Ford Motor Company: Unit 4 Management and Operations Report Analysis

This report, submitted by a student, analyzes the operations management of Ford Motor Company. It begins with an introduction to Ford and the impact of COVID-19, followed by an examination of key operational approaches, including Lean production, Six Sigma, queuing theory, TQM/Kaizen/JIT, Management by Objectives, and SMART objectives. The report then explores the roles of operations managers and how they can improve efficiency to meet business objectives. Further sections discuss the importance and value of operations, including product and process design, input-transformation-output, logistics and inventory management, and control and distribution. It also covers the factors within the business environment that impact operations, such as Corporate Social Responsibility, culture, and stakeholders, as well as how operations managers can achieve SMART objectives. The report concludes with a summary of the findings and references.

ASSIGNMENT 02 FRONT SHEET
Qualification BTEC Level 4 HND Diploma in Business
Unit number and title Unit 4: Management and Operations (488)
Submission date 26/12/2021 Date received (1 st submission)
Re-submission date Date received (2 nd submission)
Student name Nguyen Thi Kim Phung Student ID GBS200568
Class GBS0908B Assessor name
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making a false declaration is a form of malpractice.
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Table of Contents
I. Introduction...................................................................................................................................3
II. Key approaches to operations........................................................................................................4
1. Lean production........................................................................................................................................4
2. Six sigma...................................................................................................................................................5
3. Queuing theory.........................................................................................................................................6
4. TQM/Kaizen/JIT........................................................................................................................................7
5. Management by object...........................................................................................................................11
6. SMART Objectives...................................................................................................................................11
III. Operations manager’s roles.....................................................................................................12
1. Operations manager’s roles.....................................................................................................................12
2. How OP managers can improve efficiencies of operational management to successfully meet business
objectives........................................................................................................................................................13
IV. The importance and value of operations..................................................................................14
1. Product and process design.....................................................................................................................14
2. Input-transformation-Output..................................................................................................................14
3. Logistic and Inventory management........................................................................................................14
4. Control and distribution..........................................................................................................................14
5. Application..............................................................................................................................................14
V. The factors within the business environment impact OP..............................................................14
1. Corporate Social Responsibility...............................................................................................................14
2. Culture....................................................................................................................................................15
3. Stakeholder.............................................................................................................................................15
4. How OP managers can achieve the SMART Objectives............................................................................16
VI. Conclusion................................................................................................................................17
VII. References...............................................................................................................................17
I. Introduction
Ford Motor Company was founded in 1903 by Henry Ford and is based in Detroit (Dearborn,
Michigan). Based on yearly vehicle sales in 2010, Ford is the second-largest automobile manufacturer
in the United States and the fifth-largest in the world. COVID 19 could, however, be credited as
contributing to the worldwide economic downturn. Ford Motor Company is an American automaker
that designs, manufactures, markets, and serves a wide range of Ford trucks, SUVs, automobiles, and
Lincoln luxury vehicles. Automotive, Mobility, and Ford Credit are the company's three segments.

The Automotive section is responsible for designing, manufacturing, distributing, and maintaining
Ford and Lincoln vehicles, as well as their components and accessories. The Mobility section
principally consists of Ford's autonomous car development and related businesses. Argo AI, a
developer of autonomous driving systems, and Spin, a micro-mobility service provider, are also owned
by the corporation. On a consolidated basis, the Ford Credit section consists of the Ford Credit
business, which largely consists of vehicle-related lending and leasing activities. Ford Credit provides
a comprehensive range of car financing options to and through dealers all around the world. COVID
19 has an impact on Ford as well. Ford's operations management department was where he worked.
This report will evaluate current operating methods as well as management and leadership
responsibilities in various conditions, as well as the Board of Directors' successful decision on
operating regulations during the pandemic.
II. Key approaches to operations
1. Lean production
Lean manufacturing is a method of removing waste from a manufacturing system through a systematic
approach. It considers the waste produced by uneven workloads and overload, and then decreases it in
order to maximize value while lowering expenses. The term "lean" simply means "no excess,"
therefore lean manufacturing can be interpreted as "minimum waste manufacturing."
From design to production to distribution, this strategy may be applied to any area of a business. Their
core premise is that "less is more effective," implying that organizations must use less resources to
deliver higher-quality goods and services in order to remain competitive. Good supplier contacts,
devoted, professional, and dynamic staff are all essential for effective lean manufacturing. It also
maintains an excellent culture, promotes ongoing development, and prepares managers and people to
accept change and trust.

