Comparing and Contrasting Operation Management - Essay Example

?INTRODUCTION As indicated by researches, operation management is concerned with the transformation of variety of inputs to obtain a specific output based on quality (Schonberger & Knod, 1991). It indicates that operations management is the art and science of creating and delivering the final goods to the consumers to meet their demands and for their satisfaction (Schemenner, 1984). In addition to this, the field of operations management can also be related to effective management of an organization’s operations so that the organization can provide its customers with high quality goods and services that would ensure total satisfaction of customers along with enhancement of skills and knowledge who actually carry out the processes. In simpler terms, operation management is the conversion of input into output using the resources available to the organization with an aim to meet the organizational objectives such as efficiency, consistency and effectiveness (Kumar and Suresh, 2009). This assignment will highlight the factors such as volume, variety, variation and visibility of two automobile organizations, i.e. BMW and Nissan. To further highlight the importance of operation management in company’s success, the performance objectives, i.e. speed, quality, dependability, flexibility and cost, would be analyzed in order to evaluate the respective operation strategies of both the companies. COMPARING AND CONTRASTING OPERATION MANAGEMENT To compare and contrast the operation management in automobile industry, two familiar and recognized organizations BMW and Nissan have been selected. Both companies would be analyzed and evaluated in terms of volume, variety, variation and visibility characteristics. NISSAN Nissan is the world’s fourth largest automobile manufacturer. The company is located in Japan. With its aim to enrich the lives of its customers by providing them with high quality cars, the company operates in a number of countries. With the use of technology, the company aims to provide its customers with innovative vehicles. In order to evaluate the company’s operation management and its processes, volume, variety, variation and visibility characteristics have been analyzed one by one. Volume In order to consistently meet the demands of the customers, the company manufactures vehicles in high volume. This repetition of the processes has made the workforce specialize in the operation processes which eventually lead to the low units cost. With the ability to manufacture vehicles at low cost, the company is capital intensive. Variety To effectively meet the needs of the customers, Nissan provides them with variety of vehicles. With extensive product line at Nissan, the company is able to attract the customers in the market. The variety in product line at Nissan includes sports cars, minivans and vans, trucks and pickup trucks (Nissan, 2013). With such variety, the company is able to match the needs of the customers effectively. Variation The variation in demand for Nissan’s vehicle is low. This implicates that the demand is predictable and the variation in the vehicle is stable. With low variation in demand, the cost associated with the manufacturing of vehicle is also low. Visibility characteristics In operations management, visibility character indicates the level of activities that can be observed by the customer. In Nissan’s case, the visibility characteristics are low which indicates that the company utilizes its staff effectively. Since the time lag between the production and consumption is high, the visibility factor could be said as low. BMW BMW continuously strives to become the leader in the automobile industry and to do so, the company provide its customers with high quality vehicles to enrich their customer’s experience. The company is one of the top quality vehicle providers in the globe due to which the company charges premium price from its customers. Being the world’s leader of premium products, the company has its own unique identity and persona. The same way Nissan operations management has been analyzed, this report would now analyze the operations management at BMW: five characteristics (volume, variety, variation and visibility) would be considered separately to analyze the operations management of the company. Volume With such an extensive size of volume in BMW, the company aims to speed up its operation to provide the customers with quality vehicles in the market. Along with this, it has been observed that with such specialization in the processes the company has enabled itself to reduce the unit cost. Variety In order to provide the customers with high luxurious vehicles, the company aims to customize the vehicles to meet the specific needs of the customers. Along with customization, the company also provides its customers with premium vehicles that are designed to enhance the driving pleasure of the target customers. Variation In BMW’s case, the variation in demand is low which indicates that the cost per unit production is low. This helps the organization to utilize their facilities accordingly. To tower the success in the automobile industry, the company has introduced additional facility to its customers i.e. customization of cars. By doing so, the company can provide the customers with vehicles that matches the needs of its customers. Visibility