Case Study: UGB165 Mercedes Benz Operation Strategies and Improvement

This report provides an in-depth analysis of Mercedes Benz's operational challenges, stemming from the Daimler-Chrysler merger and subsequent decline in sales and profits. It explores various tools and techniques for operational improvement, including Total Quality Management (TQM), lean production principles, and supply chain management strategies. The report details the application of TQM, emphasizing continuous improvement and defect reduction, and examines how lean production can eliminate waste and enhance efficiency. Furthermore, it discusses the importance of a robust supply chain and employee empowerment in driving operational excellence. The report also touches on the role of these strategies in improving Mercedes Benz's competitive position against rivals like BMW and Audi, offering insights into how the company can regain its reputation for quality and reliability. The report also includes the factors of job enlargement and job enrichment which helps in employee's growth.

Introduction to Business
Operation and Services

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
(I) Description of tools and techniques in order to improve operational strategies....................1
(ii) Implementation of effective operational strategy..................................................................6
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
In the aspect of businesses, vital range of operations and activities are performed. This
becomes necessary for companies to manage these operations in an effective manner and it is the
responsibility of operation managers (Stredwick, 2013). The term business operation can be
defined as those activities which are regards to completing day to day activities and enhancing
value of company. The project report is based on case study of luxury car Mercedes Benz. The
company is operating its business at global level. As per the case study they are facing issue of
poor quality management in their cars and as a result their sales revenues are decreasing
significantly. The project report covers about strategies regards to operation improvement as well
as about strategies which can be adopted by Audi and BMW companies to increase market
shares.
MAIN BODY
Overview of case study- The case study is completely based on the Luxury German car
manufacturer Mercedes Benz company which is facing difficult time recently. This issue has
been occurred because of merger between Mercedes parent company, Daimler Benz and
American's Chrysler in year 1998. As a result, company's operating profit started to decrease and
their performance fell down as compare to their competitors BMW and Audi. In addition, it was
year 2005 when the company recalled their cars because of some issues such as problem in
batteries, alternators etc. With an objective to increase performance and financial results, the
company is cutting down more then 8500 jobs at its Sindelfingen plan in Germany. As well as a
new CEO is hired.
(I) Description of tools and techniques in order to improve operational strategies.
The success and failure of businesses depends on companies operations that how well
they are implementing their activities (Schaltegger, Burritt and Petersen, 2017). In order to
improve operations of companies there are a vital range of strategies which are implemented. If
operations of business will be effective and efficient then performance will raise. In other words,
the operational improvement is a basic need and continuously effort for a business entity which
likes to get success in competitive environment. Herein, this is important to know that
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operational improvement strategies are being managed along with the overall business strategies.
Such as in the aspect of Mercedes Benz company, this is important for them to improve
efficiency of their operations so that their customers can become satisfied. Due to lack of
enhancement in their operations and techniques their customers are moving towards other
companies. As well as their sales revenue is also felling down. Hence, it is compulsory to them
to implement effective strategies so that their operations can be improve. In order to find out the
issues and lags in their current business operations there are various kinds of tools and
techniques which can be applied by above car manufacturing company. Along with customers
can become loyal towards company only if their services are better. By help of new tools and
techniques, it may become possible to get alternatives to sort the issues and it can be applied by
Mercedes Benz company. Herein, below some key tools and techniques are mentioned for
improving the operations of Mercedes Benz:
Total quality management – It can be defined as a kinds of technique which is related to
enhancing quality of company's products and services in an effective manner. Eventually, this
model is too crucial for business entities in order to improve quality of various aspects. The
standard set as a component of total quality management approach can reflect both to internal
and any industry standards recently in place (Ryu, Park and Chung, 2013). Total Quality
Management (TQM) is the iterative process of detecting and reducing manufacturing defects,
simplifying product development, increasing consumer satisfaction, and ensuring that workers
are up to speed teaching. The main objective of this strategy is to hold all participants in a
production process that is responsible for the success of the finished products and services. Via
TQM, the emphasis was mainly on internal guidance and procedural requirements for problem
deduction, since six sigma aims to reduce deficiencies.
The Mercedes used this approach to implement the plan of organizational change. Along
with issues of acknowledgement, performance and many others. All the problems are solved by
means of a common method in order to regain market position. Continuously improve the system
by means of the TQM system, which offers many facilities for performance over a year. This
improves the quality of the production product to make Mercedes relevant because it knows
exactly problem to solve a way through specific technique. The definition in question was
classified into four groups such as:
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 Plan - It is the most important phase of total quality assurance where employees come up
with the various problems faced in the factory's car production. Due to root cause, they
struggle from various challenges for day-to-day operations and assess the problems. To
do, all members of staff need to gather specific information and actually sold data to
determine the remedies.
