Ford Motor Company's Supply Chain

Ford Motor Company was founded on June 16, 1903 by Henry Ford. His automobiles played a major role in the birth of the middle class and transformed the role of transportation. In its early years, groups of two or three men would work on each car from parts made mostly by third party supplier companies. Within a decade, the company led the world in the expansion and refinement of the assembly line concept and was becoming one of the world's largest and most profitable companies. Ford Motor Company has been in continuous family control for over 100 years, making it one of the largest family-controlled companies in the world. Under the Ford brand, the company designs, manufactures, markets, services, and sells a full line of automobiles and commercial vehicles, and luxury cars under its Lincoln luxury brand. The company is ranked sixth among the most valuable brands within the automotive sector worldwide.

Ford Motor Company’s headquarters is located in Dearborn, Michigan, United States. It is also known as the Henry Ford II World Center and popularly known as the Glass House. The building is a 12-story, glass-faced office building designed to accommodate its 3,000 employees. Ford Motor Company is an American car company, generating a revenue of over 127 billion U.S. dollars in 2020. Ford has 60 subsidiaries that are organized into four operating segments; Automotive, Financial Services, Ford Smart Mobility LLC, and Central Treasury Operations. 

Ford's supply chain has around 1,200 Tier 1 production suppliers who provide vehicle parts composed of nearly 1,000 different materials. Ford outsources its car parts from low-cost countries, such as Mexico and China, who develop and build these parts. This gives Ford the opportunity to identify and reduce costs to protect against changeable economic conditions. Ford always looks for ways to cut costs without impacting the product’s quality. Their main materials are carbon fiber, aluminum, and other materials in place of traditional steel. They want to use light weight materials for better fuel economy and handling. Ford serves a range of customers within the automotive sector, mostly consisting of general consumers and commercial businesses. The company has found that suburban millennials who are starting a family find Ford cars to be most fitting.

With our two geographical areas represented in our market search map, we have concluded larger dealerships in our Philadelphia location compared to the dealerships in our West Chester location have higher revenue growth with the medium household making less than West Chester. The populations near our Philadelphia locations outweigh the populations of our West Chester locations by roughly 330,000. However, the median household income for our West Chester area doubles that of the income generated in the city. With numbers like this, we can expect to see revenues to rise in the future for West Chester slightly higher than the Philadelphia location based upon the median household income as well as the population growth. Due to the fact that Ford itself places their cars at a reasonable buying price for everyone,we can assume that the revenue differences collectively are not too far off from each other. However, with the growth rate of population increasing more drastically in West Chester than Philadelphia, revenues can see an increase outside the city. With innovation also playing a role in the automotive industry, Ford is one of the companies looking to get involved with manufacturing electric cars, a trend that most will hop on eventually. With more people looking to buy electric cars in the future, and West Chester’s geographical location covering a larger area of households, we can assume that the growth of Ford in West Chester will be higher in the future than the growth of Philadelphia.

Within Ford’s productions of cars, they need to source all the supplies necessary to manufacture the vehicles. Some of the materials necessary for production are carbon fiber, aluminum, and steel. Therefore, there are many opportunities for shortages or delays within the supply chain. The risks that Ford may face within the supply chain consist of natural disasters, port disruptions, cargo theft, and raw material shortages. Natural disasters have the potential to ruin not only the raw materials necessary for production, but also the vessels that make trading possible. Port disruptions are operational risks within port processes. As discussed in class, an example of port disruption is the congestion that is preventing and slowing shipment in the Panama Canal. Similarly, another risk is cargo theft, which is the criminal taking of any goods from commercial freight. Raw material shortages can occur for a multitude of reasons. Some reasons behind shortages include the lack of balance between supply and demand and an insufficient number of employees. However, companies need to be aware of these risks and develop alternate plans for sourcing in order to continue production in a timely manner. 

Since the emergence of COVID-19, the supply chains slowed down on a global scale. There have been shortages in a surplus of sectors, including consumer products, retail, life sciences, industrial products, automotive, and tech-companies. Moving forward, supply chains plan to strategize to become more resilient and network with customers, suppliers, and other stakeholders. 

In some aspects, we believe that companies took the largest hit when it came to the impacts of the pandemic. Companies were suddenly unable to obtain the supplies necessary for production, maintain a sufficient number of employees, and manufacture the good necessary to remain profitable. All the issues companies faced were out of their control and there was not much they could do to offset these challenges.