Ford's Operation Management: Objectives, Processes, and Strategies

This report provides an in-depth analysis of operation management at Ford Motor Company, focusing on key objectives and processes. It highlights the role of an inventory marketing manager and their responsibilities in communicating product information, analyzing customer needs, and developing marketing strategies. The report also discusses the importance of external and internal customers, along with operational objectives such as cost reduction, effective inventory management, and quality management systems. Various models applicable to Ford's objectives are explored, including supply chain management, economic order quantity, just-in-time inventory, and total quality management. The analysis emphasizes the significance of these strategies in maintaining Ford's competitive edge and achieving customer satisfaction, ultimately contributing to revenue growth and brand image enhancement. The document is contributed by a student and available on Desklib, a platform offering study tools and resources for students.

OPERATION MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
a) Introduction of Ford and my role in contributing for the department................................1
b) External and internal customers and objectives of firm in context of models...................2
c) Process description and the way in which it helps in gaining achievement.......................6
Recommendations..................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Operation management is having key focus on administering different business
functioning which is concerned towards designing, decision-making and execution of operation
system. It is concerned with converting labor and material into goods and services as efficiently
as possible in order to maximize profits for an organization. The operational management is
considered to hold core significance in a manufacturing business.
Herein, Ford manufacturing company, which is one of the world’s largest automotive
manufacturers, is undertaken for this study. It is an American multinational company whose
headquarter is in Dearborn, Michigan. In this report, the role of an inventory marketing manager
of inventory marketing department of Ford has been taken. Responsibilities of it will be to
communicate organization product and services to market and analyze overall customer wants
and desires.
a) Introduction of Ford and my role in contributing for the department
Ford Motor Company is an American Multinational Automobile company, which is
specialized in selling automobiles and commercial vehicles under their own brand name. Ford
has developed two key methods for large-scale manufacturing of cars and large-scale
management of industrial workforce, this method is known as Fordism. It sells a broad range of
automobiles under Ford marque worldwide and luxury automobiles under the Lincoln marque in
US. Ford has been producing not just cars but trucks, buses, motor sport/touring cars and
tractors. It also offers automotive finance through Ford Motor Credit Company. In this era of
constant change, it is important that one must raise their level of growth and step ahead through
innovation and expansion. Ford has significantly attributed itself to this fact and has sustained
itself in terms of innovation and technology worldwide (Drucker, 2012). Year 2009 proved out to
be a year of financial crises when the rise in fuel prices affected its sales very badly. Ford then
envisioned cars that were more affordable rather than luxurious by completely transforming
manufacturing process. This helped them to lead successfully despite the crises because of mass
production, enhanced supply chain, changes in lifestyles and advancements in technology.
The key motto of Henry Ford personally focused on “Help the other Fellow” which
motivated its employees. They provided them with mental and physical satisfaction with worthy
salaries for their work (Schneider, 2003). He also opened English schools at his plants and
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provided opportunities for their employees to pursue learning. This indeed had a positive impact
on their goals, working environment and corporate strategy of the company. Ford is recognized
to build everyday man's car focusing on reliability and quality.
In this company as an inventory marketing manager, it is imperative for them to hold
different type of role and responsibilities to perform for betterment of organization. Further, it
also helps in attainment of Ford goals as well as giving positive contribution for enhancement of
company sales. As a marketing manager, it is their duty and responsibility to be in contact and
coordination with the entire head department as well as hold prime knowledge about the external
forces, which drive customer needs and wants. It is their responsibility to ascertain the current as
well as probable demand for product. Further, to make researches and report onto the external
opportunities that lies outside the company. It is his duty to develop a marketing strategy and
plan that will best help in commercializing the company brand name. For this it may undertake
situation analysis, ascertain objectives, tactics and actions that will help the organization achieve
their objectives. The key duties of inventory marketing manager must be brand development,
gaining competitive positioning of company in the marketplace and enhancing its public
relations.
As an inventory marketing manager, it must also focus on enhancing customer
relationship management (CRM) and employee management. CRM will help him to collect
information from organization customer database and create a survey, which will reflect their
level of satisfaction with the company (Panneerselvam, 2012). Employee management on the
other hand is conducted by inventory marketing manager to take in charge of marketing
department and employees working therein. Being the manager, it shall duly coordinate and
manage work along-with supervising the same among personnel who are involved in researching
and gathering information about its customer needs and demands.
b) External and internal customers and objectives of firm in context of models
External customers- These customers refer to those who belong to external
environment. They enable and affect the revenue stream of organization through its purchases
and this is something every enterprise craves for its survival. Satisfied external customers often
make repetitive purchases. It is important for Ford to survive by effectively persuading their
external customer to purchase products and services through external customers. By providing
them with premium quality of automobiles, Ford customers can be instilled to make repetitive
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purchase and they can likely spread the message and refer the product to others. On the contrary,
if a customer has had a bad experience, it can deny in making purchases of products next time
and will restrain other to make purchases from the company.
