Impact of Lean Operations on Business Performance

This assignment examines the influence of lean production and supply chain management on a company's overall performance. It delves into how lean methodologies, like those outlined in Total Quality Management (TQM), can drive improvements in product quality, operational efficiency, and ultimately contribute to enhanced business outcomes. The analysis considers academic literature, case studies, and real-world examples to illustrate the effectiveness of lean operations in achieving competitive advantage.

Running head: OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Name of the student
Name of the university
Author Note

1OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Table of contents
Table of contents..............................................................................................................................1
Introduction......................................................................................................................................2
Organizational background..............................................................................................................2
Managing quality.............................................................................................................................3
Analytic discussion with relevant and similar example(s) and applying appropriate solutions of
Operations Management..................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

2OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Introduction
With Global expansion and higher levels of competition amongst the organizations, the
importance of the productivity of an organization is utmost important. In order to achieve a
higher competitive advantage every organization chooses to focus on the methodology or the
management rather than focusing more on the output (Wagner and Hollenbeck 2014).
This report deals with the understanding of the strategies and theories that are used in the
management of the supply chain and the operational divisions. As demanded by the topic, two
specific areas in the supply chain and the logistic division has been adopted and elaborated. To
help understand better about the theories and applications of the supply chain and operations
management an automobile manufacturing organization has been cited for reference. Rolls
Royce has been cited as car manufacturing company to add advantage in to the topic (Hitt,
Ireland and Hoskisson 2012).
The purpose of this report is to understand, analyze and relate the principles and practices
of the supply chain and operations management with reference to the Rolls Royce Company as
one of the known automobile manufacturer in United Kingdom.
Organizational background
Rolls Royce is known as one of the reputated producers of British luxury cars as well as
one of the leading companies into the aerospace industry. Rolls Royce not only manufactures
cars but it is also instrumental in the production of extremely resourceful incorporated control
and impulsion solutions. Its control systems are chiefly used in automobile, aerospace, marine,
energy and off-highway applications. Rolls Royce is solitary of the world’s foremost producers

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of aero engines for big communal aircraft and communal jets and comparatively the second main
provider of defense aero engines in the globe. Rolls-Royce is well established in the automotive
and marine sector where the vessels and incorporate power systems are designed. Rolls Royce
was initially a BMW owned subsidiary company that was later on owned by the Volkswagen
group. Subsequently, there was a clash since BMW supplied Rolls Royce the engines. With the
dispute finally mitigate the both companies, BMW and Volkswagen came to reconciliation and
decided to work in collaboration and the final company came into the existence. Rolls Royce has
set up its production plant in Good Wood, West Sussex and England that has been manufacturing
the iconic vehicles for more than a century and is likely to continue its pace in the next century
as well.
Managing quality
Rolls Royce has a typically good producing operation system within the organization. All
the micro and the micro operations within the organization is completely based on the customers
and the suppliers (Krajewski, Ritzman and Malhotra 2013). The required components of the
entire system are directed towards the accomplishment of the organizational goals. The company
aims to produce the cars with superior quality, durability including well functioning design and
appeal. Rolls Royce emphasize on the relation with relationship with the suppliers and the
consumers for the benefit of effective operation and superior offerings (Wheelen and Hunger
2017).
Quality is seen as the most significant and intricate component of business strategy
(Goetsch and Davis 2014). It is considered as one of the main factors to a company’s success and

4OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
endurance in the current spirited background. The excellence of a manufactured goods or service
is its skill and capability to gratify or meet the requirements and prospect of the customers.
Rolls Royce performs with accordance to the adoption of Total Quality management
strategies to achieve the desire goals (Slack 2015). The total Quality Management is a
continuously evolving systematic approach consisting of values, methodologies and tools. Its
aim is to increase the external and internal customer satisfaction without exhausting or exceeding
the allotted amount of resources needed for the manufacturing (Dale 2015). Rolls Royce uses the
Lean method that is used as a methodical advance to identify and eliminate the wastage through
incessant development and improvising, regulating flow of the manufactured goods by the drag
of the customers who are in hunt of excellence (Kapferer 2017).
Rolls Royce choose to focus in the excellence perfection, which is in the apex main
concern in the Six Sigma and done by dipping the defects. Alongside with the other
compensation, this method is also used for plummeting the lead times. Client centric
manufactured goods growth helps the company to be spirited and sustainable in the global
marketplace (Krajewski, Ritzman and Malhotra 2013). The exclusive and robust design strategy
helps the company understand its customer better. Rolls Royce maintains its quality standards
and its benchmarks with obligation to the ISO 9000 and ISO 14001 standards, which are used to
ensure that the company meets the requirements of its customers and the other stakeholders of
the company. The Benchmarking gives the company many opportunities to progress in over all
the organizational levels (Jahanshani et al. 2014).
Rolls Royce possesses potential to provide total manufactured goods life-cycle solution
from the first theoretical intend, through the filled supplies, devising, development, manufacture

