Operational Management Analysis: Volkswagen Group - Module 214 LON

This report provides a comprehensive analysis of the operational management of the Volkswagen Group, addressing key aspects such as operational strategies, transformation processes, and performance parameters. It delves into the formulation of operational strategies, identifying key elements like innovation and market share growth. The report examines the transformation processes within the company, including passenger car, power engineering, and commercial vehicle divisions. It also analyzes five performance parameters and the three key attributes of operational strategy: implementing, supporting, and driving. Furthermore, it explores the four perspectives on operations strategy: top-down, bottom-up, market requirements, and operations resource. The report also discusses managerial skills and competencies required in a rapidly changing environment, including the impact of Brexit and new operational roles. It then examines operational functions, optimum layouts, process maps, capacity and inventory management, and the challenges posed by Brexit. Finally, it offers recommendations for improving supply chain, quality, and lean management to enhance overall business competitiveness.

Running Head: Operational Management
Operational Management
Name of the Student:
Name of the University:
Author’s Note

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Introduction
Operational management can be defined as the process in the administration in which the
business practices to create the highest level of efficiency which can possibly be within the
organisation (Tsakiris et al, 2013). The operational management is concerned with the
conversion of materials and labour into finished product which is efficient and helps to maximize
the scale of revenue of any organisation. The aim of the assignment is to analyze the operational
management of Volkswagen Group in UK. The assignment will cater to the formulation of
operational strategy which will further explain the aspects of implementing, supporting and
driving. Further the managerial skills and competencies are required where the management is
rapidly changing and with the change in the technology the environment of the company should
also be upgraded. The assignment will help to identify and analyze the new operations in the
management that caters to the roles in the company’s head office to cope up with the competition
especially during Brexit (Pinson 2013). The operational function and optimum layout will help to
analyze the process maps and process types, inventory management, capacity management,
planning and control. The chosen company for this assignment is Volkswagen Group.
Name of the Company: Volkswagen Group
Problem Statement
The problem statement of Volkswagen is termed as “unexplained inconsistencies”
because it has been found that the emission of carbon dioxide on more than 80,000 vehicles. The
company has recorded the statement of that the estimated possible economic impact is at over $2

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billion to the firm (Siano et al, 2017). Another problem that has been analyzed in Skoda is its
brand image in the UK market which is affecting the growth in the market.
Formulation of operational strategies
The process used by Volkswagen to formulate the strategies is defined as the process
where the organisation is chosen the most and there is appropriate course action which needs to
achieve its goals. This process is essential to the organizational success and is because it provides
the company with a framework for the action that leads to anticipation of the results. Beyond
Volkswagens immediate strategy for recovery it is the long term strategy which is aiming to
become successful and sustainable automobile manufacturer (Beukes and van 2016). The key
elements include the innovation which caters to the improvement, increase rate in market share,
increase in level of productivity and become the tope employer to build up the first class team.
The strategy was recently suspended and is aimed to remove the scandal of emission of carbon
dioxide by strategy 2025.
Transformation process
The transformation process that is undertaken by Volkswagen Group is comprised of
passenger car, power engineering business and commercial vehicle. The activities are focused on
the development of vehicles and engines, genuine parts of the car and sale of passenger cars. The
product portfolio is currently ranging from fuel efficient compact cars to the variety of
motorcycles which will gradually be supplemented by the mobility solutions. The commercial
business area are primarily comprise of the development and sales of light commercial transport
like tuck and business from the Volkswagen commercial vehicles (Cronholm et al, 2013). The

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activities of the financial services division are the dealers and the customers of financing, vehicle
banking and insurance activities.
5 performance parameters
The five performance parameter of Volkswagen can be analyzed with the help of ratio
that is indicated with the view of fuel energy and some of the parameter are:
 Brake thermal Efficiency: it is the ratio which is normally divides Brake power which is
indicated as bp to the input of the fuel energy (Cuce and Cuce 2014).
 Mechanical Efficiency: the mechanical efficiency is the ratio between the indicated
powers and can produce the engine which has the maximum power that is acquired from
the wheel.
 Mean effective pressure: this is a theoretical pressure which is multiplied by the value
which is displayed while the work is compares with the performance of the different
engines.
 Volumetric efficiency: the air fuel mixture enters the cylinder and the amount that could
enter the cylinder under the ideal standard atmospheric pressure.
 Relative efficiency: it is the efficiency of the actual cycle that is the ideal cycle.

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Three key attribute
(1) Implementing: the implementing strategy of Volkswagen refers to the implementation that is
executed to the plans and its aim in accomplishing them in long term strategy. The company
aims to implement the machine which will control the emission of carbon dioxide from the
vehicles.
(2) Supporting: the company aims to support its strategy in the facilities such as bookkeeping,
controlled services in the operational management and support the purpose of the growth
management. This will allow the company to focus on the business and will act as there is
extension in the respective teams.
(3) Driving. The driving strategy that needs to be implemented in the company is the process of
steady communication from the top. As a part of the managerial access it is the need of the
company to facilitate the employees to communicate with one another as it caters to various
other different things and decrease the level of conflict.
Four perspectives
(1) Top-down perspective: the top down management is more common in deeper and more
vertical organisation because it produce the specified range of products that don’t verify
significantly such as automobile any other vehicle. The strategic planning and policy occur just
below the highest level of company.

