Logistics Supplier Integration in the Automotive Industry - Term Paper Example

?ANNOTATED BIBLIOGRAPHY Article Ramanathan, U. . Supply chain collaboration for improved forecast accuracy of promotional sales. International Journal of Operations & Production Management, vol. 32, no. 6, pp. 676-695. http://www.emeraldinsight.com/journals.htm?articleid=17031552 Journal: International Journal of Operations & Production Management In this article has discussed about the importance of collaborating with the players in the supply chain in order to improve the forecasting. Forecasting is an important aspect of supply chain management as by forecasting the sales, the management is able to understand the demand and supply and thus they are able to maintain their inventory level accordingly. The author has presented his idea and has used different sources and reliable sources for this journal article in order to improve the information presented. Forecasting techniques can be improved and this can allow the businesses to improve their overall supply chain planning and control. The findings of this article are very much the same as of the other authors as they have also emphasized on collaborating with other players in the supply chain. Ramanathan is working in the department of Business Systems in the Bedfordshire Business School and has sufficient knowledge of business and he has used different books and research papers thus, the knowledge and information presented in the article is reliable. Article 2: Moyano-Fuentes, J., Sacristan-Diaz, M., & Martinez-Jurado, P. J. (2012). Cooperation in the supply chain and lean production adoption: Evidence from the Spanish automotive industry. International Journal of Operations & Production Management, vol. 32, no. 9, pp. 1075-1096. http://www.emeraldinsight.com/journals.htm?articleid=17048068 Journal: International Journal of Operations & Production Management Lean production is important in managing the overall supply chain in business. This article discusses about the significance of using lead production in the supply chain and how beneficial lean production can be in managing the overall supply chain. The article also discusses about the importance of cooperation with different players in the supply chain and how each player can add value to the supply chain. This finding is similar to the articles presented by Ramanathan (2012) and Bennett, and Klug, (2012). The article discusses about the evidences from the Spanish automotive industry. This article has been written by three different authors, Jose? Moyano-Fuentes, Macarena Sacrista?n-D??az and Pedro Jose? Mart??nez-Jurado. All these three authors work in different universities in Spain and therefore these authors have the knowledge regarding supply chain, business and operations management. Moreover, with different research studies cited by these authors, the information presented is highly reliable. Article 3: Wee, H., and Wu, S. (2009). Lean supply chain and its effect on product cost and quality: a case study on Ford Motor Company. Supply Chain Management: An International Journal, Vol. 14, no. 5, pp. 335 – 341 http://www.emeraldinsight.com/journals.htm?articleid=1810704&show=abstract Journal: Supply Chain Management: an International Journal The other article that has been used for this research study is on the company, Ford Motors. The article analyzes the lean supply chain of the company and how this system has helped the company in improving the cost and quality of Ford Motors. The findings of the article have revealed that by implementing lean supply chain, the company has been able to reduce its cost, enhance its quality and reduce its lean time. The article also presents recommendation for the company. Wee is one of the authors of the article and he is working at Department of Industrial and Systems Engineering in a university in Taiwan, Chung Yuan Christian University. The other author is Simon Wu and he is not only working in the Chung Yuan Christian University but he is also involved with the ford motors in the Ford Production System Manufacturing Division. Thus this shows that the authors are reliable and the information they have presented would be credible and authentic. Article 4: Bennett, D., and Klug, F. (2012). Logistics supplier integration in the automotive industry. International Journal of Operations & Production Management, Vol. 32, no. 11, pp. 1281 – 1305. http://www.emeraldinsight.com/journals.htm?articleid=17058038&show=abstract Journal: International Journal of Operations and Production Management This article highlights the importance of valuing all the stakeholders that are involved in the supply chain of a company operating in the automotive industry. Stakeholders that are involved in the supply chain are important because by satisfying them supply chain strategies can be successfully implemented. The other articles have either discussed about the trends in the industry or they have highlighted the importance of using lean manufacturing system or Just in Time in the production system. However this article is critical as it highlights about the importance of integrating the suppliers in the supply chain. A company can improve its performance and reduce its production time and cost, if the suppliers are integrated. David Bennett is one of the authors of this peer-article review and he is at the Newcastle Business School, Northumbria University, UK. Therefore, being a professor at the business school he is aware of different management tools and the importance of integrating the suppliers in the supply chain. Klug is the other author and he is at the Munich University of Applied Sciences. Article 5: Gimenez, C., van der Vaart, T., & van Donk, D. P. (2012). Supply chain integration and performance: the moderating effect of supply complexity. International Journal of Operations & Production Management, vol. 32, no. 5, pp. 583-610. http://www.emeraldinsight.com/journals.htm?articleid=17026911 Journal: International Journal of Operations & Production Management Supply chain is a complex process and managing it is a complex task as defined by the authors in this article. One supply chain strategy or planning cannot be successful at every context and therefore it is critical to understand the situation and formulate strategies accordingly. Integrating the supply chain