 Do-Upon evaluating the issue needed to create a best solution to various issues. Strategies
were created and applied to solve the problems that the workers are facing during the
manufacture of the vehicle (Andersson, Manfredsson and Lantz, 2015). At this point, the
efficacy of the approaches and the solution needed to be evaluated.
 Check - At this level, where individuals focus primarily on both the scenario before and
after knowing the usefulness of the techniques after measuring the results.
 Act - After a comprehensive review necessary to take appropriate measures about the
report of the staff member and to establish themselves to efficiently solve all problems.
Therefore, total quality assurance is also recognized as the principle of Deming which is the
founder of total quality management. Because of various issues the company faces several
problems that affect the Mercedes' role and brand. As a result, people have moved on to BMW
that has a negative effect on Mercedes ' results.
Lean production (set of elements) - The management's particular method is to focus on
reducing waste in order to ensure value. Lean production is generally used in the production
company to evaluate quality of the product and skill related issues. The specific approach is
applied to move from concept to development. Lean production's main objective is to eliminate
costs by making companies more productive and responding to market requirements.
The Mercedes use the same approach to focus efficiently on reducing waste and effective
resource utilization to optimize efficiency. The number of common concepts such as Kaizen and
continuous production depended on lean manufacturing. Through such a strategy, the business
gains various benefits such as deducting lead times, increasing operating costs and enhancing
quality of the product based on customer requirements, etc. The process improvement principles
adopted by the Mercedes are described, such as:
Identify value from the customer's perspective - Through the producer, produced value is
created by the customer. Mercedes need to appreciate the value of consumer locations in terms of
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different product types as well as services. This helps determine how much money customers are
paying for the material. It helps to evaluate how much money customers are paying for the
material. The business wants to use the resources properly and decrease the waste in the business
process where they create the right price and get the institution's largest profit. Map the value stream - This principle consists of recording and deciding the information
flow where, after recognizing the disposal and techniques of enhancement, material is
used for the manufacturer's unique product (Calabrese, Costa and Menichini, 2013). The
value stream goes from the raw material to the disposal throughout the life cycle. Create flow - Eliminate administrative obstacles and try to improve wait time from the
time an implementation is submitted to fulfilment in order to ensure that the processes are
effective. The flow is characteristic of wastage rescue operation. Lean production relies
on avoiding output output inputs and enabling a consistent and coordinated process set in
which activities go through a steady flow. Establish a pull system - According to the pull process, work starts from the start and the
manufacturing resource procurement process is implemented where it is necessary to
store in advance for evaluation and the item is generated to reach the goal. Nonetheless,
forecasts are unreliable, that can lead to variations between too much stock and too little
stock, as well as missed plans and bad customer service.
 Pursue perfection with continual process improvement or kaizen- Lean manufacturing
stands and embraces the perfection attempt theory. Because of the emphasis on the
quality issue, roots are primarily targeted and Fit and subtract waste across the value
flow.
Supply chain- A supply chain is a system of all people, services, organisations, activities and
technologies consisting of the top selling operation of the commodity and supplying to the
producer on time distributors (Jazdi, 2014). In this portion of the supply chain consists of
obtaining the finished products from the production house and supplying the so-called sales
channel to the end user. It is made up of the material, financial resources and information that
migrate from vendor to producer to wholesaler to retailer to buyer for the operation. Mercedes '
primary focus is on the supply chain's three flows such as product flow, economic flow and flow
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of information. To this end, it is necessary to cooperate and interact with the flows between and
within businesses.
Mercedes can use the supply chain to subtract costs and remain in the market for some
time to succeed in the competitive market. According to the CIO, the modern supply chain
management has about six elements, such as: Planning- All the essential tools that better meet the consumer's demand for Mercedes
products and services need to be prepared and coordinated. The supply chain used to
evaluate metrics and calculate the performance of the supply chain, provide consumers
with expectations and achieve the company's objectives. Sourcing - It is necessary to take material from various sources to produce the drug. To
do this, it is important to identify vendors and set up an effective process for tracking and
maintaining the vendor relation. The primary focus is on purchasing, obtaining and
handling inventories Making - Produce the product and test the performance to manufacture the product on
time to perform the various kinds of activities based on the raw resources (Fischer,
Edward Halibozek and Walters, 2012) Delivering- Creating orders, delivering on time, invoicing customers and collecting
receipts are needed because of the cooperation with the different clients. Returning - To build this network to concentrate on the organization's harm goods.
 Enabling - The supply chain tracks the data and is aware of all the wilful disobedience
with all the rules.