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(2) Bottom-up perspective: on the other hand the bottom up approach of the organisation is the
company’s development that caters to the policies and the plan that is taken for the development
of the emission free vehicles and the direction of idea and the suggestion which contributes the
level of the company.
(3) Market requirements: is the document of Volkswagen Company which caters to the project
of management and the system of engineering. It is documents that express the needs and wants
for the product and service which is typically the written part of the marketing product or the
product management (Kim, Sting and Loch 2014). The needs of the market cater to the attributes
of emotional needs and desire of the target market.
(4) Operations Resource: are the machine, tools, workers and the facilities that work in the
physical areas or the vendors which perform the activities of various projects and the production
process. They are of different types and have different facilities and capabilities which connect to
the external vendors and perform the project activities of the operation.
Managerial skill and competencies
Operational management deals with the managing of the operation which is processed
within the organisation. Hence it is the duty and responsibility of the manager in the operational
field to make judicious use of the resources and the capital. The management is required to
perform various functions as a part of the management and fulfilling the job responsibilities.
Some of the key operational management role comprises of the function of finance, designing of
the product, strategy development, forecasting and developing of the supply chain management.
It is important to note the quality of the product because Volkswagen caters to the development
of standard product and plays an imperative part in the selling process. The operational managers

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holds the responsibility of identifying the project and further rectify and defects of the ensured
system. The requirement of proper skill is mandatory because it ensures the roles and the
responsibility of the candidate wishes to aspire. On the other hand the skill of communication is
very vital for any managerial employee because this bridges the gap between the employee and
the employers. In case of any innovative idea that comes in the mind of the employee they can
have the liberty to share their ideas with the team leader. Along with the communication who
provide clear instruction and the expectation for the teams which makes the productivity and
efficiency increase at its peak (Mitchelmore and Rowley 2013). There are several other types of
organizational structure which creates an impact on the managerial department. In a project
based organizational structure it is very important to keep up with the management professionals.
Operational function and optimum layout
The operational management of the business function is responsible to operate in the
creation of the goods and services. hence the company Volkswagen comprise of the creation of
planning, organizing, directing, controlling and supervising the operational activities of the
automobile.
Process Maps and Process Types
The process map in Volkswagen group is use to create a visual that refers to the steps in
the work and the activities which involves the people to carry out each step. When activities are
mapped it means it simply draws a box at each step and connects them with a arrow to highlight
the flow. the process map represents each steps in shape and the shapes are used to carry the
flowchart shapes. There are nearly 30 standard shapes that can be used in proper process. It is

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basically used to plan up new projects, used to model and document process and also used to
solve problems.
Layout and Flow
The layout involves the positioning of the resources which is transformed within the
operations and the function which is allocated to take up the task and the resources which is
gathered together and dictate the flow of transforming the resources through the operation or
function. The four basic types of layout that can be followed are product, process, hybrid and the
fixed positions. In the process of manufacturing cars Volkswagen is consistent on the layouts and
is dependent on the plant size with the lines which builds major facilities, aisles and other
pertinent features such as department boundaries (Pheng and Meng 2018). The other layouts are
fixed positions, combination, certain types and cellular services of layouts.
Capacity Management, planning and control
Capacity management and planning can be defined as the task that is assigned to an
effective management for the purpose of operation and it can be respond with the demands and
the places where it is situated upon. This can be usually termed as how the operation should react
to the fluctuating demands. The capacity manager of the Volkswagen is responsible for ensuring
the product and services infrastructure and is able to deliver the agreed capacity. Whereas the
capacity also manages the performance target in a way the cost is made effective and in a timely

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manner. The manager must consider all the resources are required to be delivered and the plan
must be kept short and long term business requirements.
Inventory Management
The inventory management of Volkswagen is supervision to the non-capitalized assets
and the stock items. A component of the supply chain management is catered to supervise the
flow of goods from the point of manufacturer to the point of warehouses and even there is
presence of facilities to the point of sales (Cachon, Gallino and Olivares 2017). The process of
inventory can access the raw materials; work in progress, finished goods, transit inventory, cycle
inventory and many more.
Issues faced by the company during Brexit
The scandal of emission ensures that the German car manufacturer is at risk and the
Europe’s largest economy. The minister of the state named the issue and it broke out at least for
more than two years ago after Volkswagen admitted to cheat the people of US market share and
the US diesel emission test. This particular threat was given to German along with the UK’s
decision to leave the European Union and protectionist the policies by the US ministers. Strong
households and the state are spending more impulse on the German economy where the growth
is measured at 0.6 percent (Dhingra et al, 2018). The foreign trade has dampened growth as the
exports grow stronger which are less that the imports. The internal had turned into a probe where
the incorrect carbon dioxide is resistant to the fuel consumption is applied an so many as 800000

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vehicles from the company itself out of which 200000 was on the German roads. This would also
include cars from the brand such as Audi, Skoda and Seat.
Recommendation for improvement
The following are some of the recommendation that can be made on the company and
they are:
 Firstly it caters to the development of cultural change initiatives. According to the
strategic decisions taken it is realised that the benefits are old and intense and cutthroat
the company culture and make it imperative. The new culture which is outlined is
significant to the strategy which can emphasise on the value such as trust, open
mindedness and equality. It is quite challenging to bring in the new culture in the work
environment and requires new type of management approach.
 On the other hand the second recommendation can be made on improving the brand
image and regain the trust of the employees. The company also needs to improve their
brand loyalty and the trust of the customers after the emission scandal. The
recommendation can be stated on the independent group such as the WCSBD a CEO led
organisation that leads to forwards thinking of the organisation.
Conclusion
Hence it can be concluded that the company overall caters to the improvement of the
quality and the productivity quality. The aspect of the quality are correlated to the company’s
global operation and it is also mentioned that previously that the company produces 10 million
cars in a year. The managerial skills and competencies required for management of operations in

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a rapidly changing commercial and technological environment for the company. With the
assistance of the operational function it is easier for the management to process the map and
form the layouts.

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