This report was compiled for Chief Executive Officer of XXXXXXXX being answers to queries raised by him.
I have taken efforts in this report to emphasize vital facts which are important for the progress and growth of the XXXXXXXX. However, it would not have been possible without the kind support and help of many individuals and my colleagues.
I would like to extend my sincere thanks to all of them. I regret my inability mention all of their names.
XXXXXXXX is basically engaged an assembly industry. On the whole this industry depends upon iron and steel and many other materials for assembly and trimming. Most of these components are outsourced and are manufactured in different factories which are widely scattered. This report analyzes the advantages and drawbacks of XXXXXXXX’s approach at the factory which manufacture the jeep Liberty. The industry has witnessed rapid strides with the time and has been revolutionized in matters of model, shape, speed carrying capacity, amenities etc. Speed luxurious jeep with communication facilities have introduced to the market by Daimler Chrysler’s new factory plant. A large number of companies are manufacturing different types of jeeps for both defense and civil uses and as a result there is stiff competition in the market. It is necessary to evaluate the entire factory and management system to face the challenges posed by the competitors.
The company xxxxxxx takes less working hours than any other competitors’ vehicles and it is 26.11 worker hours. Ford build its Escape SUV in 22.54 worker hours and Nissan requires only 18.63 worker hours. The company outsource components of Liberty and received these components when they are required. The company XXXXXXXX has three plant manufacturing complex and it has the oldest auto plant. It also has the newest modern high-tech plant. The oldest facility dated back to 1910 and houses the body and paint shops for the Jeep Wrangler. It is assembled in the second facility. Third facility is new factory with the advanced technology and equipment to manufacture the Jeep Liberty. It is the first time that all of these have been gathered and a full assembly plant has been created under one roof.
xxxxxxx has Jeep manufacturing plant has all the requirements to be a one production plant. The first and the oldest plant is used as the body and paint shop, second plant as the assembly plant and the third plant is equipped with the modern and advanced technology to manufacture the Jeeps. XXXXXXXXhas taken up the Just-in-time manufacturing method and has reduced the inventory and decrease the capital requirement. The XXXXXXXXJeep manufacturing plant appears to be eager on improving its competitiveness by dropping the time and cost. It incessantly monitors the competitors data to analyze its status and looking for the possibilities to make improvement. Daimler Chrysler’s Jeep manufacturing facility had outsourced all non value adding activities and is focused on its core operation. This would make the time of the management saved and management can monitor make decisions to introduce new strategies for achieving its desired goals.
The xxxxxxx has a factory which consists of the oldest plant in the world as well as the newest and advance plant. They consists of latest tools to produce automobiles. These facilities are incompatible since the oldest system will not have built according to the cotemporary requirements and this may affect the production. Daimler Chrysler installed equipments similar to what was used at the Mercedes facility and paint shop from truck plant in Delaware. The products Mercedes and Jeep Wrangler cater to different section of customers. Mercedes cater to high end customer who wants their products custom built. Even though Jeep Wrangler doesn’t share the same product position as Mercedes and has to be fully conscious on balancing cost and throughput yield. Hence adopting manufacturing technologies which are consistent with the requirements of the customer segment which Jeep Wrangler is striving to achieve.
xxxxxxx appears to be adopting traditional vendor management techniques and they require parts to be delivered to the assembling point (Just in time), in the failure they impose penalty to the vendor. This may mean that the vendors may be charging higher prices on all parts such supplied so as to compensate to any penalty imposed should they be unable to deliver on time. In addition the quality of such parts may be questionable since the suppliers may be keen in completing delivery with little concern on quality. Practical integration with the suppliers where by company could attain more value addition could be an alternative methodology for value improvement. Furthermore Vendor Management Inventory is another option which can be used worldwide which would strike a balance in zero inventory and parts as and when required.
The layout of xxxxxxx’s Jeep Wrangler manufacturing plant is a ‘Product Layout’. Product layout involves locating the transforming resources entirely for the convenience of the transformed resources. The transformed resources flow along a line of process. Stoppage in one plant may result in delays in other plants and accumulation of finish products kept idling. Inappropriateness is layout in each of the three plants may in turn affect the production line.
Daimler Chrysler’s Jeep manufacturing plant separated and analyzed as per Value Chain Management1 perspective as follows.
