An Overview of the Operations Function in General Motors - Case Study Example

GENERAL MOTORS COMPANY Name: Tutor: Subject: Date: Table of contents Background 3 Introduction 3 An overview of the operations function in GM 3 Zone managers 5 Transformation processes 6 Developing operations strategy 7 How do design impacts upon the operation of GM? 9 The role of the supply chain in your operation 10 How the Just-in-Time (JIT) approach might help the organization improve operational performance. 11 Just In Time: JIT: Implementation 12 Benefits of using Just in Time: JIT 12 Importance of quality management 13 How does quality management contribute to the improvement of operational performance in General Motors Company? 13 Product quality 13 Customer Satisfaction 14 Increased Revenues 14 Reduction of Waste 14 Teamwork 15 Operational challenges facing General Motors Company 15 References 16 General Motors Company (GM) Background General Motors Company (GM) is one of the biggest manufacturing organizations in the world. The company is well globally in the manufacture of vehicles, in fact, it was the world’s largest car maker from 1931 to 2008, and then the Toyota Company came in. Between the year 2008 and 2010, the company experience poor performance with high losses recorded. The poor performance of the company in that period was due to poor management and stiff competition from other leading companies such as Volkswagen and the Toyota Company[Gre10]. Introduction The General Motors Company is the leading company in the production of cars. The company’s head office is located in Detroit, Michigan and its branches are all over the world. The company has managed to expand its business due to its strong brand name and the quality vehicles which it manufactures. An overview of the operations function in GM An operations function of the General Motors Company is primarily concerned with manufacturing vehicles that are appealing to customers. The company is working extra hard to ensure that the customers taste is satisfied whilst managing resources as efficiently as possible. This means that the operational functions lie at the heart of GM and interact with the entire organizational departments. Though the departments might be carrying out different functions, it is still essential to interact so that the company’s objectives are met. The benefit of adopting operation functions is so wide ranging from efficient use of the company’s resources to the customer satisfactions. Though the process requires teamwork in the company, it is necessary to adopt the process for the sake of maintaining the image and leadership position of the company in the market. The diagram below shows how the operational functions work at GM; it shows how the tools are effectively applied for best results. Zone managers The zone manager is the area of the main business of the General Motors Company. The responsibilities of the zone managers in GM vary depending on the region. However, the general responsibilities comprise the improvement of the business integrity, cost, safety, delivery and the quality. Furthermore, there is a long term responsibility for the zone managers. Some of these responsibilities comprise of development of effective teams, improving organizational culture and finally, continuous improvement in the vehicles manufactured[Bay12]. All the zone managers at GM have a performance plan whereby the target is set so that they can be achieved within a certain time. It is a requirement that all the staff members should know what is expected of them so that it can help in the realization of this key objective. All the managers should ensure that the employees are committed to the attainment of the company’s goals by; 1. Through motivation and application of effective leadership skills 2. Setting priorities in a right manner so that they can attain the company’s objectives 3. Exercising equality by rewarding those who deserve to be rewarded. 4. Organizing for the training of employees so that they are equipped with the required skills and knowledge. Employees of the General Motors Company have an opportunity to contribute their ideas in the achievement of the company’s success. It is extremely motivating because the employees feel part of the whole structure rather than feel as a small fish in the big pool. Transformation processes These are the activities in GM which takes various inputs, adding value so that they can useful and then pass to the consumers. The company transforms raw materials such as aluminum and copper, and other precious metals such as palladium and platinum into different models of vehicles. However, there are some cases in GM whereby inputs are people and such cases the output is not obvious. The transformation process within the company comprised of: a. Changing the physical form of a material into a useful product (cars) b. Transfer of the ownership of that material to another party c. Improving the material so that it can be possible to be stored for future use d. Changing g the physical location of the product and the nature of that product. Changing the nature of resources through a transformation process can be termed as transforming resources. These resources carry out the transformation process, and in most cases there are people or the specialized machines which carry the transformation process. The diagram below summarizes the above information showing how it works[Hal12]. Action Data Action Data Developing operations strategy The top management is the key determinant for success for the development of operational strategy in the GM. For effective results, they need to develop strategies which will support long term profitability for the company. This can be realized through breaking down the business strategies into functional strategies that comprised of financial strategies, operation strategies, human resource strategy and the marketing strategy. Because of the diverse needs of customers in the market, it is essential for the company to plan for the best operational scenario so that the customers’ needs are met. The planning and analysis of the market situation are the base for making effective decisions in the company. The needs of the customers have impacted the development operations strategy of the General Motors Company in the following