Operations and Supply Chain Management Report for Inteva Products

This comprehensive report provides a detailed analysis of Inteva Products, a global manufacturer and supplier in the automotive industry. It examines their core competencies in research and development, business processes, logistics, distribution systems, and inventory management. The report assesses their financial and operational performances, drawing on data from annual reports and corporate publications. It explores the company's multinational presence, innovative products, and service offerings, highlighting the reasons behind its long-term success. Furthermore, the report includes a forecast for the future prospects and profitability of their newly established business units in Romania. The analysis covers process analysis, facilities layout, logistics and distribution, demand forecasting, inventory management, performance measurement, quality management, and project management. The report concludes with recommendations for improvement and advancement in Inteva Products' operational and financial activities, offering valuable insights for business students and professionals alike.

Running head: OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Operations and Supply Chain Management
Name of the Student:
Name of the University:
Author’s Note:

1OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Executive Summary:
This report is prepared to analyze and discuss about the business process of Inteva Products.
Inteva Products is having diverse products and services range and they are having the core
competencies in the research and development activities. In this report, their business process,
logistics and distribution systems, inventory management and their financial and operational
performances have been reviewed and analyzed with the help of the data available in their annual
reports and corporate publications. The Inteva Products is a multinational company having their
presence in more than 30 countries. They are known for their quality and the innovative and
advanced products and service offerings. In this report, all those core competencies of the
company have been analyzed and the reasons behind their long-term success have been outlined.
In recent years, they have established a business unit in Romania. In this report, the future
prospects and profitability for those newly established business units have been forecasted with
the help of some available historical data. Lastly, the report concluded with some
recommendation and suggestions to the company for improvement and advancement in their
operational and financial activities.

2OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Table of Contents
1. Introduction:................................................................................................................................3
1.1. Brief Overview of the Company:......................................................................................3
2. Analysis of the current situation and issues faced in respective operational segment:............4
2.1. Process analysis and facilities layout:...............................................................................4
2.2. Logistics and Distribution Systems:.................................................................................5
2.3. Estimation and demand forecasting:.................................................................................8
2.4. Inventory Management:....................................................................................................9
2.5. Distribution and warehousing:........................................................................................10
2.6. Performance Measurement:............................................................................................11
2.7. Quality Management:......................................................................................................12
2.8. Project Management:......................................................................................................14
2.9. Overall business performance analysis:..........................................................................15
3. Key issues faced by the Inteva Products:...............................................................................16
4. Proposal of a new procedure:.................................................................................................17
4.1. Franchise agreements and entering into international market:.......................................17
4.2. Application and implementation of new technologies:...................................................18
5. Justification of the Proposals:.................................................................................................19
6. Conclusions and recommendations:.......................................................................................19

3OPERATIONS AND SUPPLY CHAIN MANAGEMENT
7. References and bibliography:.................................................................................................21
1. Introduction:
Business organizations are established with some basic objectives and they set their
mission and vision to achieve those objectives. Business organizations always might not be able
to achieve this targets but some efficient business strategies can led them towards achieving
those mission and vision. Certain efficient business strategies can help the business organization
to achieve those mission and vision of the business. In this report, such business strategies of the
Inteva Products have been analyzed and presented sequentially. Business process includes
various activities such as procurements, manufacturing, warehousing, logistics, sales, and
management. If an organization is efficient in all those operations and can manage them
efficiently then they can earn a significant amount of profit and can achieve their overall
organizational goals. There are two financial objectives, which can be followed by every
company. One is the profit maximization and the other is the wealth maximization. Wealth
maximization objective is considered more preferable than the profit maximization having its
superiority in various aspects. In this report, some of such business process of the Inteva
Products have been analyzed and discussed in details for better understanding of the business
process of Inteva Products. Based on such analysis some strategies have been suggested for the
company for improvement in the business process of the Inteva Products.
1.1. Brief Overview of the Company:
Inteva is a global manufacturer and supplier of engineered components and systems for
automotive industry. Their core competencies are in the quality of their products and services.
Their product line includes the closure systems, interior systems, and motors and electronics for

