Analysis of Operation Management Issues in Jaguar Cars

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Understanding Operations, Logistics and Supply Chain
Management
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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................4
Conclusion.....................................................................................................................................11
Reference List................................................................................................................................12
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Introduction
Operation management mainly concerns with activities such as planning, organising, and
monitoring contexts of manufacturing, operation, and other service provisions. The duties
performed under operation management are procurement, managing relations with related
services, resource utilisation and improving organisations’ sustainability in context to the
application of resources. Operation management can be studied more precisely by considering
logistics and supply chain management. Supply chain management involves a range of activities
including planning, supervising and executing flow of products. It starts from the flow of raw
materials to the distribution of products to final consumers. Logistic management refers to a
component of supply chain management that ensures customers’ demands are met through
effective storage and movement of goods.
The study on operation management shall be performed by taking the example of Jaguar Cars
Limited, UK, which is a renowned car manufacturer. It has introduced its business in 1935. The
current car models by Jaguar are E-Pace, F-Pace, XE, XF, and others (Jaguar.co.uk, 2019). The
essay shall elaborate on the key operation management issues faced by managers in Jaguar. It
shall analyse various components like operation functions, manufacturing process, delivery
systems, and others. It shall discuss the major dimensions of sustainability adopted in business
practices.
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Discussion
Critical review of relevant Operation, Logistics and Supply Chain Management theories
The operation and supply-chain management issues faced by managers in Jaguar are quality
management challenges, overcapacity, and problems in managing inventory. Overcapacity
occurs when Jaguar has invested resources to manufacture certain amounts of vehicles, but it
discovers that the market does not need huge amounts (Krajewski et al., 2013). The over-
expenditure damages cash flow and thereby results in waste. The automotive industry faces the
consequences of a quality issue, as this issue can be discouraging to new and existing customers.
The issue arises due to poor auto manufacturing and engineering process (Lim et al., 2014).
Overstocked or below-stock are two issues related to inventory management. If consumers’
needs cannot be met in time, customer dissatisfaction may increase. If inventory becomes
overstocked and sales become low, the business may face a huge loss.
The chosen areas for managing operations are managing quality and JIT, Lean and Agility. Total
quality management is a holistic management approach used in business processes to obtain
customer satisfaction and efficiency. Jaguar’s strong focus on productivity and quality
achievement has become possible through the application of TQM. The concepts of TQM
followed by Jaguar are customer focus, continuous improvement, product design, employee
empowerment, application of quality tools and others (Pankaj et al., 2013). The quality level is
the automotive industry is granted by the customers. Therefore, the main purpose should be the
identification and meeting customers’ needs. Customers’ preference changes quickly in the
automotive industry, as they may require vehicles embedded with new features like driver
assistance systems including forwarding auto braking, lane monitoring system, adaptive cruise
control, blind spot, and others. Jaguar should collect information constantly through market
studies and meeting with customers to ensure customer-focused service.
Jaguar emphasises on continuous improvement in every activity through a high level of decision-
making and strategic planning. The manufacturing process yields better results due to improving
machine, technology, people, process and other capabilities (Fraser et al., 2013). Jaguar arranges
employee empowerment programme to make them technically intelligent and enable them to
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make decisions related to quality achievement in the production process. TQM makes all
employees become accountable for all business activities.
Additionally, the application of quality control tools is another approach to interpret findings and
correct problems accordingly. The seven sorts of quality control tools are control charts,
checklist, Pareto chart, historic diagram, scatter diagram, flow chart, and cause and effect
diagram. Cause-effect diagram identifies possible causes for a particular problem. For example,
Jaguar is putting effort for excellent branding and marketing activities but unable to witness high
short-term sales volume. Cause-effect diagram works well in this case to identify the possible
causes of less short-term sales. The check sheet is a prepared and structured form for gathering
and interpreting data. Jaguar can apply this for various purposes such as customers’ needs and
expectations, competitors’ move and others. The histogram is a graph indicating frequency
distribution, which is beneficial for automotive companies for representing their sales figure,
profit margin, growth rate, and others in a certain interval (Azizi, 2015).
Positive impacts of TQM strategies are excellent customers’ satisfaction, competitive edge,
improved organisational performance, better personnel relation, and others. TQM results in
higher customer satisfaction by prioritising customer requirements. With the application of TQM
strategies, Jaguar can save expenses through the removal of rework and waste thereby increases
competiveness and profitability of the business. When a quality culture is promoted within the
firm, operative’ personnel and managerial performance increase rapidly due to overall quality
management. TQM promotes openness and mutual trust among employees in all departments,
which results in better personnel relations in Jaguar.
Negative impacts of TQM are demand for a sudden change, more expenses, and long-term
effects. Implementation of TQM requires a change of reprioritisation and attitude of daily
operations. It also needs constant employee involvement and management commitment, which is
hard to find in the organisation. Implementation of TQM also comes with additional costs like
team development, infrastructure improvement, training, consultant fees, and others. It poses an
expense burden on Jaguar.
