The Jaguar Land Rover - Essay Example

Table of Contents Table of Contents 2 Background Information 4 Decision making on the procedure of selecting suppliers 6 Choosing and applying appropriate decision-making frameworks relative to the selecting of the suppliers 6 Identification of the sources of information on suppliers 8 Legal requirements that relates to the compilation, application and storage of information 9 Analysis of requisite information in support of the decisions relative to the suppliers chosen 9 The Supply Chain 10 Opinion on how the supply chain for the new vehicle may differ to that of the other vehicles 10 The role of the consumer in the chain supply system 13 Opinions on the potential areas of challenges in the new supply chain 15 Recommendation 18 Conclusion 18 List of References 20 Abstract Sir William Lyons founded the Jaguar Land Rover in 1922. The Jaguar Land Rover is one of the primary players in the automobile industry with its operations indirectly and wholly owned by the Tata Motors Limited. The two major brands in which the Jaguar Land Rover sells includes the Jaguar Cars Limited and the Land Rover. The brands innovate and produce cars in the UK relative to the market demand and consumer preferences. The Jaguar Cars Limited is well known to produce sports cars, while the Land Rover is well known to produce premium 4x4 all-terrain vehicles. With the continuing design and innovation excellence, the two top brands merged to become a world class car producer cognizable for its quality and superior brands. The success of this organization depends on the supply chains and overall management. Various brands have been supplied across the globe through the intensive network that exists. In addition, the company has made its manufacturing process prompt, easy and less costly due to the proximity of the plants which enables splitting of the car body development. Introduction The Jaguar Land Rover is one of the primary players in the automobile industry with its operations indirectly and wholly owned by the Tata Motors Limited. The two major brands in which the Jaguar Land Rover sells includes the Jaguar Cars Limited and the Land Rover. The increasing demands of consumers have agitated the automobile giant to go a step further in inventing the electric car which has unique features. In line with this invention the existing supply management chains may not met the goals and hence, there is need for new supply chains to buffer the company from the ever-increasing competition from other players in the industry, and enhance its endeavors in serving its clients across the international market. In addition, the intended new supply will help expand the present market niche. This brings us to the focus of this report. This report seeks to examine the This study will examine the creation of supply management chains relative to the appropriate techniques of decision making for the new electric car. The following are the objectives that this report will aim to meet. 1. Identifying and choosing sources of data and information that regards suppliers 2. Identifying the legal requirements that relates to the compilation, application and storage of information 3. Choosing and applying appropriate decision-making frameworks relative to the selecting of the suppliers 4. Analyze and present requisite information in support of the decisions relative to the suppliers chosen 5. Offer an opinion on how the supply chain for the new vehicle may differ to that of the other vehicles 6. Evaluate the role of the consumer in the chain supply system 7. Identification and giving of opinions on the potential areas of challenges in the new supply chain Background Information The company has been able to market its brands through various avenues which include the Jaguar Heritage Museum which was established in 1998. The museum has served as a platform for promoting the brands at home. Competition from other players in the industry such as the BMW brands has always revolutionized the market trend. This has led to more innovative brands aimed at putting the organization at the top (SHAPIRA, 2002). The recent urge to manufacture the electric car is motivated by the rivals’ move to manufacture the stylish and modern car. In line with this, the company needs to open up new supply chains, since the existent ones may not serve the desired interests of the new car. The electric car is a new innovation that has not been understood by most of the consumers and this implies that new supply chains and relative management designed to fit the interests of this category of consumers needs to be created (SIMS, 2004). The process of opening the new supply chains is intensive and needs deep considerations of the internal suppliers in term of cost, competence, efficiency and extent of expanding the current market niche (SHAPIRA, 2002). Consideration of these factors it implies that, a due process of decision making should be followed to ensure the right choices are made. It is imperative to note that, the process of selecting the suppliers from across the internal arena is a complex activity which if done wrongly may lead to the fall of the organization in terms of meeting the market demands and expanding the market niche. This brings us to the following decision making framework. Figure 