Supply Chain and Operational Management at Magna International

This report provides an overview of Supply Chain and Operational Management in the context of a Canadian company called Magna International. The report is divided into three parts. Part 1 discusses careers at Magna International, including the company’s product specialty, job titles, job descriptions, and salary expectations. Part 2 focuses on the decisions made by the operations management team. Part 3 discusses the company’s mission, strategy, and competitive advantage. The report includes a table of contents and references for further reading.

Running head: SUPPLY CHAIN
Introduction to Supply Chain and Operational Management
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The report aims at providing an insight to Supply Chain and Operational Management in context
of a renowned Canadian company Magna International. The report comprises of three parts. Part
I put forward a discussion on the Careers and drive the discussion through description of Magna
International, product specialty, job title, job description and salary expectations. Part 2 of the
report focus on the decisions of the operations management. Part 3 discusses about the mission,
strategy and the competitive advantage of the company.

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Table of Contents
Part 1 - Careers................................................................................................................................3
1. Brief Description of Magna International....................................................................................3
2. Products Specialty.......................................................................................................................4
3. Job Title.......................................................................................................................................4
4. Job Description:...........................................................................................................................4
5. Description of the Major Job Responsibilities:...........................................................................5
(i). Two Job Responsibility that’s Interesting..............................................................................6
(ii). Two Job Responsibilities that’s Attractive...........................................................................6
6. Salary Expectations:....................................................................................................................6
(i). Difference in Salaries from Three Sources............................................................................7
(ii). Interest in Pursuing the Job...................................................................................................7
Part 2- Operation Management Decisions.......................................................................................9
1. 10 Critical Operation Management Decision..............................................................................9
2. Description of Each of the Critical Decision...............................................................................9
Part 3- Mission, Strategy and Competitive Advantages................................................................13
1. Mission:.....................................................................................................................................13
2. Strategy:.....................................................................................................................................14
3. Competitive Advantage.............................................................................................................15
References:....................................................................................................................................17

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Part 1 - Careers
1. Brief Description of Magna International
Magna International is an automotive supplier based in Canada and headquartered in
Ontario (magna.com, 2019). In the year, 2014, Magma became one of the largest manufacturers
of automobile parts in the North America in terms of the sales of the original equipments thereby
becoming one of the largest companies of Canada. The operating groups of the Magna
International include Magna Powertrain, Magna Steyr, Magna Seating, Magna Exteriors, Magma
Mirrors, Magna Closures and Cosma International. The auto parts manufactured by Magna
International are mostly supplied to the Ford Motor Company, General Motors and the Chrysler
LLC. Besides these, the major customers of Magna include Tesla Motors, BMW, Volkswagen
and Toyota.
Magna International employees close to 168,000 employees in its 321 manufacturing
operations and the 102 engineering, sales and product development in close to 29 countries. The
company operates under the constitution that ensures the distribution of the profits to the
shareholder and the employees (magna.com, 2019).
As far as the history of the company goes, it was found in the year 1957 by Frank
Stronach and was known as the Multimatic Investment Ltd. It later on merged with the Magna
Electronics in the year 1969 and came to be known as the Magna International (magna.com,
2019). The company acquired close to 80 percent of New Venture Gear, a joint venture between
the Chrysler and General Motors. It was then combined with the Magna Powertrain in assuming
complete ownership. In the year 2005, the company acquired CTS Fahrzeug-Dachsysteme, the

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supplier of the convertible roofs from Porshe. It also acquired German Company Getrag, a
specialist in the transmission systems.
2. Products Specialty
The capabilities of Magma International includes engineering, design, testing and the
manufacture of the exterior systems, closure systems, seating systems, power train systems,
vision systems, roof systems, electronic systems, chassis and body system, electric and hybrid
vehicle system and contract assembly and vehicle engineering(magna.com, 2019).
3. Job Title
The job title refers to the position of the Material Supervisor created for Magna Seating
headquartered in Detroit, one of the divisions of Magna Seating, which is one of the innovative
leaders in the manufacture and the development of the higher quality of seat structure, seating
mechanisms and trim and foam products for the globalized automotive industry. The capabilities
of the company ranged from consumer and market research, complete development of concept,
engineering, design, validation and testing to the world class manufacturers. In other words, the
company has been one of the world class suppliers of the complete seats for Ford, Chrysler and
General Motors (magna.com, 2019).
4. Job Description:
Material Supervisor holds the responsibility of managing and supervising the materials
required for the projects within the organization (Hill, 2017). They remain in charge of
supervising all the activities related to receiving of purchased part, flow of materials and the

