Grandiose Motors: Operations Management - Case Study Example

Name: Institution: Title: Production and operations management Tutor: Course : Date: Executive summary Grandiose Motors is an automobile organization whose operations concerns motor vehicle dealers and offering of the motoring services like repair and servicing or valuation to check the value of the vehicles. There are many things that Felix Fabulous as the CEO of the organization is expected to put into consideration in the management of the operations. He should be able to plan, control and give a report of the outcome of the activities com-pared to the intended results. These are the major roles of the operations managers in the organizations and enable them to achieve other responsibilities in the operations of the organization. This organization is made up of a network of dealerships that specialize on certain makes of cars although one of them and the most recent which is considered an auto supermarket offering a variety of makes of cars and spare parts. There are some supply chains and inventory management concepts which are essential in the reduction of investment and space require while still in operation. Table of Contents Executive summary 2 Table of Contents 3 Introduction 4 Role of operational managers in an organization 4 Structuring the purchasing and inventory functions for the Grandiose Motors dealership network 6 Differences in purchasing and inventory management policies and procedures 7 Importance of supply-chain and inventory management concepts in reduction of investment and space requirements 8 10 Qualitative and quantitative techniques 12 Conclusion 13 Bibliography 13 Introduction Production and Operations Management concerns the transformation of products and operational inputs into outputs. This is depended on the needs and desires of the customers thus when they are distributed they meet the needs of the customers. The transformation process is also referred to conversion process which involves many activities and methods of handling it. The role of product process in any business organization concerns areas like: aesthetics, performance, quality, reliability, quantity, and cost of production and dates of delivery. Operations management is a field of management concern about overseeing, designing and redesigning the operations of a business in production of goods and services. The responsibilities include ensuring that the operations of the business are efficient using as limited resources as possible and very effective to meet the needs and expectations of the consumers. The study below is a production and operations management analysis of case study on growing pains at Grandiose Motors and the experiences of Felix Fabulous as the CEO of the organization. Role of operational managers in an organization The general roles of operations manager in the management of any organization include: reporting, planning and control. These enable them to perform other responsibilities like development and improvement of the potentials of the junior staffs and improvement of the efficiency of the operations. These operations are the most essential in all the activities of any organization because these managers are responsible for the control of all the operations taking place in the organization and at all levels. They plan for them including how they are supposed to be undertaken and those to undertake them; he then controls them to ensure that they are doe as expected. After everything is done, the operations manager is supposed to give a report of the outcome compared to the expectations during the planning time. These highly influence the performance of the organization and the efficient of the operations (Chary, 2009). As the CEO of Grandiose motors, Felix Fabulous serves the responsibilities of operations management. His main focus is on the expansion of the activities operations of the organization. For the 15 years of survival, the organization has acquired four dealerships in automobile which were concern about marketing different makes of cars. The CEO was excited about the newest acquired dealership because it was like an auto supermarket in the entire network. This works better in the enlargement of the market because different from the traditional dealers, the auto supermarkets sells multiple makes of cars under a single roof. The organization has therefore grown in size and reputation and the CEO attribution these advancements with three most independent factors: volume, marketing approach and after sales services. Structuring the purchasing and inventory functions for the Grandiose Motors dealership network Structuring of purchases and inventory concerns the way in which an organization plans for the purchases to be made as well as keeping their records to be referred to during the marketing process. Generally purchasing and inventory management structure is to increase business profits as well as driving down the costs of these operations. The main objective of these operations is to put in place a service and cost effective inventory management strategy to support the corporate goals and objectives of businesses associated with distribution. Grandiose Motors is an automobile dealer which purchases manufactured vehicles and sell them to the distributors. It has a network of dealership formed by various car dealers under a common management; the organization buys ownership of the existing dealers and improves their operations to meet the expectations of the organization. It started by buying the bankrupt Mitsubishi dealership and three more others with the latest showing the most potential because of its wider market (Arora, 2004). When structuring for the purchases and inventory of the products and services required in the organization, Felix Fabulous should consider the capabilities of each dealership associated with it to avoid the risks of losses. The motor vehicle and the spare parts bought should comply withy the needs and desires of the targeted market thus the demand and supply curve will be maintained. Apart from the auto supermarket which deals with a variety of