OPERATION MANAGEMENT AT VOLKSWAGEN

OPERATION MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................2
1.1 Explain why operations management is important to Volkswagen business........................2
1.2 Analyze the operations functions of a Volkswagen..............................................................3
1.3 Evaluate by using a process model, the operations management of Volkswagen.................4
LO 2.................................................................................................................................................6
2.1 Appraise the importance of 3 E’s (Efficiency, Effectiveness and Economy) to
organizations................................................................................................................................6
2.2 Assess the impact of tension between cost minimization and quality maximization in
organizations................................................................................................................................7
2.3 Evaluate the significance of the of the five performance objectives (quality, speed,
dependability, flexibility and cost) that underpin operations management to the organizations 8
LO 3...............................................................................................................................................10
3.1 Assess how linear programming adds value to the Volkswagen production process.........10
3.2 Evaluate critical path analysis and network planning..........................................................11
3.3 Justify the need for operational planning and control.........................................................13
LO 4...............................................................................................................................................15
4.1 Produce a set of clearly defined operational outcomes (Objectives) for Volkswagen sales
department.................................................................................................................................16
4.2 Produce a network plan indicating the resultant critical path analysis................................18
4.3 Justify how quality management methods are carefully used in improving Volkswagen. .20
CONCLUSION..............................................................................................................................25
REFERENCES..............................................................................................................................26

LIST OF FIGURES
Figure 1: Process for car manufacturing with network planning..................................................12

INTRODUCTION
Operation management in manufacturing industries is effectively used to add innovation in
process of production with maximising profits. This concept encourages business to gain
advantage in the competitive market with more productivity. Current report has outlined about
production process of Volkswagen and proper management of operations with effective use of
tools and techniques. Organisation is one of the leading brands that manufacture automobile
products with effective application of technology.
Below report will develop a clear understanding of the importance of operation management for
improving the operational functions of Volkswagen. Report will also evaluate about application
of different models and techniques for improving the activities of operations management.
Management of Volkswagen with these techniques will be based on meeting with objective of
profit maximising and reducing the cost acquired in production. Moreover, report will justify
about effective use of quality management techniques for improving the process of operations.
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LO 1
1.1 Explain why operations management is important to Volkswagen business
Operation management is a branch of management system of an organization which has role and
responsibilities in regard to safety of production, quality control and process, finance
management, supply chain and distribution, problem and resource management. Operation
management helps in redesigning of the operations related to production of products and services
along with their control (Brown, et al 2013).
Importance of operation management in Volkswagen business
The Volkswagen is an organization which deals with manufacturing of automobiles and their
parts. Volkswagen is focusing on advancing their business to other counties such as India, China
and their neighbour countries. Operation management can help the organization to succeed their
plans in following manner:
Increase in production:
The organization is trying to use specific raw material and transform it into processed products
with efficient management. This will increase the productivity of their products and services.
The quality of the products can also be improved for good impact on the new market and
achievement of the organization success can establish (Brown, et al 2013). For conquering new
market Volkswagen firm has to make some strategies for the achievement of benefits
competitively and introduce their products separately by making changes in features of their
products and adding new features to them.
Installation of new techniques:
Operation management is helpful for Volkswagen as they use new strategies for the installation
and discover new techniques in advance ways for future use. Volkswagen is trying to focus on
the electrifying segment as they are making cars models with one battery installation for
preservation of resources and to satisfy their customers. They have another focus on manufacture
of synthetic fuels in order to replace fossil fuels for their conservation for upcoming generation
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as there are limited resources of natural fossil. This will also help in conduction of less harmful
products generate after their burning (RĂDUŢEANU, 2012). This will attract both customers
and human resource NGOs and leads the organization to its desired success. Some installation in
the functions of other parts with newer facilities will also help in establishing goodwill around
the world with increase in profitability.
Reduction of investment:
The operation management has a role of controlling the budget and expenses done by the
organization. This helps the organization with viewing overall investment done in the production
and helps in reducing them by taking help from human resource department which has motives
of managing healthy environment in the firm. The expenses for raw material, salary structure of
employees, techniques used and installation of new machinery, etc are also considered by
operation management (Jürgens, 2013). Volkswagen firm has to focus on bringing new features
along with low prices to satisfy customers need and have a notice on their future demands.
1.2 Analyze the operations functions of a Volkswagen
Operation functions of Volkswagen are to provide the services and promote their marketing
strategies, products quality and their supply along with new techniques they are using for
improvement of their vehicles. They are trying to give market good quality products and achieve
their goal of satisfying the customers which leads to development of financial progress and
profitability of organization (Winterkorn and Pötsch, 2012).
Some of the operations functions considered and performed by the Volkswagen organization are
described below:
Personnel development:
For the improvement in productivity of the firm, Volkswagen is providing training and
developmental programs to their workers according to their department of work and increase in
their knowledge of automobiles. The developed personnel help in better interaction with
customers and understand their needs and demands which help organization to provide better
services to satisfy customers and consider the demerits in their products to improve them for
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future (Cummings and Worley, 2014). Feedback given for product and services can be used for
processing better finished products.
Production processes & supply:
Production process of an organization is monitored by the operation management of the firm.
The raw material of low cost and inventories has to be used as after the processing of the
material into finished product the cost of product will frequently increase. Volkswagen has a
department to look over the supply of the product in the market. For the improvement in supply
process the firm can use practices for effective delivery of product directly to the customers and
reduce the efforts of maintenance of time and services during the supply along with controlling
product proportion (Ageron, et al 2012).
Product/services and technology:
New technologies used in Volkswagen in regard to monitoring supply, purchase, productivity,
services and demands of the products help firm in maintaining their market position and use
them to achieve market goals and objectives. The wastage, damaged products, quality and
features of the products can be easily calculated and observed by the organization with new
technologies [Kaushik, et al 2014]. The supply of products and their demand in market are
maintained through distributors which help in improving technologies and services provided to
customers and establish permanent customers.
Marketing promotion and finance:
Volkswagen uses low cost inventories, effective finance strategies and maintains good relations
with the government to establish their marketing goodwill. Promotion of products is important as
the services and features of product are introduced to the customers through promotion
(Subramanian, 2017). With the help of social media, banners, marketing channels and other
advertisement tools the organization promotes their new brands and products in the market. This
helps in increasing customer range.
1.3 Evaluate by using a process model, the operations management of Volkswagen
Volkswagen has three divisions for the production of their organization such as pre-production,
production and post-production.
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 Pre-production is a stage where organization considers the raw material type, use of
inventory, use of technology, expenses in production, area for manufacturing plant, and
other recommendations which can be considered before the start of production.
 The production stage includes the management of staff, requirement of supplies during
production, time management and division of task within employees for effective
productivity.
 Post-production stage includes the decisions about area of marketing, selection of
distributors, calculation of investment; sell of product and management of profitability
and feedback from the customers.
The Volkswagen uses following process model for promotion of their new vehicle:
 First; in the first part of the processing the designing and new feature installation are
considered. The demand and need of the customers are considered and involved within
the vehicle through new designing, than construction and changes are done according to
designs.
 Second; secondly the destination and purpose of manufacturing is considered. The
decisions of cost, market, quantity and quality of the product are done. The motives of the
vehicle or personal car such as education, market fluctuations and energy reservation are
also decided.
 Third; the third stage of process model includes the presentation and finishing of the
product. Painting of car, installation of other body parts and assembling of wheels, doors,
mirrors and other things are done to prepare the car for the launch in market. The
automation level of the vehicle is also considered under third stage (Sivri and Krallmann,
2015).
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