Volkswagen: Operations, Logistics, and Supply Chain Management Report

This report provides a comprehensive analysis of Volkswagen's operations, logistics, and supply chain management. It begins with an introduction to operations and supply chain management, defining key terms and concepts. The report then introduces Volkswagen as a case study, detailing its history and current market position. It examines specific operational areas, including logistics mix, location, and layout, and discusses the application of relevant theories and concepts such as Total Quality Management (TQM), Six Sigma, and Weber's location theory. The report explores the theories and concepts that are essential for understanding layout and location, along with the importance of the triple bottom line. The analysis highlights how Volkswagen utilizes these concepts to manage its supply chain, maintain quality, and achieve its business objectives. The report concludes by summarizing the key findings and implications for Volkswagen's future operations.

Understanding Operations,
Logistics and Supply Chain
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Introduction to company.............................................................................................................3
Corresponding theories & concepts............................................................................................4
Corresponding theories and concepts .........................................................................................5
Triple bottom line........................................................................................................................7
CONCLUSION................................................................................................................................8
REFERNCE.....................................................................................................................................9

INTRODUCTION
Operations management is a business practise which is concerned with various
administration practises so that there are higher possibilities which can be used for achieving
high proficiency in the company. This is a process which is concerned with designing,
formulating & controlling of various business operations in the manufacturing process of various
products & services in which the company is dealing. Supply chain management is a process
which is used by companies so that they are able to manage their flow of good and services
which has various activities such as storage of raw material, manufacturing of products,
maintenance of inventory, storage and warehouse, finally delivering of products so that they are
able to reach to their final consumers. Operations management consists of various activities such
as process designing, maintenance of quality, facilities, planning of production and
implementation of various plans. Such function help a organisation so that they are able to mane
a analyse of their present situation and according to that they are able to develop solutions to
make improvements and have effectiveness in their process if there is any scope of improvement.
Logistics on other hand can be defined as operations which are of bit complicated in nature and
they take place starting of the process and ends when customers needs are met and they are
satisfied (Ahmad, , 2018). This is a resource which is related to various equipments, machines,
raw materials, suppliers and other process which is related to manufacturing process of
companies. It can also be said that logistics is a process which is related to management of how
resources are used, they are stored, used in the process of manufacturing and finally converted
into final product of a company to be offered to customer. Management of logistics is a process
which is used to analyse allocators and their suppliers so that organisation is able to identify their
accessibility and effectiveness in the process of manufacturing.
Introduction to company
In this report Volkswagen is German auto maker brand which was founded in the year
1937 by a Labour Front and it headquarters are located in Wolfsburg Attar, Gilaninia and
(Homayounfar, 2016). This is a flagship marque of the Volkswagen group and is one of largest
auto maker brand according to slake in 2017 & 2016. in April 2018, Herbert Diess was appointed
as CEO of this brand. This is a brand which is providing service across various parts of world,

and they are trying to satisfy their customers. This brand has successfully able to establish
goodwill in the market and this is helping them in achievement of their objectives. In the present
context Volkswagen is a brand which is willing to expand their operations in those areas where
they are not having any presence (Bhardwaj, Mor and Singhand Dev,,2016) .
Selected areas of operation & supply chain management
There are two operational areas in Volkswagen which they are having in their overall
process of supply chain management discussed below:
 Logistic mix: channels, networks and managing capacity & inventory
 Location & Layout
Supply chain management is not a single activity but it consist of a series of activities which are
used for transforming a raw material into a finished good. This is a approach which is also used
by Volkswagen so that they are able to meet requirements of their customers so that their
expectation can be met. There are various different activities which are included in this such as
production, transportation and shipping of products. This is a process which is related to effort of
various stakeholders which are involved in the overall process of manufacturing staring from the
supplier who is providing raw materials and to the final person who us delivering the products to
various stores so that it can reach to final consumer are part of this process of supply chain
management. In case of Volkswagen this brand is always involved in using unique technologies
in their vehicles which can help them in having a differentiation advantage
(Chatchawanchanchanakij, Arpornpisal and Jermsittiparsert, 2019). Automotive supply chains is
difficult as there are many ideas which come from suppliers which can lead to arsing of various
issues in the industry hence the best way is that vehicles must be designed according to the needs
of customer.
Corresponding theories & concepts
Theories & concepts: There are two elements such as layout and location and logistics
mix. These are two basic elements which are associated with the supply chain process which
consists of various components which is having a effect on performance in a positive manner. In
this context it can be said that for maintenance of quality of various products and services there
are various theories & concepts which are used in the present context. This is dealing with how
inventory is being managed and usage of some techniques as discussed below:

