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Ford Motor Company – Case Study

Background (General Information)

Ford Motors is one of the three main automobile manufacturing companies in the United States. Headquartered in Michigan in 1903 by Henry Ford and has grown to revenues of $ 150 million and 370 thousand more employees 1996 [1]. In the 1970's, the automobile market leading car manufacturers – General Motors (GM), Ford and Chrysler-creak from the competition foreign products such as Toyota and Honda. In 1999, Ford acquired the Swedish Volvo model to compete in the overseas market and expand to other regions. In addition, Ford has launched a complete re-engineering of business processes organization called "Ford 2000" to restore the infrastructure of the company. The process aims to reduce the axes their vehicles (VCS) which covers only five operations that lasted from 200 countries. It also meant cutting redundancies and require information technology (TI) be the motor and the relationship between Ford facilities worldwide.

In building the infrastructure of Ford, the company focused implementation of a configuration that supported TCP / IP for the U.S. Department Defense requirements. At that time, Ford's internal network is used to transfer files unlike most companies that use the network primarily for electronic communications. Throughout the decade of 1990, Ford has developed a profitable global enterprise integration networks (GENI) processes to link all points of engagement in the type of connection and cabling for complete coverage. During the same time, Ford began building his web site, Farm, which is essentially a set of hardware and software managed by a team of public web site creation Ford. Work began the publication of technical reference documents and moved to more advanced image of a car show live. Consequently, the site has received 1000000 visitors per day within 2 years after its official launch. Throughout the late 90's, Ford set up its Web services by increasing amount of published information, the creation of intelligent Web applications and the level in a period of 12 weeks, the purchase of Netscape for installation others in the user machines and the creation of a B2B server to allow providers to secure access to intranet Ford.

In the process of reducing service costs and bring more business through the web, Ford has worked closely with its competitors in the U.S. GM and Chrysler to develop what is known as "Red Automotive Exchange (ANX) certificate. Protocols to provide a standard for unified communications across the Internet to allow suppliers to provide a common technology for all manufacturers. In addition, Ford designed so that information on its website more accessible and useful by implementing of a team to manage the process of adding and updating information based on an analysis of information as a human process. A final aspect of the activity Ford has been trying to build an infrastructure model that benefited from the model implemented by Dell to improve its supply chain and delivery. The direct model does not work Car well as with computers, then worked in Ford's network of retail remodeling and identify which would give an additional advantage in the delivery.

The problems of enterprise architecture

• Ford's regional expansion to compete for market share requires expenses management for infrastructure improvements
• The infrastructure imposes limits on the type of platform-based application development
• Easy access to information and timely delivery of critical data to key people managementOrganizations requires a good understanding of process reengineering and redesign is required when adapting new technologies to maintain cost efficiency and increased
• errors in the supply chain and delays can affect the progression of the company and the market value of the company

Analysis

Improving infrastructure

Since the inception of the Internet in the 1960's, many efforts have been made in standardizing how computers connect to it. In 1982, International Organization for Standardization (ISO) has reported that during this period of many ad hoc network systems have already been using TCP / IP for communication and well adapted as standard as a model for the Internet [2]. The main driver for IP convergence, at that time was the growth of data traffic over networks (WAN), created by local businesses. In addition, in 1991, the Internet was opened to commercial use and was established to reduce the total cost of operating the network to compared with a million Internet servers that have materialized in time only one year. Telecommunications companies like AT & T realized the potential and worked in the standardization of network services offering voice over IP networks has successfully completed the separation of voice and data transmission [3].

Al same time, Ford has launched its plan to upgrade its infrastructure, and took the opportunity for the global movement to integrate voice transmission network fax data and expanded its network expanded to include offices in Europe and elsewhere. Financial benefits also from the fact that Ford has adapted the TCP / IP from the start and ensures that all infrastructure improvements to meet the standards. This makes the transition from their system to the Internet so profitable it might be.

Web Technologies

Intranets use of hypertext and multimedia technology used on the Internet. Most Before 1989 when Tim Burners-Lee invented the web [4], applications using standard development languages ​​like C and C + + to create desktop applications owned and based platform. For example, applications running on an operating system command such as UNIX does not run on Windows, and those who work for the PC can not work on computers Apple and vice versa [5]. The invention of HTML (Hyper Text Markup Language) introduced a new model for applications that meet the standards set by a single program, "Web Browser". Unlike standard applications, the browser has a unified interface that had a steep learning curve. Users seem not require additional training to work with web browsers. In addition, system administrators do not have to spend time installing equipment upgrades users, Intranet architecture since the installation of client / server all the updates via the web server connection, [6].