1: Framework on decision making When making a decision concerning the selection of the suppliers, the organization ought to consider the present suppliers and the overall weakness attributed to their system. The new chain of suppliers needs to meet a certain criteria relative to the new product to be introduced into the market (SHAPIRA, 2002). Certain approaches should be applied to ensure that a sound decision is made. Some businesses use the multi-attribute value functions to make decisions, however in the case of JRL, a different approach is embraced. As required the new product (electric car) should be specified. The features such as the size of the engine should be specified in order to understand the requisite effort to seek for the suppliers of materials. For instance, the production line of these cars is intended to begin at the Austria. The JLR management is aimed at producing at least 10,000 cars per year as a start and the production volume to increase with the expansion of the market niche. In making a decision on the nature of the suppliers that the organization need to hire, there is need to consider the product deliverables such as the intended qualities of the end product. The market is saturated with the specifications of the normal car and consumers need qualities such as speed, pump convenience and comfort. This implies that, selection of the suppliers should follow the following criteria to ensure the desired goals are met. In addition, the decision-making process on the nature of the suppliers to select should be aligned to the intended new supply chain. Then this study should consider the current supply chain relative to the new one. Decision making on the procedure of selecting suppliers Choosing and applying appropriate decision-making frameworks relative to the selecting of the suppliers The process of decision making is fundamental in any organization that is ambitious in keeping its competitive edge and market niche relative to the quality and brand of products. The manner in which decisions are reached defines the outcome of the final products. In the case of JLR, various approaches including the multi-attribute and IBM models can be used since both of them takes into consideration the attributes of the intended product or service. However, JLR embraces the later due to its ability to analyze the information and makers work easier for the management to make the decisions, particularly those that concerns the suppliers (BASS, 2003). There is need for adequate information that is relevant to a process or product to be used in making a decision. The JRL has been able for numerous years to sustain its market niche and increased revenues due to apt decisions making processes. The JLR management team has a culture of patience in searching for relevant information whenever a decision is made. To ascertain the benefits of sound decisions making based on factual and relevant information on all spheres of the market forces, consider the following graph of JLR’s growth trends (GUZZO & SALAS, 1995). This is graph is a testimony on the influence of sound decisions making of an organization on the forces of the market. Figure 2: Market Trends Source: http://autonews.gasgoo.com/commentary/summary-jaguar-land-rover-s-sales-performance-in-120307.shtml The above performance is immensely attributed to the organizational culture of endeavoring to make sound decisions. This justifies the intense process of decision making embraced by JLR. This follows that, the process of identifying the suppliers through search of relevant information will be based on the IBM model as the organization prefers its attributes from of making decisions based on various supplier competencies. Identification of the sources of information on suppliers The foremost aspect in this process is acquiring appropriate data of the suppliers to enable making of informed decisions. The Jaguar Land Rover uses the IBM solutions in compiling relevant information for any decision making. It is evident that the IBM solution which connects multivariate data sources and then turns each of the information sources into reusable feeds. The IBM tool can be used to make decisions on the nature of suppliers to select since it offers a better focus on fundamental competencies and attributes. For instance, the aspect of quality of the components needs to be checked from time to time since it has a negative ultimate effect on the overall market performance. The IBM helps the executive committee on supply chain management to cross check on the suppliers with numerous cases of faulty parts and decide to either warn or fire them. In 2012, the JLR faced a serious challenge of poor client relationship management as a result of numerous recalls and component incompatibility during the car assembly process. This saw the management reorganize its supply chain into one autonomous component called Gobel & Partner. This reduced the 16 suppliers to one. In relation to the process of selecting the best quality suppliers, a new system called the Qtrak quality management system was introduced. The system made it easy for the management to identify only the suppliers with past history relative to top quality. This eases the process of making decisions on the nature of supplier needed for the car components, since