Analysis of Land Rover's Operational and Supply Chain Strategies

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Understanding Operations, Logistics and Supply Chain
Management

Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................5
Conclusion.....................................................................................................................................13

Introduction
Operations management is considered a key component of any successful organisation, and has
a crucial functional role as it to comprehend how effectively the organisation is serving its
customer base. Operations essentially comprises of the concept of adding value – this includes
design of the product, streamlining management functionalities and developing the production
process along with it.
Supply-chain management fundamentally is an attempt to bridge the gap between
manufacturers, distributors, suppliers, retailers and the consumers at large in an efficient manner
by implementing strategic business decisions with the ultimate objective of enhancing
productivity and cost-effectiveness (Chin et al., 2015).
Figure 1: Flow of supply chain management
(Source: Fredendall and Hill, 2016)
Logistics as a function comprises of maintaining stability between two key points that are in any
operation process – where the product is originating from and where it is being consumed. It

includes a host of activities packaging systems, warehousing facilities, communication process,
transportation and so on (Christopher, 2016).
Supply-chain management system is a bare necessity in every organisation (Dweiri et al.,2016)
to stabilize the inflow of materials required for the manufacturing process and create a finished
product that offers substantial value to the end consumer at the required time with the perfect
price point, while also ensuring maximum possible efficiency (Drucker and Gam, 2016).
This particular essay deals with the main operations, logistics and supply-chain management
issues faced by the respective department in a specific organisation, in this case Land Rover and
delves into a critical and detailed analysis of the various components involved.
Figure 2: Meaning of supply chain management system
(Source: Evangelista et. al., 2017)

Discussion
Land Rover functions as a commercial vehicle brand in the luxury sector based out of the United
Kingdom, and has been owned by Tata Motors from 2008 after an acquisition process. Founded
in 1948 by the Rover Company, the brand today has established itself into a household name
globally. With an employee count of 40,000 plus and revenue exceeding 25,000 million British
pounds in 2018, the organisation has grown exponentially over the past decade and strives to
achieve much more in the coming years. The primary manufacturing unit was the Solihull plant
near Birmingham, but a substantial amount of the production was transferred to the Halewood
Body & Assembly plant at Liverpool later on. Currently, Land Rover vehicles are assembled
across the world globally in emerging markets like China, India, Brazil, Turkey as well as Iran.
The rapid growth within the organisation has essentially been the result of implementing several
developmental policies (Evangelista et. al., 2017) and green initiatives. Shifting to recycled
aluminium vehicle bodies, polices to offset emissions, constant innovation, technological
advancements and a holistic approach has greatly benefitted the company internally. However,
the company has faced managing quality issues and traditional production processes were
bottlenecking the efficiency significantly.
One key problem was the uncommon processes between Jaguar and Land Rover individually,
that lead to product design disagreements and general rigidity. Multi-program management
policies, uncompetitive methods of product introduction and varied processes for designing,
releasing and signing-off were among the other quality management problems that they were
facing (Fredendall and Hill, 2016). Having implemented a quality management system, the
company was able to overcome a majority of these setbacks, which have been discussed in detail
later on.
Traditional manufacturing processes has also troubled the company (Fahimia et. al., 2015),
whereby production strategies were formulated on forecasts, a large amount of production was
categorized as work-in-process and the organization was approached as one single unit as
opposed to a chain of inter-related processes. The company has conquered some of these
problems by slowly shifting to lean manufacturing processes where it has streamlined the
management, thus enabling effective communication; certain specific measures like reducing

work-in-process numbers, minimizing waste production and basing production processes on
actual customer demand has certainly benefitted the organization.
By essence, managing quality is a set of processes that manages all the functionalities within an
organisation to help achieve certain desired levels of superiority. It entails various aspects like
quality of product, planning of manufacture process, organizational policies, continued
advancement of innovation, processes and so on. An empirical data driven approach is essential
to the organisation (Fernie and Sparks, 2018). Effective managerial leadership and restricting the
isolation of employees also tend to be important factors.
Quality management is an absolute necessity when it comes to consumer satisfaction and
efficiency and consistency in the manufacturing and design process are some benefits that it
brings along with it. Factors of risk, direct threats from competing forces, probability of human
error, wastage production and unnecessary manufacturing costs are greatly reduced with an
optimal implementation of a quality management system.
Figure 3: Total supply chain management costs
(Source: Fernie and Sparks, 2018)
Land Rover as an organisation has faced several managing quality problems over the years
owing to the use of traditional quality management systems that were proving to be ineffective
with the advent of large-scale industrialization and rapid technological growth (Automotive
Council UK, 2015). The primary target of Land rover as an organisation is to deliver high-value