ways. First, the customers demand more than the worth of their money. Besides, it is a fact that the world is quickly becoming a global village. With the use of technology, the customers are expecting more from the company than the value of their money. Failing to respond to such, customers will move to the available alternatives. There is a tremendous challenge in responding to the customers need. When the company produces high quality products as to meet the customers’ need, the cost will increase, and this will force the company to serve a certain class of the customers leaving others out. This is contrary to the objects and goals of the company. The company is focusing on serving the entire market. This is vital for the GM so that they can maintain its leadership position in the market. How do design impacts upon the operation of GM? The designing of the company’s products has caused a significant impact on the company by supporting teamwork among the staff members. Furthermore, it has resulted in a hallmark of our customer-driven culture. The designing of the new products has enabled GM to improve its performance and gain the initial position in the market. Currently, the company is leading in the motor vehicle industry. The company is offering the best cars and trucks and still promising for the latest models come January 2013. The new models are expected to be of high quality, economical fuel consumption, leading safety in its usage and reliability. The company is focusing to create a compelling outstanding bond. It is only possible to make the best cars in the world if the employees care taken care of through motivating them and making them feel that they are part of the organization and not small fish in large pools. It is essential to take considerable pride in the company’s work, and assuring exceptional car models that can fully satisfy the customers’ desires. According to the managing director of General Motors, he believes that new GM wins when the customers admit it. The company has promised to maintain a strong commitment to the employees, suppliers, customers and stakeholders of the company[Hua12]. The GM has laid down five principles to guide the entire operation. These principles include; Safety and quality- the company is focusing on safety. The vision of the company state that safety is the cornerstone promise to the customers. They produce cars which are safe to be used either privately or public. The vehicle undergoes thorough testing in the lab and even in the roads. Apart from safety, the company is committed to producing high quality vehicles, and this is the reason why the company is emphasizing on thorough testing of the cars manufactured before they are out of showrooms. Create long term customers- it is a routine, for the company to create and maintain them. Innovate. The company is currently designing new models because of the creativeness of the employees. The management is so fast in implementing the smallest improvement, provided it will create an impact. This can lead to executing lofty ideas so as excite both existing and the new customers. Deliver Long-Term Investment Value- due to quality and good design cars, the business has improved making many people invest in the company since high dividends are guaranteed. Make a positive difference- the company is striving hard to make positive change through improving business operations and culture of the organization. The role of the supply chain in your operation The role played by the supply chain management in GM is to ensure that there is a consistent supply of the cars to the respective branches of the company. According to the recent research it is evidence that the supply chain plays a vital role in determining a world class performance. Supply chain acts as a tool for integrating various functions such as operations, procurement, logistic, marketing, accounting and information technology. Supply chain plays a vital role in the operations of the company. This is because supply chain management is an essential element for speeding up the operation in the company. Supply chain management can be utilized in the customer satisfaction. Furthermore, the world is, without any doubt, one larger supply chain. The impact of supply chain affects many issues including the global expansion and the sourcing among others. It is, therefore, vital for the company to ensure that they recruit employees with supply chain skills and knowledge. The benefits of embracing supply chain management in an organization are that it will create jobs, reduce pollution, reduces the consumption of the energy used and increase the living standards. In business, the supply chain management ensures that the customer receives the product in time and at the right place[Har12]. The customers enjoy these services because of after sale service. Finally, supply chain affects the operational activities in a positive way. Supply chain managers will always discourage the use of large plans, warehouse making the liquidity position of the company be high. Furthermore, the cash flow of the company will improve because of the transportation of the product is expedited and at the same time receiving profits. How the Just-in-Time (JIT) approach might help the organization improve operational performance. Just- in- time (JIT) is a strategy that is commonly used in a company. This will make the company remain relevant and competitive in the market. The principle of JIT is that it requires the manufacture of cars in time and as per the customers’ expectations. This tool has helped GM in improving its operation so as to achieve its goals. JIT has also solved the problem of overproduction whereby the company manufacture cars when the customers do not need them. They manufacture cars when it is too early. This will lead to many cars being stock while waiting for the market. However, the company might manufacture cars when it is too late, manufacturing when the willing customers have obtained the cars from the competitors might be too serious for the company to contain. Application of JIT will solve many problems. The materials used in case of overproduction are a waste of resource and can cost the company. It is, therefore, necessary to carry out market research so that the company can establish the demand for the cars before