e the operations leaner, efficient and more responsive to the customer needs, hence reducing production costs and improving profit margins. The Regional mixing centres optimise schedules and delivery of finished vehicles via railway, to provide customers the right product at the right time and place, by improving the speed and predictability of new vehicle deliveries. The pressure is on for suppliers to provide materials at a reduced cost per year with increased value added services. INFORMATION FLOWThe supply chain is highly visible to both upstream and downstream activities, enabling Ford to meet customer demands. The information flows freely due to the close relationships Ford shares with its tier one suppliers and dealers. But the information flow beyond the tier one suppliers is restricted mainly due to the use of old technology by lower tier suppliers. Ford encourages lower tier suppliers to initiate collaborative working arrangements with larger tier one suppliers.Ford includes the ongoing forecasting of customer demand from the dealers in its production schedule. Dealer’s suggestions are used to fill in gaps in the order bankTier one suppliers communicate frequently with Ford using electronic data interchange (EDI).But these tier one suppliers are not financially sound enough to invest in new technologies as rapidly as Ford can.The powerful purchasing department, deals closely with the new product design engineers. All negotiations with suppliers are done by the purchasing department and engineers are discouraged from discussing prices with suppliers. All the components in the chain work closely to reduce costs and improve customer service.ORGANISATIONAL STRUCTUREAt Ford, the purchasing department enjoys a prominent position. It is organisationally independently of product development. It works closely with every major product design.Price negotiation with suppliers is done by the purchasing department, aloneIt has gained ...
