Introduction to Operations Management, logistics.
Operations management is a process which is concerned about the organization designing and controlling the production process also this particular process includes redesigning and identifying the new option for the production. It is ensuring the business resources are utilized in an efficient manner to achieve the organization objectives while satisfying the customers(Li, 2014). Hence it is concerning the all factors which is involved in the production process specially the resources such as raw materials, labor, energy etc. Operations enable the organization to produce the products and services in quality manner(Rosing, White and Man, 2012). Operations management identify and manage the process between input and the output to ensure the output will be as the expected level. This particular process includes operations strategy, process design, quality management, production planning, and other relevant activities. To sustain in the competitive environment each and every process should be considered strategically as well as the efficient manner.
Logistic management is a part of supply chain management enables to meet customer demands via the planning, implementation, effective management, movement and storage of relevant information(Li, 2014). This management process start with the raw material purchase for the particular goods or the service, it is end when the products reached to the customers. Normally logistic management involves selecting appropriate suppliers, selecting appropriate transportation facilities, selecting proper delivery methods and using the appropriate technology in an efficient manner to handle the related processes. Poor logistic management increase customer dissatisfaction and also increase the expense;s for an example damages to the product due to the inappropriate transportation decrease the quality of the product as well as reduce the customer satisfaction.
This particular report critically evaluates how Jaguar automobile organization utilizes the operations logistic procedures to achieve their objective and goals. The organization was found in 1992 by Swallow Sidecar Company(Addy, 2013). Jaguar is premium England based multinational car manufacturing organization. Their main premier brand is Jaguar land rover. It is owned by Indian TATA motors since 2008. Their other brands are Land Rover and Rover. There total production output in 2017 were 427,122 Land rovers and 94,449 Jaguars (Addy, 2013). According to their financial statements their revenue in 2016 was £24.3 billion and net income was £1.312 billion. Around 37000 employees have been working for the organization. As indicated previously, even though there many operations and the logistic activates involve in this organization this report mainly identify how people are managed in the operations and supply chain and how organization carried out logistic mix such as channels, networks, transportation, managing inventory and capacity. As a premium car manufacturing organization mainly logistic mix can be classified as finance management, human resource, inventory, suppliers, research and development, marketing and sales, procurement, IT, health and safety and general administrations (Rosing, White and Man, 2012). Also when it is come to the people management in operations and supply chain indicates how the people are managed in above mentioned operations to achieve organization goals and objectives.
Organization can use the Porters value chain to identify the supply chain issues and how organization effectively manage their people as well as operations in supply chain to achieve competitive advantage(Wahito, 2011). Porters value includes inbound logistics, operations, outbound logistics, marketing and sales and after sales as primary activities and as secondary activities infrastructure, human resource management, procurement and technology are included (Wahito, 2011).
Source : (Waito, 2011)
Jaguar is facing issues in their capabilities of maintaining effective people management in their operations as well as in the supply chain compare to the competitors. This process includes the long term supplier relationship, selecting the quality suppliers, customer satisfaction, employee satisfaction and other main stakeholder’s management (Dicken, 2004).
Inbound logistic includes receiving the raw material, storing the raw materials and proper supplier relationship. Jaguar had been facing a big issue related to the supplier management, they had to change their suppliers frequently to ensure the product quality and the customer satisfaction this would incur higher cost as well reduce the customer satisfaction. Recently Jaguar plant able to maintain the long term relationship with the DHL as their logistic partner in order to maintain quality supply and reliable goods within the reasonable price. Also this partnership enables the organization to maintain cost visibility and the budget accuracy. This particular partnership agreement reduces the overall supply chain cost by 12%. As a premium car manufacturing organization the quality is one of the critical success factor of the organization to sustain in the competitive market also customer prefer the Jaguar goods because of their brand image of the organization if organization not maintain the quality of their products the brand image of the organization automatically will down and this will negatively impact on the sales and the profit of the organization. To maintain the quality raw material sustainable supply organization, maintain the long term supplier relationship with selected few suppliers this will ensure the eventual product quality.
