Process Selection

A. Ford Motor Company and its Ford Dealerships use an Assembly Line type of product flow. Now the Assembly Line was essentially invented at Ford Motor Company by Henry Ford himself, so this method of manufacturing has become quite widespread over the last 100 years. Ford Motor Company's products are assembled and manufactured in a linear sequence of operations. The vehicles move from one step to the next in a sequential manner from beginning until total completion. While Ford Motor Company has over 90 plants worldwide, it used to have a lot more. Over time Ford has closed many assembly plants due to many reasons. But at one point in time Ford's assembly plants could only produce one or two types of a vehicle and that was it. But now Flexible Manufacturing has come in to reduce underutilized assembly plants which previously ran on one or two shifts, with mega flexible assembly plant complexes that run on three shifts. These flexible assembly plants are capable of building up to ten different vehicles off of two different vehicle platforms. This allows Ford to adjust its production accordingly to current market demands.

B. Make to Stock (MTS) and to a certain extent Make to Order (MTO)/Assemble to Order (ATO) is the consumer ordering process that Ford Motor Company and the Able Ford Dealership use. The inventory department takes into consideration the availability of each type of vehicle it orders and the sales history of that vehicle as well. This allows them to order the vehicle based on current market conditons. So if there is an extremely high demand for the Ford Focus then that means every Ford Dealership is clawing to get as many as possible, so not every Ford Dealership will be able to get as many as they want. While most Ford Dealerships, including Able Ford, would much rather use the Make to Stock process by just building vehicles according to the regular mix of what most people want, they are more than happy to use the Make to Order process as well. Despite thousands of hours of general sales data and history, there will always be a customer that comes into the dealership to purchase a speicifc vehicle with certain options that is currently not in the inventory. So the inventory department will sit down with the customer and build the vehicle with the options they want, and within six to eight weeks they can take delivery on the vehicle they ordered.

C. The particular cell that Ford Motor Company and its Ford Dealerships fall into is the Continuous and Assembly Line Flow cell, which is coupled with Make to Stock and Make to Order/Assemble to Order.

D. The factors influencing Able Ford's inventory department process selection include taking into consideration the availability of each type of vehicle they want to order and the sales history of that vehicle as well. Depending on what the current market situation is will pretty much dictate what they can order and then have built. If there is no demand for a vehicle, the inventory department will simply not carry that vehicle, but that doesn't mean a vehicle can't be ordered if a customer wanting it, wishes to buy it.

E. Ford Motor Company can adopt certain pieces to the mass customization methods. For example, years ago Ford only offered one type of mid-size utility vehicle, the very popular Ford Explorer. Throughout much of the 1990's and early 2000's Ford sold over 400,000 Explorers a year, but over time the Ford Explorer was no longer unqiue to the consumer, as everyone and their brother had one. Now Ford faced a dilema because consumers were beginning to migrate to other automakers that offered different types of mid-size utility vehicles which were different and unique. So Ford needed to continue to offer the Ford Explorer, as well as offer different types of utility vehicles, otherwise Ford would begin to lose its own customer base and market share. So through flexible manufacturing and advancing technology Ford is now able to offer (4) four different mid-size utility vehicles and they include the Ford Explorer, Edge, Flex, and Taurus X. These vehicles are beginning to share platforms, powertrains, transmissions, all-wheel drive systems, as well as many other components with each other. By sharing so many components that the consumer wouldn't even notice or care about, this allows Ford to utilize economies of scale. By having mutliple vehicles share a common platform and common components, you utilize the same starting point and hard engineering, but offer a different vehicle body or "top hat." While these vehicles aren't individually customizable, Ford is now able to offer four different types of mid-size utility vehicles because each one appeals and caters to a different type of consumer.

Inventory Management

At Ford Motor Company inventory management is definitely not a new idea, as inventory management has some of its developing origions of starting at Ford Motor Company itself.

