Operations Management Report: Strategies for Mercedes-Benz Success

This report provides an in-depth analysis of the operations management practices at Mercedes-Benz, a leading global automobile manufacturer. The study begins with an introduction to the importance of operations management and its role in enhancing efficiency and profitability, particularly in the context of the automotive industry. The report then outlines the core objectives of operational management, including quality, speed, dependability, flexibility, and cost control, illustrating how Mercedes-Benz strives to achieve these objectives to meet customer demands and maintain a competitive edge. Furthermore, the report delves into the operational management process, detailing steps such as developing new operational agendas, input transformation, and output processing, with a focus on the selection of inputs (materials, information, customers, plant, and staff) to ensure the production of high-quality products and services. The analysis highlights Mercedes-Benz's strategies for customer satisfaction, innovation, and market adaptation, emphasizing how effective operations management contributes to the company's overall success and ability to maintain a strong position in the global market.

Operations Management

Table of Contents
A) INTRODUCTION......................................................................................................................1
B) OBJECTIVES OF OPERATIONAL MANAGEMENT............................................................1
C) PROCESS OF OPERATIONAL MANAGEMENT..................................................................4
C) RECOMMENDATION..............................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

A) INTRODUCTION
Operation management is very important. Operations management is the administration
of the business practices in order to create the highest level of efficiency possible within an
organisation. It is concerned with the converting materials as well as labour into goods and
services as efficiently as possible in order to raise the profit of the company. The higher profit of
the firm is achieved by the attempts made by the operation's management team to balance the
cost. Day to day operations are also managed by the operation's department of the business.
Without operations management it is not possible that organisation can work smoothly.
In this present report, Mercedes Benz is being chosen for the assessment. It is a German
global automobile marque and a division of Daimler AG and in 2018 it was the biggest selling
premium vehicle in the world. Mercedes Benz is the well-known brand known for luxury
vehicles, buses, coaches and lorries. The headquarters of the is located in Stuttgart, Germany. It
was founded in 1926 by Karl Benz. In 2018, company has sold 2.31 million passenger cars in the
world. Mercedes is contributing for the improvement in performance of the whole organisation
by developing an effective operational management in the business which is helping the
organisation in analysing needs and demands of the customers so that Mercedes can develop the
products having ability to satisfy the needs and demands of customers to sustain them with the
company for long time and increase its profitability.
This report includes a description about how effective operation's management can help
the Mercedes in satisfying the demands of customers along with the main objectives of
operational management. The study also includes an analysis of ability of operational
management in elimination of hurdles in the business in order to achieve organisational
objectives.
B) OBJECTIVES OF OPERATIONAL MANAGEMENT
Operational management helps the management in providing smooth running of normal
course of business operations in the company. Operational management of Mercedes provides
major information to the management of overall business' operations which helps the
management in detecting the requirements of business and developing strategies accordingly in
order to improve the performance of firm and enhance its profitability and market share in the
competitive market (Annarelli and Nonino, 2016) .
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Customers plays a vital role in any organisations' success (Yao and Schwarz, 2017).
Business entity can have numerous types of customers and for the purpose of increasing
profitability and achieving organisational objectives and goals, Mercedes need to have a strong
operational management as to detect needs of customers to provide them the best level of
satisfaction from its product. Customers can be divided into two categories i.e. internal and
external. Various departments of firm, workers, members of the business, etc. can be termed as
internal customers of organisation. Whereas, external customers are those who purchases the
product and services of company. In order to enhance the performance and profitability of
business, Mercedes need to provide satisfaction to its both internal and external customers.
For the purpose of providing the best satisfaction to its all customers, Mercedes need to
fulfil its operational objectives, as it will result in better understanding of customers, needs and
demand and development of better strategies for the business in order to satisfy them and sustain
them with the business (Black, 2016).
