Production Planning and Control of General Motors Company - Case Study Example

Production Planning and Control of GM Company University Student Id Course Date Abstract This paper is about the production planning and control of General Motors Company. The processes, systems, and technologies of the company are discussed. The supply chain of the company and the general management systems have made the company competitive. General Motors Company uses sales and operations planning for benefits such as improvement of inventory management, increase promotion plans, increase accuracy based on budget forecasting, improving management process of products lifecycle and having a great view of supply and demand across the company. Table of Contents Abstract 2 Introduction 3 Production Planning and Control of GM Company 3 Elements, Technologies, and process 3 The demand management techniques and theories: CPFR and forecasting 4 The operations and sales planning process 4 Enterprise Resource Planning (ERP) and support of MPS decisions by the ERP 5 Supply chain inventory management concept 6 Material Requirement Planning systems (MRP) 6 Inventory planning and flow models (MRP and JIT) 7 Just in time manufacturing (JIT) 7 Capacity planning and utilization in MPC 8 Implementation issues in the MPC systems: integration transformation, benchmarking and supply chain optimization. 8 Discussion and conclusion 9 Recommendations 9 References 10 Introduction General Motors Company designs, markets, distributes and manufactures vehicles parts, and offers financial services. It is a multinational corporation formed in America with its headquarters in Detroit Michigan. It offers its services and goods to 37 countries worldwide that are manufacturing trucks and cars. General Motors Company assembles and sells non-automotive and automotive brands. Due to incorporating advanced technology, it assembles electro-motive diesel brand that uses marine, industrial and locomotive diesel engines (Bayou, and De Korvin, 2008). However, general motors company also designs aircraft engines, gas driven engines, appliances, electronic and electrical components. Some of its electrical and electronic components are the airplanes, information and technology and military vehicles. The company was formed after the bankruptcy of General Motors Corporation which had sold most of its assets to the new corporation. Production Planning and Control of GM Company Elements, Technologies, and process The major elements in output and planning control of GM Company include the inventory management, resource planning, and demand forecasting techniques. The management in GM Company has ensured that it adopts technology in its production to achieve efficiency where the company has assured that it keeps pace with the trend in technological advancements. The company has maintained its accurate and current costs of materials, inventory records and parts numbers to realize the benefits of manufacturing resource planning system. Adopting the systems accurately in the production process has highly helped the company to meet the demand and manage inventory at its disposal. The fact that it is time-consuming the company has tried to design another method to manage its inventory to attend to supply and demand. GM Company uses its process to gather, keep, manage and analyze data from different activities in the company. It helps follow up the company’s resources; raw materials, production capacity, cash and company’s commitments status; orders, payrolls and purchases orders. Enterprise resource planning provides information between company’s functions and having total control of connections to stakeholders outside the business (Singh and Rajamani, 2012). This system is developed to increase speed and accuracy in the operations of the company. The demand management techniques and theories: CPFR and forecasting GM Company uses historical data to forecast demand where it uses the sales made to establish the trend. For instance, the company has maintained a trade that has shown a slow increase in demand for its products. However, GM Company has continued investing in technology aiming at meeting the needs of the customers better. The company uses CPFR to manage the inventory using a joint visibility and the replenishment of its products in the supply chain to meet the needs of the customers better. The operations and sales planning process GM Company develops and executes operations and sales plans that have helped the company in becoming competitive in the automobile industry. Sales and operations planning is a process where the body that enforces laws and made decisions meets regularly to review projections for resulting financial effect, supply and demand. It’s also a process in which tactical plans and decisions are made to ensure that every business area operates in line with company’s business plan. The result of the aggregate planning is driven by undivided operating plan created to identify the allocation of the resources of the company such as employees, time and money. However, planning and frequent plans are set by the specifics of the company which is enabling effectiveness in the management of supply chain. Properly and well-implemented sales and operations planning process have helped general motors company to review consumer’s supply and demand of brands. The fact that sales and operations planning in the company encompass planning and re-planning to aid the management team to comprehend company’s achievement and primarily focus on future actions and their awaited results. Management of the company has newly adopted aggregate plans aimed at making operations customer centralized (Valukas, 2014). The plans are set to accomplish the annual operations plan targets of the company by joining monthly sales and marketing plans. This aspect of planning has highly helped the company have total control of its customers. Enterprise Resource Planning (ERP) and support of MPS decisions by the ERP General Motors ensures proper planning of its resources to make sure that the MPS is supported by the systems put in place to manage the company resources. Enterprise resource planning is a process that is aimed at managing the company using a software which allows a company to use integrated application systems to automate many office functions and manage the company in areas of human resources, services, and technology. The company activities that are subjected to the process include product planning, service delivery, inventory management, sales and marketing, and manufacturing among others. Supply chain inventory management concept General Motors has a total control of vendor relationships, and customers is an important aspect that the company has adopted to manage supply chains. I Most of the activities that are involved in the managing relationships of the company are inventory management, purchases, and transfers. Inventory has a critical role since it is a worthy