Since Ford has set its objective was to create Intranet web applications with the initial analysis of "Mosaic", the first form of web browsers. Technical Department Ford uses web languages ​​to create the first website in 1995. In 1996, the team began to build applications that use unified "Netscape" browser- deployed on all machines in the company, and work in a standard cut development life cycle. There was a substantial decrease in training costs through user-friendly interface of Web applications. In addition, speed of application development is critical to provision of different people throughout the company. For example, the site allows B2B suppliers a secure remote access to various sections of the intranet of Ford. In addition, the development team has created an application as a virtual dismantling of the website where Ford engineers at Ford could consider evidence of competitors' cars and evaluate all new technologies. The alternative would have been a real trip to a physical place where tears Ford cars to consider the parties.

Knowledge management

Although there are many definitions of knowledge, each firm can adjust its own way based on analyzing data and information to gain knowledge. University Kentucky, for example, defines knowledge as "a vital organizational resource. It is the raw material, work in progress, and finished making decisions. different types knowledge used by decision makers with information, procedures and heuristics, among others … [7].

Organizations go through different activities to manage the amount of information they collect to form the basis of knowledge of the company. Activities include creating database best practices and analysis of market information, collecting and filtering data classification, to integrate knowledge into commercial applications used by employees, and development of focal points to facilitate the flow of [8] the knowledge and skills.

Ford was excited about the traffic, has received web page and everyone has been the publication of any material they have on the desk in the Intranet. However, there is growing concern about the usability and usefulness of the materials people have been added. Accordingly, Ford has created a "team area of ​​knowledge" to build a comprehensive information into nine areas that were identified as vital for the company. The Ford process was based on surveys and input from experts on how people perceive information and what is considered vital and what is worrying about the structure of the Ford site. The aim of the initiative was to reduce the time spent searching for information through indexing the content of the right places and to ensure that the important thing may be consulted in due time, and what is trivial as not to overwhelm the investigator with thousands of results.

Business Reengineering

In the field of process innovation in the organization of re-engineering is the set of activities to achieve substantial business improvements. Companies wishing to benefit from the innovation process through the system identification process, factors change, the development of vision, understanding of current processes, and prototyping of the new organization. History shows that organizations properly define the process will have no problems of development issues and drivers of change management [9]. When the introduction of technology, restructuring companies is necessary. industrial fields have been using information technology remodeling process, production control and manage the hardware for generations. However, only recently that companies have recognized that the fusion of IT and business that go beyond the automation changes fundamentally the way business processes are carried out [10].

When foreign companies were allowed to compete in the U.S. market, Ford has realized that to succeed in business a competitive environment you need to implement strategies that competitors struggle to imitate [11]. Therefore, Ford bought Sweden Volvo to enter the European market, and partly owned by Mazda for a competitive edge with the Japanese cars1 [12]. To achieve this production was redesigned and development activities of the worldwide organization of business processes and cost reduction drama. Further understand that the expansion requires collaboration and alignment, and therefore plans to develop the IT infrastructure with an extensive network that connects all offices. In the process of innovation and reengineering, Ford has established policies to manage the cost of establishing the network models constructed for the ongoing implementation and organized meetings worldwide to align all parties in the process. Besides this, when it came to managing the site, Ford has provided an awareness campaign for all sectors to understand that Ford is using the web to collaborate and research, information technology and adaptation as a means to maximize its business value. Ford's goal was to maintain its leadership market and do it in the method more efficient and profitable there.

managing the supply chain

Supply Chain Management (SCM) is the coordination between suppliers, manufacturers, distributors, retailers and customers [13]. The basic idea that applications are running around MSC provides information to all involved in making decisions about the product or property to manage the delivery of the supplier to the consumer [14]. Studies show that the reduction of errors in the distribution of the supply chain, increase revenues, improve productivity and reduce time to implement [15].

Ford often compared the process of the supply chain to that of Dell, in an attempt to fill gaps in its own process and achieve the level of success of Dell. The difference in the distribution model of Dell and Ford is the link of the shops in the retail community support. Since Ford can not jump in retail as a distribution point central, worked on creating a network of selling your property. Ford shops that do not affect others in terms of sales, and gave them while looking standard to impose on the consumer market as sales of the company selling luxury cars. Furthermore, major restructuring initiatives have been undertaken to improve Ford external network by eliminating the correlation with small suppliers. Thus, Ford makes major suppliers have access to forecast data trends in customer purchasing and production information to allow delivery to cycle faster. Ford's vision was to create a model that allows flexibility, predictable processes and deliver product at the right time for the right of consumers.

