Teri Takai, Director of Supply Chain Systems, has been asked what sounds like relatively narrow question by the company’s most senior executives: How should Ford use Internet technologies to improve the way it interacts with supplier? To answer it, Ford needs to think about relationships not only with suppliers but also with dealers and customers. As supply chain members study the Dell model in particular, they come to appreciate that “virtual integration” must include design fulfillment, forecasting, purchasing, and a variety of other functions long considered as a separate entity within the Ford hierarchy. The steps Ford might consider taking towards implementing BTO strategy would best be served by analyzing the four questions below.
1. Consider the experiences that you (or your friends or members of your family) have had in buying a car; compare these to the experience of buying a computer online (if you’ve never done this, go to Dell’s website—www.dell.com and explore how online computing buying work). What do you think explains the differences?
2. What advantages does Dell derive from virtual integration? How important are these advantages in the auto business?
3. what challenges does Ford face that are not also faced by dell? How should Ford deal with these challenges?
4. If you were Teri Takai, what would you recommend to senior executives? To what degree should Ford emulate Dell’s business model?