Ford Motor Company Portfolio Management Plan

Introduction Ford Motor Company is considered a global automotive industry leader. Ford was able to reinvent themselves to be able to stay ahead of the economic downturns. Ford has continually improved their overall profit and recently started paying dividends again. A good portfolio management plan makes all of this possible. We are going to talk about Ford’s strategic plan, strategic capacity plan, the portfolio management process, project selection, program management plan, areas/sources of conflict, change management plan and finally resource utilization plan.

First we are going to talk about Ford’s strategic plan and their ONE Ford Plan that has helped them get to where they are today. Strategic Plan A good strategic plan is important to being successful in any organization. Ford Motor Company went through some years of struggle before they decided to do an overhaul of their strategy. Ford Motor Company’s was able to do this through their “ONE” Ford plan.

The ONE Ford plan is a four point business plan that consists of the following: aggressively restructure to operate profitably at the current demand and changing model mix, accelerate development of new products our customers want and value, finance our plan and improve our balance sheet, and work together effectively as one team (Ford, 2011). The goal with the ONE Ford plan is create a company with a profitable growth and output such as great products, a strong business, and a better world (Ford, 2011).

Ford Motor Company’s ONE Ford Plan is about more than just becoming financially successful it is also about being One Team who is dedicated to One Plan all working towards One Goal (Ford Motor Company Business Plan, 2008). The implementation of this plan enables Ford to realize that change was needed instantly and what areas needed change as well. They began to put their primary focus on Ford rather than the other brands that were in their portfolio such as, Aston Martin and Jaguar.

The other brands were taking too much of their focus on the Ford Blue Oval brand which is what Ford based themselves on originally (Ford Motor Company Business Plan, 2008). As a result they sold the majority of the other brands in their portfolio which has allowed them to put the focus back where it is needed. The One Team part of the One Ford Plan involves their employees and the ability to create an open and honest work environment. Making it a place where people want to work and involving employees in decisions and the data that makes Ford successful.

Ford Motor Company is not only concerned about making a better profit but by also being more “green” and making the customer experience even better. Ford is focused on having options for their customers so that they will be able to choose the vehicle that best fits their needs. They are also expanding into new markets, including countries outside the United States, which will increase their sales significantly throughout the next few years. The overall ONE Ford Plan has made a significant difference in the way Ford runs and the amount of success that is available to them in the coming years.

Strategic Capacity Plan Strategic capacity planning is a very important part of a business. As stated in an article from Management Study Guide (Capacity Planning, n. d. ), “the ultimate goal of capacity planning is to be able to meet current and future level of requirements with the least amount of waste in the process”. Ford recently implemented a new plan that will enable them to better match up their manufacturing capacity with consumer demand of products (Capacity Utilization, n. d. ).

In order for Ford to be able to move forward and be successful they have had to make decisions that may have been difficult but also allowed them to become more efficient and more competitive in the automotive industry. We all remember when the economy started a downturn that affected many businesses including the automotive industry. Ford had already begun to make changes to ensure that they would be able to remain successful and it set Ford apart from other automakers. With this new plan Ford made the decision to close some operations and add to others.

They had to look at the areas that were continuing to succeed and also areas that were starting to decline allowing them to make the best possible decisions to make sure that Ford would continue to be successful. Ford made changes to their as manufacturing capacity by making it possible to use the same assembly line to manufacture different models of vehicles (Capacity Utilization, n. d. ). This made them more flexible and able to adjust to the different needs of customers as they change over the years. Strategic capacity planning doesn’t end here though.

For Ford to remain successful they may have to continually make changes to ensure that they are utilizing their resources in the best way possible with the least amount of waste. Portfolio Management Process The portfolio management process has several steps or parts to the process. The idea behind portfolio management is to choose projects that are beneficial to the overall strategy of the organization. According to The Standard for Portfolio Management (2006), there are seven portfolio management processes.

These processes are the following: 1. ) Identification 2. ) Categorization 3. ) Evaluation 4. ) Selection 5. ) Prioritization 6. ) Portfolio balancing 7. ) Authorization Identification is process of managing any new and ongoing components that will need to be categorized for additional decision making. The process of put the previously recognized components into groups is categorization. Evaluation is when all pertinent or necessary information is put together so that the components can be put into the selection process.

