Since Information System is a thought for competitive benefits which identified in the first 80s, there are lots of companies spent at it. Until now, there is a survey demonstrates it investment is being more and more in every company. It is displaying that, Information system is a base for doing business today. In lots of businesses, survival and the capability to achieve strategic business goals is difficult without extensive use of information technology. For the reason that information technology can help a corporation more easy to get competitive by obtaining operational excellence, expanding services and services, improved customer and provider intimacy and exploiting digital market segments. So nowadays, information system is vital for each and every company.
This essay will discuss how useful of information system in business, by using Ford Engine Company for example which using information system to enhanced customer and dealer intimacy in customer relationship management system (CRM).
Ford Electric motor Company's group and environment
The Ford electric motor company was shaped in 1903 by Henry Ford whose target was to provide the people with an inexpensive and affordable car that any middle class utilized person could own. Ford Engine Company is a famous company which advertising automotive. Additionally it is a global automotive industry leader located in Dearborn, Michigan. It makes or distributes cars across six continents.
In 1995, Ford possessed embarked on an ambitious restructuring plan called Ford 2000, which included merging its UNITED STATES, European, and international motor vehicle operations into an individual global. Ford 2000 helps company decrease the cost by reengineering and globalizing corporate organizations and techniques. The major reengineering projects were initiated around major company procedures such as Order to Delivery (OTD) and Ford Creation System (FPS), with goals such as reducing OTD time from more than 60 days and nights to significantly less than 15 days.
Ford also launched a general population Internet site in mid- 1995; by middle- 1997 the number of visits to the website had come to more than 1 million per day. A companywide Intranet premiered in middle- 1996. And by January 1997 Ford acquired set up a business-to-business capabilities by which the Intranet could be expanded in a secure manner beyond company limitations into an Extranet potentially connecting Ford with its suppliers. Ford teamed with Chrysler and Basic Motors to focus on the Automotive Network Exchange, which can help suppliers to manage different means of conversation with each automaker to be uniformity in technology criteria and procedures in the distributor network.
In the resource chain area, there is general contract that information technology also could be deployed to dramatically enhance material flows and reduce inventories, substituting information for inventory, as the appearance gone. So in the program of Ford 2000, for reaching desire to on reengineering tasks, having a good supply string management systems and customer marriage management systems can help the business more near to suppliers and customers which can easy to lessen the cost on order to delivery system and ford creation system. As that point Internet revolution unfolded in parallel, Ford Electric motor Company created new alternatives for reengineering operations within and between enterprises by using Internet.
- Ford's Existing Supply Base
The existing source base is at many respects a product of history. Start in early 1990s, Ford experienced started to try positively to decrease the number of suppliers the company dealt with immediately. Rather than using a huge total buy individual components, it shifts to possess long-term human relationships with a subset of very ready suppliers who provide whole vehicle subsystems. By doing that, Ford can better to have a well web page link with major suppliers which can help Ford simpler to improving a range of techniques such as just-in-time and total quality management.
- Ford Electric motor Company's SCM and CRM technology of Information system
- Ford Production System
In restructuring plan, Ford 2000, the main is reengineering assignments; one of the jobs is Ford Creation System, it can be an information system to achieve a close romance to suppliers. Its aim is that improve the process on making engine to become more pull-based system, with synchronized creation, continuous movement, and balance throughout the process. For doing that, Ford could tell suppliers exactly when and where certain components would be needed days and nights in advance, and buffer shares thus could be reduced drastically. If this technique can work efficiently, the huge benefits would be experienced throughout the resource chain.
- Order to Delivery
For another key process Ford reengineering projects wants improve the customer romance management system. The information system to do that is Order to Delivery, the goal of this system was to lessen to 15days the time from a customer's order to delivery of the finished product. The Order to Delivery perspective was to make a lean, versatile, and predictable process that harmonized the attempts of most of Ford's components to permit it to provide consumers with right product in right place at right time, which means that it can benefit Ford Motor unit Company meet the just-in-time approach. By obtaining Order to Delivery, Ford assumed that it would provide better quality, higher customer satisfaction, increased customer selection, better vegetable productivity, stability because of its supply foundation, and lower supplier and company costs.
- Ford Retail Network
On 1 July, 1998, Ford Engine Company launched the to begin its Ford Retail Network ventures in Tulsa, Oklahoma, under the newly developed Ford Investment Enterprises Company. The rule of Ford Retail Network was that providing consumers the best level of treatment and create an event they would want to come back to over and over. The showrooms would be consolidated to focus resources on creating an excellent selling experience, as the quantity of service stores would increase to be closer to customer populace centers. Then Ford can decrease the cost on advertising as well as more and more on using Internet to provide the service to the customers as the information system can analysis the needs for customers effectively.
- Using SAP software
Until now, Ford not only just uses the web-site to supply the service to customers, for reaching total supply chain visibility instantly, increasing supplier and customer support satisfaction and minimizing costs, especially ongoing IT costs, Ford also using SAP software, to increase the performance on resource string management and customer romance management.
Business models for Ford Motor Company
- Three universal strategies - Cost Leadership
Under Porter (1985), he considered selecting a defendable position in a industry as the outcome of an competitive strategic evaluation. He argued that successful, profitable companies generally choose to be competitive on either low costs or by differentiating their products to meet specific customer needs. Although both of these proper options are mutually exclusive, he added a 3rd category of companies as topic players that provide a particular market or product section. Porter's three common strategies are: cost command, differentiation and concentration.
"Henry Ford was a farmer's kid whose production genius altered life around the globe" (Ford Motor unit Company, 2010). So that Ford Electric motor Company is following the business models which Henry Ford desire to be. It is the cost command.