in the business processes effectively can lead to success. However, it has also been highlighted that the integration of supply chain is only successful when the relationship between the buyer and supplier is highly characterized by high supply complexity. Having a strong relationship with the suppliers in the supply chain has been an important aspect of supply chain planning and control and it has been emphasized a number of authors including Bennett, and Klug, (2012), Ramanathan (2012), Moyano-Fuentes, Sacristan-Diaz, & Martinez-Jurado, (2012). The findings of the article identified that the performance can be negative if there is a structured communication medium in the supply chain. The authors of the article are from Business Schools and thus, they have the knowledge and expertise in business management. Cristina Gimenez is working at Universitat Ramon Llull, Barcelona. Taco van der Vaart and Dirk Pieter van Donk are the faculty of Economics and Business at University of Groningen. So these authors have sufficient knowledge of business and economics and with a number of books and published journal papers cited in the research study, it can be said that the information is highly authentic. FORD MOTORS: MANUFACTURER OF MOTOR VEHICLE INTRODUCTION Different organizations functioning in various sectors face distinctive operations management issues. Operation management includes managing the processes which ease the production of goods and providing of services. For smooth functioning of the system and efficient management of the operations supply chain is very important. Improving the operations is one of the major goals of the organizations. In other words it can also be classified that operations management is the conversion of all the inputs into outputs. This requires control which can be enhanced and strengthened through efficient measurement and constant feedback. Over the years, the ways businesses are operating have changed. Globalization has influenced businesses to change and businesses even in automotive industry have learnt from other companies in the same industry in other parts of the world. In this report a discussion will be posed at Ford Motors which falls in the category of the manufacturing sector. According to the International Standard Industrial Classification of All Economic Activities (ISIC) this company falls under the manufacturing sector. The manufacturing sector comprises of several distinctions and further elaborates the manufacturing of various different products. Ford motors fall under the specific distinction of manufacturing of motor vehicle, trailers and semi-trailers. Analysis of different operations management functions and the difficulties which Ford Motor Company is facing will be discussed in this report. BACKGROUND OF FORD MOTORS Ford motor company is an American multinational automobile manufacturing company. It is headquartered in Michigan, Detroit. It was founded by Henry Ford in June 16, 1903. The company is popular for building commercial vehicles and automotive parts. Ford is excelling under the motto of one Ford. In 2012 the company realized a pre-tax profit of $8 billion. For enhancing the operational efficiency the organization is striving for managing the brands, manufacturing, suppliers and constant product development. The company has developed and enhanced its corporate affairs accordingly so that the operational challenges can be overcome (Ford, 2012). OVERVIEW OF OPERATIONS OF FORD MOTORS Ford is a huge company with widespread operations worldwide. This includes operations in the U.S., Canada, China, UK etc. Ford Motors has an agreement with the Russian automakers which enhances the operations of the business. The core operations which are essential to be highlighted and aid the formation of the value stream include putting together, marketing and sales of the products. For managing the processes Ford Motors has designed the procedures which ease monitoring and structuring the systems for meeting the demand and supply of the products (Ford, 2012). The staff responsible for efficient management of operation requires constantly assessing the technology, design the work system and motivate the employees for enhancing the efficiency. Operations management also includes managing the purchasing, industrial engineering, distribution and maintenance functions while manufacturing the products (Ford, 2012). OPERATIONS PROCESS During manufacturing of the automobiles the operations management require identifying the issues that emerge during the operations and making sure that the process is going smoothly. Operational management comprises of various different functions such as purchasing of raw material, industrial manufacturing for setting the industrial standards, distribution of the final products and maintenance of the equipment. All these factors are the key elements which require that the managers design strategies which cause hindrance in the smooth running of these functions as smooth running of operations is one of the success factors for businesses. A business comprises of three basic functions which are finance, marketing and operations. All these business functions are interlinked. Managers use these factors for delivering value to the customers. Efficient managers interlink the operations with finance and marketing aspects for improving budget allocation, managing the funds, improve the lead time, manage the human resource and improve the public relations. Management Information Systems are used for ensuring effectiveness of the operations which ease the process of decision making. Different qualitative and quantitative approaches are used for enhancing the systems efficiency (Bennett and Klug, 2012). Ford Motors has taken numerous steps for improving the operational efficiency of the organization. For enhancing the storage facility the organization has emphasized on automating the integrated technology solutions. Services rendered by IBM for enhancing the storage solution have improved the operations of Ford. Integration of a main frame storage system has automated the disaster management capabilities of the organization. For staying ahead the implementation of the technological advancements is essential. The organizations corporate management has suggested standardization for simplifying its technologies. Standardization