Operation identifies how organization input can be changed in to output in an efficient manner to attract the customers. Different region and different economy level customers prefer different types product and service from Jaguar It is very hard to fulfill all kind of customer requirements. So Jaguar able to select a particular customer segment and able to achieve different competitive advantage by implementing different strategies such as responsible planning production, best fit to European networks, integrated supply chain management and continuous improvement, shared and carrier management, 18,000 meter squared facility replaced by 5000 meter squared, risk reduction, higher sustainable environmental performance such as reduction of environmental hazards good usage, reduction of carbon emission by 22% and proper scheduling and vehicle utilization capacity (Dicken, 2004). Organization collaborate with the different organization to expand their business as well as introduce new technologies in to their production process for an example organization collaborate with the European government on automotive industry. This strategy enables the organization implement the photo type production in their production process.
HRM identifies how jaguar utilizes and manage their human resource to get the quality output in an efficient manner. Nearly 25,000 employees have been working for Jaguar all over the world specially around 5,000 engineers includes in this particular criteria. Jaguar’s employee turnover is high compared to competitorsalso Jaguar had to incur extra £1.8m as overtime cost as a production cost to fulfill the demand(Jacobs, 2017). It is very crucial for the organization to attract skill professionals and retain those employees to gain competitive advantage. To attract and retain good professionalsJaguar can use different strategies such as recruiting high quality professional for the different departments, paying higher salaries for the employees with lot of incentives, proper health and safety facilities, health insurances, career developments and proper training and developments for the employees. These strategies enable the organization attract good employees as well able to retain those employees for a long period of time.
Infrastructure includes how organization manage the administrative part such management, accounting, legal, general administration etc.One of the main issue Jaguar has been facing is there 90% production process going in UK hence they have to pay around 10% export tariff for the government also they have to incur around 40% of cost for sourcing the raw materials from European countries this will reduce their profit margin(Peterson, 2018). To overcome this issue, Jaguar management can target the BRIC (Brazil, Russia, India and China) countries specially China and Brazil these countries economically potential countries their population also very high so if organization implement the production process in those countries then they can target customers easily without any export cost as well as inventory cost(Georgieva, 2006). Other than this organization can reduce the export tariff by lobbying hence can recruit the government officials as part time employees.
Technology identifies how organization utilize the technology in their supply chain to achieve competitive advantage.It is crucial organization utilize the technology to in their production process. Technology will reduce the errors, time consumption, cost etc. When the organization utilizing the technology it is very important to consider the cost effective. So to overcome this issue organization can use the BRIC countries technology. Because BRIC countries are well developed in technology compared to other countries specially in China so organization can utilize this technology by recruiting these employees and can gain competitive advantage also their expected wage limit very low compared to the European countries this will reduce overall production cost and eventually that cost benefit will be given to customers and can gain the competitive advantage(Georgieva, 2006). Other than this organization able to utilize the technology well in their production process to achieve their goals. Jaguar utilize the state art technology well in their production process to gain competitive advantage (Mendling, Reijers and van der Aalst, 2010). Jaguar manufacturing plant able to create sample cars before the actual production this process includes the 3D design rooms and advanced technology printers. This particular process enables the organization to reduce overall cost (wastages) of the organization hence able to produce according to customer needs.
Marketing includes how organization promote their goods and service according to the customer’s needs. Sometime improper communication between differ departments may reduce the output quality and production failures. Jaguar can maintainproper communication between different core functions departments to achieve their objective and goals. For example, Jaguar hale wood plant can produce the cars and vehicles according to the customer’s feedback and the research and development teams’ advice this process enable the organization to achieve competitive advantage hence when the organization develop a new car modification the customer’s feedback given by the marketing division as well as the innovations ideas will be given by the research and development team.
Procurement includes finding the proper suppliers and negotiating with them to achieve organization objective and goals. Jaguar able to reduce the fuel consumption by replacing the body by Aluminum this strategy is reducing the weight of the vehicle and eventually this can be reduced the fuel consumption of the vehicle. Also this will reduce the fuel emissions and consumers more prefer the vehicles which consume low amount fuel compared to the competitors, this strategy will give the competitive advantage to the organization other than this their main suppliers Novelis also positively support this strategy(Kumar and Van Wassenhove, 2002).
After service includes how organization provide the service after sales to attract and retain the existing customers. Improper after service can reduce the customer satisfaction and the competitive advantage. Jaguar organization made the multi-year warranty claim agreement with SEKO logistics. This agreement can be implemented in different countries brazil, Canada, UAE, japan, Singapore etc. This contract enables the customers to claim their warranty in an efficient manner hence without any delay, same quality as the original product, lower prices etc. This will increase customer satisfaction as well eventually increase profit of the organization.