Raw materials received from suppliers and send them to the assembly point and xxxxxxx operations are based according the system of just-in-time and this refers to the components received as and when required. In order to avoid work breakdown due to the fact that no availability of raw materials the company maintains a better supplier management practice. Company impose penalties for not delivering necessary components to the assembly point on time. Supply chain risk management is responsible to inbound logistic procedure. Increasing cost resulting companies to search for alternative sources or adopt other production techniques. Therefore supply chain risk management is an important section of the jeep production facility of Daimler Chrysler.
The company has adopted up to date modern techniques in jeep manufacturing plant and operational aspect of value chain management covers the actual assembly process. It takes every endavour to achieve better quality production adhering to lowest time duration and cost. On the other hand it would require progress as its manufacturing process is presently far behind its competitors. Daimler Chisler has invested over US$ 500 million in its new plant. Operations are closely integrated and materials are sent at the assembly point as and when required. It has initiated just in time approach or the Lean manufacturing.
Another aspect of value chain management is customer relationship management. The company send its products to customers and company has its stock keeping stations. As same as the chain management, management of customer relationship involves amalgamating and networking the marketing such as wholesalers, retailers and finally the end users who are customers. Outbound logistics is also a extremely significant aspect in the company monitors its finished products and statistics are prepared , complaints received and recorded. Customer complaints are taken and consider very seriously and find solutions for them.
xxxxxxx’s in its Jeep plant produces jeeps with the target of exceeding the expectations of its customers. The Company has a well-built focus on marketing communications and promotions of sales and marketing. With modern technologies XXXXXXXXaspire to provide customers with quality products which are jeeps thereby increasing value and fulfilling the needs of the customers.
There are lot of checking points has to go through prior to products are delivered to the market at Daimler Chrysler. The Company has an effective way offering customer service and also handling complaints of the customers effectively. specially in this industry of automobile, customer satisfaction is a significant aspect. There must be a effective mechanism to solve customer problems and pave the way for customer satisfaction. In order to make loyal customers for any company it is a must to handle customers problems and make happy customers.
Purchasing of goods services and materials are the responsibility of Procurement. The target of this arm of the company is to get quality products for minimum cost. Supply chain management and supply chain risk management are involved in procurement. Procument section of the XXXXXXXXis responsible for obtaining the materials at the right assembly point at the exact time of production. Therefore this section must be handled by the experienced and expert employees. They must know how to coordinate all functions of the company With the advancement of computer technology and Information technology this section should b e fully computerized and web based procumbent section is a must to fulfill the contemporary requirements.
Advance technology is significant in achieving competitive benefits. The company has to understand this fact and had commissioned an assembly plant equipped with advanced technology so that jeeps could be produced with highest quality standard at low cost. Just in time manufacturing philosophy does not involve incorporation of advanced technologies. Supply chain management is linked with the automobile plant whereas inventory requirements are communicated to the suppliers when needed with the automobile plant whereas inventory requirements are communicated to the suppliers when required automatically there suppliers to deliver the materials at assembly point. Further supply chain management marketing, customer relations also can be well incorporated with the advanced technology.
Management of Human Resources
In any organization most important aspect is its human resources. Therefore lot of qualities are evaluated when recruiting an employee. Company requires people who can work as a team in order to achieve the company goals and aspirations. For any organization today it is a challenge to find people with skills , capabilities and exact attitude who can dedicate to the work with cooperating with others and also with supervising people. Therefore XXXXXXXX needs to train its employees with the necessary skills for the current situation.
Technologies which includes manufacturing tools, management information systems, are the infrastructure. Daimler Chrysler has specially made a manufacturing plant with advanced technologies. This clearly requires information communication, incorporation with suppliers and customers etc. Value chain analysis represents a tool used by many companies in assessing and improving their inside abilities in view of striving to attain its long term goals. As mentioned above in the analysis, XXXXXXXXhas fine tuned its internal capabilities in line with its goals. This, however, requires continual upgrading as new technologies are discovered every day and present ones becoming out of date quickly.
Operations management need more defined objectives which specially to contribute to its basic requirement of satisfying customers with quality products.
The five basic objectives are:
- Quality of the products should be to customer satisfaction.
- Supplying products speedily when orders are made.
- Delivering products or services as agreed with the customer.
- The degree to which an operations process can change what it does, how it is doing it or when it is doing.