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servicing parts. In other words, the material supervisor will hold the responsibility of the
planning, directing and coordinating of the activities related to material department that includes
the quality, safety, employee relations and productivity. In fact, they ensure supervising the team
leaders, tuggers/sequencer and the forklift truck drivers of the Materials Department.
5. Description of the Major Job Responsibilities:
The key responsibilities (magna.com, 2019):
1. Supervising the day to day activities of team leaders, sequencer/ tugger and forklift truch
driver of material department.
2. Directs coordinates and plan all the inbound and the outbound movement of the material
within the manufacturing facilities.
3. Assist the superintendent of the material department in managing and determining the
requirements of the manpower.
4. Provide assistance in managing the counts of the material cycle and reconciliation of the
physical inventory on an annual basis.
5. Participate and lead the process of the improvement projects which included quality,
ergonomics and productivity
6. Provide training to the transferred and the new employees on the job responsibilities
and provide cross training if necessary
7. Ensure that the employees consistently adheres to the standardized rotation and the
work process schedules
8. Providing required feedback on the work performance including housekeeping, safety,
accuracy, quality, attendance, punctuality. Adaptability, job knowledge, initiative,

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communication, teamwork, comprehension and judgment. They also make sure that the
performance reviews are completed on time based on the established schedule.
(i). Two Job Responsibility that’s Interesting
There exist two job responsibilities that seem interesting, the first one is acting as the
supervisor of the daily activities of the team leads and the second one is providing acting as
supporting assistance to the supervisors of material department.
(ii). Two Job Responsibilities that’s Attractive
There exists two job responsivities that seem attractive, the first one is serving as the
coordinator in planning the inbound and the outbound activities of the process and the second
one involves providing assistance in keeping a track of material cycle and its reconciliation
with the physical inventory on annual basis.
These two portrays the present status of the job of the individual and where he or she stands
economically. It is however known that, Magna International is renowned Canadian
manufacturing firm so a job in such an international organization will not only results in better
impact on the other but would also prove to be good for the individual’s future.
6. Salary Expectations:
Glassdoor $45,000
Ontario Job Futures Website $48,480
Payscale $62,000

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Source: (glassdoor.ca, 2019, payscale.com, 2019, canadacareer.ca, 2019)
The potential salary identified in the Glassdoor website is $45,000 and in the Ontario Job
Futures Website is $48,480. While the salary portrayed in the Payscale is $62,000.
(i). Difference in Salaries from Three Sources
The three sources put across different amount of salary structure as the source of
information varies for these sites.
(ii). Interest in Pursuing the Job
I would like to opt for Payscale as they are offering more salary compared to the others
for the same post. I would in fact love to opt for the job not just for the salary reasons but I
would like to be part of the Magna International which is one of the largest manufactures of the
automotive parts for bigger companies like General Motors. I would continue working for the
company in future and make myself capable of the international brand.
(iii). Acceptance of the Salary

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Yes, I would definitely accept the salary provided I am offered the job. This because in
not only improves the economic status but also leads to mental satisfaction thereby leading to
happier minds. The money is used for the fulfillment of my dreams and the responsibilities that
makes me contented and happy. This will finally result in a happier and healthier work
environment that helps in nurturing the skill and knowledge. This will thus enable me in
contributing towards maximum output that benefits the company as whole.

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Part 2- Operation Management Decisions
1. 10 Critical Operation Management Decision
These include (McIvor, 2013):
1. Designing of the Goods and Services
2. Process and Design Capacity
3. Quality Management
4. Layout Strategy and Design
5. Location Strategy
6. Job Design and Human Resource
7. Inventory Management
8. Supply Chain Management
9. Maintenance
10. Scheduling
2. Description of Each of the Critical Decision
Designing of the Goods and Services: The development of the concepts of completed
vehicle that meets global requirements of future mobility is a key aspect of the global strategy of
Magna International (magna.com, 2019). The company’s competence in the transportation
design of transportation starts off with the idea of the sketches, computer aided styling (CAS),