producing it. Lastly, overproduction may lead to a serious problem such as poor cash flow in the company and this can reduce the competitiveness of the company. Just In Time: JIT: Implementation The company has successfully implemented JIT. According to research, it is evident that the GM implemented JIT in 2011 when the company was facing stiff competition from TOYOTA Company. Initially, the company had faced the managerial problems and poor timing of the market. Though the company was manufacturing high quality cars, it fails to use the lean manufacturing tool so as to time the market. Benefits of using Just in Time: JIT Since the introduction of JIT in the General Motors Company, the company has been able to reduce a lot of cash which was always tied in the slow moving car due to low demand. Between 2008 and 2011, the company liquidity ratio was too low because a lot of cash was tied in the inventory[Har11]. Secondly, the company, after introducing JIT, was able to reduce the need of having a large space in the company. Finally, the company was able to reduce the extra cost which could be required for the transportation and other cost which is associated with people and other equipment. Importance of quality management This is a principle that has enabled General Motors Company to manufacture quality cars. The company uses various types of quality management program depending on the place and the situation. Some of the management programs that are utilized by the company include six sigma, total quality management and the theory of constraints. Management program is always adopted depending on the current situation and the specialist for that day. However, the goal still remains the same; to manufacture high quality cars that meet and exceeds the expectations of the customers[Har12]. How does quality management contribute to the improvement of operational performance in General Motors Company? Product quality Adoption of quality management in GM has contributed to operational performance through the implementation of primary aspects such as product quality in terms of durability of the cars manufactured, high performance, and reliability. Quality management can also improve operational performance through satisfying customers' needs. This is achieved through the feedback provided by the customers. It is essential for the company to carry out surveys so that they can know the feelings of the customers towards company’s performance. It is also essential to interview customers who are shopping from other companies apart from GM so that they can know what to improve[Han12]. Customer Satisfaction The company has increased revenues through the use of quality management. This is because quality management facilitates the spotless reputation in the industry making it possible to win new customers. Furthermore, GM has been able to sell more cars to the existing customers because of the quality management program[Har11]. Increased Revenues Quality programs have facilitated the reduction of cost in General Motors Company because all the efficiency process has been eliminated. This is beneficial because the employees of the company cannot involve in an activity which can bring loss to the company. The program ensures that all unnecessary process is removed, leaving all the pertinent process to be solved. The staff can spend less time on projects that are not relevant to the objectives of the company. In brief, quality management process safes the money which could be lost in unnecessary programs[Dru10]. Reduction of Waste Quality management has improved the operational programs in the GM since they capitalized on manufacturing cars that have ready demand. There is no issue of stocking the cars in the warehouse. The program is profitable because there is no extra cost incurred in stocking of inventory which waiting for the customers. Teamwork The quality management system can only be attained through teamwork. Most companies encourage their departments to work as a team so that they can meet the set targets of the company in a timely manner. It is essential for managers to participate in this program especially when filling the score card is evaluated at the end of the trading period of the company. Teamwork is the key to success of the company[Bar11]. Operational challenges facing General Motors Company There are various challenges facing the GM Company. Some of these challenges are successfully dealt with while others are difficult to be solved. Some of these challenges facing GM include the desire to achieve concurrency in all operations. This is extremely challenging, and it is almost impossible to achieve it has given stiff competition present in the market. Another challenge that the company is currently facing and almost every company faces is the attempt to integrate human and technical resources. Because of this challenge, it is hard to satisfy the customers’ needs. Furthermore, improving performance in the company can be a problem due to this challenge. The transformation of the information collected into useful knowledge so as to facilitate decision making has also been a considerable challenge to the GM. The company has established research and development department but converting the information gathered to facilitate decision making is a challenge. Professionals might differ in interpretation of the information making it hard to reach a final decision[Oze12]. Another challenge facing the company is the attempt of reducing production waste. It is quite challenging to reduce waste in a manufacturing company. Furthermore, it is quite expensive for the company to reduce pollution, yet the manufacturing is going. The demands of customers are frequently changing, making it so hard to adopt a single effective way of manufacturing the products. In brief, manufacturing companies face various challenges. Furthermore, the challenges are diverse making it impossible to solve them at the same time. It is only vital for the company to solve the issues that are possible to be handled. References Gre10: , (Greg 2010), Bay12: , (Bayoua 2012), Hal12: , (Hall et al. 2012), Hua12: , (Hualdeb 2012), Har12: , (Harry 2012), Har11: , (Harber 2011), Han12: , (Handel 2012), Dru10: , (Drucker 2010), Bar11: , (Barnes 2011), Oze12: , (Ozeki, Karen & Kossek 2012), Read More