An Analysis of Operations, Logistics, and Supply Chain for Rolls-Royce

This report provides a detailed analysis of Rolls-Royce's operations, logistics, and supply chain management. It explores key concepts such as operation management, logistics, and supply chain management within the context of the automotive industry. The report examines Rolls-Royce's quality management strategies, including total quality management (TQM) tools like benchmarking and product design, and their impact on customer retention, competitive advantage, and brand image. It also investigates the importance of supplier relationships and the approaches Rolls-Royce employs to manage these relationships effectively, comparing them with Jaguar Land Rover's practices. The report further highlights the benefits of quality management and TQM tools, along with the challenges and solutions in maintaining a robust supply chain. This comprehensive analysis offers valuable insights into Rolls-Royce's operational strategies and their impact on the company's success.

UNDERSTANDING OPERATIONS,
LOGISTICS AND SUPPLY CHAIN
MANAGEMENT

TABLE OF CONTENTS
INVESTING OPERATION MANAGEMENT, LOGISTICS AND SUPPLY CHAIN OF ROLL-
ROYCE............................................................................................................................................3
REFERENCES .............................................................................................................................11

INVESTING OPERATION MANAGEMENT, LOGISTICS AND SUPPLY
CHAIN OF ROLL-ROYCE
Operation management implies for business practices for creating high level of efficiency
in the organisation. It is a process of converting raw materials and labour into finished goods
efficiently and effectively to maximize profits. It involves utilization of resources such as
technology, equipments, materials etc. Operation manager acquire resources, produce products
and deliver goods and services to clients according to their needs. Operation manager also deal
with strategic issues i.e. deciding size of manufacturing plant, method of project management
etc. In automotive industry Operation management is used in product planning, control, quality
control to meet the requirements of the customers and sustain in the market.
Logistics is a detailed organization and execution of complex operation. It refers to the
flow of management from the point of production to consumption, logistics helps in meeting the
requirements of customers and company. Resources managed in the logistics includes tangible
goods i.e. materials, supplies, equipments, food etc. Logistics in automotive industry deals in
material handling, information flow, inventory, warehousing, security, transportation, packaging
and production (Wang and et.al., 2016).
Supply chain management includes a wide range of activities which is required for
planning, controlling and implementing a production flow. It involves acquisition of raw
materials, production and distribution of finished goods to the customers. SCM is the process of
transforming raw materials into finishers products and services. Supply chain of automotive
industry manages business activities, sales channel and distribution. It is related to direct or
indirect flow of goods and services (Prajogo, Oke and Olhager, 2016).
Roll-Royce motor Ltd. Is a manufacturing distribution company established in 1998.
company's headquarter is in Goodwood, West Sussex,UK. It is a subsidiary company of BMW.
Firm also provides customisation services to its customers. Products of the company includes
Phantom, Cullinan, Ghost, Wraith and Dawn. Company has important trademarks for its aero-
engine maker. Its highest sales was achieved in 2014 i.e. 4063 cars. It sales increased
continuously in Asia Pacific, Britain etc (Christopher, 2016).
Quality management makes sure that products and services of the company in
maintained. There are 4 elements which need to be kept in mind in quality management such as
quality planning, assurance, control and improvement. It not only focus on product quality but it

