The Quality Drag on China's Car Industry - Term Paper Example

Operations Management Article Presentation Article “The Quality Drag on Chinas Car Industry” by LI LUBO, senior director with J.D. Power Asia Pacific based in Shanghai. The article named “The Quality Drag on Chinas Car Industry” provides a useful picture of the actual scenario of the product quality aspect in the Chinese car industry. It highlights that the domestic Chinese carmakers are yet to be in league of international carmakers in terms of quality management. As far as the operation management issues are concerned, this article mainly focuses on the quality aspect. ‘Total Quality Management’ is perhaps the common principle that is followed by most of the automobile companies in China. Management of these companies tries to remind the employees about this aspect by painting signs on entrance gates, in cafeteria and in many other places. By providing the example of Hyundai, this article tries to establish the fact that the carmakers, especially the domestic Chinese carmakers, have no choice but to focus on quality in order to achieve sustainable success. Chinese automobile companies must shift their focus from higher market share to better quality by making significant investment in research and development for further improvement of quality of their cars. There are huge opportunities for these players to make improvement in the areas like handling, power train and ‘driving experience’. Having made all these points, one may ask if quality comes automatically by the mere fact that the need for quality is trumpeted to workers every now and then. The fact is that quality is earned and it must be earned methodologically. In most global jurisdictions as far as business is concerned, renowned companies and multinational corporations have relied on the basic principles of operations management to enforce and ensure quality among their workforce. It is not surprising therefore that in the article, the writer notes that “when the trade-off is between higher sales or greater profits, their instinct is to go for sales, often at the expense of profits” (Lubo, 2012). In the words of McNamara (2011), “operations management focuses on carefully managing the processes to produce and distribute products and services.” It basically entails the practice of using what you have to achieve what you want. The most important factor however is that in determining what you want to achieve, the needs and expectations of the customer must stand out (Dodge, 2005). The question that should be asked therefore is whether the customer needs or expects inferior quality production from Chinese car manufacturers. With total awareness of the ticking clock for competitive advantage among companies around the world, many are companies who are actually operating on the very core concepts, dynamism and models of operations management to yield results in terms of producing quality. A number of these concepts and models are briefly outlined below. Rank (2001) outlines six (6) major concepts of operations management. Supply chain is mentioned as the very first one. Writing on supply chain, Kietzman (2011) notes that “a supply chain is a network of retailers, distributors, transporters, storage facilities, and suppliers that participate in the production, delivery, and sale of a product to the consumer.” The core point here therefore is that the search for quality must be sought for from not just one source but then from a network and an array of persons whose individual efficiencies come together to ensure a holistic sufficiency for customers. To undertake such integrated approach, it is important for stakeholders to devote a lot of time and attention for research. This is in line with Lubo’s admonishment in his article that focusing on quality improvement requires more time to show results and that those who refuse to pursue this may not help advance their careers. Next is the concept of marketing interface. Here, operations managers are expected to be in a position to research the market to identify the precise needs of customers and consumers so that the end products that the company gives to the customer would be something that meets the immediate needs of the consumer at any point in time. With the Hyundai example, it was pointed out that even though the company had just amassed 300,000 units of sales in two years, a combination of ill-researched market force led to a situation where the company could not trace the quality level being sort by customers and so “Hyundai quality did not meet the expectations of American consumers, who complained loudly about the vehicles and then deserted the brand” (Lubo, 2012). This also avoids disappointing sales because the company will be taking to the people only that which they desire. There is also the concept of finance interface, which enshrines operation managers to keep “capital equipment and inventories comprise a sizable portion of many firms assets” (Rank, 2011). There also is the concept of service operations when dealing with operations management. Here, the operations managers are expected to have very intimate and personal relationship with the customers through service delivery. Indeed, the production and manufacturing duties of car manufacturers in China will be of no need if the companies cannot have mechanisms that make customers have satisfactory service deliver. Furthermore, there should be what is termed operations strategy. Operations strategy cannot be underestimated in any way because it is the only way that the company plans ahead of how to continue staying on top above all competitors (Gardener, 2011). Last but not least, there should be process design and improvements, which should be a form of monitoring and evaluation process to ensure that strategies that are adopted are working to perfection and that future ideas are better than existing ones. Finally, as China is becoming the world’s largest economy, Chinese-made products are becoming common in most households. For that matter, customers used to high quality products will expect the same standards from China, meaning that having an effective and efficient Quality management will allow the Chinese corporations to take the lead in most businesses, as they are already leading the cost race. This should also mean that customers must be ready to pay a little more for quality service as Lubo (2012) points out that even though companies may plan for low price car production as competitive advantage, “it is not easy to build high quality into cars at such a low price.” Several tools are thus used in order to measure the product’s quality during its manufacturing such as the PP100, Problem Per 100 units, which indicates the number of units damaged during the production process. As the Chinese ratio is significantly high compared to its foreign competitors, China 231 > US 124, corporations must understand that cost is not the only factor considered in the customers’ buying decisions. REFERENCE LIST Gardener, Frances. Modern Company Practice. 2012. Print.kj PrintHouse Incorporated: Paris. Dodge. George. Practical application of Operations Management. 2005. Print. Kingsford Press Limited: London. Kietzman, Shannon. What is Supply Chain? 2011. Web. 1st February, 2012. Rank J, Operations Management. 2001. Web. 1st February, 2012. McNamara, Cartar, Operations Management. 2011. Web. 30th January 2012. Read More