Business Decision-Making Relations to Recent Natural Disaster Events: BMW Company - Term Paper Example

 Evaluating the Business Impact, Operations Management Issues and Effectiveness of Business Decision-Making Relations to Recent Natural Disaster Events The purpose of this study is to be able to know how a particular company which is affected by an interruption in its global supply chain due to a recent natural disaster, can make effective business decisions that will be able to keep the company from temporarily or permanently shutting down its operations. The problems and issues that have been identified with BMW Manufacturing Company, one of the biggest car producing corporation, is that the materials it is using to build cars that must be transported to South Carolina, United States from its European manufacturing plant are: 1) supply of car parts has been temporarily disabled because of the eruption from an Icelandic volcano that grounded most outbound and inbound air flights since the ash cloud reduced visibility, which may cause accidents if flights continue with normal operations; 2) how to get or secure critically needed car parts from other suppliers; 3) how to reroute and ship the car parts needed to South Carolina; and 4) how to be keep the plant in South Carolina operational for the meantime until the natural disaster has been overcome (Bell, n.d.). The response of the company regarding the natural disaster that affected their operations is first to find alternate shipping routes so that the parts needed in South Carolina can be flown in. BMW Manufacturing Company also contacted its other suppliers if they can fill the supply requirements until the situation in Europe goes back to normal. And while the company is waiting for that to happen it will reduce its normal daily production as well as shorten the working shifts of its employees so that the company is still running and its workers will still have a job to go to everyday. In considering the events that happened with BMW, I can say that in making business decisions, any business company must understand that customers, investors and business partners remain the same. And that the company is expected to deliver what it must deliver no matter what happens because of commitments and agreements that were made before the disaster happened. Therefore, BMW Manufacturing Company is expected to make good on every delivery that was promised and should see to it that necessary people as well as the equipment to make good on that promise are available Lynch (2009). In this particular business sense, BMW is doing its best to find a solution to the problem it is currently encountering so that the negative effect, financial and otherwise, it may have on the company in the long run will not be very overwhelming. Taking into great consideration that the car manufacturing industry has just started to recover and grow again, which is putting heavy pressure on every manufacturer and supplier across the whole industry. Although BMW is doing making the correct decision by trying to find other ways on how to transport the much needed supplies from their European manufacturing plant and making some adjustments in the local daily production and working shifts of its employees. It can also avoid encountering such problems again in the near future by trying to make appropriate changes in its business priorities and objectives. While the monitoring of the company’s survival on a daily basis is being done without lapses, short term solutions are only good for a particular span of time. But since times are changing environmentally and economically, BMW must acknowledge that the way that things may have been done yesterday may no longer be how they should be done tomorrow. It may be difficult to try and make changes where long term solutions are interlinked with the company’s short term goals; but this will make the company more flexible in times when unforeseen events arise and when the company’s usual method of dealing with business must be made so it can easily adjust to the necessary change. For BMW Manufacturing Corporation to withstand future unforeseen natural disasters, the flow of supply must be regionalized or distributed accordingly where the company might consider putting up a manufacturing plant outside Europe a future venture. Meaning, that aside from the main supply office it has in Europe it can build or develop other manufacturing plants that can ship out supplies from either South America or Asia for instance. This is just a way of trying to make sure that the supply chain is not easily broken should a natural disaster happen again in the near future. Although BMW will see this as another form of expense, which is likely the case, it must also consider that it is another means of trying to protect the company from coming to a financial dead end because there is always a natural risk involved in all kinds of business decisions. As it has already attempted in dealing with offshoring by having a supply plant in Europe, it may as well try to outsource in other parts of the world. However outsourcing would mean that the said outlets or manufacturing plants should have adequate raw materials; sufficient manpower and appropriate equipment in storage. And most important of all, can transport the needed products on time through a different route. This particular strategy might add to the overhead expenses of the company since it must also include in its computations on how to contain any adverse situation to minimize the possibility of tampering and losing of products when rerouting for delivery becomes a necessity. Aside from offshoring or decentralization, BMW must be able to review situations in the past that hampered the delivery of products or happenings that disrupted the smooth flow the supply chain. Every aspect of the said situations must be critically analysed starting from what actually happened? What type of natural disaster was involved? How did the company manage to keep itself financially afloat? And what could the company have done to minimize the risk of not being able to continuously provide or ship products to expectant customers? But if this is the first time BMW encountered such a situation then it must not only look to its privately owned manufacturing plants in order to survive. It must also try to have tie-ups with a wider network of other offshore companies who are willing to fill the gaps within the supply chain. The costs or expenses involved must be reasonable or lower but must not affect the quality of the products that the company is known for. The objective here is to be able to maintain satisfied customers and investors, which will aid in keeping the company financially durable during hard and economically trying times (Dillon et al., 2010). In conclusion, I can suggest that the most critical thing that any business company must do is to consistently go for change and improvement. Change will always be a factor that is present in anything including businesses like BMW Manufacturing Company, so it is essential that the company is willing to undergo certain changes in order to fit in with the ever-changing financial times. It is not just enough to be aware that there is a need for change but to act and do something in order to go with the flow of the changes that needs to be done. And if change is necessary, so does improvement. The company must constantly look for ways on how to innovate their products that must answer the need of customers. If the company can lower its production costs by producing locally without having to sacrifice the quality of the goods, then the company must consider manufacturing locally. This will at least lessen transportation costs, avoid long routes for delivery, save time and may even have a lower labor market to maintain, which may offer more profit with lesser capital expense (Gutierrez et al., 2004). References Bell, Rudolph. (29 April 2010). Volcano Disrupts BMW Supply Chain to S.C. Retrieved from http://www.thestate.com/2010/04/20/1251405/volcano-disrupts-bmw-supply-chain.html Dillon, R.L., Mazolla, J.B. (May 2010). Management of Disruption Risk in Global Supply Chains. IBM Journal of Research and Department Archive, Volume 54 Issue 3. Gutierrez, H., Pura Jr. J.M., Garcia, R. M. (2004). Business Organization and Management. Sixth Revised Edition. R.M. Garcia Publishing House. ISBN 971-1024-007-1. Lynch, G. S. (August 2009). Risk Management and Economic change: A Catalyst for Re-evaluating Business Preparedness, Mitigation and Response. Retrieved from http://www.mmc.com/knowledgecenter/viewpoint/Risk_Management_And_Economic_Change.php Read More