motor vehicles the other three dealerships in the network are desired to certain makes like the first dealership deals with only Mitsubishi makes. Felix should always have in mind that the customers expects all the after sale services from them for example, repair, servicing and sometimes valuation to value of their machines as well as gauge for the deteriorating rates. As the purchasing department plans for the parts to be purchased depending on the services they offer, they should also consider other factors as the costs to support the concept of one free- lowest price as well as provision of rights parts at the desired time for faster and reliable after sales services. Both internal and external factors like the intended services and changes in the needs of the consumer market due to changes in the style of living should foe instance changes in technology should be considered (Panneerselvam, 2006). Differences in purchasing and inventory management policies and procedures The policies and procedures of purchasing and inventory management differ as the dealership purchase different types of service parts and materials. This because each of the four dealerships are expected to purchase their own materials and service parts thus following differing policies and procedures that they felt were most suitable. The purchase of lubricants and genuine parts is depended on the services that any dealership offers. The process of buying spare parts is depended on the demand of the consumers and the maker of the vehicle to be serviced (Rama, 2007). These parts are specified for any make of the motor vehicle and cannot be put to any to avoid complications for example; the parts of Nissans are not the same as those of Toyotas and Volkswagens. The procedures of getting the parts of a Nissan as well as the prices may completely differ depending on the source and availability of these materials in the market. Most of the spare parts are acquired from the manufacturers of the machines thus they may know the exact material that best fit any given vehicle while others may be made by other companies like the assemblers. The lubricants on the other hand may not require much as compared to the parts because they all serve the same purpose; are applied between metals or on joints to reduce friction. There are a wide range of oils and lubricants which are considered for the motoring needs like maximizing wear and resistance of corrosion. These lubricants are easy to buy since they are not specific hence the purchasing management can set policies and procedures of obtaining them from any level of distribution. This common is available at any desired time. The operations manager of Grandiose Motors should set the policies and procedures of buying the general materials and services like lubricants mostly on high quantities to minimize the costs of buying in small bits. This should be done after having a thorough market research of the available commodities and their prices. This will help the general management to plan for policies and procedures to be considered while purchasing them as well as supplying them to the consumers. The management of various departments or dealerships should be advised to set policies and procedures of obtaining their spare parts depending on the maker of the vehicles that they specialize in (Kumar, 2006). Importance of supply-chain and inventory management concepts in reduction of investment and space requirements The objective of the supply chains is to provide clients with what they want and when. Inventory management plays great roles in every supply chain’s need to satisfy the clients. Supply chain management concerns the management of network of interconnected organization departments involved in the provision of services and products packages which are required by the consumers. The supply chain management covers all movement and storage of raw materials or products and the activities to be undertaken throughout the production process until the products reach their destiny. A supply chain is a group of organizations directly linked by either one upstream or downstream flow of the products, finances, services or information from the source to the customer. The supply chain involved in Grandiose Motors entails motoring products and services. The chain is made up of several dealers offering unique products and services; dealing with certain makes of vehicles although the most recent dealership is of an auto supermarket which offers a variety of makes of vehicles under one roof (Garland & Anthony, p. 2003). There are many benefits associated with supply chain in comparison to the other methods. This type of management works to undress the following problems: distribution network configuration, strategy of distribution, tradeoffs in logistical activities, information, cash flow and inventory management. In this organization, supply chain is considered from a cross function approach which includes the management of movement of products and services. The supply chain enables Grandiose Motors to reduce its cost on investment and space because the dealerships are well organized on the products that they handle. The strategy of distributing the motor vehicles and other after sales services offered like repair and servicing is well controlled because each dealership handles all the operations on their line of specialization. Supply chain also enables the organization to survive in the competing global market by relying network of operations. The advancement in technology has enabled the Grandiose Motors to operate a solid supply chains networks whereby each of eth dealership are able to focus on their specified business operations. These dealerships improve the general performance of the entire organization by competing with each other. Each of the management of the dealers is keen on the activities of their operations since they are well defined to their linage (Gorawara-Bhat, 2000). The operation process can be considered in the context of many factors like effectiveness, efficiency, flexibility, quality, internal control and compliance to various statutes and