also considers how a company achieve quality standards. Management of company need to
formulate policies which need to met. In automotive industry cars are tested to ensure that it is
well-engineered, comfortable and safe. Generally company use total quality management to
manage quality of their products (Schönsleben, 2018).
Maintaining relation with the suppliers ensures that business is operating in the right
way. Companies need to make sure that all the links in their network are satisfied. Relationship
plays an important role between business and suppliers because if organisation does not maintain
relationships then complexity is created between suppliers, business and customers. In
automotive industry there are many competitors thus, business need to maintain relationships
with their suppliers. If relations are not maintained suppliers will not supply raw materials
(Fayezi, Zutshi and O'Loughlin, 2017).
Managing quality
Quality management makes sure that products and services of the company in
maintained. Rolls-Royce faced jet engine problem because of which company was forced to do
product inspection, redesign parts and repair its products. This incurs huge cost, and company
has lost its number of customers. Company need to manage its quality and inspects its products
before delivering. There are various benefits in maintaining quality standards which are as
follows:
 Maintaining quality standards will increase the efficiency of Roll-Royce. Companies
production cost will be reduced and there will be less waste of raw materials (Wang and
et.al., 2016).
 Quality management leads to better control on business operations and process such as by
doing regular inspection Roll-Royce managers will get to know about defects and issues
arising in the products. Company will fix the issue on time which leads to proper control
on business.
Roll-Royce use total quality management in maintaining the quality standards and
compete in the market (Prajogo, Oke and Olhager, 2016).
Total quality management: TQM is a method through which business improves their
operation system. Main purpose of TQM is to improve the quality of products and services
through continuous inspection and internal practices. It a management approach which lead to
long-term success of company. All members of the company are involved in improving products,

process, services and culture. It is generally applied at front-line level where low level managers
are involved in production and manufacturing (Christopher, 2016). Roll-Royce use various TQM
tools such as:
 Benchmarking: It is used in comparing procedures, policies and products of business. It
assist company in further improvement, developing a performance plan etc. Management
of Roll-Royce engage in benchmarking and identify opportunities and threats. Firm
compares it policies, procedures and products with other company and analyse which
company is performing better. Based on results company improve its process (Fayezi,
Zutshi and O'Loughlin, 2017).
 Product design: It is one of the most important element to be considered while
producing a product. Product of company need to meet the requirements of the customer.
Roll-Royce provide quality products to the customers, as customers prefer safe, sleek and
tough features in their car. Firm design its product according to the needs of customer and
provide them with quality products. While planning a product design company also take
care of suppliers quality as most of the components are purchased from suppliers
(Schönsleben, 2018).
There are many benefits that Roll-Royce gain in using total quality management tools which are
as follows:
 Customer retention and loyalty: The main heart of every business is its customers.
Using TQM tools Roll-Royce has build quality products for customers according to their
needs. Company also provide customization services which have added value to
customers. Firm has identified the needs of customers and satisfied them. This has
increased revenue and customer loyalty towards the brand (Prajogo, Oke and Olhager,
2016).
 Competitive advantage: Nowadays quality is the most important factor to compete in
the market. There are various standards formed, every company had to fulfil those
standards. Roll-Royce has applied various quality control tools in order to maintain the
standards and improve its operations. Company has gain competitive advantage by
delivering quality products to its customers. Roll-Royce has increased its productivity
and market share (Wang and et.al., 2016).

 Brand image: Quality products increases the image of brand. After the problem of jet
engine, Roll-Royce decided to implement various quality control tools and started
inspection, product redesign and product planning. This has helped company in
improving it brand image in the market. Customers started to trust the company, brand
awareness was increased and firm started to earn high return on investment.
Comparison of Jaguar land rover with Roll-Royce
Roll-Royce Jaguar land rover
 Company is awarded with IATF 16949
certification. It is mainly use for
managing international quality
standards.
 Roll-Royce uses benchmarking and
product design control tools to maintain
the quality standards. It has benefited
company in increasing customer
loyalty, increase revenue, building
positive brand image and attracting new
customers. Company has also gain a
competitive advantage by improving its
products to meet quality standards
(Christopher, 2016).
 Jaguar land rover is also awarded with
IATF 16949 certification.
 JLR uses Plan-do-check-act cycle as a
quality management tool which has
benefited company in identifying issues
in current operations and improving it.
Firm also measures the performance
and act according to the results.
Company decides whether to move
further or implement change in the
organization. Firm has also improved
its brand image and customer base by
providing quality products
(Schönsleben, 2018).