There are five main objectives of operation management which are defined as under:
Quality : Quality can be defined as performance of tasks with some sort of
specifications. Quality in the business operations can help organisation in reducing the cost of
business (Martín, Ramos and Herrero, 2018). For the purpose of attracting and sustaining the
customers with company, it is most important task for the Mercedes to give the best satisfaction
level to each customers. For satisfying internal customers of the business, Mercedes need to
develop strategies and plans as to provide job satisfaction to its employees and all members of
different departments i.e. its internal customers. For providing better satisfaction to the external
customers of business, Mercedes has to develop products having the best quality and ability to
fulfil their needs and expectations from its products and services (Mercedes Benz Operations
Management Essay, 2018). Fulfilment this objective of the operational management helps the
business in sustaining the customers with business in order to maintain and increase the
profitability of the organisation.
Speed : Speed refers to time gap between demand of external customers and delivery
made by the company in order to supply product or services as per the demand. In context with
operation management, speed includes time taken in movement of goods, taking any decision,
delivery of goods, implementation of strategy framed by management, etc (Wang, 2015.). Speed
in these factors in the Mercedes, can result in quickly making products available in the market as
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per the demand of customers. It results in development of loyal customers for the company by
making the fastest delivery of products for them and make them to buy and even pay more for it
as well. In this way, by fulfilling this operational objective, Mercedes can fulfil the demand of its
customers in order to grab more market share of competitive market and enhance its profit
generation capacity as well.
Dependability : Dependability refers to making the goods and services available to the
customers at the time when they need it or when the company has promised to deliver it. It is
also a major objective of operational management of Mercedes, as it leads in development of a
better image in the eyes of customers about its management. Dependability affects the customer's
views towards the business which need to be positive for its success in the future (Harrison and
Lock, 2017). If Mercedes does not make faster delivery of product or services to its customers,
initially it might not affect the customer's image, but after a certain time, company would
definitely downward the firm's image, which will result in dissatisfaction of customers and
making them shift to another organisation's product and services. By fulfilling this objective of
operational management, Mercedes can efficiently control cost, time and stability of the
company in market.
Flexibility : flexibility can be termed as ability of company to adopt changes in the
organisational structure, strategies or plans of the business. With the help of maintaining
flexibility in the operations of business, Mercedes has become able to produce number of
modified goods and services as per the need and expectations of customers and also to develop a
flexible product from the customer satisfaction level in the organisation as per the demand in the
market. Flexibility in the organisational operation of Mercedes also helps in speeding up the
response to the customer's expectations, saving time and also maintaining and developing
smoothness in the providing products to the customers whenever they need it.
Cost : Cost of the operations of company directly effects the price of product or services
provided by the company to its customers. Mercedes needs to have an effective cost control
management in the company (Orta and Ruiz, 2019). It would help the company in maintaining
cost efficiency in the operations which would help it in reducing price of product and services of
the business. Customers mostly attracts towards those companies' goods which provides the best
quality of product with the cheapest price. In this regard, while maintaining cost efficiency in the
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firm, Mercedes can provide a high level of satisfaction to its customers and sustain them with the
company for long time as well.
C) PROCESS OF OPERATIONAL MANAGEMENT
Operational management process is a sequence in which organisation can easily achieve
its objectives by smoothly processing its day to day operations within the organisation.
Involvement of efficient operational management process in the company leads in easily meet
the needs, demands and expectations of customers by maximisation of quality of performance in
the company (Zhou, Fu and Yang, 2016).
For maintaining good and effective management in the operations of business, company
can follow the operational management process as under:
Development of new agenda of operations: Today, in the world full of competition,
Mercedes has a pressure of developing and innovating strategies as per the latest trend of the
market. In this regard, business performs frequent market research which enables it in identifying
the actual customer needs to be fulfilled by the company by providing them innovated products
accordingly to fulfil their needs (Giustolisi, 2015). For example, Mercedes has targeted high
profiled customers only, in order to increase the satisfaction level of customers, company set a
new agenda to produces more high quality of automobile globally along with developing new
roads for its new customers as well.