there is only one central point for quality check. Legal requirements that relates to the compilation, application and storage of information As observed the Jaguar Land Rover has invested a lot of capital in collecting relevant and useful information that relates to the suppliers. This is to enhance its competitive edge by increasing the quality of its products. In line with laws governing the personal information, JLR has always endeavored in protecting the information obtained from various databases under its privacy policy. The JLR privacy policy requires that the integrity of the process of collecting, compiling, applying and storage of information is upheld at all times (TIERNEY, 2008). This is to increase the confidence of its supplies and also to keep its competitors away from knowing the secrets of its supply chains. In essence, it is the responsibility of the top executive management team to ensure that integrity is prioritized in this process. Analysis of requisite information in support of the decisions relative to the suppliers chosen For instance, the quality inspector can opt to use the relative frequency method to check on the probability of selecting the defective parts. In the case of supplier A with 600 parts supplied, the quality inspector finds that 30 parts are defective. The probability of selecting a defective part is computed as follows P (defective) = Number of defective parts/ the total number of parts = 30/600 = 0.05 And in the case of supplier B with 800 parts supplied, the inspector finds 20 parts are defective. The probability of selecting defective parts is computed as follows = 20/800 = 0.025 Upon finding the frequency rates for both supplier A and B, the quality inspector will keep a record and make a follow in the subsequent supplies from these suppliers. In the event that, the defective frequency increases, then the affected supplier needs to be either warned or stopped from supplying. In essence, the process of computation is a critical component in making a decision on the nature of the supplier to select for the new car. Other methods such as classical approach and subjective thinking can be used in complex cases, where an individual determination is used to make a personal judgment dependent on the past history of the supplier (GEUNES & PARDALOS, 2005). It is imperative to note that, in the current situation of selecting the suppliers for the new electric car needs a well researched data on the quality of components supplied, since this is a new brand which needs premium components for the eventual premium product. Besides the computations, additional information on the suppliers’ reputation can be searched on web and technological tools such as the web engine, InfoSpace and metasearch engine. Comparison between the computational data and the information from the search engines helps the executive committee to make sound decisions on the suitability of suppliers to consider. The Supply Chain Opinion on how the supply chain for the new vehicle may differ to that of the other vehicles It is notable that the existing supply chain is designed for the normal car brands. To establish the nature of supply chain requisite for the new brand the current chain is considered as illustrated in the diagram. Figure 3: The present JLR supply chain Source: http://www.sipac.gov.cn/english/2009y/200906/t20090610_47779.htm The attributes of this supply chain are requisite in the supply chain for the new brand; however aspects of finance particularly on the payment period need to be considered since it is not predictable after how long the new product will find its niche in the market. This will need a considerable period of waiting (LAMBERT, 2008). Consider the following chart on the financial analysis of the intended supply chain. Figure 4: Supply Chain and par period Source: http://www.smmt.co.uk/supply-chain-finance/key-findings-and-recommendations Since, the electric car is a new brand that is yet to be introduced into the market, it is unclear how the consumers will perceive it and react. The consumer buying process will depend on numerous factors which include uniqueness over the BMW series and same brands from other companies, the level of information about the car, and most importantly the quality of the car relative to the same brands from other companies such as Ford (BLECKER et al, 2008).These factors form a pattern that will determine the first impression the brand will receive in the market. In addition, the rate at which the market will expand is uncertain, consequently, the nature of a supplier to be considered for this new brand should be that one paid after 90 days. This duration is adequate for the organization to make at least a few sales to ensure that some percentage is from the revenues is sued to pay the suppliers. It is imperative to note that; supplier A represents the suitable supplier for the intended new electric car. In essence, a suitable supplier should be selected after careful consideration of various factors, which include past record, reputation data from web pages, financial requirements such as permanent period and time of delivery. These pieces of information are critical in the process of decision making and the executive committee should consider every bit of data to avoid errors. It is