Supply Chain and Quality Management Practices at Aston Martin

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Understanding Operations, Logistics, and Supply
Chain Management
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Contents
Operations and Supply Chain Management....................................................................................3
Managing Quality............................................................................................................................4
Managing Business Relationships in Supply Chains.......................................................................6
Triple bottom line............................................................................................................................8
Recommendations............................................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Operations and Supply Chain Management
Operations Management refers to the administration and management of different processes and
departments in an organisation. Operation management includes designing and administrating
the processes of product and service development in a manufacturing organisation. It includes
managing different business operations to maximize business profits and revenues. Operations
management is essential in a manufacturing organization to support for effective
accomplishment of objectives and goals. Operations management also denotes for alignment of
business operations and processes as per the needs and requirements of the business. It ensures
for increasing the business revenues and lowering the costs of operations (Krajewski, et.al.,
2013). Logistics refers to the channels and networks that enable the business organization to
supply the products and services from the point of origin to the consumers. Logistics can also be
defined as the management of the flow of operations and business processes from the
development of the product or the service to consumers.
Aston Martin is a luxury car group that has been developing and supplying automotive through
two brands for more than 100 years. The car manufacturing company aims at excelling the craft
of designing the most beautiful and accomplished automobiles in the world. Aston Martin is
globally popular for crafting some of the iconic British sports cars with detailed and handcrafted
features. The company is named as Aston Martin Lagonda Global Holdings plc founded by
Lionel Martin and Robert Bamford. The company was founded in 1913 and is headquartered at
Gaydon, United Kingdom.
The two areas which will be discussed in this essay are Managing Quality and Managing
Business Relationships Supply Chains. The operations in the automotive industry are highly
prone towards managing quality and different standards to ensure for the accomplishment of
needs and requirements of the consumers and the identified target market. The organisation also
requires managing business relations in the supply chain to support effective management and
distribution of products towards the end consumers (Walker and Jones, 2012). Any business
organisation such as Aston Martin observes various issues and conflicts in the management and
administration of business operations and services. The essay will cover for discussing these
issues and conflicts observed by Aston Martin in its supply chain and logistics management.
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Managing Quality
Quality and its management are considered as an integral part of business operations and
services at Aston Martin. The company strives to develop the excellence level of quality in its
products and services to derive for effective customer satisfaction. Quality management has
applied through the practices and aspects of Total Quality Management at Aston Martin to
develop the effective quality of the products and services. Total Quality Management is a
business management approach through which quality in the business processes and functions is
achieved. The approach defines for developing a continuously learning environment which
supports the employees to strive for development (Oakland, 2014). The approach determines for
improving the abilities of employees to supply with products and services as per the demands of
the consumers.
At Aston Martin Total Quality Management is undertaken with simplifying the workflow and
increasing the employee engagement. These practices ensure reducing the redundancy of
processes and also support reducing the cost for business operations. The operations at Aston
Martin included for developing touch screen at the work stations for the workers and the
employees which supported for reducing the paperwork. These technological systems also
provided for reducing the time involved in maintaining the inventory and system details of the
products. It also supported for real-time exchange of the information and details across different
channels and networks of the organisation. It is necessary for the supply chains to be regularly
informed and educated about the details of the product and its stages in the delivery process
(Goetsch and Davis, 2014).
However, the supply chain managers of Aston Martin observed different issues and conflicts
with the implementation of Total Quality Management. The managers observed that employees
were not trained enough to handle the operations through the technological aspects and required
to imparted with training to ensure effective execution. This recorded for an increase in the
expenditures and costs of the organisation to develop and implement the technological settings
and processes. Other issues identified in the management of Total Quality Management included
the burden of work structures over the employees due to data capture and operator engagement
services. The processes required collecting data through the mechanism and systems
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implemented in the approach of Total Quality Management. This took more time than expected
durations and impacted on the operations and services at the Aston Martin manufacturing units.
The quality management of Aston Martin can be compared with the American automaker Ford
Motor Company. The American automobile industry was threatened by an invasion of Japanese
imports twenty years ago. This led to the revival of quality based on the philosophy of
management (Gharakhani, et. al., 2013). The results of the TQM movement were stunning at
Ford. Between 1979 and 1982, a series of the home run was hit by Ford and by 1986, the
company became the most profitable auto company in America. This was a result of the
application of TQM to its processes in order to ensure the overall quality of the products
provided by the company to its customers. The company made continuous attempts to come up
with new, innovative and advanced product designs such as fuel efficiency, attractive look and
many more.
In order to enhance the quality in all the disciplines, it is important to solve the problems. The
company Ford adopted an 8D problem-solving tool which was useful for solving problems in a
disciplined way. The employees were given an opportunity to learn about the vehicles yet to be
released. For the purpose, information sessions were organized called ‘go further employee
event’ (Kumar, and Sharma, 2015). Therefore, the company Ford had an extensive approach to
ensure effective implementation of total quality management.