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feasibility phases and the physical model making before the completion of designing of a car that
is production ready.
Process and Design Capacity: The deeper technical background of Magna helps in
constantly refining the engineering skills and the advanced development while satisfying the
higher expectations of the modern design (magna.com, 2019). For supporting this, the company
takes part in the design activities of the various Original Equipment Manufacturer (OEM) s while
creating newer language design from the scratch.
Quality Management: It forms the basis of long term and trustworthy relationship between
the company and its partners which includes customers, business partners, employees, suppliers,
authorities and owners (magna.com, 2019). The modern orientation of Magna International
supports the implementation and development of the new concepts, ideas and methods and it
covers the structuring and the organization of the effective process through optimal use of the
existing resources. The company focuses on increasing customer satisfaction and motivation of
highly skilled employees.
Layout Strategy and Design: At Magna International the decision area of the operations
management is defined in terms the facilities and workforce of the company. The firm is known
for the creative and innovative work environments. In developing its product the company makes
use of the efficient workflows integrated with the creative ideas.
Location Strategy: Magna International finds targets busy locations. They set the shop in
prominent locations for attracting people and that have a better environment. Physical location
acts as the major concern for this particular area of the operations management. The objective of
Magna International lies in optimizing the efficiency and cost through the proximity of the
suppliers, employees and the target market.

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Job Design and Human Resource: The human resource management of Magna
International lies in addressing the decision of operation management through emphasizing on
the smartness and the excellence of the employees (magna.com, 2019).The company usually
favors smarter employees. In order to retain talent, Magna International makes use of higher
compensation packages that includes higher salary and incentives. The human resource of the
company also holds the responsibility of improving quality of the work life for all the employees
along with ensuring leadership to the management for supporting the procedures and the policies.
Inventory Management: Magna International appoints an inventory coordinator who holds the
responsibility of maintaining higher level of inventory integrity and accuracy within facility. The
Company relies on the inventory coordinator for monitoring the inventory levels and the product
movement (Lwiki et al., 2016). The major responsibility of the inventory coordinator includes
controlling and monitoring the inventory integrity along with researching the inventory
discrepancies and making required connections. They are also responsible for overseeing the
physical inventories, cycle counts, random or receipt audits or reconciliations. The company also
ensures inventory management through maintenance of the Inventory Accuracy Metrics along
with the associated reports of management. In addition to enhance the inventory accuracy there
should be integrated and coordinated efforts. Through the inventory coordinator the company
also records and identifies issues related to the negativities of the cycle count and the
discrepancies and thereby initiate action for preventing its reoccurrence.
Supply Chain Management: Magna International, one of the renowned manufacturers of
vehicle parts, stands in centre of procurement industry. The company not only requires procuring
the items but also necessitates the creation of the products (magna.com 2019). Besides, it also
needed to deliver completed parts to the manufacturers of the vehicle. The first challenge lay in

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building of a platform that could handle the services provided by IT along with demonstrating to
the decision makers the advantages of the system without compromising on the decentralized
business model.
Maintenance: Magna International needs to maintain servers, facilities and the information
system. In doing so, the company has an entire team dedicated for it maintenance. Such teams
are differentiated as the operations and support. The activities of the personnel allow the
company in keeping all the facilities and equipments running smoothly for addressing the
decision area.
Scheduling: In the effort of supporting Just in Time (JIT) delivery its is expected that the
suppliers constantly strives in reducing the lead time with the supplies, improving the flexibility
and minimizing the changeover times (magna.com, 2019). Besides, for supporting the JIT
schedules the supplier is asked for supporting the localized warehousing. Routing, scheduling
and the delivery requirements will get communicated earlier in the program award through
Supplier’s Statement of the work. The requirements and arrangements of all means of
transportation should be agreed and signed.

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Part 3- Mission, Strategy and Competitive Advantages
1. Mission:
Magna International does not believe in a traditional mission statement. The company is
guided by key principles outlined in the corporate of the company (magna.com, 2019). Magma
International remains committee towards the operating philosophies based on the concern and
the fairness of the communities and the employees where they operate. Magna International the
largest supplier of automotive partners with the leading automakers for pushing the boundaries
of the technology, backing the innovative ,means of thinking and the world class engineering
and the manufacturing process.
. The employees of the company possess the autonomy of influencing the real change and
the opportunity for taking the ownership of the accomplishments and thereby share the success
of the company (magna.com, 2019). The company has thus made an investment in the
employees and puts across the developmental programs that help in acquiring the skills
necessary for becoming the futuristic leaders.
The value system of the Engineering Center Steyr depends on:
 Magna Company Constitution and Magna Charta
 Communication and Engineering Spirirt
 Participation and involvement of all the team member
 Execution and customer focus
 Co-operation with the research and the development institutions