Selection is where these components are then narrowed down to a list of components that are ready to be prioritized based on the evaluation process and the selection criteria used in the previous steps. After selection comes prioritization which is the selected components that are put into a ranking based on evaluation and criteria that is decided by management, so the criteria could be different for every company. The next step in the portfolio management process is portfolio balancing.

Portfolio balancing is when all of the selected components are put together in a way that has the best potential while also supporting that organization’s strategic goals. Balancing the portfolios makes the organization better equipped to allocate resources accurately. The last step is authorization. Authorization is when the selected components are approved, funded, and to communicate the decisions to the key stakeholders (The Standard for Portfolio Management, 2006). Portfolio Management Process Flow Chart The Standard for Portfolio Management. (2006).

Project Selection Project selection is going to be different for every organization. Here is some of the criteria that could be used: does the project line up with the organization’s strategy, is the project going to improve a process, will it give the organization a competitive advantage over its competitors, what would happen if the organization did not go through with the project, what risks are associated with the project (i. e. technology, implementation, business). During project selection the organization is also going to look at some financial criteria.

These criteria can include what is the cost, what is the return on investment (ROI), the net present value (NPV), is there any cost savings, will the project increase revenue, and how long will it take to pay back the cost of the project. Many things are considered when selecting projects for an organization. These criteria are just some that could be considered. Each organization will have their own specific criteria that they will use for project selection that best fits the needs of that organization. Program Management Plan Ford Motor Company has a lot of different products.

Since there are several different products at Ford it is necessary to have a program for each product or vehicle. For this reason Ford is going to assign a separate program manager for each product also. This will allow them to focus solely on one final product even though there are several processes in order to get to the final product. Each of these programs will have the same basic management plan. The scope will be a little different for each specific product but the basic goal of the project will be to complete the vehicle (project) on time, within budget, and at the best quality possible.

Ford has the goal of giving their customers the best products possible at an affordable cost. Keeping the project within budget and on time will help to ensure that this happens. The scope may seem general but there are far too many processes and projects involved to give a detailed scope that would explain everything involved. The schedule will include all pieces or parts of the project that are needed to complete the project as a whole. It is absolutely essential to ensure that each part of the project stays on schedule in order to meet the production goals for dealerships and customers.

One the project is schedule out it is essential to take a look at the critical path to see what parts of the project may become a problem if something within the schedule does not go as plan. It is also very important to have a couple of back of plans or what-if scenarios to ensure that you will be prepared for anything. The schedule is very detailed and includes anything from personal schedules, man hours, what the goal of the project is, any risks that need to be assessed and a list of all of the activities that are necessary.

The schedule is one of the most important parts of completing and managing a project. If the project gets behind schedule it is likely to cost Ford money as well possibly putting other projects behind schedule if any of the processes are related which is likely since a lot of vehicles require the same parts for their process. Quality is very important throughout the entire project process. Customers want a quality product that won’t require maintenance and cost them money. Quality is very important to Ford.

According to Ford’s Media Fact Book (2011), “quality comes first”. Ford uses the Global Quality Research Survey (GQRS) to measure the quality of their vehicles built and sold in the U. S. (Ford Media Fact Book, 2011). Their ultimate goal is to have customer satisfaction and quality plays a huge role in that. I located a chart also in the Media Fact Book (2011) that shows how the TGW (Things-Gone-Wrong) trend has decreased over the years. That chart is located below. TGW Trend Chart Area/Sources of Conflict Many things can cause conflict throughout the course of a project.

The key is to be able to identify and solve the conflict as soon as possible. Conflicts that can arise are scheduling conflicts such as actually scheduling people around other appointments and work or making sure not to overschedule any of your people or resources. It can prove very difficult to schedule around peoples schedules or tasks, managers have to ensure that they clearly communicate to everyone to ensure that down the line in the project there won’t be any problems or to try to schedule in a little slack for unexpected schedule conflicts.