In order to achieve operational efficiency and counter the market challenges, Aston Martin
decided to modernize its operations of manufacturing in almost every aspect. However, the
company aimed to accomplish the objects within its existing resource level and plan size. The
company focussed on its quality by way of integrating a production management solution in its
operations (Goetsch and Davis, 2014). Under this solution, the employees were provided with
specific work instructions, requests of change and other documents. They were also given access
to real-time information as they were provided with touchscreen devices at an operator work
station. This resulted in a fully aligned process of manufacturing, safety, quality management,
and engineering. The operational faults and production cycle times were also reduced
dramatically. Such improvements were achieved as aimed meaning only available resources
were used. This also resulted in lower per unit costs and fewer claims for warranty.
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Managing Business Relationships in Supply Chains
A lot of ground is covered by relationships in supply chain management. By its very nature,
supply chain management depends on the connections and relationships. There are tactical
relationships, strategic relationship, internal or transactional relationship and many more. Aston
Martin believes that in order to ensure successful supply chain management, it is important to
maintain high communication, high-trust and mutually beneficial relationships with the
customers and suppliers. The ideal supply chain relationship is the one in which both suppliers
and customers establish connections in ways which allows them to exchange information easily
or status visibility and demand data.
The supply chain management of Aston Martin relies on the concept that management of the
supply chain is more about establishing different links in the network and operating in an
effective way. The management of Aston Martin signifies that a central role is played by
relationships in the supply chain and the company does not get it right, the ramifications may be
felt from suppliers to customers. Relationships are placed at the center of the supply chain
management by Aston Martin. This helps the company in creating an effective dynamic and
more collaborative environment.
The company uses established relationships throughout the supply chain in mitigating the risks.
Better relationships with the suppliers provide the company with increased visibility of
unforeseen cost implications or any other regulatory requirements. This leads to a reduction in
costs. With increased visibility, the company is able to see the invisible costs and take steps to
exercise better control on those costs (DuHadway, et.al., 2017). Good relationships with
suppliers also drive administrative efficiencies significantly. Most importantly, the company
uses its relationships with its vendors to hold the value of its brand and enhance such value.
There are two approaches adopted by Aston Martin. Their approaches are significant for the
management of relationships in the supply chain. It is important that the relationships are
strategic, and growth focussed. The approaches followed by Aston Martin includes Reactive
approach and Strategic approach (Brandon Jones, et.al., 2014). The under-reactive approach, the
company starts managing the relationships with suppliers as and when there is an unpleasant
situation. The company then focusses on figuring out the ways to improve unreliable suppliers’
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performance. However, the company also believes that this approach may be important but
consumers a lot of resources. Further, under the strategic approach, the company starts building
a relationship with a supplier even before there is a signed agreement. This ensures the company
a competitive advantage in the long-run. Further, it is a forward-focussed approach and it can
result in successful relationships from the very beginning of the relationship.
The management of relationships in the supply chain is complex as the company Aston Martin
faces greater volatility, unexpected and unprecedented risks, and more uncertainty. As a result,
there are various challenges faced by the company in managing relationships in the supply
chain. The company Aston Martin operates in various nations and throughout the processes,
there are various people involved who belong to different cultures. The company faces various
problems with people belonging to different cultures as their interpretation or views are different
even when having the same conversation (Aston Martin, 2016). Further, in company supplier
relationships, gaps are also created due to the processes which are not transparent. Here, the
company faces a dilemma. Sometimes, the information is crucial for the business and sharing
which could increase the risk factors. Hence, it creates hindrance in the transparency of
processes.
With reference to the management of relationship in a supply chain, the procedures of Aston
Martin can be compared with Volkswagen. Recently, the company Aston Martin boosted its
domestic supply chain. The main aim of the company is to increase sustainability and flexibility.
The company shows a sense of trust and loyalty towards the local suppliers. The company
believes that with reference to the increasing component complexity, the local suppliers have
both flexibility and capability. However, along with this major decision, the company shared its
concern that targeting local suppliers would not mean that there will not be complexities, but
they are willing to apply the strategic approach and select partners and relationships which will
hold for years. However, on the other hand, recently Volkswagen was found to be involved in an
unprecedented struggle of power with its suppliers. The delivery was stopped by two of its
suppliers and it resulted in a full stop of multiple production lines at six plants of the company.
This was a result of ineffective relationships with the suppliers. The company failed to observe
its developed cooperation with its suppliers (All about Lean, 2016). Here, the company had no
choice but to adopt a responsive approach to manage its relationships with suppliers.
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Triple bottom line
Triple Bottom Line is a notion which broadens the focus of a business on its financial bottom
line to include environmental and social considerations. It measures three elements of an
organization including the degree of social responsibility, its environmental impact, and its
economic value.
Amongst all other main aims of Aston Martin, one is that the company will work together with
the suppliers to develop and design sustainable components to integrate into its products. The
company established a responsible procurement guide in 2012, under which the commitment of
the company to the ethical, social and environmental principles in the supply chain is set out.