The visibility of BMW is average. The customers cannot see the operation activities of the company but surely can provide the company with instructions regarding the customization of cars. On the other hand, the company keeps its operation management confidential so that the activities could not be copied by anyone in the industry. IMPLICATIONS FOR RESPECTIVE OPERATION STRATEGIES Using the performance objectives (i.e. cost, quality, flexibility, dependability and speed) the company’s operation management strategies would be analyzed and evaluated. Each of the objectives is separately identified below for both of the automobile companies. NISSAN By considering the performance objectives, the company’s operation management strategies are as follows; Cost Cost is one of the most important factors in operations management (Loader, 2006). In order to cut cost to great extent, the company has focused on manufacturing of vehicles in bulk quantity. This strategy has helped the company to reduce its cost of manufacturing per unit to a great extent (Chase & Aquilano, 1977). Along with this strategy to reduce cost, it was observed that the company has been able to reduce 50 percent of its suppliers for the sole purpose of reduction in cost. Quality Quality being the central focus of the company, it was observed that Nissan in earlier years sent a team of engineers to eliminate the quality problems even if the company had to pirate it from competitors. Speed In order to enhance the speed of the company to provide them with key parts, the company has started working closely with second and third-tier subcontractors. This strategy has been adapted by the company in order to ensure that it can provide key parts so that Nissan can provide its customers with products in the right time (Miyazaki, 2012). Flexibility In Nissan’s case, flexibility is difficult as the company operates in bulk manufacturing of cars due to which the company lacks the ability to change with the passage of time. In order to readily change, the company has taken JIT to ensure flexibility in the production. Dependability The company is highly dependable on its contractors and sub-contractors to provide the company with necessary key parts. As the company is heavily dependable on other parties, therefore it can create difficulties to meet the requirements of the customers. To overcome such problems, the company has implemented JIT strategy in UK manufacturing plants. BMW By considering the performance objectives, the company’s operation management strategies are as follows; Cost In order to cut down cost, the company relies on external assistance from companies. By doing so, the company gains all the information regarding production. This outsourcing of research has allowed the organization to enhance their potential along with cutting down of cost to great extent. In addition, the company has also implemented JIT approach to cut down the cost associated with warehousing. Quality Quality refers to being right. Since the company is known for its superb designs and exclusive quality, the company is in a league of its own in quality. The company ensures quality in all the processes from the transformation of raw materials to finished products. Speed Being able to provide the customers with vehicles at the right time provides the company with superiority over others in the industry. With the company supply chain management at work and JIT approach in action, the company can efficiently provide vehicles to the customers without any delays and time laps. Flexibility Due to mass customization, the company has enabled itself to meet the changing demands of the customers. With such customization, the company has established a unique image in the industry. Dependability Being premium vehicle provider, the company always provides its customers with required cars on time. CONCLUSION Both the companies; Nissan and BMW have unique operations management which has allowed both the companies to achieve such position in the automobile industry. By considering the position and performance characteristics of BMW, it could be said that the company operates in a totally different class. With superior quality and design BMW has attracted many customers. Along with this, BMW also provides its customers with additional facility i.e. customization of car. On the other hand, Nissan has achieved such success with its dedication and commitment towards operation management. References Chase, R.B., & Aquilano, N.J., (1977), Production and operations management: A life cycle approach, R. D. Irwin, Homewood, IL. Kumar, A. and Suresh, N. (2009). Operations Management. New Dehli, New Age International. Loader, D. (2006). Fundamentals of global operations management, 2nd ed, John Wiley & Sons, England. Miyazaki, K. (2012). ‘Nissan to strengthen parts supply chain following quake’. The Asahi Shimbun, Available from http://ajw.asahi.com/article/0311disaster/recovery/AJ201203270075 [Accessed 28 February 2013] Nissan. (2013). Products. Available from http://www.nissanusa.com/buildyournissan?fromSav=true&next=header.vehicles.sav.button [Accessed 28 February 2013] Schemenner, R.W. (1984). Production operations management: Concepts and situations, 2nd edn, Science Research Associates, Chicago. Schonberger, R., & Knod, E.M. (1991). Operations Management: Improving customer service. Irwin, Homewood, IL. Read More