4OPERATIONS AND SUPPLY CHAIN MANAGEMENT
the automotive industry (intevaproducts.com 2019). They business operations are based on their
headquarter at Michigan and having manufacturing and research and development units in 30
countries. They are having more than 100 industrial customers and they are broadening their
reach to their customers virtually. They are having a strong base in the research and development
and a wide logistics and distribution network. The company started their business in the US with
a limited product portfolio and gradually they have expanded their product portfolio and entered
into the international market with (intevaproducts.com 2019). They have been experiencing a
rapid growth and expanding their business internationally with the establishment of new research
and manufacturing units in various locations cross the border. The company develops tailor made
products as per the requirements and specifications of the order and it gained a huge customers’
attraction and gave them the initial pace of business and gave them the opportunity to grow up
their business. In this report, the operational efficiencies and operational performance have been
analyzed in the following paragraphs (intevaproducts.com 2019).
2. Analysis of the current situation and issues faced in respective operational segment:
2.1. Process analysis and facilities layout:
Inteva Products is a customer-oriented company who manufactures and sales various
engineered products to the automotive companies. They are mainly known for innovation and
advancement in their technologies in their products. They have been investing in their research
and development activities and continuously striving to develop new and advanced products and
services. Therefore, the core competency of the company is its research and development and the
innovation in their products and services (intevaproducts.com 2019). Their whole process of the
business depends on their research and development activities. They create customized products

5OPERATIONS AND SUPPLY CHAIN MANAGEMENT
and develop customized systems for their customers, which will be used as a major component
of the automobiles. Major part of their expenses includes the research and development expenses
and it is identified as a revenue expenses as each order requires certain identical product
developmental works (Rothaermel 2013).
The layout of their business activities can be described after considering their nature of
activities and business procedures. Their activity starts with the research activities and then the
development of the prototype. After testing the prototype of the products and services and after a
proper testing and inspection, it is finalized with the customers. After getting approval from the
customers and after getting the confirmation about the units required, the manufacturing process
starts and lastly it is supplied to the customers within the stipulated time. Complete these process
they need advanced and sophisticated research laboratory and manufacturing unit. They are
having such research and manufacturing units in 30 countries and they are continuing their
product development, manufacturing activities from those units, and supplying products all over
the globe (intevaproducts.com 2019). Therefore, it can be concluded that, their manufacturing
process are also diversified and decentralized and products are developed and manufactured in
the nearest location and supplied to the markets nearby (Rothaermel 2013).
2.2. Logistics and Distribution Systems:
Logistics and distribution system is the whole process of procurement and supply of
finished products to the customers. It starts with the procurement of the raw materials and ends
with the delivery of the finished products to the customers, and all the activities within are
included in the logistics and distribution system. The most important part of the logistics and
distribution system is making available the raw materials for the production in time and
arranging the smoother delivery of the finished products to the customers. Inteva Products is

6OPERATIONS AND SUPPLY CHAIN MANAGEMENT
having more than 30 research and development and manufacturing units in 30 different locations
(intevaproducts.com 2019). They have decentralized their manufacturing process for various
reasons. Decentralization of the manufacturing process helped them to capture a wide market
share and to make easy availability of the raw materials. It also helped them to supply the
finished goods to the nearest location for easy and timely delivery of the goods and services
(Rothaermel 2013).
Logistics and Distribution is an important part of the business process, which can make
the business profitable by reaching to the maximum possible numbers of customers and
procuring required raw materials in time. Inteva Products is a multinational company and having
overseas customers. They are having manufacturing units in more than 30 countries and all those
30 manufacturing units cater the nearby markets with their products and services
(intevaproducts.com 2019). The decentralization strategy and entering into new markets and
establishment of manufacturing units in various countries helped them to make it possible to
reach international market and to supply the products and services to their customers in time with
the advanced and innovative products and services features and characteristics (Jenkins and
Williamson 2015). The market share in the automotive components manufacturing industry can
be presented with the help of the following chart.