The procurement procedures and policies of Aston Martin provide support to these principles.
They are also supported by the standard supply terms and conditions.
Further, the environmental obligations are taken seriously by Aston Martin. The company has an
environmental policy which helps it in driving forward with its commitment to operate as a
responsible business (Azevedo and Barros, 2017). Under the environment policy, all the aspects
of the business including engineering, manufacture, design, servicing, and restoration are
covered. The environmental system of the company is operated and maintained in line with
18014001: 2004. The company promotes sustainable construction and product design using low
carbon energy resources. Further, the company sets, monitor and attain the targets and
objectives for ensuring environmental performance management and also ensure controlling
other environmental aspects strongly.
Lastly, there is a positive impact seen on the economic line of the company as a result of its
progress in environmental and sustainable components. Based on research, 73% of the
millennials in the UK are willing to pay more for the products which are sustainable. The
company is also taking these measures to avoid any brand damaging. The company is able to
generate revenue by integrating its environmental and social standards with policies of corporate
governance (Gimenez, et. al., 2012). Apart from the benefits derived from governance, the
company is looking at the triple bottom line as a significant factor to develop goodwill and
corporate brand.
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Recommendations
It is a well-known fact that an organization stands nowhere without its employees. Hence, in
order to achieve the objective of total quality management, it is important for Aston Martin to
train its employees. Such training may relate to practices of satisfaction system for customers,
adoption of new concepts of quality and such others. Implementation of processes for effective
and real-time communication can also be a major contributor (Oakland, 2014). Further, in order
to ensure that any challenges faced in establishing the supply chain relationships are eliminated,
it is important to consider and integrate certain factors in the processes of the company. The
company must acknowledge that the suppliers are not only the vendors but partners. The
relationship with them must not only be based on the financial transactions but must also be
built upon mutual loyalty and trust. Such trust and loyalty can be built with effective
communication, making timely payments and no conflicts over contracts. The company must
ensure that the contracts entered into are detailed agreements and there is no possibility of
conflicts or confusions. Further, the company must ensure that the risks in dealing with the
suppliers are evaluated and appropriate measure to eliminate any such risks is taken (Walker and
Jones, 2012).
Conclusion
From the analysis of the report, it can be concluded that the ultimate goal of a customer-driven
organization must be total quality management and therefore it’s exponentially vital for the
companies to implement total quality management. Successful implementation of a plan for
management of quality results in achieving a balance of profitability, quality, and efficiency in
the organization. Further, the management of relationship impacts all the areas of the supply
chain and also influences the performance of an organization dramatically. However, the
management of relationships among the various aspects of the organization is the most
complicated part of the supply chain management initiative. When the interpersonal
relationships are not moving in a positive direction, all the functions of the supply chain cannot
operate effectively.
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References
 All about Lean, 2016. Volkswagen Supplier Relations Failure. [Online]. Available at:
https://www.allaboutlean.com/volkswagen-prevent/ [Accessed on 28 March 2019].
 Aston Martin, 2016. Sustainability Report 2016. Available at:
https://www.astonmartinlagonda.com/responsibility/sustainability-reports [Accessed on
28 March 2019].
 Azevedo, S.G. and Barros, M., 2017. The application of the triple bottom line approach
to sustainability assessment: The case study of the UK automotive supply chain. Journal
of Industrial Engineering and Management (JIEM), 10(2), pp.286-322.
 Brandon‐Jones, E., Squire, B., Autry, C.W. and Petersen, K.J., 2014. A contingent
resource‐based perspective of supply chain resilience and robustness. Journal of Supply
Chain Management, 50(3), pp.55-73.
 Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
 DuHadway, S., Carnovale, S. and Hazen, B., 2017. Understanding risk management for
intentional supply chain disruptions: Risk detection, risk mitigation, and risk
recovery. Annals of Operations Research, pp.1-20.
 Gharakhani, D., Rahmati, H., Farrokhi, M.R. and Farahmandian, A., 2013. Total quality
management and organizational performance. American Journal of Industrial
Engineering, 1(3), pp.46-50.
 Gimenez, C., Sierra, V. and Rodon, J., 2012. Sustainable operations: Their impact on the
triple bottom line. International Journal of Production Economics, 140(1), pp.149-159.
 Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence.
Upper Saddle River, NJ: Pearson.
 Krajewski, L.J., Ritzman, L.P. and Malhotra, M.K., 2013. Operations management.
Pearson.
 Kumar, V. and Sharma, R.R.K., 2015. Identifying critical success & failure factors for
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Conference on Industrial Engineering and Engineering Management (IEEM).
 Oakland, J.S., 2014. Total quality management and operational excellence: text with
cases. Routledge.
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 Ross, J.E., 2017. Total quality management: Text, cases, and readings. Routledge.
 Walker, H. and Jones, N., 2012. Sustainable supply chain management across the UK
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