TQM (Total Quality Management): This is a technique which was founded by William
Deming so that they can provided guidance and assist the organizations so that overall defects
can be reduced and minimized. TQM is a a process which is taking place on a continuous basis
and is used by management teams in the organizations so that defects and errors can be reduced.
This techniques are very helpful in improvement of quality and setting of various standards
which can assist so that goods and services can be manufactured with best quality level. In the
present context Volkswagen is examine and management team of this company has to adopt.
There are various communication and distribution channels which can be used by managers
which can help them in enhancing effectiveness. Customer driven approach is used by
Volkswagen based on ISO 9001. The overall requirement of this standard is to maintain
standards of quality in their vehicles.
Six Sigma: It is a approach which is data driven and statistical used fir continuous improvement
in the company. Six sigma is a methodology which has a main focus on continuous improvement
in the company. This techniques is very helpful for managers in identification of defects which
can help their manager in maintaining their quality standards (Somjaiand Jermsittiparsert, 2019).
Primary objective of this aspect is that these techniques can help in achievement of set goals by
management of company in a more effective manner.
In Volkswagen managers can use various theories in the organization so that quality can
be maintained in the overall products and services. If two companies are compared which are
Volkswagen and Jaguar it can be said that, Jaguar is using Just in time techniques in their process
so that they can maintain overall inventory system. Volkswagen is using six sigma by making a
series of changes in their production process such as assembling, stamping and painting their
automotive parts. This has helped the management team so that overall inventories can be
managed and objectives can also be achieved.
Corresponding theories and concepts
To develop a better understanding of layout and location there are various theories which
can be used by companies to achieve their targets.
Location:
This is with context to geographical location such as container freight, terminal, seaport
etc. this is offering various facilities and movement of goods like customers, support device and
storage. This is related to the location theory which was given by Weber in 1909 which is

dealing with various factors having effect on industries and is divide into two categories which
are given below:
Regional factors: According to view o0f Weber for evaluating the cost structure of various
companies it can be said that production cost is something which is varying with region, this
leads to a situation that industries must use a general view for attainment of higher levels of
profits. According to Weber two general factors are discussed below:
Transportation cost: This is in relation with the location of a organization which is
influenced by distance which has to be covered and weight which has to be transported.
Weber focused on a view that effective transportation must be there so that transportation
cost can be managed properly (Dogahe, Meydanghah, and Imani, 2019).
Labour cost: This also has a influence on location of industries as if location is
unfavorable and it is not easy to find skilled and competent labour according to
requirement of the company. Then this may lead to having a labour force who will be
working according to requirement of the organization.
Agglomerative factor: According to this companies can centralize in a appropriate place which
includes various external facilities, economies etc. centralization is influencing the overall
manufacturing cost in the total production being done by companies.
Degglomerative factor: This is related to decentralization of location of a company and this
includes cost of land, transportation cost and labor cost (Kochak and Sharma,2015).
In case of Volkswagen this brand will also be affected by factors which can they both positive
and negative impact on their operations and functions. This theory can help this brand in making
improvement in those areas where they are having a scope of improvements and loopholes are
present.
Criticism of Weber’s Theory:
Inadequate analysis of cost of transportation: According to the view there are some
factors such as topography, quality goods etc. which is affecting cost of transportation. Weber
has not been able to give any justification to this criticism.
Omission of important reason of location: Weber has involved various transportation
cost and labour cost because of location. There are some factors which are influencing location
such as cost of capital, weather condition and facilities.