notable that, since 2012, the Jaguar Land Rover has increased its level of good customer relationships through provision of quality premium products (COUSINS, LAWSON & SQUIRE, 2006). This has been achieved through assessment of the suppliers through one central point. The role of the consumer in the chain supply system The consumers play a critical role in the supply chain of any organization in numerous ways. In the case of the Jaguar Land Rover, the organizational culture has made it possible for the consumers to be integrated into the organization. In essence, the consumers in the JR supply chain form a critical role since they are the ultimate users of any product produced by this organization (AN & FROMM, 2005).In line with the importance attached to the consumer, the JLR management team has made it possible for the consumers to give their opinion on the nature of the products and attributed efficiency they might need. In most cases, the consumers help the management in making decisions since they offer the desires in the market. Use of this information helps the management to make sound decisions on the designs and attributed efficiency relative to the engine use and fuel consumptions which are the foremost considerations of any car consumers. This relationship has made the JLR understand the market dynamics and has always endeavored to meet the expectations of its consumers. For instance, in the case of the intended the hybrid and electric cars, the JLR has already identified that for the brands to have easy acceptance once they are in the market, they should have the specifics that fit the consumer’s dynamics such as power train efficiency (SEHGAAL, 2009). This involves the efficiency of the aerodynamics, reduced friction of the tires on the road and engine transmission. The other aspect that the JLR management learned from the involvement of the consumers in the supply chain is that the intended hybrid or electric cars need to have the stop/start technology to enable starting and stopping the cars under any conditions. In essence, the involvement of the consumers in the supply chain is a critical component of learning the behavioral change in the market. This goes in the long way of attaining sustainability of the market niche and further expansion by meeting and satisfying the consumer dynamics. The question that revolves around this scenario is the exact position the consumers occupy in the supply chain. With the intended new car, the likely position that the consumers may occupy by either natural selection or environmental forces is at the middle and end of the chain. At the center of the supply chain, the consumers help in offering the dynamics which they might want integrated in the new car and at the end of the car, the consumers receive the finished product for use (WANG, 2013). Essentially, over many years the organization has always extended value to its customers and this has helped in developing and sustaining its market niche both locally and internationally. In the case of the international market, the organization needs to learn even the culture of its consumers in order to offer designs that are in line with the beliefs. This implies that, the organization’s involvement if the consumer in the supply chain, particularly those of the international markets, which may include the emerging markets, is of critical essence to have feedbacks on the brands for further improvements. As seen in this report, there is stiff completion from other players in the automobile industry such as the BMW. These players have penetrated the international market and they have impacted its trends, this explains the sole reason as to why the consumer is vital in the supply chain (COAD & PRITCHARD, 2013). The market trends cannot be considered if the consumers are not at the fore front. The forces behind the market trends are attributed to the consumers. Essentially, the JLR has learnt the trick of cordial and value for the consumers over some time now and its enhancement to another level is an indication of it continuity commitment to offer the best quality brands. The consumer is a powerful trend changer in a market and any organization that recognizes the value does not hesitate to embrace its customer base to meet its set goals on increased market niche, top quality brands and sustains its position in the competitive edge. Opinions on the potential areas of challenges in the new supply chain Since the supply chain for the new electric car is new, it may face numerous challenges in the line of supply chain. The supply chain of the new electric car comprises of the manufacturers who are the Jaguar Land Rover, the suppliers identified through a competitive process and the consumers who are going to use the cars after manufacturing. Like any other product, the hybrid and electric cars will face challenges right from the supply chain to manufacturing and consumption (PLUNKETT, 2009). Firstly, the challenge of supplying quality and up-standard parts for the manufacturing process takes the center stage in the whole process. This is the foremost challenge that will face the suppliers since it will be first time to supply parts for such a new brand. Issues on defective parts will be eminent and this will take some time to correct since it is a process that requires