policies. The effectiveness of the operation is the extent on which the outputs which are expected from the process are obtained as planned. It is considered as the as the first measure of the fundamental adequacy of the process and its ability to fulfil the most logical and reasonable expectations of the process. The efficiency of the process explains how fast it takes to have things done as the expectations of eth customers. This is considered at all levels from the purchases through the production process to the distribution. The process of conversion of the raw materials or services to status that are acceptable or suitable use by the consumers is effective if it is done within the stipulated time. The efficient of the operations process is determined by the amount of time that it takes and costs to the organization. The consumers in Grandiose Motors expect some motoring services for their vehicles; these should be done within the planned time and also cost effective to the organization. Some of them come as after sales services hence the consumers are not charged anything (Lewis & Slack, p. 2003). Internal control is another aspect explaining the operations process. This is applicable in scenarios whereby the quantities of the major materials are regularly ordered and consumed. The spare parts for the motor vehicles may be highly demanded in the auto supermarket offering variety of makes. Internal control is essential for the organization to be able to monitor the supply, as well the prices exaggeration. This is because the prices of these commodities are very unstable hence needed to be regulated to prevent the organization from making loss as well prevent the consumers from being overcharged. Compliance to various statutes and policies is essential in the operations management especially where payment is made to consultants and some service contractors. This should be done after the deducting all the taxes and the amounts deposited in the treasury of governments. This for the security and sustainability of the organization by complying with policies and regulations of government thus are not liable to criminal or civil legal action (Kamauff, 2009). Industry consolidation, which involves creating huge global corporations through joint ventures, mergers, alliances, and other kinds of inter-organizational cooperative efforts, has become increasingly important in the twenty-first century. Among organizations of all sizes, concepts such as agile manufacturing, just-in-time inventory management, and ambidextrous organizations are impacting managers' thinking about their organizational structure. Indeed, few leaders were likely to blindly implement the traditional hierarchical structure common in the first half of the century. The first half of the twentieth century was dominated by the one-size-fits-all traditional structure. The early twenty-first century has been dominated by the thinking that changing organizational structures, while still a monumental managerial challenge, can be a necessary condition for competitive success (Davis & Aquilano, 2002). Qualitative and quantitative techniques The use of both qualitative and quantitative techniques is essential in the operation management as guidance in the management of the operations. The quantitative techniques enable the CEO of the organization to relate with the other staff members as well the consumers while the qualitative techniques are mostly considered in eth management of the technical operations, it is considered by the operations manager in the understanding of the in-depth activities of the automobile organization and all the motoring services as well as the products they deal with (Waters, 2006). There are many and differing recent trends in the operation management that the CEO and the entire management of Grandiose Motors should consider in the, management of their operations. These include; global market competition, operation strategies, flexibility, workers involvement among the others. These enable the organization to improve its operation s to suit the expectations of eth consumers as well as enable the organization to survive the stiff competition of eth market. These trends are intended to make the organization fit in the global world of business. Conclusion Felix Fabulous as the CEO of Grandiose Motors is a member of its operation management. There are many things that the operations manager of the organization is required to put into consideration for the success of the operation. He should be able to structure the purchasing and inventory functions for the network of the dealership of the organization to ensure that they meet the general goals and objectives of the organization. Other factors of operations management process should be considered to boost the management and operations of the organization. Bibliography Chary, 2009, Production and operations management, London, Tata McGraw-Hill Education. Arora, K., 2004, Production and Operations Management, London, Firewall Media. Panneerselvam, R., 2006, Production and Operations Management, New York: PHI Learning Pvt. Ltd.,  Rama, P., 2007, Production and Operations Management; Business & Economics / Production & Operations Management, (2) p. 275-315. Kumar, S., 2006, Production and Operations Management: Business & Economics / Production & Operations Management, (2)3; p. 98-102. Garland, J. & Anthony, R. 2003, Large-scale software architecture: a practical guide using UML: Timely, practical, reliable, (3)2; p. 134-145. Gorawara-Bhat, R., 2000, The social and spatial ecology of work: the case of a survey research organization: Plenum studies in work and industry, (2)3; p. 56-64. Lewis, M. & Slack, N., 2003, Operations Management: Critical Perspectives on Business and Management: Critical Perspectives on Business and Management Series, p. 167-185. Kamauff, J. 2009, Manager's Guide to Operations Management. Briefcase Books, (2)1; p. 123-143. Davis, M. & Aquilano, N. 2002, Fundamentals of Operations Management: Business & Economics/ Management, (4)2; p. 67-85. Waters, D., 2006, Operations strategy: operations management, (4): p. 57-78. Read More