Ex: During shift changes, an automotive manufacturing business was losing production efficiency.
Three shift changes every day took an average of 30 minutes each, and a lean consultant worked with
teams from all three shifts to establish a changeover that avoided downtime, allowed for equipment
repair for the next shift, and improved communication of particular concerns or important information.
The new changeover system added one and a half hours to production uptime and improved
throughput by more than $1 million per year.
2. Six sigma
Six Sigma is a statistically-based process improvement system that identifies and eliminates tooling
sources to lower the mistake or defect rate to 3.4 defects per million potential failures. business
process dynamics (uncertainty); Six Sigma relies on a thorough understanding of client requirements
while defining defects and is hence extremely customer oriented.
Lean 6 Sigma is a model that integrates Lean and Six Sigma at the same time. This is one of the most
successful methods available today for identifying and reducing non-value-added activities (NVA),

and it is used by many of the world's leading organizations and enterprises, including Toyota,
Motorola, and GE,Ford…
Use the DMAIC approach to implement the Lean 6 Sigma model.
• Define (D) the problem to be solved, as well as the project's needs and objectives.
• Measure (M): comprehend the organization's true capacity, measure labor productivity, time
(Lead time, Cycle time, Takt time, Waste time), build a thorough production process, identify
production bottlenecks, etc.
• Evaluate (A): analyze the parameters gathered in the Measure stage to hypothesis the source of
the fluctuations and conduct verification, identifying the points that add value (Value added)
and those that make up the difference. Non-Value Added: Identify root causes of problems and
manufacturing bottlenecks.
• Improve (I): concentrate on establishing solutions that eliminate the source of variations, as
well as verifying and standardizing solutions.
• Control (C): set standard measurement parameters to sustain results and, when needed, correct
faults, such as measuring system issues.
3. Queuing theory
Queuing theory is a branch of mathematics that studies the formation, function, and breakdown of
lines. Queuing theory looks at the arrival process, service process, number of servers, number of

system locations, and number of customers—which might be persons, data packets, automobiles, or
anything else (Theinvestopediateam, 2021).
4. TQM/Kaizen/JIT
a) TQM
Total quality management (TQM) is defined as a management technique that focuses on long-term
performance through customer satisfaction. All members of an organization participate in a TQM
endeavor by working to improve processes, products, services, and the culture in which they operate.
TQM is a management system for a customer-focused firm that has all employees participating in
continuous improvement. It integrates the quality discipline into the organization's culture and actions
through strategy, data, and effective communication. Many of these ideas may be found in today's
quality management systems, which are the successors to TQM (Mary K.Pratt, 2020).
The eight principles of overall quality management are as follows:
Function Explanation
Customer-focused The level of quality is ultimately determined by
the customer. The consumer determines if an
organization's attempts to increase quality are
worthwhile, whether it is through employee
training, incorporating quality into the design
process, or upgrading systems or software.
Total employee involvement All personnel are involved in achieving common
objectives. Only once fear has been removed