7OPERATIONS AND SUPPLY CHAIN MANAGEMENT
From the above graph, it can be observed that, the Inteva Products is having almost 15%
of the total market share in US in automotive components manufacturing industry. The company
was established in the year 2007 and it gained a huge market share and a good response from the
market within these 11 years because of their products features and advance technology. Their
efficient logistics and distribution strategies helped them to develop and supply tailor made
products as per their customers’ requirements. Further, it can be commented that they need to
enter into tie-ups and franchise agreements with the regional business organizations to reach out
to the more international markets and to reach out to the more number of customers possible.
They need to diversify their product portfolio so that a wide range of the customers’ needs can be
fulfilled and the business volume could be expanded (Jenkins and Williamson 2015).

8OPERATIONS AND SUPPLY CHAIN MANAGEMENT
2.3. Estimation and demand forecasting:
The Inteva Products have been expanding their business operation to various countries
and establishing new manufacturing units with new and innovative products in various countries.
They have recently established new manufacturing units in Romania with the same product
portfolio. They have marked a significant sales growth in their domestic market and it is
expected to have a same response in the Romanian Automotive market as well. Over the last
couple of years they have experienced an exceptional growth of 300% in their sales and with the
introductions of few new products and with the entry to the electrical and electronics industry
they expect a more growth rate in their sales (intevaproducts.com 2019). They have started
manufacturing and supply of solar panels and solar powered electrical systems, which will
definitely draw an attention of their customers and could create a huge demand as the same
industry is still unexplored properly. Therefore, it can be expected and commented that the
Inteva Products is having a good market share as compared to their competitors and can gain
more market share if they strategically map up their products and services offerings (Arora and
Taylor 2016). Therefore, a huge demand potential can be projected for the products of the Inteva
Products if they can come up with some innovative and advanced products and with a diversified
product portfolio (Jenkins and Williamson 2015). Based on the historical data a lay out for the
future sales and expenses can be provided in the following table.

9OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Table 1: Projected Income Statement of Inteva Products
FY18 FY19 FY20 FY21 FY22
Sales $ 60,380 $ 72,209 $ 1,09,981 $ 1,13,426 $ 93,054
Cost of goods sold $ 58,798 $ 66,376 $ 99,481 $ 1,01,730 $ 83,204
Materials $ 46,098 $ 52,387 $ 77,796 $ 78,627 $ 63,551
Material cost $ 44,150 $ 50,279 $ 74,666 $ 75,464 $ 60,982
Total freight $ 1,948 $ 2,108 $ 3,130 $ 3,163 $ 2,569
Manufacturing and indirect costs $ 10,994 $ 11,849 $ 19,197 $ 20,590 $ 17,283
Direct labor $ 3,606 $ 3,744 $ 5,987 $ 6,422 $ 5,427
Total burden $ 7,389 $ 8,105 $ 13,209 $ 14,168 $ 11,856
Plant engineering $ 365 $ 529 $ 667 $ 678 $ 617
Depreciation and amortization $ 1,341 $ 1,610 $ 1,821 $ 1,835 $ 1,753
Gross profit $ 1,582 $ 5,833 $ 10,500 $ 11,695 $ 9,851
Total operating expenses $ 1,230 $ 1,569 $ 1,815 $ 1,832 $ 1,734
Corporate engineering department
expense $ 444 $ 665 $ 770 $ 777 $ 735
Corporate selling, general, and
administrative $ 279 $ 355 $ 411 $ 415 $ 392
Plant selling, general, and administrative $ 508 $ 549 $ 635 $ 641 $ 606
Operating income $ 352 $ 4,264 $ 8,685 $ 9,863 $ 8,117
2.4. Inventory Management:
Inventory is the stock of raw materials as well as the stock of finished goods. Raw
materials are the main components, which are required for manufacturing of goods. Availability
of the raw materials in time helps in efficient and smoother manufacturing process. If the raw
materials are supplied to the manufacturing units as and when it is needed, then the
manufacturing process does not get hampered and it can be completed in time and supplied to the
customer in time. On the other hand, stacking of the finished goods is one more aspect of the
inventory. Adequate amount of finished goods must be warehoused properly to meet the
expected demand and to supply the materials to the customers as and when demanded by them.
Inventory management is nothing but the efficient management of such raw materials and
finished goods (Rushton, Croucher and Baker 2014). The function of the inventory management

