Can Dell's virtual integration be a good supply chain strategy to Ford?

Yesterday I made a presentation about Dell's virtual integration and how it should be implemented to Ford in BUS 144 class. While I have prepared for the presentation, I could learn about Dell's virtual integration and how some challenges can be occured when Ford trys to implement it. Since the establishment of the organization in 1984, Dell has grown enormously in a relative short period of time. According to the article, "The Power of Virtual Integration: An Interview with Dell Computer's Michael Dell," Dell became a $12 billion company in 13years from 1984 to 1997. The main reason why Dell experienced such a fast growth is mainly due to the use of its direct business model. Unlike traditional business model, Dell's direct model eliminates the time and cost of third-party distribution in the value cahin. By doing so, Dell could save its time and reduce cost so that Dell could have competitive cost advantages. Based on the development of Information technology nowadays, Dell even developed more its direct model and created "virtual integration," which make work faster by blurring the traditional boundaries and roles in the value chain. By using virtual integration, Dell is able to provide excellent customer service and communicate more effectively.

In an another artice, " Ford Motor Company: Supply Chain Strategy," Ford is trying to implement Dell's virtual integration in order to resolve the problems that Ford is experiencing now. It is predicted that Ford can expect to minimize its suppliers, elimininate middlemen, and have more flexibility in its supply chain by using virtual integration. In addition to that, like Dell, Ford can boost its sales by providing better customer services and having faster communication between suppliers, manufacturers, and customers in the value chain.

However, since Dell and Ford are two different type of industry, one is a computer manufacturing company and the other is an auto industry, it does not seem to right to implement exactly the same "virtual integration" that Dell is using now to Ford. In fact, there are some challenges that Ford would face by implementing Dell's virtual integration. As an example, since the cost of automobile is much more expensive than that of computers, it is doubt that the customers will buy their cars online without test-driving, which allow them to touch and feel the car that they are going to spend several tens of thounds of dollars. Also, an automoblie is needed to have much more components (approxminately 20,000 parts) in order to be produced while a computer needs less than that of amount of components. Due to the fact of mass amount of its components, it will be challenged to adopt Dell's virtual integration solely without having any additional business system that support Ford to work that system appropriately.

In colcusion, it is no doubt that Ford should make some change on its supply chain because of changing environment of supply chain due to the development of information technology. However, as I already mentioned above, since Ford has much more complex supply chain than Dell and is different type of industy from Dell, Ford should change Dell's virtual integration or add some other supplements in order to implement it most appropriate way to Ford. It is cruical decision to make for Ford to become a competitive auto industry again by defeating its competitive competitors such as Japanese and Korean auto industries by implementing the most effective virtual integration that works best to the Ford.