Critique of Operations Management Principles: Mercedes Benz Case Study

This report provides a comprehensive review of operations management principles and their application within Mercedes Benz. It begins with an introduction to operations and operations management, followed by an overview of the company's background and market position. The report then delves into the core principles of operations management, discussing their relevance and practical implementation. A significant portion of the report focuses on analyzing Mercedes Benz's operations, including its lean processes and continuous improvement strategies. It highlights areas for potential enhancement, offering specific recommendations for the company to optimize its operations and maintain its competitive edge in the automotive industry. The report concludes with a summary of key findings and insights.

Operations and
Project management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Introduction of Organisation........................................................................................................3
Operations and Operation management.......................................................................................5
Principles of Operation management...........................................................................................5
Operations management in Mercedes Benz ................................................................................7
Lean process of Improvement......................................................................................................7
Developing a Continuous Improvement Plan..............................................................................8
Recommendations for Mercedes Benz .......................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
Books and Journals....................................................................................................................11

INTRODUCTION
Operations management means carefully looking and managing the operations of
company. Operations are necessary steps and processes of developing and launching desirable
products in market. In their management, great dealing are related to efficiency and effectiveness
of operations.
In this report, different aspects and dimensions related to Operations management are
discussed. Report first starts from understanding what operations and operation management
means for an organisation, followed by principles related to guiding their management. After
this, report make discussion on operations management in context of particular organisation,
Mercedes Benz . Along with making continuous improvement plan for company and suggesting
recommendations of improvements for Mercedes Benz . Also discussed in this report in Lean
process of continuous improvement.
MAIN BODY
Introduction of Organisation
Mercedes Benz group is a one of the most popular and leading organisation in the auto
mobile sector not just in Europe but all over the world. Started in 1926 in Germany, company
have successfully and significantly gained momentum by coming of 21st century (Benjaafar and
Hu, 2020). Mercedes Benz is widely popular among people, mainly for manufacturing luxury
vehicles and commercial vehicles. It is acknowledged for producing people's car. In 2018,
Mercedes Benz became largest producer of premium cars. As it had been initially the leader of
producing cars which are called cars of people's choices. Very well preferred by middle class
sector ans populations of developing and developed countries, ,company had consolidation of
significant market portions there. This provided Mercedes Benz with large consumer market
already and now it have became the largest producer of cars as well. Both of these factors
together constituted to become major chunk of company's growth. Especially after 2018.
However, this growth do not came in isolations and more bigger challenge was already before
company. Company faced a major crisis to it public relations. It was due to malpractices claims
of United States Environment impact agency (Chiarini and Vagnoni, 2017). The agency accused
company and its management prize fixing produced by company contained a software which
had helped engines of these vehicles to pass emission tests even when they were not actually

following the norms. These claims hit PR of Mercedes Benz badly, mainly in US. However, the
company prominently fought these obstacles and overcame these challenges. Its growth was
hurdled for shorter duration only. Now, becoming the pioneer of future generations cars,
Mercedes Benz is not only present in the market of Electric vehicles, but also seen leading in
there. It is giving a very tough competition to prominent players in market, like Tesla. The
company have many important brands under its name, who are the western cars.

Operations and Operation management
Operations can be described as a set of those activities, which are necessary for an
organisation to not only continue its business but to maintain its survival along. Operations are
blood life of company. In a operations of company are included activities like Production and
manufacturing of desirable and targeted products, and many similar activities who are together
responsible for generation of revenue to the company (Fukuzawa, 2020). It should be noted that,
operations are only concerned with activities involved in Production of products of company
and those activities which facilitate these production and production targets. Like for Mercedes
Benz , operations are production of vehicles, ranging in different kinds and suitable of various
consumer bases of company.
Whereas, Operations management includes those practices which are related to
managing of operations of company. It basically deals with supervising, planning and organizing
these operations of company. Management of operations can be considered as those tasks, which
are oriented towards delivering desirable products to customers. It necessitates desirability of
products. It emphasises successfully turning inputs into outputs. In Mercedes Benz , management
of operations are done by no specific person but set of managers together, considering diversity
of production. All these managers coordinate to assure efficient operations management.
Principles of Operation management
Principles of operations management is necessary to understand driving forces behind
decisions related to management of operations of company. For this purpose report have
discussed ten principles of operation management by Randall Schaeffer.
Reality- This principle states that Mercedes Benz group should focus on reality of problems that
are in way of efficient management of operations of company (Größler, 2020). It insist on
developing a pragmatic approach. It is emphasised to focus on problem rather than on techniques
because there are no particular way handling any problem. Hence, by focusing over problem
company can develop its own solutions.
Organization- It explains that process of manufacturing of vehicles or any other product are
interconnected with each other, therefore they must be seen in alignment. Mercedes Benz should
make good coordination between different activities of production so that they all deliver similar
outcome. Organization helps to avoid any deviation from results which are actually satisfactory
for company and consumers both.