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or production, operational trying and stipulation of the life technical support of their product. The
company has the potential of devising the intend ability to meet the customary of American
Society of Mechanical Engineers (ASME), British Standards and additional Europeans codes
applicable for the implementation of nuclear and non – nuclear applications.
Rolls Royce uses tough designs to appreciate its needs of the customers. Parameters and
acceptance are the fundamental element of the full-bodied design that is devised. The
progression also includes the assessment of the design’s sturdiness and the selection of an
ostensible design (Evans and Lindsay 2013). The first step taken by the company is to collect the
manufacturing information and mapping it onto the retort representation productivity. In the
second step, the company ensures about the toughness of the whole assortment in the realistic
vicinity. The final step taken by the company is the selection of the supposed design that fits in
the middle of the manufacturing distinction segment.
The process controls of Rolls Royce are conducted in the division of the interior
operations and the supply chain management. To maintain the quality and business management,
the Rolls Royce organizational system incorporates stout controls that are implemented in the
supply chain system, the business, customer service, the manufacturing and the design related
activities. The implemented exceptional process-based arrangement and coordination is labeled
as the Rolls-Royce Quality Management System (RRQMS).
In this manner, Rolls Royce maintains and devises its exclusive and intricate quality
management system to gather its reputation in the global market as an exclusive automobile
manufacture, also maintain a loyal set of patrons who completely rely on the company to meet
their needs and demands in a compliant way.

6OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Critical review of relevant Operation, Logistics and Supply Chain Management theories
With close relevance to the quality in the manufacturing Rolls Royce uses certain
strategies to boost its productivity and live up to the reputation as well as the customer needs and
the demands. Rolls Royce adopts the strategies of Lean strategy, Six Sigma method and just In
Time (JIT) method in its production to maintain and retain the agility in the quality and nature of
the production (Agus and Shukri Hajinoor 2012).
The supply chain network is essential in the company as this helps in emphasizing both
on upstream as well as downstream of the supply network. The upstream starts when there is a
subscription online and the subscription of the customers goes to the distribution centre that is
closest. This helps in understanding the differentiation between upstream and downstream. The
information and the relationship flows across the entire company and proper structure and
relationship is required in all the countries as this helps in creating proper relationship between
the consumers and the employees in the entire organization. Proper information technology is
essential in nature as this will help in analyzing the different issues that are faced by the
company regarding supply chain network.
The Japanese companies initially introduced the lean manufacturing system in year of
1970. John Krafcik was a MIT student, who worked as a excellence check engineer for Toyota
and the original introduction responsible for the prologue in the lean strategy, as it is at present.
Lean production system is a manufacturing carry out, which meets the demands of the clientele
with perfect and the allotted quality (Drohomeretski et al. 2014). It primly focuses on the
reduction of the waste, by minimizing the non-value other behavior. Continuous improvement
and improvising are the key parts of the lean philosophy (Belekoukias, Garza-Reyes and Kumar
2014). The primary benefits of the Lean strategy are the fundamental reduction in the lead-time

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for the customers, reduction in the inventories for manufacturers, which results in the lesser
wastage and complete selling of the whole stock. It also helps in the improvement in the
knowledge of management and highly emphasize on robust process, which can be measured by
the less amount of errors and less number of reworks (Belekoukias, Garza-Reyes and Kumar
2014).
All the three methods are interrelated with each other in one sense or the other. The lean
strategy helps Rolls Royce to reduce the inventory levels and manage it effectively by the Just in
Time (JIT) product or service, thus maintaining a good customer relationship with the
punctuality and the commitment (Flumerfelt, Bella Siriban-Manalang and Kahlen 2012). This is
a heave manufacturing or service structure that is applicable and imposed when an order is
placed. This in turn favors the elimination of wastage of the resources thus improving the
quality, with the reduction in the cost and production time. As classified under the Lean
Principle, there are eight wastes that is stated under the same, which are the defects, over-
production, waiting, non-value added processing, transportation, inventories, motion and idle
employee creativity. The lean principle effectively removes all of these wastages, in turn making
the system more proactive and agile (Belekoukias, Garza-Reyes and Kumar 2014). Proper flow
of information is essential in the organization as this will help in transmission of proper
information from one place to another. This will help in creating proper interaction between the
system as well as sub systems of Roll Royce.
Six Sigma is another strategic initiative that is used by Rolls Royce to effectively reduce
the costs of the poor quality and mitigating the customer dissatisfaction due to higher
malfunctions or defects. This method of manufacturing lays emphasis on the quality and the
improvement along with the variation reduction (Pyzdek and Keller 2014). This is a business

8OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
organization plan, which is applied by hundreds of companies globally to identify and get rid of
the different causes of the defects and plummeting randomness with this process. Six Sigma is a
business improvement approach that manages to find and eliminate the causes of mistakes or
defects in business processes by choosing to focus on the process outputs, which are of grave
significance to customers and can affect the organization if mismanaged (Pyzdek and Keller
2014).
Rolls Royce implements the sigma strategy, which is considerably a never-ending
process. It includes the stages of Definition, Measurement, Analysis, Improvement and Control,
which a considered as the most essential fundamental of this methodology (Pyzdek and Keller
2014).
Roll Royce uses this method, which is considerably one of the most applicable methods
in improving the quality. The company adopts this methodology to denote the spread value of
one standard deviation. Under the influence of the Six Sigma quality, the Rolls Royce Company
makes about only 3.4 defects per million opportunities and manufactures it does in terms of
production, since the sigma strategy only ensures and guarantees 99.99966% perfection in the
output (Kabanov et al. 2013).
Analytic discussion with relevant and similar example(s) and applying appropriate
solutions of Operations Management
The operations management of Roll Royce means the function of business that is
conscientiousness about organizing, planning as well as controlling of resources that are required
in order to properly generate services and products of the organization. The Roll Royce Motor
Cars is good producing operations and the micro and macro operations in Roll Royce is based on

9OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
the suppliers and the customers. The components that are required in the whole system are to
fulfill the mission of the company and the entire company aims to produce the different goods
with excellent quality and durability. Roll Royce Motor Cars is emphasizing on the relation of
the suppliers as well as customers for proper operations in the company more effectively in
nature. This will help the company in offering the customers high quality motor cars.
In order to form a proper operations system, proper supply chain network is essential in
nature as this will help in analyzing the issues as this will help in adding value to the customers.
The supply chain network of the Roll Royce has to properly identify the different issues that are
faced by the company and implement that will help in resolving such issues as well. The
upstream of the supply network is essential in nature in Roll Royce as this will help in attracting
customers and this will help in achieving profitable outputs.
For example- In Roll Royce, proper operations management is followed in the organization as
this will help them in maintaining proper planning for performing the different tasks in the
organization and this will help in satisfying the customers as well in the organization as well.
The upstream of the supply chain network in Roll Royce Ltd starts while the customers subscribe
online and this helped them in differentiating the products from their competitors as well. Roll
Royce has to properly identify the supply chain network in the organization. This will help in
analyzing the proper issues that are faced by the company and this will help in resolving the
issues as well.
Conclusion
With the help of this report, it can be concluded that the tools and methodologies related
to the quality have been discussed previously which clearly states about the efficiency of the

10OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
theoretical application in the real life by choosing to focus on the Rolls Royce managerial and
operational practice. The corporation uses the tools and methodologies, which is instrumental in
providing excellent products according to needs of the customers. Rolls Royce is functioning
with excellence and distinction management from a sustainable perspective and they are
endlessly trying to recover their products and the services quality as well as their processes with
consideration to sustainability in mind. Most of their achieved goals can be associated with the
huge network and the close collaboration with its suppliers. Rolls Royce has made investments
in energy saving technologies and managed to come up with innovative solutions, especially in
the aviation industry, the quality, which is an indication of their superior efforts. These
innovations and resourceful ideas have contributed to the market leading position in automobile
industry and in this manner, shaped a huge competitive advantage. However, most of the credit
goes to its quality products and services which managed to fulfill its needs of the customers, both
before and after sales. Rolls-Royce pays high attention to its all kinds of benchmarking, to keep
their in general presentation in the lead. Concluding from this, Rolls Royce is one of the leading
automobile producing companies that have made equal reputation in the aerospace industry due
to its operations and managerial performance.

11OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
References
Agus, A. and Shukri Hajinoor, M., 2012. Lean production supply chain management as driver
towards enhancing product quality and business performance: Case study of manufacturing
companies in Malaysia. International Journal of Quality & Reliability Management, 29(1),
pp.92-121.
Belekoukias, I., Garza-Reyes, J.A. and Kumar, V., 2014. The impact of lean methods and tools
on the operational performance of manufacturing organisations. International Journal of
Production Research, 52(18), pp.5346-5366.
Dale, B., 2015. Total quality management. John Wiley & Sons, Ltd.
Drohomeretski, E., Gouvea da Costa, S.E., Pinheiro de Lima, E. and Garbuio, P.A.D.R., 2014.
Lean, Six Sigma and Lean Six Sigma: an analysis based on operations strategy. International
Journal of Production Research, 52(3), pp.804-824.
Evans, J.R. and Lindsay, W.M., 2013. Managing for quality and performance excellence.
Cengage Learning.
Flumerfelt, S., Bella Siriban-Manalang, A. and Kahlen, F.J., 2012. Are agile and lean
manufacturing systems employing sustainability, complexity and organizational learning?. The
Learning Organization, 19(3), pp.238-247.
Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence.
Upper Saddle River, NJ: pearson.

12OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases:
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