Managing business relationship in supply chain
Supply chain management is taking care whether different networks are operating in
desirable manner or not and for the same managing business relationship is very important
part(Heckmann, Comes and Nickel, 2015). By having a good relationship in supply chain
management it becomes easy to create collaborative dynamic. Supplier relationship management
can help the company Roll-Royce to increase the level of innovation so that with the help of
effective tools and technology company can have success. There are different approaches for
managing business relationship in supply chain:-
 Reactive approach:- By this approach Roll-Royce manage the relationships only in
some unpleasant situation and for the same, company finds out the cause of problem to
make improvement in supply chain. For this approach time and resources are required in
higher amount and these resources can better be used in other parts of the business
processes(Hugos, 2018).
 Strategic approach:- This approach is key to success for all the businesses as here
supplier relationship with company starts before any agreements is being signed that is at
early stages and this helps to bring competitive advantage for the firm (Fayezi, Zutshi and
O'Loughlin, 2017). Roll-Royce is having long relationship with its suppliers and this
helps the company to have an effective supply chain strategy and because of this only
Roll-Royce is having good reputation in market.
For managing a better relationship of business in supply chain Roll-Royce is building
mutual trust and loyalty with its suppliers and always make them feel that they are part of there
business. For the same company is giving them detailed information about the whole process in
new product development and promotional activities(Papadopoulos and et.al., 2017).. Roll-
Royce invest in modern IT solutions in support of supplier management so that company can
track information about their suppliers and an effective supply chain management can be there in
the organization. Roll-Royce supply chain management skills are very effective and helps in
delivering the items on time and with high quality. For having a strong relationship it is
necessary that companies make payments on time and for the same Roll-Royce is using different
methods to satisfy there suppliers by making payments on agreed date. Maintaining a regular
communication is also very essential, so Roll-Royce is keeping the suppliers up to date about the
strategy and plans so that they get attracted by knowing the benefits they will get as partners.
7

There are companies buying from vendors on daily basis, in such cases a supplier relationship
agreement is essential so that parties can trust on each other and possibility of disputes get
reduced. Roll-Royce evaluate the risks before it deals with any supplier as it become very tough
in complex supply chain.
Managing business relationship in supply chain differ from company to company. Roll-
Royce and Jaguar both are automotive companies of UK and have different styles to manage
business relationship in supply chain.
Roll-Royce Jaguar
 Roll-Royce is building trust of their
suppliers by making them feel that they
are part of the business, as this helps in
building good relationship with the
suppliers(Alicke, Rexhausen and
Seyfert, 2017).
 They track all the information related to
suppliers for an effective supply chain
management by investing in modern IT
solutions in support of supply chain
management so that they can have clear
understanding with the suppliers.
 They analyse the risks before making
agreement so that afterwards any
dispute is not there and have come up
with nuclear supply chain management
programme(Kozlenkova And et.al.,
2015).
 For having an effective supply chain
management company is giving special
training to the employees so that they
can build an effective relationship with
the suppliers and can make them
 Jaguar is giving networking opportunity
for the supply chain management and
this helps in building a good
relationship of suppliers with that of the
company without any dispute.
 They are supplying in global market
and this has brought wide range of job
opportunity for the people and resulted
in bringing a good relationship with the
people and suppliers, that resulted in
having good reputation in the market.
 There effective relationship with the
suppliers have made there business
operates at the highest standards in
market(Heckmann, Comes and Nickel,
2015).
 Company is nurturing there relationship
with the suppliers by having
coordination with the logistics that
helps Jaguar by delivering precisely
needed things.
8