Conclusions

Ford is an example of how traditional organizations can mature to adapt what maximizing value for the company. The process has crossed that Ford need to support management ongoing. Also, depends on the alignment between those involved as the key to success. The correlation is not limited to internal staff, was extended to competitors to achieve mutual benefits of working with suppliers to maintain similar patterns and adequate infrastructure, and create training programs to educate everyone about vision and objectives of the organization.

Ford, technological progress came at a time when the Internet was yet to reach their full potential. The introduction of fiber optic cables in the expansion of the late 90's and substantial bandwidth that helped Ford reduce costs of their own liaison offices. In addition, the services of Internet service provider providing accommodation servers has been limited to only a few players, which explains why Ford preferred to manage their own Web server and maintain 24-hour general uptime and backup.

In this case study, I understand that the level of commitment large companies should maintain their market position. These companies know the renewable nature of the company in the sense of how easy it is to terminate the contract if not follow this change. The Ford process also shows the need for quick thinking and resources in situations that might seem to be unfavorable. The way Ford ventured into foreign markets by acquiring local manufacturers was a strategic decision not only allowed Ford to match different technologies, but it saved the cost of building new production facilities in Japan and Europe.

Recommendations

• Maintain leadership in the market requires innovative organizations wishing to restructure for success.
• IT merger with through restructuring and renovation of understanding the role play to meet business objectives
• Planning and modeling is essential in coordinating work with large equipment.
• Creating websites is not the content, trying to understand what adds value and how humans interact with information.
• Knowledge management is a business plan should be developed as part of their business process modeling initial
• Not bad for big business deal to adapt the procedures used successfully by other companies.

References

1. Robert Cotteleer Austin and D. Marcos, "Ford Motor Co.:. Maximize the business value of Web technologies" in Harvard Business Publishing July 10, 1997 harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml; .. jsessionid = id = 198006 WDARNHINBSYKSAKRGWCB5VQBKE0YOISW? (Accessed July 30, 2008).
2. Computer History Museum, History of the Internet 80. 2006. computerhistory.org/internet_history/internet_history_80s.shtml (Accessed July 30, 2008).
3. Shoubridge Wilksch Darren and Peter, "IP convergence in global telecommunications." Defence Science Organization technology. March 2001. http://www.dsto.defence.gov.au/publications/2400/DSTO-TR-1046.pdf (Accessed July 30, 2008).
4. Computer History Museum, History of the Internet 80.
5. H. Joseph Wen, "From client / server intranet for the Management of Information and Computer Security (MCB UP Ltd.) 6, No. 1 (1998): .. 15-20.
6. R. Bout, K. The Guemioui, and P. Dini, Journal Communications (IEEE), October 1997 "A look at the management of the intranet." 92-99.
7. Joseph M. Firestone, portals Business Information and Knowledge Management (Oxford: Butterworth-Heinemann, 2002), 169.
8. David J. Skyrme, "solutions for knowledge management – The contribution of information "ACM SIGGROUP Bulletin (ACM) 19, No. 1 (April 1998) .. 34-39, 34.
9. Thomas H. Davenport, Innovation process: restructuring of work through information technology (Watertown, MA: Harvard Business Press, 1993), 28.
10. Thomas H. Davenport, "The New Industrial Engineering: Information Technology and Business Process Redesign" Sloan Management Review 31, No. 4 (Summer 1990): 11-28 .. 12
11. Gary Erickson, Robert Jacobson, and Johny K. Johansson, competition for market share in the presence of invisible assets strategic. The U.S. car market, 1971-1981 ", International Journal of Research in Marketing (Elsevier Science) 9, No. 1 (March 1992). 23-37, 23.
12. Austin and Cotteleer, "Ford Motor", 2.
13. Henk A. Akkermans, et al. "The impact of ERP supply chain management supply. findings of an exploratory study European Journal Delphi "European Operational Research 146 (2003): 284-301, 286
14. Thomas H. Davenport and Jeffrey D. Brooks business systems and supply chain, "Journal of Enterprise Information Management 17, No. 1 (2004) ..: 8-19, 9.
15. Kevin B. Hendricks, Vinod R. K. Singhal and Jeff Stratman. "The impact of enterprise systems in the performance of businesses. A study of ERP, SCM, CRM systems and applications of "Journal of Operations Management 25, No. 1 (January 2007). 1965-1982.

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Better Never Than Late (Part 1 of 2)