Layout:
It refers to the plan which is a blue print related with the established work such as
websites, books, newspapers etc. this is also referred as arrangement various graphic elements
such as headlines, body etc. this can help Companies in achievement of their goals in a better
manner (Saleheen, Habib and Hanafi, 2018). Some of the objectives are discussed below:
 It is helpful in facilitation of the whole manufacturing process.
 It is helping companies in effective usage of equipment, human resource and available
space.
 Time of production is reduced and effectively used which leads to completion of the
whole production process in specified time period.
 Layout helps in reduction of investment or proper outstation of available resources with
the company.
 Layout is based on structure of the organization and offering safety & convenience to
employees.
 There are many different arrangements which has to be done by the company which can
also be done so that better operations are performed in the organization.
According to the above mentioned points it can be said that effective plan is very helpful
in usage of various layouts at various locations (Sharma, Chandna, and Bhardwaj,2017). This
can help in developing trust of customers. Location & layout is very appropriate for a business so
that they are able to have competitive advantage. In Volkswagen these factors will help in
smooth functioning of various business operations so that adequate feedback can be taken from
customers and this is also very helpful in implementation of innovative ideas for business
expansion. In jaguar this brand is always in a state that they are having new innovation taking
place in company and this helps them in getting a competitive advantage (Mohamed Elias,
Othman and Yaacob, 2017). In case of Volkswagen this approach is not much in use as they
believe in continuous expansion but not at a much rapid speed as in Jaguar. This is a drawback
which requires that company has to make more investments in research so that new innovation
can be done by them in the specified time period.

Triple bottom line
This refers to accounting framework which is basically been divided into three major parts
such as financial, social and environmental. In present scenario. Some companies are willing
to adopt this framework so that they are able to evaluate overall performance and then based
in that effective value can be developed in a business.
Economic Factor: this is a factor which is having various elements and laos
some approaches which are used in operating a business in a more perfect manner. In
context of Volkswagen there are many approaches according to this factor such as rate
of interest, rate of inflation which can make any business more attractive and at same
time effective. Based on such elements Volkswagen this will help in achievement of
goals in a limited period of time. This economic factor is very beneficial in respect of
this company for expansion plans and also is very helpful in meeting if various set
targets by the company (Yuliadi and Nugroho, 2019).
Environmental Factor: In respect with Volkswagen this environmental factor has a
major influence and that is also in a very positive manner. This can take place because of
climatic changes, various laws and regulations. All such elements are very useful for the
company in attracting more number if customers. Manager in Volkswagen will be using such
concepts and theories so that they are able to survive in the competitive environment. In context
with Volkswagen, environmental factor has a influence on this company in a very positive
manner. This will also help in application of concepts and theories which can help in attainment
of objectives in the competitive business environment.
Social Factor: according to this factor in Volkswagen there are many benefits which company
can take advantage from. These elements are increase in customer value, attitude of
society and increasing interest of people. For this company can make short term goals
so that they can measure their performance with time. For social factor Volkswagen
must adopt this culture so that organisation is more effective (Suryanto, Haseeb and
Hartani, , 2018).
From above discussed points it can be said that for Volkswagen the company can
increase their sales and overall revenue which can helps them in achievement of their goals. This
will also help them in formation of various strategies so that customer’s desires can be
accomplished in an appropriate manner.

Recommendation
According to above analysis it is recommended that in Volkswagen management must try
to bring various techniques and use some strategies so that they are able to make proper
gaols and frame their objectives. This is also very helpful in providing training to their
employees for those various development plan and programmes can also be started by this
company which can lead to enhancement of skills of their employees and at same time their
overall competence level will also be enhanced because of such tools. There is also a need
for high skilled employees who can help the company in bring more innovation in their
existing vehicles so that they can have a competitive advantage in the market. Apart from all
such efforts, there is also a need by the management that they must focus on their operations
management so that they can evaluate their business performance in a more effective
manner.

CONCLUSION
According to above report, it is concluded that in the automotive industry every company is
having their own advantage and speciality which they have developed by usage of various
resources and skilled labour with them. With changing scenario it has become more important
that such a differentiation strategy is very necessary for surviving in the market for a longer
duration of time. Quality and differentiation is the most important two aspect which leads to
success of companies operating in the automotive industry. Appropriate knowledge is very
necessary for establishing communication channels. Total quality management is very necessary
for every company especially those who are functioning in the automotive industry as this helps
in establishment of a differentiation in their vehicles as compared to other brands who are
offering same products. Triple bottom line is also a concept which is very helpful in inventories
management and also for optimum usage of skills of employees, this also has a effect on creation
of better environment for working of employees.

REFERNCE
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