A successful application of TQM requires a training programme for employees, who are
associated with quality improvement. Jaguar has the capacity to empower employees by giving
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training to employees. If it will follow all principles and tools of TQM fully, it can witness a
consistent series of changes in its manufacturing, marketing, and other functional areas.
Another area to be discussed in managing operation and supply chain is JIT, Learn and Agility.
Jaguar had faced a problem a few years back in its production system. With less production, it
was unable to meet consumer demand. With higher production, it had to face the consequences
of maximum waste removal from its inventory. In order to reduce the problem, Jaguar tried
building a continuous flow system of manufacturing or production based on Just-in-time
approach. The approach purposes to reduce stocks of components to the number needed to keep
production flow smoothly (Amasaka, 2014). The production team asks for fresh stocks as per
their requirement. The central store of Jaguar gives a quick response when new parts arrive at
workstations. The process is cost-effective, as less space is required and damage of additional
components is reduced. JIT is a pull system of manufacturing in which actual demands give the
signal for the production. It enables Jaguar to produce vehicles at the right time with the right
quantity. The stock amount of raw materials, finished goods, and work-in-progress materials are
kept at a minimum level. The smooth flow of resources and careful scheduling are required for
such a production system.
Additionally, Jaguar uses electronic data exchange to facilitate information flow among
customers and suppliers. This production scheduling software is effective in planning production
as per requirement.
Lean production is an operation management approach that emphasises on cutting costs
ensuring quality (Bhamu and Singh Sangwan, 2014). It is applicable to every aspect of the
manufacturing process of Jaguar-from production to distribution. Jaguar uses this approach for
cutting out all activities that do not give value to the production such as unnecessary movement
of product and staff around the plant, repairing faulty products and holding of stock. The
production plant of Jaguar at Castle Bromwich has been designed based on lean production.
Previously, Jaguar’ factories were taking much more space due to a lot of supplies and stocks.
With the application of JIT or lean production, the stocks are kept in a separate area from where
they can be delivered as per requirement of production teams.
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Agility refers to the organisation’s competence to change as per dynamic nature of the
automotive industry due to certain internal factors such as the breakdown of machinery, labour
strike along with external factors such as economic condition, technological factors, competition,
and others. Jaguar’s agility is reflected in its strategic flexibility, capable people, adaptive
process, collective leadership, supportive culture, and others. The firm captures short-term and
long-term opportunities in its business environment to respond immediately to consumers’
demand. It hires people with skills and knowledge fit with its workplace. It practices
transformational leadership to share common goals among individuals and empower them to
respond towards uncertainties quickly.
Positive impacts of lean production on Jaguar include worker satisfaction, waste elimination, and
competitive advantage. This operation management approach minimises all sorts of waste
including defect vehicle parts and unnecessary spare parts and others (Čiarnienė and
Vienažindienė, 2012). The production staff of Jaguar can see the inefficiency in the production
system through the application of lean production, which increases their work satisfaction with
higher engagement. Beyond improving efficiency and reducing cost, the lean production system
develops skills and introduces new work practices supporting workplace changes. Additionally,
space saved in inventory can be used for new product lines. These aspects provide Jaguar with a
higher competitive edge to the powerful competition in the manufacturing industry.
Negative impacts of lean production can be worker frustration and new inefficiencies. When
Jaguar meets a specific level of refinement, the production process becomes more squeezed
leading to employee dissatisfaction and frustration (Mostafa et al., 2013). Overuse of lean
production techniques can be ineffective for Jaguar, as tracking of productivity may start
influencing the time required for production.
Analytic discussion with a relevant and similar example(s) and applying appropriate
solutions of Operations Management
Jaguar uses other solutions similar to TQM and lean production to solve its operation
management problems. The solutions are effective conceptual design, improving the supply
chain, new product development, and others. Jaguar gathers data about a vehicle throughout its
lifecycle. It uses big data solution in order to shape the design for future vehicles by acquiring
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performance of an old vehicle during its whole life. Big data solution provides real-world
information gathered from different sources and thereby, enabling Jaguar to improve basic
elements of vehicles such as performance, safety, and aerodynamics.
Sometimes customer dissatisfaction increases in the automotive industry due to unavailability of
spare parts during the after-sales service. The quick supply of spare parts is crucial for increasing
customer satisfaction. Jaguar has kept varieties of components and parts in its inventory. It
supplies the parts through an effective supply chain to make them available always. It carries out
a complete supply process in association with car dealers and forecasts the spare parts demand
on time.
Jaguar has succeeded in building an efficient inbound supply chain in the automotive industry.
The techniques are facility selection, product flow-path optimisation, transport route optimisation
and consolidation centre selection (Christopher, 2016). Jaguar uses modelling technology to
make optimised manufacturing and supply chain decisions. The technology allows evaluating
alternative systems used in supply chain and recommending the best one. This has solved the
challenges like low-cost versus local and offshore versus near-shore. The process of transferring
products from production to distribution involves numerous decisions. Jaguar emphasises on
optimising the product flow-path to reduce related costs.
