Operations Management of Mercedes-Benz

Understanding Operations,
Logistics & Supply Chain
Management
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Operations Management of Mercedes-Benz
Operations Management can be defined as the process and approach of managers of any
organisation which includes certain set of activities with an objective of increasing the efficiency
and effectiveness of the company’s operations (Reid and Sanders, 2015). Operations
management is primarily focused on redesigning and controlling the production and
manufacturing operations of the company in order to achieve the highest level of efficiency with
optimum resource utlisation. In the following essay, an attempt is being made to understand
operations and supply chain management with the help of an organisational context of Mercedes-
Benz. Principles of operational management can be better understood and comprehended with
the help of evaluating its application and implementation in the company operations of
Mercedes-Benz. Mercedes-Benz in one of the highest valued brand which is a German
automotive company dealing in production and manufacturing of luxury sports car and sedans.
Mercedes-Benz is another multinational division of the company Daimler AG, a brand dealing in
luxury buses, trucks, automobiles and coaches. Automobiles manufactured by Mercedes-Benz
have worldwide popularity and are being exported almost every part of the world. The brand tops
the industry when it comes to customer satisfaction and level of quality. The company has
quickly responded to the market demands of green technology and offering a major part of its
products with blue efficiency packages. The revenue of the company in the year 2019 was 94
Billion Euros with a sale of around 2.4 million vehicles in the same year (Azman, 2019). The
large-scale operations and massive growth prospect makes it imperative for the company to
adopt the principles and theories of operations management for increasing the overall efficiency
of the company operations. Two distinct approaches of operations management which are being
followed by Mercedes-Benz are Quality Management and Lean Production. Quality
management, as an approach of operations management, is a process which involves monitoring
and supervising the entire manufacturing and production process with an objective of ensuring
the quality of the products as per the standard or desired levels.
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(Source:https://www.zigwheels.com/news-features/news/mercedesbenz-pips-bmw-and-audi-in-
2017-j-d-power-india-customer-satisfaction-index/29383/ )
It can be observed from the above graph indicating the customer satisfaction elements that
customer satisfaction in the case of automobile giants like Mercedes-Benz largely depends or is
influenced by the quality of the product which makes quality management a very important and
relevant part of its operations management. Another approach or measure of operations
management being followed by the company is Lean production which has the objective of
waste minimisation in every operation of the business (Krajewski, Ritzman and Malhotra, 2013).
A detailed and critical analysis of both the areas of operations management which are
implemented by Mercedes-Benz is being done in the following section of the essay:
Total Quality Management of Mercedes-Benz:
Quality management can be defined as a concept which involves ensuring that the quality
standards of the manufactured products are in alignment with the customer expectation as well
the internal or company benchmarks of quality (Goetsch and Davis, 2014). It is an important part
of operations management which helps in improving the customer satisfaction and the efficiency
of the business operations. The management of Mercedes-Benz understands the significance of
managing quality of their products and automobiles to obtain a competitive edge in the industry
with such stiff competition. Rapid developments in the automobile industry has hiked the
significance of quality in influencing the final purchase or buying decision of the customer. The
industry in which the company operates is a luxury automobile sector with target customers of
high-income group working class people which reduces the overall role played by price in
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