In the auto industry, Ford Motor unit Company can meet its business design, cost management. As Porter (1985) explained that cost management is about being the cheapest cost producer on the market. For a business to gain competitive gain, it must achieve overall cost leadership within an industry it is contending in. To lowest the price, there are many techniques and technique for organizations to use. Among the popular and successful techniques employed by successful organizations worldwide in boosting quality, productivity, cutting down cost are six strategy, Total Quality Management (TQM), Benchmarking Competition, Just-in-Time (JIT), Resource String Management (SCM), Total Productive Maintenance (TPM) and MRP alternatives.
When Ford Motor Company developed the info system, it is much easier to achieve this business design. It is because Ford using information system to increase the romance to customers and suppliers. Ford develop the Ford Production System can help it to improve Supply String Management system to be a competitive advantage. And in addition, the Order to Delivery system can decrease the time, which means Ford can much easier to achieve the just-in-time techniques.
Not only both of these reasons, but also the major reason of Ford can perform this business model, cost leadership, is the fact Ford through developing information system to get a power on by using a cheaper price to choose the materials from suppliers. By that, Ford can reduce the cost effectively, that's why Ford Engine Company can achieve cost command.
Ford developed the info system is concentrate on enhanced customer and supplier intimacy, it wants what customers want to, not for what company what things to develop. In order that means, Ford is not simply focus on thin target. It is because different customers need different kind of cars.
- Value Chain
Porter (1985) stated that value string model is a systematic way of studying all the firm's activities and analyzing how they connect to each other. Such an examination is necessary in order to identify potential resources of competitive advantage. For Porter, the worthiness chain can be consisted for five most important activities (including inbound logistics, functions, outbound logistics, marketing and sales, and service) and four support activities (including firm infrastructure, human resource management, technology development and procurement).
The value chain of the Ford Electric motor Company is not absolutely all that not the same as other manufacturers in the automobile industry. However, when Ford Motor unit Company developed information system, it helped Ford to boost its value string. In one of support activities, Procurement, Ford through its information system, Ford Production System, to improve the marriage of suppliers, it is not only supporting Ford to lessen the price for buying materials, but also working strongly using its suppliers to eliminate waste and therefore lower costs for both organizations. This will be considered a "win-win" situation for both companies and really should help lift Ford from its near-last rank in supplier relationships.
The next activity for information system to boost is technology development. Ford through the information system, Ford Retail Network, to comprehend the worthiness of consumer insight and what consumer needed, which can help Ford better to design an effective modern design solutions. They have initiated tailoring design models after open public demand. This technique has proven highly successful in recent financial cycles.
Marketing is also a very important facet of the Ford. By using Ford Retail Network system, Ford has been working with dealers or will buy all sellers to collect more information to make marketing strategies that help improve sales. That is shown to be the primary basis for the consumers' perceived values.
Ford in addition has teamed-up with Caterpillar Logistics and SAP to boost warehousing and its Daily Parts Edge network so you can get spare parts with their dealers. Their anticipation in partnering with Kitty Logistics was "to secure a partner with knowledge in the motor vehicle supply string, laying a groundwork for development of a new information system. The target was to acquire end-to-end visibility of service parts, boost the speed of their time to market, optimise inventories at each location, and do a much better job serving the client" (Resource Chain Brain).
Along with Feline Logistics and SAP, Ford is also using an SAS platform that helps customer romance management (CRM). This SAS platform boosts Ford's existing customer marriage database and a powerful bottom for information examination, data mining and predictive modeling thus allowing impressive reporting, trending, segmentation, customer rating, and customer life-cycle research all of which support key activities for CRM.
As information system can improve lots of activities in value string, it can help the company to gain the competitive advantage.
Problems and issues in the introduction of the info System
When Ford Motor unit Company developed the info system, it needs to face tons of challenges. Here are some of these.
- Costly and timely
As Ford is a big company, it's very costly on expanding information system. A couple of complex pieces of software which Ford developed to achieve its competitive edge. To develop these large system, Ford need to invest its recourses. Not merely the price on buying software and hardware of the machine, but also other cost such as consulting fees, employees costs, training. Also, the majority of them need to spend time to build up. For Ford Engine Company, it has large team on IT, which needs to hire a lot of employees to work. You will find costly on the earnings and and yes it needs spend over one mouth to train the employees to understand the system and use the machine.
As Ford adopts an organization program from SAP, it is very costly to change SAP and it become dependent on SAP to upgrade its product and maintain its set up.
- Hard to gather information
Some of the information systems which produced by Ford give attention to supply string management. These systems require multiple organizations to share information and business procedures. It is difficult for each participant to change of its process and just how it uses information to make a system that best acts the supply string as complete. Also, there will vary policies in different company; Ford cannot acquire the information totally because of its suppliers as a few of the information may be the secrecy.
- Hard to handle the technology
As the technology of information system such as internet is expansion quickly, it is not easy for Ford Motor unit Company to understand evidently about the technology, it will be a risk on losing profits when develop that technology. So when growing the info system, Ford needs to make sure it understands what is its usage obviously.
Conclusion
In brief, Ford uses it on business administrator, SCM and CRM, for enhanced customer and supplier successfully. It could notice that information system can help Ford achieve its business design.
Nowadays, every company will establish the information system to attain competitive, the majority of them hold the e-business, too. It is surly that information system is an extremely useful and major tool to help company to meet their goals. However, it does not mean have information system can help the company to do a successful business, because the most crucial is the fact that company have the correct business strategy. As the example on Ford, its business design is cost leadership; it is a great competitive benefit at early 1900s when Ford provided Model T vehicles. However, following the change of environment, it isn't work now. So, if the company want to achieve competitive, it isn't only focusing on develop information system, but also concentrating on the business enterprise strategy.
