Comparisons of Production and Operations Management among Countries - Essay Example

COMPARISONS OF PRODUCTION AND OPERATIONS MANAGEMENT AMONG COUNTRIES AND THE DETERMINAT OF COMPETITIVE ADVANTAGE By Location Date Comparisons of production and operations management among countries Introduction The prosperity of nations squarely depends on its ability to utilize its resources in order for them to gain competitive advantage in their industries as they operate in a globally competitive market. Therefore, a country depends more on its industries in gaining competitive advantage against rivals through innovative strategies and constant upgrading within this process. In essence, nations are able to gain competitive advantage by applying highly localized mechanisms by the assimilation of knowledge and technology as part of the desire to achieve industry and national growth (Surie 2008, p. 102). As mush as nations are able to attain this fact, they also cannot be dominant in all industries through the application of a production or operations management system that is effective. The implication of this is that nations are only able to succeed in one area of operations or industry based on the fact that their work environments dynamic and challenging for the good of the nation. In most cases, a nation is able to formulate an operations process that is unique to its nation that can be drawn from the production process applied by a certain company. A better placed example of this would be the Just in Time strategy developed by Toyota in the 1950s and is applied across Japanese industries and has influenced an increase in the productivity levels through the elimination of wastages (Fruin 1994, p. 174). Essentially, countries rely on their own production strategies in order for them to be dominant in certain industries as is the case of Japan and Toyota. Based on this overview, this essay will delve into the comparisons of the production and operations management systems that help in revealing the ways in which they act as determinants of national competitive advantage. The focus will mostly be in Japan, China, Germany, USA and the UK by determining the operations and production management systems applied in these countries. Management techniques, use of machinery and equipment The main idea behind operations management is ensuring that the business operations within a company are efficient through the use of as minimal resources as possible while seeking to meet the requirements of the customers. The top management of a company tends to develop the strategy, then leave it for the other levels of the organization to implement them, but the role of oversight remains that of the senior management. Essentially, the USA has for a long time applied the American system of manufacturing that was later expanded by Henry Ford when the company introduced the model T car. Before this production system was introduced, production was mainly through the domestic system and the craft guilds where merchants took the materials required in the making of products to the home of craftsmen in order for them to work from there. This meant that each process of production required handling by a specific artisan in different locations, which relatively a time consuming process. However, things changed during the First Industrial revolution in the 18th century where merchants made use of the American system of manufacturing that included the use of mechanization in the production process and interchangeable parts. Henry Ford made use of this concept at Highland Park, where he created an assembly line where the intention was to create an affordable car through a simplified process that would minimize the wastage of resources (Coffey 2006, p. 1). The concept was a success as it helped in mass production of the product that later many industries in the USA also took up in order for them to increase their production levels. This production system has been applied in many nations across the globe since it was invented and has led the USA in gaining national competitive success (Khir & Rubenstein 2008). Japan uses an almost similar approach through the Just In Time production strategy developed by Toyota, which focuses more on minimizing wastage within the production process and ensuring that a maximum return on investment is achieved. The strategy influences production effectiveness by using Kanban signals that communicate on which production stages are complete and which one should follow so as to avoid the repetition of tasks. The advantage that this aspect presents is that it helps a company to pay workers for the normal working hours rather than having to pay for overtime. Additionally, the JIT production strategy helps in the smooth running of the supply chain because a company only orders for the materials it needs at the time of production rather than ordering for materials that might be needed at that time. Storage space is also reduced because there is no need to store raw materials that is not needed, which can be a way of managing resources effectively. Germany also has one of the world’s largest automobile industry after Japan through its production of renowned car brands such as Mercedes BBenz, Volkswagen and Porsche among a list of other car brands that target the high end market in the world. Commonly referred to as German machines, the car brands from Germany do well in other foreign markets, hence influencing the notion that Germany has been able to gain competitive advantage in the automobile industry. The manufacturing system applied