Internal Customers- Internal customer may not specifically assure purchase of the
product or services that are offered, by the firm, but developing internal customer relationship
can also be considered to play a key role in the success of business. They are either the workers
of firm or people who are involved in the activities of the business (Cepeda and Vera, 2007).
Their key role is to maintain a healthy relationship with them and add worthy opinion or
suggestion about their own product and services from them. No dealership of customers can last
for long if the employees are unable to develop a good rapport and make good connections with
their customers.
Operational objective of IKEA limited
For survival in a competitive market and sustaining its position as world's largest
automotive manufacturer, it is important to define few objectives that are very important to be
fulfilled in any circumstances. These are as follows-
1. Reduction in production and manufacturing costs- For Ford automobile
manufacturing company, cost reduction is one of the key motives that hold core
significance in the organization. Its focus must be on reducing cost of production that can
affect the overall set of prices of its final manufactured product (Yang and Luo, 2004).
This can be made possible by acquiring raw material in bulk quantity and receiving high
discount of making bulk purchases. Every firm makes use of this technique in order to
controls its budgets and earn high end of profitability. As Ford is one of the largest
automotive manufacturers, it must make use of this method to attain objectives. However,
in some ideal cases, when demand for company’s product is high or demand of its
accessories has suddenly been enhanced; the bulk purchase is likely to cut the cost in
such a situation. Company can obtain trade or cash discount while making such
purchases. Even during recession, the key priorities of Ford must be on reducing its fleet
operating costs (Weske, 2012). Cost control in any fleet operations of Ford can help in
steadily cutting cost of vehicles.
2. Effective inventory management- Ford Motor Company inventory management is not a
new concept for the firm which has been followed by them since their origin. Continuous
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inventory management and manufacturing process have resulted in innovative
management system such as EOQ decision and JIT inventory. Ford Motor Company
must employ elements of both these methods for maintaining close relationship with their
suppliers. Henry Ford has cut down its inventory by 40 million dollars by bringing
variation in ways in which it procured the materials for manufacturing automobiles
(Understanding operations management, 2013). Ford motor must also have a clear access
to the entire important information that will help in analyzing the inventories and in
satisfying the overall market needs as well as in reaching to the minimum level.
3. Quality Management System- Quality management is a very crucial aspect of the firm
whether the company is a manufacturing or service delivering firm. In today's modern
era, every customer demands quality of product and services. This makes it imperative
for Ford Company to pay key attention on its quality management. Management of
quality is not an easy task there are varied techniques that must be duly applied through
which Ford can control and manage the quality of its product and services. The quality
enhancement in their product will bring in improvement of its brand image.
Models that may apply in relation to objectives that are set for Ford Motor Company
1. Supply chain management- The concept of supply chain management was initiated with
the logistic literature and logistics have a significant impact on this concept. Supply chain
management includes relationship marketing and market orientation (Mahadevan, 2009).
SCM will help in reducing the inventory investment in chain and in providing the
competitive advantage to company by creating higher customer values.
2. Economic Order Quantity- The Economic Order Quantity (EOQ) decision model is an
analysis that is made in order to determine the optimum quantity of product that must be
employed by company to minimize the total manufacturing or production costs. Here,
firm’s management is impelled to make complex analysis to evaluate the minimum
amount of product required to complete a specific job and to keep its cost of inventory as
minimum as possible (Renault, Facon and Wahaj, 2007). This analysis will help in
generating time management for generating an order, for processing, to manufacture,
organizing and shipping the same and ultimately, to sell the product.
3. Just in time inventory- This model assists the firm’s manager to assure that there is a
clear availability of raw material within firm (Sanders, 2014). The key purpose of using
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this model is to minimize the overhead costing expenses of Ford which is making
excessive purchases of raw material. As recognized as one of the world’s largest
automotive manufacturers, Ford exclusively makes an effective use of this model. The
model helps in organizing and collecting information on exactly the number of parts
which are required to finish the production cycle. By acquiring and utilizing this
information, Ford and its suppliers are collectively enabled to deliver the right amount of
product or inventory at an appropriate time. This requires a close contact of relationship
between parties that help in minimizing the amount of idle inventory. This model also
indeed helps in reducing the warehoused costs because the material manager requires
large quantity of material for long duration. This method also helps in bridging the risk of
goods that are turning into obsolete or damaged. Any sort of uncertainties can result in
defects in products therefore, it is important to keep the stock stored at a balanced rate.
Furthermore, firm is able to deliver better supply chain management because it enables
Ford to be more effective through competitive supply chain which assures appropriate
utilization of resources (Azhar and Elliott, 2008.). As a result, the firm can acquire more
satisfaction from their customers and would lead to increment in revenues.