The input transformation output process: Being an automobile manufacturing
company, the main operation of the company is to select the best set of inputs which could be
easily transformed into the such an output products which could have an ability of fulfilling the
needs and expectations of the customers like Eco-friendly cars, fuel efficient cars, etc. from the
company's product. In this order, firm can become able to fulfil its customer's needs (Ruiz,
2018).
Selection of inputs: It is the fundamental process of operational management as if the
company selects the best input for its production process, it would result in production of the best
quality of output, which is the major need of any customer from the company. Best input mixture
can be selected as under:
 Material: Mercedes need to select the best quality of material like, colour, steel, wheels,
etc. in order to get the best quality of result after the production process.
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 Information: For producing innovative products for as per the customer's needs and
latest trend, first business need to collect the information showing the latest trends of the
market (Slack and Brandon-Jones, 2018). In this regard, Mercedes developed strategy to
collect the information using the latest media. For this purpose, company also frequently
innovates its technological.
 Customers : Customers are the major factor influencing success of the business entity.
Therefore, before development of any product, Mercedes need to understand the
customers need properly. Mercedes frequently innovates its product in order to enhance
their capacity of attracting the customers. Mercedes can collect information from many
sources like surveys, mails, social media platform, etc.
 Plant: Mercedes should install the best plants and machinery having greater ability to
produce its products efficiently using less amount of materials for making the company
cost effective.
 Staff: They are the person who converts the input into output and also make them
available to the customers. Mercedes should develop strategies to provide its staff a better
job satisfaction, as a satisfied member will always perform job with the full efficiency.
Which would help company in gaining and improving profits and market share.
An input of combination of all above factors, can provide the best input for the purpose
of processing and developing the best product having ability to meet the customers' need
effectively.
Output from processing : Output can be in the form of product or services. After
collection of the best inputs for the company, it needs to process the inputs and develop product
having ability to attract the customers and provide them the best satisfactory experience from the
product or services (Hitt, Xu and Carnes, 2016). Mercedes provides both quality of product and
services to its customers. Company makes proper research of customers needs and demands by
using the latest technology and media. Which helps the company in developing and innovating
products and services accordingly. This process of operational management helps the firm in
transforming effective services and products from its quality inputs. Mercedes generally targets
high profile customers. Therefore, it innovates its products and services accordingly, so that they
can have ability to attract them effectively. It makes the business entity in satisfying its
customer's demand and needs in the most efficient way.
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Customers : Customers are the essential part of any business organisation. Therefore,
they are included in the input process as well as the main operational management process
(Mahadevan, 2015). Customers are the major factors that influences the success of any business.
In this regard, Mercedes makes proper research on customers to identify their needs and
demands. For this purpose, Mercedes employed a team which perform its task to make frequent
research over the customers' attitude and forecasting their needs as well. It helps the company in
developing its product and services for the purpose of meeting customers' needs and grab
maximum market share in the market.
In this way, operational management can help the Mercedes in attracting numerous
customers towards company's product by meeting their all needs, demands of customers, as it
have many steps through which business enables to identify and forecast the actual trends of the
market and consumers' needs. This process also makes the firm more cost efficient which may
result in decrease in price of the product along with enhancement of quality of product and
services. It helps the enterprise in providing products to the customers having the best quality
and cheap price, which is the major requirement of all the customers (Mercedes-Benz
Consistently Implements Its 2020 Growth Strategy, 2019).
C) RECOMMENDATION
While taking into account above report, it can be seen that Mercedes Benz has a strong
management of marketing, but it needs to develop and innovate some strategies and operations to
enhance its market share and its overall performance. It is recommended to the firm to enhance
its cost control management so that it can be able to reduce the price of its products which may
help the organisation to attract more customers towards the company's product.
It is advised to the business to develop more effective strategies as to provide more job
satisfaction to its employees, i.e. internal customers. The company should innovate its human
resource management in the organisation which would help in providing better satisfaction to its
internal customers. Company should provide its employees a platform where they can give views
and feedbacks related to their jobs and organisational environment, which would help the firm in
knowing positive and negative or it, with the help of which business would be able to plan their
operations accordingly in order to provide them proper satisfaction of job by solving their
problems in the organisation.
