Logistics Relationship and History of Ford Company

Ford Motor Company is one of the greatest automobile manufacturers of all time. They started under Henry Ford in Detroit, Michigan. Ford had a skill for craftsmanship when he built an experimental car in 1896. It was a twin cylinder engine with potential of 20 mph. In 1899 he left his job in order to organize the Detroit Automobile Company. Ford's first production was in 1903, the Model A, with an under the floor engine selling for $850. In the first season it sold 1,708 cars.

Almost from the start, Henry Ford puts an aim to has a totally self-sufficient industrial empire. In  River Rouge,west of Detroit, Ford developed a huge manufacturing complex that include a port, network of rail and road transportation . Ford objective's was control. To achieve his goals, he set out to develop the world's first complex integrated firm.

To ensure a reliable supply of materials, Ford invested in coal mines, iron ore, timber lands, and even land to grow soybeans used to manufacture paint. Ford's commitment to self-sufficient extended to buying 1.5 million acres in Brazil to develop a rubber plantation, named as Fordlandia.

Ford's rubber plantation

Ford's desire for control went beyond material and components. To transport materials to River Rouge and finished products to dealers. He invested in railroads, trucks, and both Great Lakes and ocean vessels. The idea was to control all aspects of inventory moving from a network of manufacturing, service and assembly plants throughout the United States, Canada, Australia, New Zealand, United Kingdom and South Africa to dealers throughout the globe.

However, Ford found out that he needed help. At the peak of Ford continuation of the successful, the firm faced economic, regulatory and labor union barriers that eventually required products and services to be provided by a network of independent suppliers. The key of Ford effective marketing was finally found by developing a strong network of independence dealers. As time passed, Ford discovered that specialized firm could perform most essential work as well as or better than his own concept.

In fact, these specialist often outperformed Ford’s own units with respects to quality and cost. Entrepreneurial firms soon became contributors to Ford’s network. Over time, the Ford strategy shifted from ownership based control to one of the channel relationship. The financial resources at Ford were shifted to develop and maintaining core manufacturing competencies. Ford found out that final analysis, that is no firm can be self-sufficient. Every business needs logistics activity and supply chain relationship.