4. Total Quality management- The total quality management (TQM) is a management
approach that has originated in 1950's which with passing years has become a popular
approach followed by company. Firms like Ford Motor Company have effectively
implemented TQM policy (Heikkilä, 2002). This policy integrates all organizational
functions which will help in meeting the wants of customers and organizational
objectives. The management of quality requires various efforts that will help in
enhancing their capability and talent in order to provide quality services and products to
its customers. It can be considered as a customer focused approach which forces the
employees of Ford to continuously improve their services. This specific approach is used
for utilizing different data, initiating strategies and enhancing communication system to
integrate the quality discipline in firm’s activities. TQM is a collaborative approach
whereby all personnel (Marketing, engineering, R&D, HR etc.) are required to practice it
in all its activities. TQM core aspect is customer-supplier interface, both internally and
externally and at each level, there are a number of checks to confirm the quality
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assurance (Sudha, Venugopal and Ambujam, 2008). The tool emphasizes on improving
the quality performance in each aspect of its business.
From the above all tools and objectives, it can be seen that FORD Motor Company
inventory marketing manager needs to play an attentive and crucial role in all such aspects. As
an inventory marketing manager, it needs to assure that there is an effective supply chain
management (Bassett and et. al., 2005). It must also look on enhancing the relationship
management which will assure the quality management.
c) Process description and way it helps in gaining achievement
In the previous section, tools used by Ford have been explained in detail. The effect and
impact of such tools and techniques on firm is given in brief below-
1. During supply chain management, it is the due responsibility of inventory marketing
manager to drive their customer focus on company by enhancing their relationship with
their customers. The customer focus will help in overall enhancement in profitability of
company. The analysis of market done by the marketing department will help in
adequately determining the supply chain management along-with the control of
inventory.
2. Economic Order Quantity (EOQ) minimizes the handling cost and ordering cost of the
firm. The use of Economic Order Quantity (EOQ) technique by Ford is only possible
through correct evaluation of market demand and sales of product. Where the inventory
marketing manager is suspicious about growing demand of customers which affect the
inventories of company, they will be given with due knowledge about the changes that
are happening and which can affect these demands (Niknam and et.al., 2011). The
inventory marketing manager who evaluates about the details about demand will help in
meeting the uncertainties. The demand is likely to affect the inventory calculation
through EOQ formula.
3. The practical application of Just in Time in Ford Motor company means intentionally
making strategies that will help it to reduce the overall cost of purchasing raw material. A
key role of inventory marketing manager is to make Research & development that is
important to identify the suppliers through which bulk quantities can be made. The next
thing is that, by working in association with inventory department, they can present the
trends of demand of company’s product (Zhao and Develtere, 2010). The key
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presentation on trends will help in identifying the areas where cost can be reduced and
profit can be maximized.
The time interval undertaken in drafting these trends will help in identifying the
movement of possible inventories. Just in time technique is helpful in minimizing the cost and in
increasing profits. Since ford makes use of this and Economic Order Quantity (EOQ) in
combination, it is able to get benefited by adequate maintenance of stock and minimization of
overall cost. This technique turns out to be beneficial from the profitability point of view.
4. The practical application of Total Quality Management in Ford Motor Company can help
in supplying the best quality products to their customers in minimum time period which
enhances their profitability as well as the brand image (Kerzner, 2013). For checking the
quality assurance, market manager must employ a team which will look on the areas that
require quality improvement and evaluate the efficiency in services of company. The
customer responses can be recorded through surveys and identify where firm is lacking.
The survey will help the organization to ensure that whether the key components of total
quality management i.e., training, teamwork, communication, brand recognition,
customer relationship etc. are duly complied or not. The best quality of automobiles can
only be assured if through survey, they have given proper focus on the areas where they
are lacking (Link and Marxt, 2004).
These methods can be duly assisted by inventory marketing manager as through its
survey and researches, company’s inventory system can be adequately calculated and quality can
be assured.
Recommendations
Though, Ford is among the world's largest automotive firm but it still needs to make
improvements for better attainment of its objectives. It has a huge base with its expansion
worldwide. It has over 187,000 employees globally and requires being staying updated with
management. The inventory marketing manager will help in determining the adequate supply
management.
Analyzing customer needs and wants will help in evaluating the supply chain
management which will in turn examine the overall inventory required. For enhancing the
service, the inventory marketing manager can analyze the perception of their customers. Ford
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Motor Company should benchmark their level of quality that can easily help it in gaining the
leading position in automobile industry.
CONCLUSION
This report has helped in concluding that operational management is the core part of
business which is inseparable from the organization. Key focus is to be made on maintenance of
qualitative products. Ford Motor Company is chosen for this report which is the leading
automotive firm in the world. It has adopted tools such as supply chain management, just in time,
EOQ and TQM for better production activities.
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REFERENCES
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Science & Business Media.
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Niknam, T. and et.al., 2011. Optimal operation management of fuel cell/wind/photovoltaic
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Sudha, V., Venugopal, K. and Ambujam, N. K., 2008. Reservoir operation management through
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