Operations Management of Mercedes

Understanding Operations,
Logistics & Supply Chain
Management
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Operations Management of Mercedes
Operations management is an important discipline or management function which includes
redesigning and controlling the business activities and operations involved in manufacturing or
production of goods and services to improve the overall operational productivity and efficiency
(Reid and Sanders, 2019). In simpler terms, operations management is primarily concerned with
ensuring that raw materials are converted into goods and services with the maximum possible
level of efficiency and optimum utilisation of resources to reduce cost and maximise the
profitability of operations. Managing the operations is an important activity for every business
organisation that assist the business managers to make the best possible use of limited resources
of the company and administer the routine activities in a seamless horizon. Implementation of
change that is primarily influenced by external environment factors is also determined by the
effectiveness of operations management of the company and the readiness of the organsiation to
make changes in its operations without hampering the productivity and profitability (Fettermann
and et. al., 2018). Operations management extends to supply-chain management, lean production
concept, plant layout and design, quality management, management of inventory and logistics
etcetera. In the following essay, an attempt is being made to determine the importance of
operations management concept and theories with the help of its practical application in the
organisational context of Mercedes.
Mercedes-Benz is a subsidiary company of Daimler AG, a German automotive company
involved in the production of buses, trucks and other automobiles which offer luxury. Mercedes-
Benz is involved in the manufacturing and production of luxurious and premium cars which was
founded in the year 1926 and the headquarters of the company are located at Stuttgart, Germany.
The company is widely popular and famous for providing the customers a very premium and
luxury driving experience in both sedan as well as sports cars segment (Corporate history, 2020).
Customer satisfaction drives the efforts and operations at the company. In the year 2018, the
company sold more than 2.3 million passenger cars and became the world’s largest seller of
premium cars. It is a large-sized business organisation which has its operations spread over the
globe and the company holds a very strong position in the automobile industry. The management
of Mercedes-Benz responds to the dynamic and changing needs of customer and with the help of
innovation and development, production system at the company is aligned with the market trends
and demand. In the following essay, quality management at Mercedes-Benz is being evaluated
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with the help of concepts and tools of quality management under operations management and the
report also aims to determine the importance of plant location and layout which is another
importance area of managing the operations of an organisation. Concepts of quality management
and plant layout are being critically evaluated with the organisation context of Mercedes-Benz in
the following parts of the essay.
Managing Quality at Mercedes-Benz:
Managing quality is a very significant dimension of operations management that involves
monitoring and supervising the production and manufacturing activities of an organisation to
achieve a pre-determined level of excellence (Pambreni and et. al., 2019). Quality of the product
or service is an important determinant of the extent of customer satisfaction which drives future
sales and making quality management a very important aspect of operations management. One of
the most important theory or conapt of quality management in practice is total quality
management or TQM which requires development and fostering of an atmosphere and
organisational culture where every employee or member of the organsiation is committed to
contribute to his best potential and deliver a very high standard of work completion is each and
every dimension of company’s operation (van Kemenade and Hardjono, 2019). Total Quality
Management is a very effective approach of improving the quality of operations with the help of
organsiation wide-efforts to increase quality of work execution and attain high levels of customer
satisfaction. However, management style and leadership has an important role in determining the
organisation wide-efforts since employees must be motivated to improve quality of work which
is being completed by them and it requires communicating the importance of improving quality
and aligning it with the individual interest of the members. The management of Mercedes-Benz
applies the tool of TQM in the organisation to improve and deliver the best quality of products
and services as per the promise made the company to deliver ‘the best or nothing’. In the
premium automotive industry, customers are usually people from high-income group and are
usually insensitive to prices. Hence, the only approach or strategy for attracting more customers
very effectively in this industry is to improve the quality of product and service offered to the
customers and constantly innovate and launch new products which have high attractive element
for the customers. With the help of delivering a high-quality to the customers, the management
of Mercedes-Benz has established a strong brand image of premium and luxury cars that come
with a superior quality and an excellence in customer service (Ng, 2012). Key provision of total
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quality management being applied by the management of Mercedes-Benz is installation of a
technical software with an automated process for screening of different components used in the
manufacturing of a car during the production process and eliminating every part or component
which is not meeting the standard or benchmark of quality. Involvement of human-eye and
manual inspection is also provisional after the system detects a problem. Real-time scanning and
analysis of the images produced by machinery with 100% X-ray technology helps in
identification of even the slightest problem that could affect the quality of the car (Top-quality as
the basis for success, 2019). For example, using the scanning technology, wheels used in the
production process are scanned to determine smallest pores or misalignment which could
potentially affect the stability of the car. Hence, quality is being accorded as the topmost priority
in the production process at Mercedes-Benz. Another important approach of TQM being applied
at Mercedes-Benz is external collaboration with subject-matter specialists to guide and supervise
the production process of its different range of products (Top-quality as the basis for success,
2019). With the help of guiding employees through experts and specialists, high-standard of
quality can be assured by the management. The management of the company recognises the need
to motivate employees and build a highly motivated and skilful workforce with an aim of
improving the overall quality of operations. Along with the extensive inspection process and
external help to establish high-quality standards, the topmost factor which determines the quality
of operations is employee motivation and morale (Escrig-Tena and et. al., 2018). Human
resource managers of the company adopt various strategies such as career management,
incentives and rewards etcetera to motivate the workforce to attain high-level of quality and
productivity. Product innovation is an important subset of quality management which is being
stressed by the management of Mercedes-Benz and the company has shifter to blue-efficiency
packages and batteries are being procured from the industry pioneer in battery equipment, Tesla
Inc. Quality management at Mercedes-Benz extends beyond the production and manufacturing
of goods to improve the quality of after-sales service being provided to the customers. With an
aim of attaining highest level of customer satisfaction and retention, free home-service
arrangements and telecall helpline assistance are being offered by the management of Mercedes-
Benz to improve quality of customer service. However, increasing operational has been a
problem linked with the application of TQM concept in an organisation context which needs to
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