from the workplace, empowerment has occurred,
and management has given the appropriate
environment can total employee commitment be
achieved. Continuous improvement efforts are
integrated with typical business activities in
high-performance work systems. One type of
empowerment is self-managed work teams.
Process-centered A focus on process thinking is an important
aspect of TQM. A process is a set of processes
that take inputs from internal and external
sources and change them into outputs that are
provided to clients (internal or external). The
steps necessary to complete the process are
outlined, and performance measurements are
regularly checked to detect unanticipated
variance.
Integrated system TQM focuses on the horizontal processes that
connect these tasks, even though a company may
have many different functional specializations
grouped into vertically structured divisions.
Strategic and systematic approach The planned and systematic approach to
attaining an organization's vision, mission, and
goals is an important aspect of quality
management. This process, also known as
strategic planning or strategic management,
entails the creation of a strategy plan that
prioritizes quality.
Continual improvement Continuous process improvement is a big part of
TQM. Continuous improvement forces a
company to be analytical as well as creative in
order to become more competitive and effective
in achieving stakeholder expectations.
Fact-based decision making Data on performance measurements are required
to determine how well a company is performing.
TQM necessitates that a company gather and
evaluate data on a regular basis in order to
improve decision-making accuracy, reach
consensus, and make predictions based on prior
performance.
Communications Effective communications is critical in
preserving morale and inspiring personnel at all
levels during times of organizational change, as
well as in day-to-day operations. Strategies,
methods, and timeliness all play a role in

communications.
b) Kaizen
Kaizen is a Japanese phrase that means "constant improvement" or "transformation for the best." It is a
Japanese business philosophy that focuses on processes that enhance operations over time and
incorporate all personnel. Kaizen views productivity development as a thorough and steady process.
Kaizen is a broad concept that incorporates a variety of principles. It entails building a team attitude,
refining daily operations, assuring employee involvement, and making a job more satisfying, less
stressful, and safer (Marshall Hargrave, 2021).
c) JIT
Just-in-time (JIT) inventory management is a strategy for aligning raw-material orders from suppliers
with production schedules. Companies use this inventory technique to improve efficiency and avoid
waste by acquiring products only as needed for the manufacturing process, lowering inventory
expenses. This strategy necessitates producers precisely forecasting demand (Caroline Banton, 2021).

d) Application
For reasons connected to the company's goal of achieving the highest levels of production and
customer happiness, Ford opted to apply TQM. Ford was a forerunner in implementing TQM in the
1960s (Kumar & Sharma, 2017). The company was intent on implementing a management system that
would raise quality standards. TQM was first used by Ford in the 1980s, when the company's tagline
was "Quality is Job 1." (Kumar & Sharma, 2017). However, it is critical to remember that there is a
significant difference between quality and total quality during this conversation. Unlike the former,
which assumes client pleasure with the results, the latter entails a number of important considerations
(Goetsch & Davis, 2014). Ford's goal in implementing TQM was to improve the quality of its
operations and personnel rather than simply increase customer happiness. The company achieved its
objectives, according to researchers, and has become one of the most successful TQM users (Kumar &
Sharma, 2017). As a result, the issue that prompted Ford to implement a TQM program was the aim to
achieve the greatest level of quality not just in customer service but also in process and employee
quality.
Ford Motor Company achieved significant positive results as a result of using TQM. Ford's
productivity was boosted by the primary components of overall quality—strategic direction, customer
focus, "obsession with quality," cooperation, long-term commitment, and more (Goetsch & Davis,
2014). Ford introduced TQM in a joint venture with ChemFil, a part of PPG Industries (Scheid, 2011).