Recently Jaguar recall their 104,000 vehicles from US due to the poor quality hence the break and lights were not as the expected level (GLEN WHITE, 2015). Outbound logistics ensure quality product reaches to customers. To ensure eventual quality output of the product organization can use the quality gateway process, this particular process involves mainly four steps those are requirement elicitation, analysis of requirements, representation and specification and validation.
Requirement elicitation – In this particular step organization can find the product requirements from the different stakeholders specially form the customers as well as the marketing departments (Gunda, 2008).
Analysis the requirements – According to the customer type and the customer loyalty the demand will differ different customer’s satisfaction will depend on different matters. Fulfilling the all customers need is impossible for the organization by utilizing their scare resources so organization can select the product according to their organization goals, resources and their strengths this will ensure the organization sustainability (Abbasi et al., 2015).
Representation – In this particular stage organization can maintain a formal documents in order this will ensure the final product will be produce according to the organization needs (Gunda, 2008). Also in this stage organization can keep the approval and proof documents to ensure the process runs smoothly without any interference.
Specification and validation – This will be the eventual process of the gateway this particular process focuses on the validation determination of the needs proposed in the initial steps of the quality gateway. In this stage different prototype and different technologies will be used to ensure the quality standard of the requirements (www.jaguar.co.uk, 2015).
By implementing the gateway process jaguar can increase the customer satisfaction drastically while reducing the overall cost. Also jaguar can reduce the wastages by 50 % by implementing this particular process hence the wastages automatically will reduce if the organization produce only according to the customer’s needs this will reduce the inventory holding costs and other overhead costs and management time as well as help to utilize the scare resources in an efficient manner this will ensure the success of the organization (Lobes, 2002).
As well stabilized reputed multinational premium car manufacturing organization. It is crucial organization includes environmental, social and economic aspects in their supply chain to satisfy the customers as well other main stakeholders.
Jaguar Land Rover all ways consider the corporate responsible manner when they make strategic decisions. In 2017 the organization initiate a carbon financing initiative called Climate care. This particular initiation enables to supported 50 climate and developments projects in 17 different counties all over world(Juguar Land Rover, 2017). It is estimated this project able to cut 10 million tons of carbon emission and improve life condition of 2 million people all over world.
Also organization more consider about the health and safety of the customers and organization employees. When the organization allow employees to work in their plants they strictly follow the health and safety procedures such as wearing helmets, implementation of fire exit places, instructions boards etc, these procedures ensures the organization employees safety.
Jaguar purchase a latex plant in Peru to purchase latex from the local committee this enable to give livelihood for the society(Birkenhead, 2016). Also Jaguar individual employees committed to do the social works such as helping to learn English for the refugees, helping the refuges to write the citizenship exams, giving lectures in colleges in different countries such as India, providing training and development for the Afghanistan prisoners, providing leadership training for the youthetc(Juguar Land Rover, 2017).
In addition to this organization directly providing funding for the following activities such as providing emergency help for the who affect by the natural disasters, give permanent solutions for the refugees, improve the quality of the people in different countries by providing clean drinking water, sanitation facilities, proper hygienic training and awareness programs, protecting children from child abuse specially from the sexual abuse, providing the food and shelter to the people whose income is far below the threshold level, providing the medical facilities for the individuals who are suffering for the HIV in Zambia, capacity building for female to find a permanent income source for them specially those who are affected by the civil wars collaborate with organization which are consider about the Animal well-being(Juguar Land Rover, 2017).
Even though implementation of this triple bottom strategy incur extra cost in short term it will benefit in different ways in the long term. Researches indicates that people more prefer the organization goods which is doing something to the society so by implementing this strategy organization increase the demand for the goods, reduce the unwanted interference from different stakeholders such as government interference, environmental interference this will reduce the extra cost as well the time consumption. Other than this strategy increase brand image of the organization while giving the competitive advantage to the organization.