by companies such as Mercedez Benz focus more on limiting the amount of investments that can be made for each the production line of each car model. Mercedes uses the MO (Mercedes-Benz Operations) operations strategy, which reduces the fixed costs, is flexible and increasing productivity levels through lean manufacturing. According to Hetzner (2014), the system seeks to eliminate the manufacturing network that is controlled by individual factories through plant directors to have one that is managed by four senior directors. This strategy is the ideal one because it helps in reducing the amount of capital investments and lowers the fixed costs through a centralized supply chain management system. In essence, this manufacturing strategy allows Mercedes to operate on a global production network, but with the individual locations being responsible for their own logistics and quality. Therefore, this operations strategy requires that individual plants do not operate autonomously but the brand architectures ensure that production is similar across all the plants. In China, the concept of operations management is a relatively new concept, but many industries have adopted this, especially based on the fact that China is the world’s leading manufacturer. Based on this, the Chinese government has seen the need to include operations management as a way of improving oin the quality of products being manufactured in China so that this nation can continue enjoying the competitive advantage it has in the manufacturing industry. Most of the companies in China are state owned based on the socialist ideology that is applied in this country that can still make use of the operation management tool for increasing production efficiency. China is learning from nations such as the USA on the need for listening to the market demands and making the production management system to revolve around the same. One such demand is the need for the society to go green that requires that the products manufactured are not harmful to the environment and that they are the sustainable options. This helps in the marketability of products meaning that those products that are not aligned to this demand are likely to attract minimal sales and would not be preferred by the market. China’s industries through company heads have attempted to apply the lean and six sigma production systems but have not been successful because of the method of application (Panneerselvam 2012, p. 635). Presently, Japan has been able to achieve competitive advantage in the automobile market because they have developed the traditional approaches to car production further. The result of this is the Just In Time approach or lean manufacturing that appears to have been an expansion of Fordism as developed by Henry Ford. The UK automobile sought to apply the Fordism concept, but was not successful, hence requiring an improvement of the same through the localization aspect (Zeitlin & Herrigel 2004, p. 125). In essence, automobile manufacturers discovered the missing link in replicating Ford’s mass production idea effectively to which Japanese automobile companies were able to apply this production management system, which influenced their production levels (Schrotter 2005, p. 61). For the UK the missing component that the UK manufactures discovered was the need to invest in the knowledge of employees and exploitation of the same, which in turn fosters continuous improvement on the performance of a company. For the UK, industries have included the humanization factor within their production management systems that the just in time approach in manufacturing had ignored that has led to the gaining of competitive advantage for this nation. This means that the UK applied production management system focuses on influencing employee commitment to their work rather than to their employers as it is in the case of the JIT approach used in Japan. The beauty of this approach is that companies in the UK are able to influence innovativeness among employees, which is an effective way for achieving the desired manufacturing capability (Sweeney 2005). In order for companies to compete on a global scale, they should be able to localize the production management strategies that they can be able to suit their needs rather than implementing them in their raw form based on their success in other countries. Japan has been able to import its production management system to the USA has been able to register significant success within the Japanese companies operating in this region (Florida & Kenney 1992, n.p). Supplier and marketing networks differences within the automobile industry With the aspect of globalization being most dominant in today’s world, many companies have had to realign their manufacturing, marketing and development competencies with this concept as a propellant to success in the automobile and steel making industries (Madar 2010, p. 133). This also requires the inclusion of very comprehensive coordination within the value chain through the application of interborder strategies. Competition has become steep for players within the automobile industry, which has led to the inclusion of international strategies as an attempt to stay relevant in this market (Qimiao 2009, p. 20). Human resources and training Culture can be a hurdle towards the introduction of a production management system that will be able to increase production efficiency, but it is manageable. The idea is not to impose a system that goes against the existing corporate culture, but it should be able to complement the same