- Produced goods at a cost which enables them to be priced appropriately for the market while still allowing for a return to the company.
The automobile is a highly engineered, sophisticated product that meets stringent reliability, and durability. Its design, manufacture, and operation is sophisticated process and technology considerably contribute to improving competitiveness in automobile industry viable innovations and endeavour to produce environmentally friendly automobiles. Advanced technology have an impact on design and manufacture of automobiles. It appears these aspects are not adhered at the XXXXXXXX jeep manufacturing process.
Today’s world customers are prefer to eco friendly vehicles all automobile manufacturers are conducting research and studies to find ways to manufacture eco friendly vehicles. Research is conducted in finding advanced lightweight materials, energy conservation, and aerodynamics, improving efficiency of internal combustion, emission control and advanced crashworthiness. Daimler Chrysler’s Jeep manufacturing should consider the above as serious in manufacturing. This would not present unattainable as the firm posses one of highly technologically sophisticated manufacturing facilities in hand.
Advanced technology does have a positive impact on production and this same principle is applicable for Daimler Chrysler’s Jeep manufacturing. Technology is ever progressing continously. These developments are aimed at finding the most economical technologies in manufacturing. XXXXXXXXbeing able to implement Just-in-time initiative is a technological deployment. The Company is able to let the vendor know exactly when the shipment should arrive and where and how the particular shipment would fulfill the manufacturing process which is already in process. Resources would be required when advanced technologies are taken on. This present the Company with benefits and reduction of cost is one of them. Other benefits are flexibility and quality improvements.
Automobile companies are engaged in continuous research and development and are being able to find the most fitting materials and technologies which make improved vehicle efficiency, low emissions and protection to the travelers.In the event XXXXXXXXfocus its attention on these aspects it can secure more custoemr share in the market.
Flexibility means able to change the operation in some way. There are four different types of flexibilities.
- Ability of the operation to introduce new modified products
- Ability of the operation to produce a wide range or mix products
- Ability to change its level of output or activity to produce different quantities or volumes of products
- Ability of operation to change the timing of the delivery of the products.
Mass customization is defined as the ability to produce products in high volume, but
vary their specifications to the requirements of individual customers.Mass
customization is achieved through flexibility in design. High variety does not produce
high volume. Furthermore it does present the organization with high cost in comparison with low variety production. Mass customization however, has become a norm in the automobile industry. It increases customer satisfaction. More importantly flexibility enables plants to respond more effectively to changes.
xxxxx’s Jeep manufacturing mass customization would yield more
benefits. It will operate on pull strategy which is built to order other than push strategy. Thereby as in just-in-time products are built with the necessary options and variety as per customer preference and then shipped to the customer. This would enable the firm to operate more profitability as unnecessary cash would not be tied up in finished products lying in its customer premises. This would also result in better customer relations. Further as mentioned earlier mass customization does enable the Company to respond more effectively and quickly to the changes.
Quality is doing things right and exact may it be products or services. Customer’s perception of high quality products means customer satisfaction and as such the probability that the customer will persist doing business with the Company. High Quality products leads to customer satisfaction and also makes the operational aspect in the company more easier. Furthermore it reduces cost as a result increasing Company’s ability to achieving competitive advantage. Fewer mistakes made at each stage of the operation, less time will be required for any correction activities. Reduced cost will be spent as less number of errors would mean less returns, less corrective action and less number of quality control rectification. High quality at the same time would increase dependability and increasing customer confidence and growing the probability of recurring business with the particular Company.
Quality in perspective of automobile industry and in perspective of Daimler Chrysler’s Jeep manufacturing operations means all parts are made in compliance with specification and Quality requirements are clearly communicated to all concerned. Therefore less rejection and low instances of defective part being fitted in the vehicle. All assembly is in compliance with specification. Assembly is done in compliance with the specifications. The final product is absolutely reliable and final products with no defects. This improves customer relations with the company and its products. It increases the probability of recurring business for the company. The product is attractive and with no blemishes and aesthetical aspect has a key impact on a product particularly on an automobile. An attractive product would contribute to increasing customers satisfaction and relations.
The company xxxxxx had commissioned a new manufacturing facility equipped with the advanced technology to produce one of its product which is Jeep Wrangler. The cost of this facility exceeded well over $ 500 million and therefore, performance of this new facility required to be stringently monitored by the company in order to maximize return for its investment. Gauging performance is defined as the movement of measuring and assessing the various aspects of a process or whole operations.
