Quality Assurance - General Motors - Essay Example

The United s of America are the pioneers of the automobile industry which started in the early part of the 20th century. The earliest ancestor of the automobile was a steam wheeled vehicle called the Fadier invented by Frenchman Joseph Cugnut (Ideafinder, 2009). The first gas-engine auto turned up in Germany in 1889, but it was until 1901 that cars began to be mass produced in factories. This occurred in the United States of America. Three companies were born: Ford, Chryrisler, and General Motors. These firms drove the automobile industry with great innovations and new edge manufactory techniques and technologies that allowed the majority of American families to own a vehicle. By the end of the 20th century new foreign companies particularly the Japanese firms began to dominate the industry and became a major threat for US auto makers. The company that is going to be profiled in this report is General Motors. The purpose of this paper is analyzing the company with emphasis in quality and performance and to provide recommendation of possible solutions to improve the operations of General Motors. General Motors General Motors was founded in 1908 and during its trajectory it has sold millions of car units to its global clientele. Today the company whose corporate headquarters are in Detroit employees over 244,500 people and has a market presence in 140 countries (Gm, 2009). The company is currently facing major economic problems. The current global economic recession is one of the major factors for their demise, but in reality the problems GM is facing today has to do more with the accumulate effect of years of poor operating decisions that allowed its competitors to further reduce GM global market share. Lean Manufacturing Lean manufacturing is an assembly line methodology system developed originally by the automaker Toyota which is also referred too as just-in-time (Searchcio, 2009). The system seeks perfection and to eliminate waste out the production line in order to reduce costs and increase productivity. A lean manufacturing system retrieves feedback from the customers in order to make adjustment and improve the quality of the goods based on expectations of the clientele. Nine key attributed of a lean manufacturing system are listed below: 1. Reduce waste by emphasizing in inventory reduction 2. Utilization of Just-it-time techniques in order to drive down the production time of cost switching from one product to another 3. Create systems that help employees produce a perfect part every time 4. Reduce space requirements 5. Develop close relationships with suppliers 6. Educate suppliers to accept responsibility for helping meet customer needs 7. Eliminate production activities that do not add value 8. Develop the skills and capabilities of the workforce 9. Reduce the number of job classes to reduce administrative costs (Heizer & Render , 1996, p.290). General Motors has not followed the basic principles of a lean manufacturing system. One of biggest problems has been their lack consideration for implementing design changes in their automobiles in order to meet the customer demands. As the price of gasoline was rising through the 21st to reach a peak of $151 a barrel in the summer of 2008 car drivers were looking for autos that provided a higher mile per gallon (mpg). GM did not adjust to this market adequately. Another problem in their production strategy was the creation of too many brands of automobiles. Having a lot of different models means that there the company has to have higher amounts of inventory because each model utilizes different parts. The company has a poor philosophy as far as its relations with suppliers. They tried to squeeze the maximum penny our the supplier in their negotiation process, which might seem like good but in reality they are fostering a partnership relationship which would provide with greater benefits due to synergy and cooperation consideration in the long term (Economistview,2009). Zero Defect Zero defect is a quality control program which utilizes a continuous improvement approach in order to ensure that the goods or services produced by a company are free of defects. When the program is properly implemented the quality standard of a company improves which reduces warranty costs and creates branding value for a company due to increase reliability and consistency in the quality of the production output. The customer confidence in the product their buying increases which creates benefits for a firm such as a higher amount of sales and an increase in customer retention. In the auto industry cars that do not break down after a few years is imperative for the success of a company. General Motors in 2008 announced a recall of 123,000 Pontiac Vibe hatchback vehicles due to defective power window systems (Parker & Waichman & Alonzo, 2008). This is just one example of many blunders the company has had over the years with defective vehicles. In 1987 the Highway Traffic Safety Administration performed an investigation of possible safety defects in the power steering system of 2.5 million General Motor Cars (Nytimes, 1987). Another recent example of GM’s poor track record concerning quality issues is the defective Saturn transmissions. In September 2008 General Motors had to pay out an estimated $90 million to the owners of 90,000 Saturn for the expenses they incurred due to the faulty transmissions (Gibb, 2008). Reccomendations General Motors is currently facing the biggest challenge of its illustrious history. The company is at the blink of bankruptcy and it needs radical changes in order to change things around. The two quality control systems discussed in this paper can be utilized by the company to create a quality assurance program that would provide the company with a strategic approach and a formula for the success. The company brand image has deteriorated and the American customers along with global clientele have lost confidence in the company’s product. The firm has to get back to the basics and start producing quality vehicles. The company must reduce its amount brands to control inventory better. GM has to utilize innovation and engineering technology to produced new green vehicles. These vehicles have to have a mpg that is at least 10% higher than their Japanese competitors. There must a quality assurance program with a zero defect philosophy because in the past the recurrent defective GM vehicles really hurt the image of the company and the firm was not able to retain its customer as future buyers of GM vehicles. Change management techniques must be applied throughout the entire organization. It is not going to be easy, but the radical changes in this firm are mandatory in order for this company to survive and once again become a profitable firm with a bright future for all its stakeholders. References Economistview.com (2006). Why Totota is better than GM and Ford. Retrieved March 15, 2009 from http://economistsview.typepad.com/economistsview/2006/02/why_toyota_is_b.html Gm.com (2009). About GM. Retrieved March 14, 2009 from http://www.gm.com/corporate/about/ Heizer & Render (1996). Production and Operation Management (4th ed.). New Jersey: Prentice Hall. Ideafinder.com (2009). Automobile. Retrieved March 14, 2009 from http://www.ideafinder.com/history/inventions/automobile.htm Nytimes.com (1987). GM Cars Under investigation. Reuters. Retrieved March 15, 2009 from http://query.nytimes.com/gst/fullpage.html?res=9B0DE4D61F38F935A2575BC0A961948260 Parker & Waichman & Alonzo (2008). Toyota, GM Recall 600,000 Cars for Power Window Problems. Retrieved March 15, 2009 from http://www.yourlawyer.com/articles/read/14204 Searchcio.com (2009). Lean manufacturing. Retrieved March 15, 2009 from http://searchcio.techtarget.com/sDefinition/0,,sid182_gci810519,00.html Read More