power because of the sheer volume of purchases annually; a small reduction in price leads to large saving in the annual procurement spend.SUPPLY CHAIN PERFORMANCEThe supply chain performance is frequently analysed and it is restructured to save costs by enhancing material flows, reducing inventory (JIT) and lowering manufacturing costs (FPS)The information flows smoothly across the supply chain streams, but is handicapped beyond the tier one suppliers.Ford reviewed the different components of its chain, identified bottlenecks and took measures to make them more efficient, leaner and responsive. For eg: The Ford Production System, its important part “Synchronous Material Flow” (SMF) and the Ford Retail Network were implemented. Ford has a large supplier base. It procures from over 30000 suppliers and deals directly with less than a 1000. (http://global.umi.com/pqdweb?Req Type=301&UserId=IPAuto&Passwd=IPAuto&JSEnabled=1&TS=953862775Up-to-date techniques like EDI, JIT and TQM are being used to communicate and coordinate between Ford and tier one suppliers.Ford’s major suppliers have modern Information Technologies (IT) but do not have the capacity to invest in new technologies as rapidly as Ford. This technology modernity diminishes further in the lower tiers of the supplier base, mainly due to financial constraints. MAJOR ISSUES & PROBLEMSThe question here is “Should Ford harness the benefits of the emerging information technologies and ideas from new high-tech industries to change the way it interacts with suppliers?”In this light, the major issues identified are as follows:1.Information flow impaired beyond level one suppliersFord's supplier network, is its ability to handle information. But that must cascade into the second and third tiers of the supply chain, for Ford to reap complete benefits of chain.The sub-tier suppliers are not technologically up-to-date as tier one suppliers or Ford, leading to over...