focus of chains of supply. The inventory also plays the most necessary role in supply chains of providing or enhancing the balance between the demand and supply (Singh and Rajamani, 2012). General Motors Company has effectively managed forward and reverse continuity in the chains of supply by dealing with an increase in supplier exchanges and the downfall of customers’ demands. The operations of the company have been able to be updated on the direct sales forecasting information which help in planning inventory needs for future. Lastly, enhancing balance through the inventory in the company by use of point-of-sale data for lasting inventory management in it. The company has tried to balance the supply and demand of its brands by ensuring that demand information is well followed to the latter. Material Requirement Planning systems (MRP) General Motors Company has ensured continuous development and updating of the MRP systems to ensure no interruption of the production process. The idea of developing material requirement planning system encompasses using computational powers to plan and control manufacturing. It has helped to generate profiles of demand of brands in the company. This system derives its demand from subassembly and levels of production schedule to the final brand (Inkpen, 2008). Materials requirement planning system has played key roles in scheduling production, specifying production schedule, the cost of material and describing the structure of brands. It also offers off-set lead times where a particular part, subassembly or end product is manufactured. The adoption of the material requirement planning system has enabled the company to schedule production using the available materials. Inventory planning and flow models (MRP and JIT) The major inventory flow and planning models in General Motors include MRP and JIT. The inventory planning is done by the computer that is material requirements planning systems has highly helped productions managers in placing and scheduling items orders of dependent demand. Inventory depends on the production level of the end brand produced which is influenced by subassemblies, parts and raw materials. Advancement of material requirement system has included information feedback platform to enhance production managers to change and update inputs needed in production. In the advancement of the material requirement planning system to the manufacturing resources planning system, several planning aspects have been incorporated finance, accounting, human resources, engineering, and marketing. In an attempt to expand manufacturing resources planning system MRP has been developed where various functional areas of the company are linked by use of computer technology (Valukas, 2014). JIT in manufacturing has helped general motors company to meet customers’ needs in time and meet demand and supply. Just in time manufacturing (JIT) This is a method of production that general company has adopted with the aim of decreasing continuity times within the systems of production and as we respond times from customers and suppliers. Just-in-time manufacturing is meant to making required brands always available for suppliers and customers. This is also known as continuous flow manufacturing or short-cycle manufacturing or demand flow manufacturing (Bayou, and De Korvin, 2008). The manufacturing the company has adopted ensures that customers and suppliers are not held down to wait for brands to be manufactured. Capacity planning and utilization in MPC Capacity planning has proved to be useful in the production planning of finished products of the company to developing requirements of raw materials and components. It has broken down requirements of inventory planning periods for production cost kept low and production be done and completed on time. Manufacturing planning and control (MPC) is utilized together with manufacturing resource planning system by the production managers in General Motors Company to allocate the time of production and plan for capacity needs. Implementation issues in the MPC systems: integration transformation, benchmarking and supply chain optimization. The MPC systems have dramatically changed as far as controlling and managing large scale manufacturing systems. Success in the company has been realized due to increased power due to the use of modern computer systems. The system requires detailed knowledge due to the integration transformations in materials, parts, and resources when accepting orders from customers. The adoption of the system in the supply chain has helped a company address to urgent orders by customers and optimized production (Singh and Rajamani, 2012). Through benchmarking general motors has enhanced the tracking of materials used in productions and brands leaving the company. Also, data of the products produced by the company are well kept through the material requirement planning system. Discussion and conclusion The Production Planning and Control can be improved through understanding relationships of supply chains. Developing good relations can ensure general motors company is in a position to achieve a balance between fulfilling the customers’ demand and maintaining materials and goods supply adequately. Inventory enhances achieving the balance. Sale and operations planning implementation in production enhances management of demand for their brands by marketing and sales forecasting (Inkpen, 2008). The sales and operations planning together with firms operations functions like manufacturing, procurement, logistics, and supply chains play a critical role in inventory. Extensive discussion is needed on firm’s inventory and the process of putting it into practice. The discussions have helped the sales and marketing group plan adequately to win more customers for their brands. Recommendations General Motors Company needs to invest in research and development to keep pace with the changes in taste of the customers. Through research, the company can be in a position to keep pace with the changes in the automobile industry hence offering products that are relevant in the market. Also, General Motors Company should make sure it increases its investment in technology. This is because technological advancements in the automobile industry are important in achieving competitive advantages. References Bayou, M. E., & De Korvin, A. (2008). Measuring the leanness of manufacturing systems—a case study of Ford Motor Company and General Motors. Journal of Engineering and Technology Management, 25(4), 287-304. Inkpen, A. C. (2008). Knowledge transfer and international joint ventures: the case of NUMMI and General Motors. Strategic Management Journal, 29(4), 447-453. Singh, N., & Rajamani, D. (2012). Cellular manufacturing systems: design, planning and control. Springer Science & Business Media. Valukas, A. R. (2014). Report to board of directors of General Motors company regarding ignition switch recalls. Jenner & Block, Tech. Rep. Read More