influence to work with the company.
 Roll-Royce supply chain management
skills are very effective and helps in
delivering the items on time and with
high quality that helps to bring good
relationship with the suppliers.
Triple bottom line:
Roll-Royce is having its focus on economic, environmental and social approaches that
helps the firm to sustain in the market for long period. All business focuses on sustainable
development so that they can improve quality of their business by identifying societal issues and
impacts. Roll-Royce is conducting its operations and managing supply chain by keeping its
consideration towards economic, environmental and social approaches.
 Economic approach:- Roll-Royce is having its operations with effective technology for
having sustainable economic growth(Papadopoulos and et.al., 2017). For the same
company is investing for long term and having innovative ideas for operating and
managing the supply chain. The focus of Roll-Royce is research and development and
brining sustainability programs by keep in consideration about environment and society
in which company is operating.
 Environmental approach:- Roll-Royce works to make it operations in such way that it
does not affect environment in any way. For this supply chain management is also been
focused. Company reduces the environmental impact by developing new low emission
and renewable energy products. Company focuses on supply chain management and
make different strategy in creating a working environment where best people get
attracted to work and get involve in success of Roll-Royce. Company have taken
significant steps to reduce green house gases emission and there is approx 5 to 6%
overall reduction in GHG emission(Alicke, Rexhausen and Seyfert, 2017).
 Social approaches:- Roll-Royce also take care that there operations and supply chain so
not affect society in any way. For the same company is having Environmental advisory
board that helps in making business strategy and design process. Company is creating
9

targets to have aviation business for reducing CO2 emission and noise pollution so that
people are not affected due to activities of the business(Hugos, 2018).
Recommendation
Roll-Royce is doing a very good job as the company is following all the approaches in
effective manner for both quality management and managing business relationship in supply
chain to create collaborative dynamic. Company is working on total quality development and
providing customers what they are actually looking for. The thing that company can improve is
doing more research and development and bring products that are Eco-friendly and can give
competitive advantage as competition is very high in market. Company is also working to build
relationship with the suppliers and can make it more effective by using new strategies with the
help of research and development. Company is involved in sustainable development of the
products so that they do not harm the environment. Company can also address the issues related
to zero carbon power generation to increase its core capability(Alicke, Rexhausen and Seyfert,
2017).
Conclusion
From the above study it is being concluded that operations and supply chain management
is very important for all the organization and Roll-Royce is working very effectively for both the
things. Company is working on Total quality management so that it can provide customers what
they are actually looking for. Company is also having good relation with the supply chain and
that is the reason Roll-Royce is having good reputation in market. Company is also working on
economic, environmental and social approaches so that there is no effect of operational activities
on the business. Not only operations but company also focuses on supply chain that it do not
affect society or environment in any way. Roll-Royce can make improvement in its research and
development to bring competitive advantages for the firm.
10

REFERENCES
Books and journals
Alicke, K., Rexhausen, D. and Seyfert, A., 2017. Supply Chain 4.0 in consumer goods. Mckinsey
& Company.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Fayezi, S., Zutshi, A. and O'Loughlin, A., 2017. Understanding and development of supply chain
agility and flexibility: a structured literature review. International Journal of Management
Reviews. 19(4). pp.379-407.
Heckmann, I., Comes, T. and Nickel, S., 2015. A critical review on supply chain risk–Definition,
measure and modeling. Omega. 52. pp.119-132.
Hugos, M. H., 2018. Essentials of supply chain management. John Wiley & Sons.
Kozlenkova, I. V. And et.al., 2015. The role of marketing channels in supply chain management.
Journal of Retailing. 91(4). pp.586-609.
Papadopoulos, T. and et.al., 2017. Big data and analytics in operations and supply chain
management: managerial aspects and practical challenges. Production Planning & Control.
28(11-12). pp.873-876.
Prajogo, D., Oke, A. and Olhager, J., 2016. Supply chain processes: Linking supply logistics
integration, supply performance, lean processes and competitive performance.
International Journal of Operations & Production Management. 36(2). pp.220-238.
Schönsleben, P., 2018. Integral logistics management: operations and supply chain management
within and across companies. CRC Press.
Wang, G. and et.al., 2016. Big data analytics in logistics and supply chain management: Certain
investigations for research and applications. International Journal of Production
Economics. 176. pp.98-110.
Online
Benefits of TQM. [online]. Available through <https://www.accountingtools.com/articles/what-
are-the-benefits-of-total-quality-management-tqm.html >
11