Fundamentals- It talks about necessary rules set by Mercedes Benz to realise its production
operations. Rules provides standards that are adopted by managers and employees to deliver best
outputs there. It avoids biases of decisions between and strict adherence assure major part of
success.
Accountability- As operations of production are well organised and also Mercedes Benz
emphasises over strict adherence of set rules, accountability of managers increases due to this. If
any deviation or fault occur in meeting targets of operations than managers can be challenged.
As they were already having prepared plan along with rules, which they had to execute and
follow (Lee and Tang, 2018).
Variance- Variance is a factor which deals with creativity. When managers assuring operation
management are assured of complete execution of plans and strict adherence to rules. And, every
activities is organised. Managers can then bring their own creativity to allow some flavours.
Causality- Causality focus on attacking, changing and eradicating main causes of problems.
Causes are roots of problems, so unless are completely thrown away, same problem will appear
again and again. Problems for Mercedes Benz can relate to inefficiency of machinery or any
employee or any other factor within or outside control of management.
Managing passion- Proper management of passion or motivation and performance of
employees, involved in conducting production activities of Mercedes Benz is very important.
They are the one bringing input into output as well as they are responsible for success of results.
Hence, their management can be major driver of growth.
Humility- Humility deals with approach of managers in dealing with processes and employees
and their management. Humility required managers in Mercedes Benz to be flexible. Regarding
any problem managers must seek help and then execute it. Allowing themselves to carry other
tasks then.
Success- Measurement of success may vary with the time. But for the company engaged in
production of certain goods, like Mercedes Benz . Success always means satisfaction to
customers.
Change- Mercedes Benz is company with large scale business operations. Diversity of its
products is another factor which make company vulnerable to effects to several factors. Hence a
scope of change should always be there (Liu and et.al., 2019).

Operations management in Mercedes Benz
Operation management is not only helpful in establishing coordination between various
production activities of organisation and their efficient management but also helps is reducing
production cost, complexities of processes and standardization of components like product
output and performance of employees. Mercedes Benz is manufacturer of automotive vehicles.
Which are engineering and technical products. In productions of such products, beside basic
drivers of production, much involved elements are research, product designing and multiple
stages of productions process. Therefore, strategic planing plays bigger role in operation
management activities for Mercedes Benz (Olsen and Tomlin, 2020).
Mercedes Benz have wide range of products and brands under its name, which are
falling in various categories like luxury cars, low priced cars and electric vehicles a well.
Production of all these products and management of product portfolio is carried on by different
subsidiaries. Hence, to establish coordination among all of the Mercedes Benz is required to
consolidate a shared platform. So they can exchanges plans, ideas and techniques of operation
management together. This would be a structural advantage for Mercedes Benz group, become
more competitive and thus dominate the market.
Lean process of Improvement
Process of Improvement, is evident from its name, related with making positive changes
in operations of organisation. Mercedes Benz is a company of wide range of operations,
occupied in multiple sets of products and various brands that lie within the organisation. This
way process of improvement becomes more complex in organisation. It ranges from identifying
opportunity of improvement, to making plans, implementing plan and measuring and controlling
its success as well.
Understanding lean process of improvement is challenging as well. Before pursuing its
understanding it must be noted that Lean process of improvement is a mindset more, rather a
process or methodology. Lean process view improvements in a continuous and daily basis
practice, making sure that products delivered by organisation aligns with requirements of
customers in market (Qi and Shen, 2019). Therefore, every part and of Mercedes Benz is
required to work in order on daily basis. Lean process of improvement requires Mercedes Benz
to offer and develop more values for its consumers. In a systematic way and working as a team
on daily basis. The entire process of improvements can be summarized under following heads:

Identifying- Identifying opportunities of improvements from different dimensions of Business
environment.
Planning- How can existing process of operations can be improved.
Executing- Implementing the plan of making change.
Review- How far changes are bringing desirable changes.
Developing a Continuous Improvement Plan
Mercedes Benz is an organisation having that stature and reputation which many
companies in automotive sector look forward to. Hence, in order to maintain its age old
reputation and secure more growth in future, Mercedes Benz is required to make continuous
improvements in its operations. In this report a levelled plan for Mercedes Benz is developed
through which company can do so.
Involving Executive management- Mercedes Benz have large scale operations, conducted by
range of employees divided in various countries. This is evident from looking at the supply chain
of company. Therefore it is necessary that senior management and leadership in organisation
must gets involved at priority helping employees to adapt changes and motivate employees as
well. Executives needs to convey their employees that improvements are necessary to achieve
efficiency and make working environment in Mercedes Benz happier.
Starting from Small- Starting from smaller goals and objectives is necessary in a huge scale
company like Mercedes Benz . It would help Mercedes Benz in looking at smaller
improvements which can be missed while carrying out bigger changes (Wamba and et.al.,
2018). To make sure efficient implementation of smaller changes Mercedes Benz can best do it
through Pilot-projects. These Pilot-projects should be fully dedicated and invested in making
suitable changes and deriving best of outcomes.
Encouraging Participatory importance- Employees are most valuable resource in carrying out
changes and improvements. They are bread and butter of any improvement. In solitude, when
these employees work, they can make improvements for themselves and not organisation.
Therefore, it is required them to work as a team, especially while making improvements for
betterments. In Mercedes Benz , operations of company are wide and integrated with each other.
Thus, working as team, for employees, here becomes more imperative.
Make space for mistakes- It is obvious that, not necessarily all the planned changes gets
implemented at the first time in right way. Employees are humans too and therefore they are