Ford was able to improve its work environment and profitability with the help of ChemFil by
introducing a less hazardous painting method (Scheid, 2011). As a result, TQM became a focal point
in painting design, as ChemFil's preparation was based on client quality standards. Furthermore,
established rules influenced work at all levels, putting an end to the "days of guesswork" (Scheid,
2011). As a result, the company's tagline has been altered from "Quality is Job One" to "Quality
People, Quality Products" (Scheid, 2011). As a result, the main result of introducing TQM at Ford
Motor Company was an increase in overall quality.
5. Management by object
Management by Objectives (MBO) is a strategic strategy to improving an organization's performance.
It is a process in which the organization's goals are created and communicated to the organization's
members with the purpose of achieving each target.
Monitoring and evaluating each employee's performance and development against specified targets is
a crucial stage in the MBO strategy. Employees are more likely to perform their responsibilities if they
are involved in formulating goals and determining their course of action.
The goal of MBO is to improve the organization's operational results through achieving the company's
objectives. MBO encourages all members of the company to participate in the goal-setting process,
rather than just the management department. When all members of the company are willing to assist
the company's growth, there is a chance of meeting the goal (vietnambiz,2019). The operation
management must determine their resource capability and right direction in order to pursue the
company's goal and communicate the company's purpose and effort to employees. The effectiveness of
MBO increases when all employees work hard toward a single goal.
6. SMART Objectives
The S.M.A.R.T principle can assist operations management in identifying and achieving their goals in
the future. Operation management may comprehend their company's capabilities, such as what they
can accomplish, and have a detailed plan in place to reach their objectives. In his 2003 book, "Attitude
Is Everything: If You Want to Succeed Above and Beyond," Paul J. Meyer, a businessman, author,
and founder of Success Motivation International, discusses the features of SMART goals. We'll build
on his concepts to look at how to set, develop, and attain your objectives:

Factors Explanation
S-Specific During the operation stage, the strategy must have a clear and concise purpose.
For example, if the objective simply states that the company needs to develop its
market, it is not clear, and the employee will be unable to understand what the
operation management is looking for. Instead, the operations manager can go into
further detail about their strategy, such as increasing the number of distribution
stores to reach more customers in more locations. Identifying precisely can aid in
the improvement of operation management abilities.
M-Measurable In this example, measurable refers to a strategy that has a specific figure that the
operations manager wants to attain. This element has the advantage of displaying
the details of the strategy result, which aids operation management in determining
the efficiency degree of operational operations.
A-Attainable Although a company's operational actions have a clear goal and can be measured,
the success of its plans is determined by the company's ability. The operation
manager must understand the company's capabilities in terms of resources,
finances, quality, and timeliness.
R-Relevant The impact of vision on decision-making in operations management is
significant. Every operation activity must adhere to the company's common goal
and vision, which is why, before deciding to implement a new strategy, operation
management must consider all relevant variables.
T-Time Bound Is a factor in achieving a task on time. It not only motivates employees, but it also
ensures that operations run smoothly and the organization remains disciplined.
Ford has some real engineering that complies with the S.M.A.R.T. model requirements. As an
example, Ford claimed it revealed intentions to expand its expenditure on electrification by another 30
percent and set a target of 40 percent of output under the so-called "Ford+" strategy. By 2030, electric
vehicles will account for a third of all car sales, and investors will view the corporation as a
technology company. The all-electric Mustang Mach-E crossover was unveiled, as well as electric
versions of the Transit and F-150 pickup trucks. In the electrification race, Ford is lagging behind its
competitors. Ford executives, on the other hand, disagreed, claiming that they were deploying Mach-E
and functioning in a different way than electric vehicles. By 2023, the corporation also wants to
achieve an 8% profit margin. By 2025, the business wants to boost sales in the commercial market for
hardware and related services to $45 billion, up from $27 billion in 2019. Ford also plans to create
many types of electric car batteries, ranging from lithium-ion to lithium-ion phosphates for
commercial vehicles to solid-state batteries. When you join with a startup like Solid Power, you can
save a lot of money. By the end of this year, 1 million vehicles will have received software updates
over the air, with that number predicted to rise to 33 million by 2028. The business sees an opportunity
as well. By 2030, the market for linked features like driver-assist technology, new features, and
software content that refreshes and charges electric vehicles could be worth $20 billion. Ford intends
to create two separate electric vehicle platforms. Trucks and large SUVs have one lane, while
automobiles and smaller SUVs have the other. According to sources, Ford plans to introduce at least
nine all-electric passenger vehicle models, as well as at least three electric pickup trucks, vans, and big
SUVs, including next-generation models. Mid-decade, Ford released the second F-150 Lightning and
Mach-E. (Ford, 2020).
III. Operations manager’s roles