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 Safety, health and the environment
Thus, the engineering centre of Magna International is driven and focused towards the
longer term strategy that supports the sustainable and consistent growth in balancing with the
safety, health and the environment. The company also drives in newer products through
innovation for maximizing the benefit of the customer. The discipline of the company lies in
time management, quality assurance and the reduction of cost.
2. Strategy:
The strategy of the company lies in operating in the prominent geographies and thereby
put forward comprehensive analysis of the growth strategy and the financial performance of the
firm. The company is seen to perform against the key indicator that includes the key units like
the production unit, sales units and the generation of the net income, operating income and the
total revenue (magna.com, 2019).
The key highlights:
1. A recorded increase of revenue in Europe: The revenue of the company in Europe rose
by 16.4 percent from the US $12.8 billion in the year 2016 to US $14.9 billion in the year 2017.
The revenue of the region increased by close to 17.4 percent during the year 2015 to 2016 due to
the launch of Audi A3 and A4, E-Class of Mercedes-Benz, Skoda Superb and the BMW X1,
thereby partially offsetting the losses of close to US $ 146.0 million that resulted from the
weakening of the foreign currencies in comparison to the British Pound, Russian ruble, US
dollar, Euro and the Turkish Iira. The lower volumes of production of Paceman and Mini
Countryman had a negative impact on the revenue.

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2. Increase in Revenue in the Rest of the World Segment: It was found that the revenue of
the rest of the world rose by closer to 25.6 percent from US $64.0 million in the year 2016 to US
$ 583.0 million in the year 2017 which portrayed an increment of about 0.7 percent during the
year 2015 to 2016. This has been primarily due to the net prices put across to the customers and
launch of the newer programs in Brazil that partially offset the loss of about US $67.0 millione
due to weakening of the foreign currency against US dollar that included the Brazilian real and
the Argentine Peso.
3. Launch of Newer Programs that led to the Increase in the Segmental Revenue: The
revenue of North America rose by close to 0.8 percent from close to US$ 20.7 million in the year
2016 to US$ 20.8 billion in the year 2017 along with an increase in the revenue in Mexico and
Canada. The increase has however been driven through launch of the Ford Edge, Chrysler
Pacifica, Lincoln MKX, Chevrolet Malibu, F-Series Superduty Ford, Lincoln Continental and
Cadillac XT5. Further, the acquisition of the Getrag during the first quarter of the year 2016
resulted in the sales growth of production by about US $593 million that partially offset the
US$225.0 million loss due to weakening of the foreign currencies against the Canadian and the
US dollars.
3. Competitive Advantage
Magna is placing emphasis on the global coordination, best practice and standards for
both packaging and logistics with the training and the technology remaining vital for the future
success of the tier 1. The defining characteristics of the larger tier one suppliers are often referred
as decentralization (international.gc.ca., 2019). At the Canada based Magna International which
is one of the largest suppliers of tier on a global scale has operating units such as seating,

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powertrain, body or exterior and the chassis group remain hugely responsible for the respective
business and their supply chain and the logistics processes.
The size and scope of Magna International provides it with the advantages of higher
switching cost and the significant entry barriers. This also creates an appeal for the key auto
manufacturers who seeks in consolidating the purchase with the fewer suppliers. The company
also gains competitive advantage through the research and the development capabilities and
required product portfolio that helped the company in thriving through technical disruptions
facing auto industry. In other words, the competitive advantage of Magna International lay in the
solid profitability, strong growth, returns from the generous shareholder, healthy balance sheet
and attractive valuation and paves the way for attractive investments for DGI investors and
Global Association of Risk Professionals (GARP).
Magma International experienced outstanding results in the recent years. The company
had consolidated sales of close to $ 9.4 million in its first quarter which is a new record. This
implied an enhancement of sales revenue by 8.9 percent during the first quarter of 2016
(magna.com, 2019).The net attributable income of Magna International was 20 percent higher
and stood at the record figures of about $592. The company had a total cash flow of about $443
million from all the operations that represented a rise in 46 percent.
The results reflected that the strength of Magna International lay in the diversified global
business model. The competitive advantage of the company further provides it with a strong
profitability and leaves it well positioned in order to benefit from the growth in the emerging
auto markets and survive through the technical disruptions.

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