Usually the five basic performance objectives are used in measuring performance particularly in a manufacturing body. Issues such as customer perspectives, external environmental pressures required to be equally considered with managing performance. The five basic performance objectives could be more disaggregated so that detailed performance measures could be arrived at. These detailed performance measures could be used to arrive at the key performance indicators so that the operational level personal could be well trained and equipped to achieve KPI’s thereby the organizations overall objectives.
Warranty claims arise due to defective products and this should be at the very minimum.
Customer satisfaction surveys give the company a better knowledge of what the customers perspectives regarding products and they should be carried out constantly in order to aware of any shift of change of perception of the customers of the company.
Customer order lead time
This will give the company with a benchmark with figure with its competitors. The less the lead time better customer services
- Frequency of delivery
- Should Strive to achieve
- Zero defective products
- Effective customer service
- Maintain a good communication with the customers
- Complaints on Defective vehicles Company should take every endeavour to keep at minimal level.
- Warranty claims also should be kept at minimal level due to defective products .
- Recurrent customers satisfaction surveys to be conducted and the firm will have the perspective of customer on the company and its products.
- Customer order lead time is a measure to compare with competitors and lead time is less the customer service can be defined as
There must be consistency in Delivery
- The time duration for production must be compared with competitors and gaps should be bridged.
- Deliver of ordered products on time and delays must be cautiously reviewed and all attempt must be taken to
- Producing to suit the requirements of various segments of customers
- Depending on most economical production mix. The lesser the cost implications would arise
- xxxxxxx must have a contingency plan to increase the production rate to cater to a sudden increase in demand and be fully knowledgeable to time duration required to increase the present production
- xxxxxxx should be aware of the optimum production capacity and the average capacity the running of production and it is required to achieve optimum production capacity.
- xxxxxxx must check the budget difference as high variance would have serious cost implication as it would render the cost structure unrealistic.
- Productivity of labour should be kept to the optimum
- Reduced cost will benefit the company as well as the As such reduction of costs is significant
- Cost per hour the actual and planned cost structure as a significant difference would render the initial estimates impractical.
The most of the present companies use the tool the balanced Score card approach in order to increase the value of the business. The balanced scorecard offers a management system that links strategic objectives to comprehensive performance indicators. Balanced scorecard approach could also be used in determining or measuring performance of the XXXXXXXXJeep plant. XXXXXXXXhas a three-plant manufacturing complex in Ohio which mainly focuses on manufacturing of Company’s Jeep brand SUV’s. These three plants consist of the oldest at the same time latest manufacturing plants. Just-in-time manufacturing philosophy has been implemented in the said plants. Projected improvement initiatives were to implement a new vendor management initiative , analyze the present layout of the production plant and to devise a most suited one in terms of the operational requirement and to review the operational and manufacturing technologies used presently in the plant to see whether it yields the anticipated results.
xxxxxxx to globally compete with other rivals in the SUV segment requires the management to be highly observant and focused in continuous improvement in both operations not excluding supply chain management and customer relationship. Operations need to be aligned with the objectives which the organization is striving to implement.
XXXXXXXX has laid down a very good foundation to its operations and supply chain process. This is a very high-quality plant form for the organization to boost up their performance. Liberty jeep plant is not competitive against it competitors in efficiency terms, even though it is the best manufacturing division amongst XXXXXXXX group.
It looks like one of the most well-organized manufacturing plants in the world. Practicing the best manufacturing practices of the World such as, just in time concepts through its supply chain process. xxxxxxx has implemented the most modern technology available in the world in its jeep manufacturing plant. The company needs to fine tune by applying the above mentioned tools and systems to its supply chain approach in order to make it more efficient. On the other hand to implement lean thinking culture. This will help to boost up the problem solving systems and smooth up the supply chain performance and the operations of the XXXXXXXX. And also It will help to implement a proper performance evaluation method. By doing all these things the XXXXXXXX can boost the efficiency of the manufacturing process. This will directly help XXXXXXXX to compete with its competitors in the automobile market and ushering into global limelight.
Therefore, this report is presented to the senior management and it is anticipated that serious consideration is made to the points highlighted herein.