will eventually improve the production efficiency and increase the available lead time for manufacturing the end product (Wee and Wu, 2009). EVALUATION OF PERFORMANCE IMPERATIVES Implementation of the one source operational transfer pricing is a technology which is used by Ford Motors for managing the transfer pricing volatility. Being an organization operating in multiple countries requires that measures are taken for controlling and making transfer pricing transparent. The collection and validation of the data require a centralized system for managing the overall operations. Such systems must be implemented for transferring the pricing analysis. All these processes make the reviewing process easier. This in turn minimizes the risk of managing the reserves, manage the differences in the material cost, minimize tax volatility, audit defense and put more efforts for managing the value added activities and thus overall it improves the operations and efficiency of the organization. Ford has come up with different techniques to improve its processes and the management analyzes the processes and operations on a regular basis to improve the efficiency (Ford, 2012). From amongst many functions which are used for enhancing the operational efficiency one source operational transfer pricing is one example. Lean management and the Just in time (JIT) are also some processes which are used for enhancing the operational management of the organizations. All these functions enhance the quality, speed, flexibility and cost management of the operations. Evaluating these methods eventually lead towards enhancing the operational efficiency (Wee and Wu, 2009). EVALUATION OF THE SUPPLY CHAIN FUNCTION The supply chain of an organization is associated to the transformation of raw materials into the end products. The diagram below shows the simple supply chain process of an organization. Converting the raw material into the final product requires managing the skills and efficiency which ultimately enhances the value of the product for the customers (Wee and Wu, 2009). Ford Motors is a multinational business which has divided its operations into various segments. The basic supply Chain model is shown below. (Chopra, Meindl, and Kalra, 2008) Managing the supply chain of the organizations enhances their overall cost, profit and cash flow. It is important to integrate the suppliers in the supply chain in order to improve the performance (Bennett, and Klug, 2012). According to Bennett, and Klug, (2012) by integrating suppliers, companies are able to offer better quality to the consumers and reduce its cost. Operations management is made successful with the business performance improvement which can be controlled with the efficient supply chain management. Proper implementation of the model will ultimately enhance the lead time and manage the cash flow and the material along with the human resource efficiently (Wee and Wu, 2009). (Deloitte, 2011) TOOLS AND TECHNIQUES USED FOR ACQUIRING OPERATIONAL EXCELLENCE Lean manufacturing, just in time (JIT) and bench marking are the tools which are used for enhancing the operational efficiency of the businesses. In manufacturing businesses like the Ford Motors which manufactures the automobiles this functions reduces the over production, improves the lead time, maintain a balance between inventory and the work in progress, avoids over processing and minimizes the defects associated to production for improving the efficiency (Wee, and Wu, 2009). Other important component is utilizing the workforce for improving the business operations. Ford tries to make sure that the human resource or the workforce of the company is used in a way to improve the overall processes of the organization (Ford, 2012). Ford Motor Company uses all these methods for improving and enhancing the operational efficiency of the business. Monitoring the functions requires that appropriate supply chain system is managed. This enhances the value of the organization for its customers. Ford Motor uses methods such as standardization, automation, transparency and crisis management functions for enhancing the operational efficiency of the business. All these practices are important for efficiency in the operations of the organizations and these have resulted in the success of the organization over the years (Ford, 2012). CONCLUSION Advancement in competition amongst the businesses has forced the manufacturers for opting towards the practices which enhance the operational efficiency. These practices are essential for maintaining competition and cost effectiveness. Ford Motors has over the years applied different techniques for adapting the technological advancements and managing the operations efficiently for increasing the profitability. In this report a discussion has been presented about the operations of the organization. Different cases and challenges faced by the organization were presented and the application of the tools and techniques used for managing the operations were also discussed in this report. Step by step application of all these techniques enhances the operational excellence of the business. Discussion and application of different models on the operating system show the impact which operation management has on enhancing the profitability of the business and Ford Motors has been able to use its operations properly to enhance profits. References Bennett, D., and Klug, F. (2012). Logistics supplier integration in the automotive industry. International Journal of Operations & Production Management, Vol. 32, no. 11, pp. 1281 – 1305. Chopra, S., Meindl, P., Kalra, D. (2008). Supply Chain Management: Strategy, Planning and Operation, Dorling Kindersley: London Deloitte. (2011). Winning with your Supply Chain: Strategies for creating value, and preparing for the rebound. Available from http://www.deloitte.com/assets/Dcom-Belgium/Local%20Content/Articles/EN/Services/Consulting/Winning-with-your-supply-chain-2011.pdf [Accessed 16th November, 2013] Ford. (2012). Annual Report. Available from http://corporate.ford.com/doc/ar2012-2012%20Annual%20Report.pdf [Accessed 16th November, 2013] Wee, H., and Wu, S. (2009). Lean supply chain and its effect on product cost and quality: a case study on Ford Motor Company. Supply Chain Management: An International Journal, Vol. 14, no. 5, pp. 335 - 341 Read More