justification on the defective parts and the requirements of the desired parts. On a similar note, the various designs for the new car will be considered depending on the information from the consumers and the overall market trends (PLUNKETT, 2008). This implies that the manufacturing process will take some time to meet the desires of the market. On the side of the suppliers they will be required to be acquainted with the exact requirements in terms of quality and the intended designs to supply requisite materials. The other aspect that poses a big challenge is the consumer perception. In the case of the Jaguar Land Rover, the consumers are integrated in the supply chain. In essence, the consumers are involved in the process of market research and even the manufacturing process and this implies that, their perception of the intended car might delay the process since the management has to take time to convince them on the benefits of the new car. The consumer perception on a brand or product is a powerful tool in influencing the market trends. For instance, if the consumer perception is negative from the beginning of the process, then, the probability of the product to be accepted after its manufacture is low. In essence, a small consumer base can easily impact the rest of the market negatively by citing the perceived disadvantages of the intended car. This scenario means a lot to the manufacturer. There is need to stop the manufacturing process and invest in perception change. This implies that, the manufacturer should market the car by citing the benefits it will offer to the consumers. For instance, in the case of JLR, the aspect of powertrain efficiency should be well explained to ensure that the consumers understand the benefits that the new car will come along with. The essence of the consumers to understand that the new JLR electric and hybrid car will come with high efficiency engines is of immense benefit in changing the perception. The other challenge that will face the new supply chain is overall functionality (PLUNKETT, 2008). This implies that, being a new brand whose production cost is expensive, the functionality of the supply chain between the suppliers to the manufacturers and to the consumers may be seem a bit difficult in initializing and implementing due to the diverse desires of the parties involved. It is until the desires and demands of the parties are integrated to one common objective that the supply chain will operate smoothly due to the lessened conflicting interests. The needs of the consumers and the suppliers should be harmonized to meet a common level with the goals which the organization wants to meet for the smooth functioning of the supply chain to function properly (GHUMAN & ASWATHAPPA, 2010). The challenge of initial cost of initializing the brand manufacturing process is eminent. The cost of manufacturing this car is too high and this implies that the manufacturer should selected the suppliers keenly to ensure that the period of payment and amount payable is manageable to avoid running operations on debts. For instance, the management should consider the suppliers whose payment period is 90 days to allow the organization plan itself after the manufacture of the car. This is trend is indicated in figure four. In addition, development of the supply chain in the emerging markets may be a bit challenging since there is lack of information about the hybrid cars and the attributed infrastructural structures. This implies that enhancing the supply chain to these markets may be expensive and to some extent impractical. The other challenge that may be faced during the functional period of the supply chain of the hybrid and electric cars is attributed to the numerous components requisite for the car manufacturing process (BARABBA, 2011). Some of these parts include the electric motor, controller and the battery among others. Since they are manufactured by different companies, they need to be harmonized to attain a blended product of high quality. This process is not easy. It is time and money consuming. Consideration of these challenges, one thing comes out clearly that, the whole process of creating a new supply chain system for the intended electric and hybrid cars is an expensive investment which by no means should be planned and budgeted for. This scenario communicates that, the Jaguar Land Rover should be keen when carrying out this venture to avoid making losses, since the possibility of making losses is higher compared to that of making profits. This is ascertained by the existence of a small market size, need to change the market perception about the car and the heavy costs that need to be met for the venture to start. All these are attributed to organizational strategy (IRELAND, HOSKISSON, & HITT, 2008) It is admissible that, the Jaguar Land Rover has a big task ahead and need to consolidate its capital resources, experience, expertise and human resources before venturing into the manufacturing of the hybrid and electric cars (SINGH & KUMAR, 2011). In essence, if all the discussed requirements are met, the supply chain will function as anticipated. Recommendation The Jaguar Land Rover management team should invest in perception change and awareness to create a ready market for the intended hybrid and electric cars. This