products in an extremely competitive market like that of the UK, while minimising
manufacturing costs and attaining the general objective of profit maximisation. As a result, an
effective quality management system becomes crucial to its survival, especially due to the
presence of major competing players, both local and international, like Mercedes-Benz,
Lamborghini, Bugatti, Ferrari and many others.
It is necessary to get a deeper insight into certain crucial theories that were implemented, to
understand how the organisation shifter from this traditional approach to a total Quality
Management system to increase efficiency. However, it is important to note, that even with
effective implementation, certain barriers will remain and not all the factors within a theory can
achieve a cent percent execution (Stadtler, 2015), as is the case with Land Rover. The theories
discussed here specifically include Deming’s theory of total quality management and the TQM
Model.
Deming’s theory has been globally accepted in the context of Total Quality Management
systems and was formulated by William Edward Deming during the late 1950’s. Although
inspired from prior work regarding the same, the concept of Total Quality Management gained
mainstream popularity through the works of Deming. Born in 1900, Deming’s work has been
credited with being one of the key inspirations in global economic miracles, with particular focus
on Japan as it rose to a global superpower from the destruction of war.
The theory focuses on fourteen primary principles, which in turn are based on four key tenets –
understanding the internal processes of a company, understanding the points and causes of
variation, theory of knowledge or comprehending what can be understood and the basic
understanding of human psyche. The fourteen points fundamentally delve into a continued form
of production process, removing the sense of fear within a company, absence of barriers,
quantity-bases targets as well as an emphasis on training, education and effective leadership.
The implementation saw problems being addressed based upon substantive empirical data and a
functionality of integration was encouraged. Large emphasis was placed on creating a product
correctly the very first time to minimise waste and work-in-process categories and this had a
substantial effect on the operational functions of the organisations (Allen et. al, 2016). However,
it had its drawbacks – the process of implementation is time and resource consuming as well as

tedious. It asks for a complete change in the culture, which may not be suitable to certain
employees. Creativity is not encouraged to an extent and the concept is by no means an easy fix.
The TQM Model is an amalgamation of various authors’ works, but key persons include
Deming, Armand Feigenbaum and Kaoru Ishikawa. The model focuses on very similar things
with the ultimate objective to maximise consumer contentment and product satisfaction, and
emphasises on the authority, management and the employees serving the organisation as one
functional unit.
Land Rover has tried to accommodate the model as much as possible, most notably due to the
immense success of Rolls Royce, who serve the same sector, and have seen a rise in profits post
implementation by up to 4.2%. However, the process is gradual and several technical errors,
often dormant in nature, still exist. This is mainly due to technological challenges and limiting
factors, which Land Rover must try to focus on in the coming years.
Fig 4: Total Quality Management model
(Source: Singh et al., 2018)
The implementation of the above theory resulted in a number of changes that gradually increased
the profitability of the organisation. Product quality was determined based upon the specific
needs of the consumers and customer-satisfaction was gradually internalised by the company at
large (Monczka et. al., 2015). Long-term success was the focus and employees were not held
responsible individually anymore; instead, departmental units were held accountable as a group,
thus focusing on the concept of shared responsibility. However, this too had its own similar

problems like an over emphasis on training and lack of true employee empowerment. Time
constraints towards quality enterprises also crept up due to focus on short-term monetary results,
and internal politics and poor inter-departmental communication proved to be major limiting
factors.
The term ‘lean manufacturing’ and just in time manufacturing are often used interchangeably,
but although consisting of similar foundations, they are not the same concept. JIT manufacturing
focuses solely on organisational efficiency, where as lean manufacturing utilizes efficiency as a
core value to add utility to a product.
Figure 4: Meaning of JIT
(Source: Drucker and Gam, 2016)
Agile manufacturing on the other hand is also similar, but conceptually different in the sense that
it also utilizes efficiency to respond to market changes in a time restricted, efficient manner. All
three functionalities are heavily co-related and are mere steps in the manufacturing process as a
whole.