Another possible conflict to plan for is cost or the potential to go over budget do to other conflict problems. The best way to prevent this is to plan for the possibility of problems or what some call what-if scenarios. This will allow you to be prepared for possible problems or difficulties throughout the course of the project which will help to keep the project within budget and on schedule. Conflicts throughout the course of a project are bound to occur. Along with schedule and cost conflicts is the possibility for quality problems within a project.

When a project seems like it is going to either fall behind schedule or over budget there may be temptation to take short cuts to get back on track. These short cuts would most likely cause the quality of the project to come into question. That is why it is important to have a quality team or least a member of the team to be able to oversee all parts of the project to ensure the project will be a good quality product at the end of the project regardless of other problems that may happen throughout the course of the project.

Change Management Plan Change management is important in any organization. Resistance to change is normal but it is important to be prepared to manage any resistance that might occur. Most people resist change because they don’t understand what is happening or they feel left out. The first part of the change management plan is to get employees involved. Management needs to embrace the change while at the same time getting others involved by allowing them to take part in the change process. The next step is communication.

Communication is important in all parts of a company especially in the change process. It is important for employees to have a clear idea as to what it is that the company’s overall objective is. If employees are still resisting then it is vital that management listens to their concerns and to make them feel as if they have been heard. Communication is not a one-time deal; it needs to continue through and after the change process. It is vital to prepare employees as far in advance as possible so that they can better prepare for the upcoming change (tagonling. org).

Training is the next part of change management. When it is evident that a change is going to take place it is important that employees are ready for any new tasks that may be presented to them. Training is a key component to ensuring the success of a change. This training should include but is not limited to team workshops, management training, how to deal with conflict, and problem solving. Without training it would be easy for employees to resist because they would not be prepared for the change to take place and could even end up feeling lost or out of place.

The last part of the change management plan is feedback, both during and after a change takes place. Informing employees of what they are doing right or wrong can help to strengthen the change process while allowing employees to grow and learn. Feedback also allows them to feel like they are successful throughout the change, making them feel rewarded with the new tasks of the change enables them to feel as if they were able to make a difference as a part of the change. The change management plan may change over time but the most important thing is to ensure that there is a plan in place to prepare people for changes.

Resource Utilization Plan Resource planning starts with first identifying what resources will be needed for the project(s). Resources include people, equipment, and materials that will be needed to successfully complete the project. Once all of these things have been determined this information needs to be put into a program such as the MS Project to help track the resources. After all of the resource information has been input into the program we will be able to see any areas that could possibly cause over allocation or schedule conflicts.

It is possible to eliminate overloads or over allocation by leveling the resources or reorganizing of tasks to ensure that everything can be completed in the necessary timeframe and within budget. Resource utilization and capacity utilization go hand in hand. If one resource is over or underutilized it can affect other resources. For instance if you plan out your resources and do not realize that one or more of your resources are planned to be working on two different projects at the same time that could affect the outcome of both projects therefore throwing off capacity utilization.

That’s why it is important to plan very diligently to ensure that those things don’t happen. One way to help prevent this would be to have a second or third set of eyes on the plans to ensure that everything has been covered and to catch any areas of over allocation that may not have been noticed originally. Efficiency is important when it comes to utilizing resources, which is why using a program like MS Project and Gantt Charts can help project and program managers to prevent any possible mishaps throughout the course of a project. References 2011 UAW-Ford National Negotiations Media Fact Book.

(2011). Retrieved fromhttp://media. ford. com/images/10031/2011_Media_Fact_Book_Final. pdf on February 22,2013. Capacity Utilization. (n. d). Retrieved fromhttp://media. ford. com/images/10031/Capacity_Utilization. pdf on February 15, 2013. Capacity Planning. (n. d. ). Retrieved from http://www. managementstudyguide. com/capacity-planning. htm on February 15, 2013. Ford. (2011). Sustainability 2011/12. Retrieved fromhttp://corporate. ford. com/microsites/sustainability-report-2011-12/blueprint-strategy onFebruary 5, 2013. Ford Motor Company Business Plan. (2008,