of the Internet to collaborate, and analysis and adapt data know-how to maximise enterprise worth. Ford's purpose was to take care of its market management in essentially the most environment friendly and cost-effective manner potential.

provide chain administration

Provide Chain Administration (SCM) is in regards to the coordination between suppliers, producers, retailers, retailers and clients [13], The essential thought of ​​SCM purposes is to supply data to anybody concerned in making selections in regards to the product or items to handle supply from the provider to the patron [14], Research present that errors in provide chain distribution are decreased, gross sales are elevated, productiveness is elevated, and order achievement instances are shortened [15],

Ford usually in contrast the provision chain course of with that of Dell to shut the gaps in its personal course of and obtain the success Dell has achieved. The distinction within the distribution mannequin between Dell and Ford lies within the center relationship between the usage of retail shops. Since Ford can't omit retail as a key distribution level, it has been working to construct a community of stores that belong to it. Ford made certain that the shops didn't have an effect on one another by way of gross sales and gave everybody a constant feel and appear to determine themselves within the client market as a good retailer for automotive gross sales. As well as, in depth re-engineering initiatives have been taken to enhance Ford's exterior community by eliminating the correlation with smaller suppliers. On this manner, Ford ensured that key suppliers may entry forecast information from clients' buying traits and manufacturing data to allow a quicker supply cycle. Ford's imaginative and prescient was to create a mannequin that allowed for flexibility and predictable processes, delivering the product to the best client on the proper time.


Ford is an instance of how conventional organizations can mature to adapt to the present state and maximize enterprise worth. The method that Ford went by required continued assist from administration. It additionally trusted coordination between stakeholders as the important thing to success. The correlation was not restricted to inner staff. It was expanded to cowl rivals as a way to present mutual advantages, to work with suppliers to take care of related grounds and infrastructure, and to create coaching packages to teach everybody in regards to the group's imaginative and prescient and objectives.

Ford's technological advances got here at a time when the Web was not but at its full potential. The introduction of fiber optic cables within the late 1990s and the numerous improve in bandwidth helped Ford and lower the price of connecting its personal places of work. As well as, the ISP companies internet hosting servers supplied have been restricted to a couple gamers, so Ford most well-liked to handle its personal net server and preserve the overhead of 24-hour uptime and backup.

From this case examine, I understood how a lot dedication huge firms should compete within the market. These firms know the revolving nature of the enterprise within the sense of how straightforward it's to step again if they don't sustain with the change. The Ford course of additionally exhibits the necessity for fast and imaginative pondering in conditions that will appear unfavorable. The best way Ford entered the overseas market with the acquisition of native producers was a strategic resolution that not solely allowed Ford to mix with totally different applied sciences, but in addition saved the extra prices of establishing manufacturing facilities in Japan and Europe ,


  • With a view to preserve market management, progressive organizations that need a reengineer should succeed.

  • IT merger with the corporate means restructuring and rebuilding to grasp what function IT would play in attaining enterprise objectives

  • Planning and modeling are essential while you coordinate work with giant groups.

  • Creating web sites shouldn't be about content material. It's about understanding what provides worth and the way individuals work together with data.

  • Information administration is a plan that firms must develop as a part of their first enterprise course of modeling

  • It isn't incorrect when giant firms attempt to adapt to profitable processes applied by different firms.


  1. Robert D. Austin and Mark Cotteleer, "Ford Motor Co.: Maximizing the Enterprise Worth of Internet Applied sciences." Harvard Enterprise Publishing. July 10, 1997.;jsessionid=WDARNHINBSYKSAKRGWCB5VQBKE0YOISW?id=198006 (accessed July 30, 2008).

  2. Laptop Historical past Museum, Web Historical past of the 80s. 2006. (accessed July 30, 2008).

  3. Darren Wilksch and Peter Shoubridge, "IP convergence in international telecommunications". Group for protection, science and know-how. March 2001. (accessed July 30, 2008).

  4. Laptop Historical past Museum, Web Historical past of the 80s.

  5. H. Joseph Wen, "From Shopper / Server to Intranet." Info Administration and Laptop Safety (MCB UP Ltd) 6, No. 1 (1998): 15-20.

  6. R. Boutaba, Ok. El Guemioui and P. Dini, "An Outlook on Intranet Administration." Communications Journal (IEEE), October 1997: 92-99.

  7. Joseph M. Firestone, Firm Info Portals and Information Administration (OXFORD: Butterworth-Heinemann, 2002), 169.

  8. David J. Skyrme, "Information Administration Options - The IT Contribution." ACM SIGGROUP Bulletin (ACM) 19, no. 1 (April 1998): 34-39, 34.

  9. Thomas H. Davenport, Course of Innovation: Reengineering by Info Know-how (Watertown, MA: Harvard Enterprise Press, 1993), 28.

  10. Thomas H. Davenport "The brand new industrial engineering: data know-how and redesign of enterprise processes." Sloan Administration Evaluation 31, no. 4 (Summer time 1990): 11-28, 12

  11. Gary M. Erickson, Robert Jacobson and Johny Ok. Johansson: "Competitors for Market Shares within the Presence of Strategically Invisible Belongings: The US Vehicle Market, 1971-1981." Worldwide Journal of Advertising and marketing Analysis (Elsevier Science) 9, no. 1 (March 1992): 23-37, 23.

  12. Austin and Cotteleer, "Ford Motor", 2.

  13. Henk A. Akkermans et al. "The Impression of ERP on Provide Chain Administration: Findings from a European Delphi Examine." European Journal of Operational Analysis 146 (2003): 284-301, 286

  14. Thomas H. Davenport and Jeffrey D. Brooks, "Enterprise Methods and the Provide Chain". Journal of Enterprise Info Administration 17, no. 1 (2004): 8-19, 9.

  15. Kevin B. Hendricks, Vinod R. Singhal and Jeff Ok. Stratman. "The Impression of Enterprise Methods on Enterprise Efficiency: A Examine on the Implementation of ERP, SCM, and CRM Methods." Journal of Operations Administration 25, No. 1 (January 2007): 65-82.

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