in order for it work and avoid resistance from those that are being targeted. The process should also be involving and participative so as to influence innovativeness among team members, which can lead a company within a nation to achieve competitive advantage (Pitsis 2012, p. 88). This can be necessary, especially in countries such as Japan, where the JIT approach is applied where the management team is considered superior and considered the main source of guidance. The success of this approach is visible in UK where junior members are considered to be partners in the development process of a company and where their input is valid, especially when a company seeks to achieve growth (Godwyn & Gittell 2011, p. 284). In terms of marketing, automobile companies should be able to understand their markets before they embark on the process of manufacturing as this will be helpful in meeting the market needs effectively. As much as the approach being applied is localized, it should also be able to meet global standards so that it remains relevant and relatively acceptable (Freyssenet, Shimizu & Volpato 2003, n.p). The trends is now the application of technology in all aspects of production of and also marketing as many of the targeted markets seek convenience (Okazaki 2007, p. 1). Therefore, companies seeking to achieve competitive advantage within their respective industries should make sure that technology driven options are their strengthens when intending to meet the needs of their target markets. Production and operation as strategy Germany was considered to have perfected the modern automobile industry in the 18th century, but USA later on overtook this country in the 20th century through the application of Hery Ford’s strategy (Blamming 2000, n.p). World War was an essential platform as it enabled countries to invest most of their resources into military vehicles that soared automobile production in Europe and Japan (Pavlínek 2008, p. 3). In the USA, the demand for the creation of automobiles and parts was influenced by the fact that it had vast land that could no longer be covered on horse backs hence requiring the development of gasoline powered machines. At that time, quality was not a standard requirement, but Ford later became the game changer as it sought to develop quality cars that were to be affordable to the population that needed them. Sloanism as developed by Alfred Sloan, the then president of General Motors in 1923, replaced Fordism because of its flexible nature especially in the production process of automobiles (Heitmann 2009, p. 60). Competitive advantage was gained by General Motors through this approach because they used to mass produce different car models each year and had different prices according to the niche market being targeted (Mitchell & Coles 2003, p. 131). According to Sloan, the Great Depression did not affect the car sales of GM because the company made profits on an annual basis, making it to a more applicable strategy to Fordism that only mass produced one model. Historical and institutional explanation of varying management approaches and investments, changing patterns over time In the UK, the automobile industry is the most lucrative industry with its enormous contribution to the GDP of the country with production continuing to be high currently as compared to the 1980s. However, production in the USA has been decreasing over the years, but Japanese car manufacturing has continued to rise by the day, especially in the UK (Cooney & Yacobucci 2007, p. 10). The UK has continued to export vehicles to the USA and the country owes its success to the Japanese approach of car manufacturing though it has had to localize it to include viewing employees as untapped exists because of the potential they hold (House of Commons: Great Britain 2007, p. 82). The reason why the market demands for UK automobile is high is because the company’s offer value for the money that their customers are willing to pay, which is also the same to the automobiles from Germany (Holweg & Pil 2005, n.p). To them it is not more of mass production through lean strategies, but it is mostly based on the fact that their greatest reward would be to satisfy their target markets because of the quality attached to their products and their reliability. Conclusion In essence, most companies have failed to effectively implement production systems because of the management taking hard stances rather than the softer approach to implementing change. This means that managers should take up the leadership roles and ensure that they communicate with the employees on the way that things should be done so as to reduce on the productivity inefficiencies. Employees should have adequate training in order for them to manage their work stations effectively as this can also help them in identifying the problems that are likely to result to wastage during manufacturing, which should be eliminated (Eloot, Huang & Lehnich 2013). In most industries, the process of introducing an operation management system that is likely to influence lean manufacturing has been met with resistance because of cultural differences meaning that the Chinese should be made aware that these strategies do not intend to replace their cultural and traditional attributes. The UK’s automobile market is also considered to be one of the strongest in the world, but recent competition has influenced a change of tact by automobile makers because of the excess product capacity that is being witnessed across Europe. 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