Managing people through effective leadership and training programmes are other solutions
adopted by Jaguar to improve their operation management. Transformational leadership is being
followed within Jaguar to bring innovation in business operation and working practices. The
managers give employees the freedom to use their ideas and skills for the development of
production, distribution and other areas. Employees are provided with next-generation training
programmes to excel in their professional career. They can set own learning goals, track
improvement and stay informed about new skills required in the automotive industry by
attending Jaguar’s learning management system. The company is getting competitive edges with
the effective management of people.
Another example of TQM practices by Toyota can be taken here to understand the importance
and benefits of managing quality through total quality management principles. Toyota’s
excellence exists in its total production system, which involves engaging employees in business
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decisions, reconciling between morality and business, contribution to the society’s welfare and
development and others. The best practices adopted by Toyota Motor Corporation under TQM
include customer focus, continuous improvement, strong leadership, lifelong learning, workforce
focus and many others (Shang and Sui Pheng, 2012).
Toyota has established customer assistance centres worldwide to understand customer
expectations and build a lifelong relationship with them. Top visionary leaders operate its
business and they focus on four major domains such as cost reduction, productivity, safety, and
quality. Both managers and workers involve themselves in small and constant improvements in
the workplace through kaizen or continuous improvements. Toyota has not stopped identifying,
adapting and implementing new production and operation techniques by analysing current
learning and competitors’ moves. In order to support these practices, the company provides five
types of training programs including improvement-based programs, programs for management,
skill-based programs, and others. Toyota has grown from a small manufacturer to a large
corporation in the industry through practicing the best approaches and techniques of operation
management.
Recommendations
Jaguar can improve its current business performance by achieving sustainability in business
practices. Incorporating sustainability in manufacturing process requires many things to be
discussed. It can be understood in detail with application of the Triple Bottom Line concept
(Gimenez et al., 2012). The concept is helpful in assessing the profits that Jaguar can make
through corporate sustainability solutions. The factors considered under the triple bottom line are
social, environmental and economic. Social bottom line involves measuring Jaguar’s profits in
human capital. It can ensure social sustainability by adopting beneficial and fair labour practices
along with the involvement of the corporate community. Jaguar should emphasise on hiring
people locally to improve the local economy and thereby ensuring social sustainability.
Implementing fair hiring standard is another approach to adopt social sustainability. Both men
and women should be given an equal chance in the recruitment process to develop a work
environment with a lack of discrimination.
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Environmental sustainability can be achieved through effective utilisation of direct or indirect
energy, recycling of materials, waste management and others. Jaguar should empower all
departments to fulfil the sustainability goals by giving emphasis on managing and controlling
emissions and waste along with the consumption of natural resources. Economic sustainability
can be achieved through helping local suppliers of the automotive industry to stay in business,
paying adequate salary to employees for stimulating spending and economic growth and
choosing raw materials having a good investment.
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Conclusion
With the progression of the essay, it is found that Jaguar is managing its business activities
successfully through the application of total quality management and lean production system.
Total quality management has helped in the continuous improvement of the operation, engaging
employees, improving customer satisfaction and managing relationship with suppliers. Lean
production or JIT has proven beneficial for Jaguar in terms of increasing space in warehouses,
eliminating wastes and fulfilling consumers’ demand timely. Jaguar is adopting some other
solutions such as logistics management, big data solutions, and transformational leadership to
improve its manufacturing, distributing and other areas. The study has recommended Jaguar to
adopt Triple bottom line solutions for ensuring economic, environmental and social sustainability
in its business practices.
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Reference List
Amasaka, K., 2014. New JIT, new management technology principle: surpassing JIT. Procedia
Technology, 16, pp.1135-1145.
Azizi, A., 2015, March. Relationships between total quality management critical techniques in
automotive industry. In 2015 International Conference on Industrial Engineering and
Operations Management (IEOM) (pp. 1-8). IEEE.
Bhamu, J. and Singh Sangwan, K., 2014. Lean manufacturing: literature review and research
issues. International Journal of Operations & Production Management, 34(7), pp.876-940.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Čiarnienė, R. and Vienažindienė, M., 2012. Lean manufacturing: theory and practice. Economics
and management, 17(2), pp.726-732.
Fraser, K., Tseng, B. and Hvolby, H.H., 2013. TQM in new car dealerships: a study from the
firms’ perspective. The TQM Journal, 25(1), pp.5-17.
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.
Jaguar.co.uk. (2019). Jaguar Factory Tours | Experience Jaguar. [online] Available at:
https://www.jaguar.co.uk/experience-jaguar/factory-tours/index.html [Accessed 29 Mar. 2019].
Jaguar.co.uk. (2019). Overview | Jaguar Stories | Jaguar UK. [online] Available at:
https://www.jaguar.co.uk/about-jaguar/jaguar-stories/index.html [Accessed 29 Mar. 2019].
Krajewski, L.J., Ritzman, L.P. and Malhotra, M.K., 2013. Operations management. Pearson,.
Lim, L.L., Alpan, G. and Penz, B., 2014. Reconciling sales and operations management with
distant suppliers in the automotive industry: a simulation approach. International Journal of
Production Economics, 151, pp.20-36.
Mostafa, S., Dumrak, J. and Soltan, H., 2013. A framework for lean manufacturing
implementation. Production & Manufacturing Research, 1(1), pp.44-64.
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