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Automobile Essay


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.

















Executive Summary

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.

Inbound Logistics

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.

Outbound logistics

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

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.

Mass customization

Flexibility means  able to change the  operation in some way.  There are four different types of flexibilities.

  1. Ability of the operation to introduce new modified products
  2. 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
  1. 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.

New plant

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.

Performance Objectives

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

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.


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