Staff empowerment- It is a theory of management that has an impact on the value of
encouraging team members to make and act on critical decisions. Empowerment of the workers
is separate from nano-management. Within the Mercedes sense, worker empowerment helps
employee member with respect to different practice and takes responsibility for the performance.
It is primarily focused on organizational culture and job structure. The primary purpose of this
theory is to make important decisions for workers and to assist them in getting their decisions
right. The idea of job enlargement and job enrichment is understood via empowerment because
both are distinct from each other.
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 Job enlargement- There is a broad section on horizontal operation caused by changes in
the job (Martins Rindova and Greenbaum, 2015). An employee receives the input in a
traditional and modern manner in order to facilitate the conversation in advance and
promote the progress and development of the employees.
 Job enrichment- Increasing the complexity of the job consists of various types of
obligations to historically bring out the top level of the company.
All the tools and methods the organization uses to identify the quality problem through total
quality management and get the best alternative. Supply chain management helps provide their
clients with timely delivery to ensure that employees take all the major decisions on time.
(ii) Implementation of effective operational strategy.
The various types of companies apply a marketing plan to reach their set goals and
targets efficiently. It is primarily designed by BMW and Audi to advertise their products and
services in order to generate massive profits. The primary purpose of the labelling strategy is to
create large market shares with Mercedes consumers. Due to various problems in the Mercedes
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product design, quality and batteries. BMW and Audi are promoting their goods this time to
draw customers from their side. It has a positive effect and it increases both firms' sales. Various
types of marketing strategies are identified that BMW and Audi have applied to attract customers
and cover large markets such as: Cause Marketing- Other businesses exploit the situation after analysing Mercedes '
position and try to attract buyers for their goods (Xu, 2012). Ever more time is faced in
this approach where all customers are connected to the civic responsibility according to
the buying decision. Different brand styles prove how they attract the customer's interest
and set the standard for brand recognition and loyalty. Social Marketing- Compare their products and services with other businesses in this
strategy business and reveals that products are better than other companies and give the
consumer several deals (Huang and Zhao, 2013). As a result, consumers are interested in
knowing about the brand and attracting enterprises. Currently, most customers use
different uses so that the company can advertise on such applications to have details
about the vehicle.
 Event marketing- There is the enhancement and execution of promotional activities that
figure out the atmosphere and interact with the unique opportunity as well as the venue.
Develop an advertising campaign for this business and provide consumers with
promotions to boost sales. All the sales agent is eligible to efficiently customize the car
models. As a result, consumers are pleased by this and are interested in buying a car. It is
a very useful marketing strategy that assists in the event marketing centre to draw
customers to conduct report.
Various types of marketing techniques were established that the Audit and BMW implemented
to gain Mercedes customers. Based on the company's justification for various strategies that
efficiently attract customers. In order to apply marketing plan, most items such as:
Market Research- To do this, market research needs to be analysed focusing on the taste &
preferences of the customer. Emerging technologies are developing in the auto mobile field, so it
is necessary to know about these developments in order to effectively implement their products
and services (Beuren, Ferreira and Miguel, 2013). Continuously changing the taste of the
consumer in modern times in terms of car size, design and features. So Audit and BMW are
carrying out market research to find out about the quality of the brand.
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Promotion of the products- Upon evaluating the market under this plan organize and apply the
organization's successful strategy to increase consumers and revenues. Different marketing
methods were established that the organization used to attract customers in the business. Audi
and BMW choose the best possible techniques for this intent.
All businesses are conducting research on how consumers can be impressed with their products
and services.
Operational strategies- Herein, below some key operational strategies are mentioned that are as
followings: Customer driven strategies- There are the various types of methods that help meet the
client's demand and need (Hilton Little and Marandi, 2013). Developing effective
methods for this business to know the strengths and limitations of the organization.
 Corporate strategy and cross functional interactions - The particular system consists of
interconnecting the various types of parts. Every department that is premised on the
human body so necessary to meet the workers ' requirements that they make efforts.
Suggestion:
 It is recommended that businesses implement online marketing to retain their company's
profits.
 Subtract the cost as other firms compete and focus primarily on the value that consumers
need.
 It is recommended that efficient tools such as personal sales, sales membership should be
used to work with the multiple companies.
 It is advised to follow the new marketing system that is different from other businesses.
CONCLUSION
It is concluded, according to the above assignment, that each organization wishes to
succeed via efficient operation and services. To do this, it is necessary to determine all the
problems that cause low productivity problems. In order to define these problems, active
methods & strategies must be applied and all the necessary solutions applied. Recognize the
quality issue by full quality assurance and know the production problems with the aid of lean
manufacturing. The Deming principle, price-effective model that offers the optimum solution,
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applies for this. BMW and Audit use successful marketing techniques to protect greater market
share and improve productivity.
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REFERENCES
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