Different organizations use different policies and control systems in the logistics and operations. This will change according to the organization product and service, capability of the organization, target customers etc. When it is come to Jaguar land rover organization has been maintaining well standard logistic and operational procedure to maintain their brand image and their competitive advantage. Specially their environmental sustainable strategies and the quality management in supply chain give the competitive advantage and cost benefit to the organization. As discussed above, it can be recommended that choosing suppliers who are more into ‘green supply chain management’ who also ensure quality through the supply chain, will help eliminate the issue of Jaguar having to constantly change suppliers in addition to the recommendation proposed through Porter’s value chain element of ‘Infrastructure’ where manufacturing can be done in the BRIC countries as stated earlier in the report.
To increase the eventual product quality organization can implement TQM and ISO quality standards these procedures will ensure the quality will be considered each and every steps of the supply chain. Particularly, to eliminate the issue of communication issues resulting in poor end product quality, the quality gateway process can be introduced. This will reduce the warranty claims, customer inconvenience, overhead costs eventually increase customer satisfaction and the brand image of the organization.
Organizations supply chain management includes all operations and logistic activities at the organization. Hence includes the procurement, raw material selection, customer’s satisfaction, human resource management, marketing, inventory management, supplier’s management etc. As mentioned Jaguar organization implement different strategies in their supply chain management to satisfy the supply chain stakeholders and use the resources efficiently to achieve organization goals and objectives.
Abbasi, M. A. et al. (2015) ‘Assessment of Requirement Elicitation Tools and Techniques by Various Parameters’, Science Publishing Group, 3(2), pp. 7–11. doi: 10.11648/j.se.20150302.11.
Addy, N. A. (2013) ‘Leading Change in Management: A Case Study of Jaguar/Halewood’, International Journal of ICT and Management February, 1(1), pp. 46–53. Available at: http://www.ijictm.org/admin/html/mail/attach/2013-02-25-11-06-59.pdf.
Birkenhead (2016) ‘’ Be Enterprising , Be Successful ’ Kate Birkenhead CSR at Jaguar Land Rover’, HOPE BUSINESS GATEWAY, (December 2016), pp. 2016–2018.
Dicken (2004) ‘Logistics Providers and Production Networks : A Case Study of DHL Exel Supply Chain in the Automotive Sector’, Department of Geography Queen Mary, University of London.
Georgieva, K. (2006) ‘BRIC countries in comparative perspective’, Russian Federation.
GLEN WHITE (2015) ‘Jaguar Land Rover issues its largest ever recall of 104 , 000 vehicles’, Global Manufacturing, pp. 1–7.
Gunda, S. G. (2008) ‘Requirements Engineering : Elicitation Techniques’, p. 40.
Jacobs, K. (2017) ‘Case study : How Jaguar Land Rover kept production rolling’, How Jaguar Land Rover kept production rolling, pp. 1–5.
Juguar Land Rover (2017) ‘6.pdf’.
Kumar, N. and Van Wassenhove, L. N. (2002) ‘Supply chain design at Jaguar: Bringing “Nirvana” to Halewood’, Supply Chain Forum: An International Journal, 3(2), pp. 74–80.
Li, X. (2014) ‘Operations management of logistics and supply chain: Issues and directions’, Discrete Dynamics in Nature and Society, 2014. doi: 10.1155/2014/701938.
Lobes, A. (2002) ‘Search eLibrary’, 220.127.116.11, p. 43. Available at: http://18.104.22.168/handle/123456789/4117.
Mendling, J., Reijers, H. A. and van der Aalst, W. M. P. (2010) ‘Seven process modeling guidelines (7PMG)’, Information and Software Technology, 52(2), pp. 127–136. doi: 10.1016/j.infsof.2009.08.004.
Peterson (2018) ‘Jaguar Land Rover ’ s Billion-Pound Brexit Problem’, Technology and Operations Managmenet, (June 2016), pp. 1–8.
Rosing, M. von, White, S. and Man, H. de (2012) Business Process Model and Notation, The Complete Business Process Handbook. doi: 10.1007/978-3-642-33155-8.
Wahito, M. E. (2011) ‘PORTER ’ S VALUE CHAIN MODEL AND COMPETITIVE ADVANTAGE IN THE OIL INDUSTRY IN KENYA BY A RESEARCH PROJECT SUBMITTED TO THE SCHOOL OF BUSINESS IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF MASTER OF BUSINESS ADMINISTRATION DEGREE OF THE UNIVERSITY OF NAIROB’, UNIVERSITY OF NAIROBI, (November).