10OPERATIONS AND SUPPLY CHAIN MANAGEMENT
includes procurement of required units of raw materials with good quality and in economic
quantity and warehousing the required units of the finished goods to meet the market demand in
time. The most important aspect of the inventory management is to make the overall cost of
inventory to the lowest possible. In doing so, the cost of purchasing the inventory and the
carrying cost of the inventory need to be considered. Raw materials should be procured and
warehoused in such a quantity, which will make the total inventory costs to the minimum
possible without hampering the manufacturing process (Jenkins and Williamson 2015).
Inteva Products are having decentralized manufacturing units and they have decentralized
their inventory system. They procure the raw materials from the regional markets and warehouse
them in the regional warehouse to supply it to the nearest manufacturing units. They manufacture
the products and warehouse them in the regional warehouse to supply it to the regional markets.
The decentralized inventory system gives two benefits, one is the savings in transportation costs
and another is the reach to the wider market for procurement of the raw materials. They are
having such an inventory management system, which helped them to meet all the production
requirements and to supply finished products to their customers in time. It also helped them to
make a significant amount of cost savings and a wider access to the regional markets for
procurement and supplies. Lastly, it can be commented that, still there are some chances of
improvement in the inventory management so that the products can be delivered to the locations
and a wide market with a minimum time constraint (Rushton, Croucher and Baker 2014).
2.5. Distribution and warehousing:
Distribution and warehousing is the process of warehousing the products after it is
manufactured and timely delivery of the products to the regional distributors and the retailers of
the regional markets. Distribution and warehousing are the main tow activities of the logistics

11OPERATIONS AND SUPPLY CHAIN MANAGEMENT
and distribution system. Warehousing refers to the safe storage of the materials and the
distribution is known as the supply of materials to the distributors and customers in time when
there is a demand in the market (Rushton, Croucher and Baker 2014). The Inteva Products is
having regional warehouses for storage of their raw materials and finished goods and they have
so many tie-ups with some logistics companies to deliver their products to the regional
wholesalers and retailers. As it has already been discussed that they have a decentralized
warehousing system and the regional warehouses procures raw materials from the regional
markets and caters the inputs to the nearby manufacturing units. The manufactured products are
stored in the regional warehouses and supplied to the nearby markets. Though they have a strong
distribution network, still it can be improved and more remote markets can be reached with the
tie-ups and franchise agreements with some regional delivery and logistics companies. If those
strategies can be adopted then the company can broaden their distribution network and reach out
to more remote and convenient market and can have a large customer base as well (Rushton,
Croucher and Baker 2014).
2.6. Performance Measurement:
The Inteva Products has been established in the year 2007 with the intention of making
innovative and advanced products with advanced features in the automotive industry. They had
started their business according to their plan, invested a huge amount in their research and
development activities, and invented various advanced and high-tech automotive parts and
components, which attracted the interest of the automobile manufacturers and created a huge
demand in a very short period (Cappelli and Tavis 2016). They had started their business in the
US only thereafter with the increase in the demand for their products in the international markets
they had started supplying their products internationally. In doing so, they faced various