bound to make mistakes. Hence, Mercedes Benz must be flexible over implementation of
planned changes. One other benefit, Mercedes Benz can derive from mistakes is that, while
making improvements on mistakes, results could be more precise and accurate (Slack, 2018).
Looking at the difference- Continuous improvement helps employees to look at smaller and
incremental changes from a bigger picture. Hence, for employees a vision is developed. For
securing growth and efficiency for employees individually and organisation as a whole,
employees are needed to have their own perspective and vision towards their job role and
improvements in Mercedes Benz . Looking at hugeness of company. In this way, employees in
Mercedes Benz can get onboard of continued improvements on their own.
Recommendations for Mercedes Benz
After considerations of Operations management in Mercedes Benz , its scale of
operations and how their management can be planned in organisation. The report, in this section
have attempted to look over two best possible recommendations for Mercedes Benz , which are
necessary sets of improvements for company.
Emissions- The emission targets met by products of Mercedes Benz in various range of products
in portfolio, have not only bought products of company in doubt but snatched a reputed
organisation in to various scandals. Company is currently have centralized research bases in most
advanced companies of the world. To make better innovations in meeting emissions standards in
a targeted manner, Mercedes Benz must go on establishing at least one research base in every
country where it has its operations. Through this standards of particular country can be analysed
and met in products of country itself.
Electric strategy- Mercedes Benz is increasingly becoming hope of new generations automotive
products, along with scalable competitors like Tesla. Along with traditional automotive products,
Mercedes Benz is required to focus over new generation products as well. Make necessary
changes in its operations from now onwards for supporting production of these products at
present and prepare base for future along.
However, it must be noted that, scale of success in Electric vehicles market is integrated
with its efficiency in dealing with emission standards targets at present. When company will
build up its reliability in environmental concerns at present, then faith of consumers could be
catered in future.

CONCLUSION
Operations management, a tool for companies for developing efficiency and
compatibility of its products, is directly responsible for productivity of company. Productivity
can be defined as ratio of input to output of company. Higher the ratio is for the company, more
is its productivity of products in market. Concealing, securing and maintaining of productivity is
most essential for manufacturing companies. In this report, various dimensions discussed
regarding operations management process helped concluding at one point only, to increase
productivity of company. Therefore, preparations and implementation of plans of necessary
improvements must be focused over it. However, approach and methods of improvements may
differ between organisations.

REFERENCES
Books and Journals
Benjaafar, S. and Hu, M., 2020. Operations management in the age of the sharing economy:
what is old and what is new?. Manufacturing & Service Operations Management. 22(1). pp.93-
101.
Chiarini, A. and Vagnoni, E., 2017. Strategies for modern operations management.
Benchmarking: An international journal.
Fukuzawa, M., 2020. Function of value stream mapping in operations management journals.
Annals of Business Administrative Science. 19(5). pp.207-225.
Größler, A., 2020. System Dynamics and Operations Management. System Dynamics: Theory
and Applications. pp.273-284.
Lee, H. L. and Tang, C. S., 2018. Socially and environmentally responsible value chain
innovations: New operations management research opportunities. Management Science. 64(3).
pp.983-996.
Liu, P. and et.al., 2019. Bridging energy performance gaps of green office buildings via more
targeted operations management: A system dynamics approach. Journal of environmental
management. 238. pp.64-71.
Olsen, T. L. and Tomlin, B., 2020. Industry 4.0: Opportunities and challenges for operations
management. Manufacturing & Service Operations Management. 22(1). pp.113-122.
Qi, W. and Shen, Z. J. M., 2019. A smart‐city scope of operations management. Production and
Operations Management. 28(2). pp.393-406.
Slack, N., 2018. Essentials of operations management. Pearson UK.
Wamba, S. F. and et.al., 2018. Big data analytics in operations and supply chain management.
Annals of Operations Research. 270(1). pp.1-4.