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It is also recommended to the Mercedes to develop customer relationship management in
order to provide more satisfaction to the customers by keeping in touch with them through social
media platform or latest technologies.
Mercedes should also improve its quality in speeding up its response to the customers
needs and expectation. In this regard, organisation can also provide its customers a platform, at
which they can directly communicate their expectations and demands from the business' product.
It would develop a emotional bond of customers with the business entity, which would help it in
eliminating substitutes for its consumers which would result in sustaining them with the firm's
product for long time period.
Mercedes should innovate its engineering process in order to enhance its efficiency of
production and developing as more cost efficient, it would lead in reduction of price of the
products and also enhance the profitability of the organisation.
Firm is also advised to develop more effective and attractive advertisement which could
show all the features of its product in order to attract more customers towards the company's
product and increase its sales and profitability. It would also help the company in enhancing its
position in the competitive market.
For the purpose of providing better services to customers, Mercedes should innovate its
strategies. It may innovate its operations and should collect the car from their house whenever
they required to repair the cars and deliver it to them after repairing it. Firm may appoint drivers
in the business in this regard. It may help the organisation to provide its customers more
satisfaction from its services and keep them for long time with the company's products and
services.
In order to have better control over inventory of business, Mercedes is advised to develop
its own software which could detect its number of inventories purchased, used and sold as well.
This software may also help the organisation in identifying its capacity. In this order, company
may also innovate its strategies and plans as to enhance efficiency of work by detecting its area
of inefficiency and innovate their operations accordingly to enhance their efficiency.
In recent years, Mercedes has faced a tough faced due to some quality issues regarding
safety of its cars. Therefore, it is advised to the company to innovate its safety features like
installing hydraulic breaking system, etc. as it is the major factor effecting the position of
business at global level.
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Further, firm is advised to improve its supply chain management as to meet its customer's
requirement. Mercedes may use the best application software like SAP, etc. in its operations. It
may help the firm in bridging gap between its actual capabilities and required capabilities and
also enhance the quality of its products by ability of the application of detecting quality of
material used, customer's demands, elimination of wastage of cost, etc.
In addition, with all these innovations, business is also advised to produce more unique,
high quality products with more unique colours and variety of features. It would help the
enterprise in providing more satisfaction to its existing customers and attracting new customers
in global market as well.
CONCLUSION
From the above study it has been concluded that, Mercedes the biggest automobile selling
company in the global market. It targets high profiled population globally, therefore, it has a
major focus over the quality and uniqueness of products, business has the best operational
management within the organisation through which it has developed a speedy system of
providing the best quality product to its customers whenever they need it as to meet their needs
and demands quickly. It has also a flexible manufacturing operation which has helped it in
manufacturing products as per the demand in market. All these strategies of Mercedes has helped
it in meeting its customers expectations from it and also in eliminating hurdles in achievement of
its organisational goals. Further, some recommendation as been provided to the company in this
report, which may help it in enhancing its capacity, efficiency and quality of business in order to
provide better satisfaction to its customers.
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REFERENCES
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Mahadevan, B., 2015. Operations management: Theory and practice. Pearson Education India.
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Importance of Intellectual Capital Protection–Capitalize on the Commitment of Its
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practice for strategic impact. Pearson UK.
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models. European Journal of Operational Research. 247(3). pp.685-698.
Yao, Q. and Schwarz, E.C., 2017. Transnational venue management corporations and local
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Zhou, K., Fu, C. and Yang, S., 2016. Big data driven smart energy management: From big data
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Online
Mercedes Benz Operations Management Essay. 2018. [ONLINE] Available through
<https://studymoose.com/mercedes-benz-operations-management-essay>
Mercedes-Benz Consistently Implements Its 2020 Growth Strategy. 2019. [ONLINE] Available
through <https://www.prnewswire.com/news-releases/mercedes-benz-consistently-
implements-its-2020-growth-strategy-144818195.html>
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