In the context of Land rover, the company, for a very long time, had continued to function under
the traditional approach to manufacturing. Due to sudden changes in market trends and global
indices, mostly due to technological variations, Land Rover found it hard to keep up and
eventually shifted to lean method of manufacturing process. Prior to the introduction of JIT
system by Toyota essentially, several manufacturers stocked large inventories based on
speculative forecasts. Toyota eliminated this factor, and found that production costs decreased by
50 percent, because of which it rapidly spread to other companies including Land Rover.
Land Rover adopted the JIT principle and implemented a lean manufacturing process where
the true value of the product for the consumer was emphasised. This was followed by an in-depth
comprehension of the stream of value, to understand which part of the manufacturing process
was adding utility and subsequently eliminating the necessary parts. Land Rover implemented
this by removing distant warehousing facilities and centralising the manufacturing processes,
which eventually did provide the company with a certain degree of cost-effectiveness.
The concept of ‘pull manufacturing’ also began to be internalized where the specific demand of
the consumers would induce production, and not the notion of stocking inventory. Pull
manufacturing further diminishes production costs as parts and components are ordered on the
foundation of short-term cycles. However, the spearheading factor behind this too remained to be
addition of utility rather than cost reduction, which was held largely as a direct effect of pull
manufacturing as opposed to the driving factor itself. This also came to be a very positive
change, mostly due to the fact that Land Rover had functioned on the push manufacturing
approach for so long, which essentially thrusts the product at the consumer without really
considering specific want-based needs of the consumer itself.
The General Systems Theory was initially a part of the works of eminent authors like Boulding
(1956) and von Bertalanffy (1969). The theory stresses on the manufacturing process’systematic
structure as opposed to the functionalities and utility-adding approaches. The components of the
manufacturing process comprise a system, which operates in a very specific manner within a
certain environment and background. These components were essentially the various steps in the
process of manufacturing, like production, logistics, purchasing, packaging and so on. The
concept of General System Theory saw natural as well as unplanned changes upon
implementation and although organisational by nature, this too had its drawbacks like excessive

divisional policies; inability to adapt within a time bound factor and a varying degree of
communicative dysfunction. The General Systems Theory, although proving to be beneficial in
other sectors like information services and biomechanical processes, did not garner positive
responses when implemented in the automotive sector, specifically Land Rover.
The shift from traditional manufacturing processes to lean and JIT manufacturing and the
application of the general systems theory saw certain beneficial factors like a heavy reduction in
waste production (Mangan et. al., 2017). As the concept disregards inventory stocking and
hoarding of components for surge in demands, a majority of the waste production was inherently
curtailed in a de facto manner. It also saw increased customer relationships due to the targeted
focus on customer retention, which in turn led to a steady inflow of revenue. With the shift to
lean manufacturing methods, Land Rover also witnessed that no wastage of space and
equipments was occurring, mainly due to the elimination of unnecessary processes. However,
Land Rover also faced several limiting factors, of which two major factors were failure of
equipment and a gross inconsistency in deliveries. Because there is almost no room for error in
lean and JIT approaches, minor equipment failures could cause the entire operational process to
come to a standstill. In large-scale traditional manufacturing processes, employees could easily
switch over to another facility, but not in this case. This evidently would have a direct impact on
the consistency of deliveries, which in turn would obstruct consumer relationships, benefit direct
competitors as well as cost the organisation valuable profit ratios.
The triple bottom line theory, which is often referred to as TBL or 3BL, is fundamentally a
directive framework that seeks to ascertain the various aspects within an organisation relating to
primarily three factors: economic considerations, social considerations and environmental
considerations. The term is claimed to have been coined by John Elkington in the year of 1994.
In the context of the present company, Land Rover as an organisation operating primarily in the
luxury vehicle sector, bore economic considerations over any social or environmental factors up
until the early 2000’s. Traditional manufacturing processes had caused the organisation to lay
major emphasis on economic factors like production values, revenue generation and turnover
potentials and quite naturally, this had a varying degree of effect on the markets as well as the
consumers at large (Hugos,2018).

Fig 5: Triple Bottom Line Theory
(Source: Azevedo and Barros, 2017)
With the onset of lean manufacturing processes and the sensitization of consumer bases, Land
Rover gradually shifted to a more socially and environmentally acceptable approach. Post the
acquisition by Tata Motors, several green initiatives were undertaken to diminish the
environmental impact of the operations processes and create a better public image of the
company in general. Land Rover’s new plants at Wolverhampton were built in an eco-friendly
manner in tune with their futuristic policies. A more sustainable sourcing operation was also
implemented and transport impacts were heavily reduced by supplying products to dealers
directly without the use of distributions centres. A closed loop recycling system was also set up
at the Castle Bromwich production centre (Govindan et. al., 2015), where a majority of the
production component used aluminium to make the vehicle bodies. Land Rover also managed to
decrease emissions by offsetting methods to 18% per vehicle, and even reduced the water use per
vehicle by 17%.
However, several steps are yet to be taken in this context and the organisation should strive to
convert all of their facilities into modern, eco-friendly sites. It should also be noted that
dependence on conventional fuels must be taken into consideration and alternative sources must
be experimented with. Almost a cent percent of their vehicles use traditional fuels, and no policy
of sustainable energy sources are in place.