Ongoing analyses of both inventory management and manufacturing processes have led to innovative management systems, such as just-in-time inventory or the economic-order quantity decision model. Just-in-time inventory is a process developed by the Japanese based on a process invented by Henry Ford.

Henry Ford managed to cut his inventory by forty million dollars by changing how he obtained materials to produce automobiles. Through a process called vertical integration, Ford purchased mines and smelting operations to better control the source and supply of material to produce cars. In this way, he was able to reduce his standing inventory and increase turnover. In the 1950's, Taiichi Ohno, a mechanical engineer working for Toyota Motor Co., refined this process into what we know today as just-in-time inventory.

Just-in-time inventory usually requires a dominant face (or a major partner that has the resources to start the process and keep it organized and controlled) that organizes the flow and communication so that all the parties in the supply process know exactly how many parts are needed to complete a production cycle and how much time is needed in between production cycles. By having and sharing this information, Ford Motor Company and its suppliers are able to deliver just the right amount of product or inventory at a given time. This requires a close working relationship between all the parties involved and greatly minimizes the amount of standing or idle inventory.

In the economic-order quantity decision model, an analysis is made to determine the optimum quantity of product needed to minimize total manufacturing or production costs. In other words, through a complex analysis, management attempts to determine the minimum amount of product needed to do the job and still keep the cost of inventory as low as they possibly can. This analysis considers the amount of time needed to generate an order, to process, manufacture, organize, and ship each product, then to receive, put into inventory at a Ford Dealership store, and then sell each product. Lastly is to process the paperwork upon receipt through the final payment process.

Ford Motor Company, like many companies today employ a mixture of both processes in order to maintain their independence but still have a close relationship with suppliers. Ford Dealerships, for example, work closely with Ford Motor Company to maintain the lowest possible inventories but still have enough cars to satisfy their customers demand. Ford Motor Company has access to information about each of its Ford Dealerships inventory levels, this allows management to further analyze inventories to ensure that each Ford store is carrying the correct amount of inventory in stock to satisfy that markets needs and maintain minimum levels.

The Inventory Management Process at the Able Ford (formerly Oasis Ford) Dealership.

At Able Ford, New Car Inventory is ordered by computer, using a UCS Tracking System, this allows the inventory department to order the cars and then track them through the production system and shipping process. This also allows for them to see what is currently in stock, what is incoming, or what is currently being built. This system utilizes a counter balance so that the department knows that a certain amount of the inventory will be gone by the time the incoming inventory is then in stock. So if a car has been in stock for over 500 days, the system tells them not to reorder it.

Also at Able Ford the inventory department has an inventory sales history, which allows them to properly forecast short-term needs and to also know which cars are not being sold. It provides sales for the past 6 years and will tell the inventory department what type of cars tend to sell the most during a given month. So if every April, Able Ford tends to sell 30 Ford Focuses, and there are only 15 in stock, then they know to order more to have for that given month. This system helps them with control by tying in with the Ford Motor Company sales and manufacturing departments. Whenever a sale is made of a car that has been sold, the car is deleted from inventory and made part of a history file that can be reviewed manually or automatically, and that depends on how the inventory department wishes to keep things organized.

About Ford Motor Company

Ford Motor Company is a global automotive industry leader based in Dearborn, Michigan, and manufactures or distributes automobiles across six continents. With about 229,000 employees and about 90 plants worldwide, the company's core and affiliated automotive brands include: Ford, Lincoln, Mercury, Volvo and Mazda. The company provides financial services through Ford Motor Credit Company.

Ford Motor Company offers a variety of Cars, Crossovers, SUVs, and Trucks as well as many other products and services to the automotive consumer. In their second century of business, they're in a position to appeal to the widest range of potential customers. Each of their automotive brands has a unique personality and holds a distinct place in the Ford Motor Company Family of Brands. For more information regarding Ford's products, please visit http://www.ford.com/.