should be done mostly in the emerging international markets. The supply chain of the new brand should consistently allow the consumer to participate from the beginning of the manufacturing process through market research to ensure that even the latest consumer dynamics are considered in the product. The competitors in the market such as BMW have produced superior products of this nature and it is the responsibility of JLR to carry out intensive market research relative to this category of vehicle to ensure that a competitive edge is sustained. To create a market niche for this category of a vehicle, it is requisite for the JLR to offer a unique attribute for the new car, which will attract the consumers to their product. For instance, the JLR should endeavor in offering top quality with minimal recalling rates. Conclusion The aspects of decision making and creation of a supply chain are critical in any organization since they reflect the ultimate product. The process of decision making as discussed in their report requires a framework whose driving force is accurate and relevant information. The use of IBM by JRL is of great importance since the tool has proved that it can gather information of various suppliers and help the marketing executive committee in making decisions. It is imperative to note that the JLR has excelled in data collection, interpretation and use of the data in making decisions. The present positive trends in growths, revenues and profits of the JLR are attributed to the intensive decision making process which results to the making of sound decisions. As evidenced in the report JLR has gone an extra mile in consolidating its consumers as part of the larger process of creating the supply chain. This explains the value to customers which the organizations have been using for some time to remain in touch with the consumers. In addition, embracing value and connection with the consumer helps the organization to be updated on the ever-enhancing dynamics in the market and this helps in planning to meet these desires. Consideration of all these factors makes the JLR the leading player in the market. Similarly, with the experience and top quality brands attributed to JLR, even the intended venture of the new electric car will flourish and within a short period it have created a mark in the international market. In essence, the strategy attributed to apt decision making model and tools, and efficient supply chain commands the position an organization is able to occupy in the market. List of References BARABBA, V. P. (2011). A design for interactive decision-making in organizations. Axminster, Triarchy. SIMS, R. R. (2004). Ethics and organizational decision making: a call for renewal. Westport, Conn., u.a, Quorum Books. SHAPIRA, Z. B. (2002). Organizational decision making. Cambridge [u.a.], Cambridge Univ. Press Top of Form GUZZO, R. A., & SALAS, E. (1995). Team effectiveness and decision making in organizations. San Francisco, Ca, Jossey-Bass. BASS, B. M. (2003). Organizational decision making. Homewood, Ill, R.D. Irwin TIERNEY, W.G. (2008). The impact of culture on organizational decisions making: theory and practice in higher education. Sterling, Va, Stylus Pub GEUNES, J., & PARDALOS, P. M. (2005). Supply chain optimization. Springer E-Books. New York, Springer. http://public.eblib.com/choice/publicfullrecord.aspx?p=302875. BLECKER, T., HUANG, G. Q., & BAJIC, E. (2008). RFID in operations and supply chain management: research and applications. Berlin, Erich Schmidt Verlag. LAMBERT, D. M. (2008). Supply chain management: processes, partnerships, performance. Sarasota, Fla, Supply Chain Management Institute. COUSINS, P. D., LAWSON, B., & SQUIRE, B. (2006). Supply chain management theory and practice the emergence of an academic discipline? Bradford, England, Emerald Group Pub. http://site.ebrary.com/id/10146652. AN, C., & FROMM, H. (2005). Supply chain management on demand strategies, technologies, applications. Springer E-Books. Berlin, Springer. http://www.books24x7.com/marc.asp?bookid=16293. SEHGAAL, V. (2009). Enterprise supply chain management integrating best-in-class process. Hoboken, N.J., Wiley.http://www.books24x7.com/marc.asp?bookid=33784. WANG, J. (2013). Management innovations for intelligent supply chains. Hershey, PA, Business Science Reference. COAD, N., & PRITCHARD, P. (2013). Leading sustainable innovation. Oxford, DōSustainability. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=779351. PLUNKETT, J. W. (2009). Plunkett's transportation, supply chain & logistics industry almanac 2009: the only comprehensive guide to the business of transportation, supply chain and logistics management. Houston, TX., Plunkett Research Ltd. PLUNKETT, J. W. (2008). Plunkett's automobile industry almanac 2009: the only comprehensive guide to automotive companies and trends. Houston, Tex, Plunkett Research Ltd. GHUMAN, K., & ASWATHAPPA, K. (2010). Management: concept, practice and cases. New Delhi, Tata McGraw Hill. IRELAND, R. D., HOSKISSON, R. E., & HITT, M. A. (2008). Understanding business strategy: concepts and cases. Mason, OH., South-Western Cengage Learning. SINGH, P. N., & KUMAR, N. (2011). Employee relations management. New Delhi, Pearson Education South Asia. http://proquest.safaribooksonline.com/?fpi=9788131726013. Read More