Analyzing Operations Management at Volkswagen: A Detailed Report

This report provides a detailed analysis of operations management at Volkswagen, a leading vehicle manufacturer. It examines core and support functions, the input-transformation-output process, and the roles and importance of operations management within the organization. The report identifies challenges faced by Volkswagen, such as technological advancements, globalization, and sustainability issues, and discusses methods for measuring operational performance. It evaluates different approaches to quality management and the organizational integrated philosophy, along with the role and scope of the supply chain. Furthermore, it assesses Volkswagen's supply chain performance objectives and effective supply chain management options, offering insights into how the company can optimize its operations for sustained success and competitive advantage in the automotive industry.

Operations Management

TABLE OF CONTENT
TASK 1............................................................................................................................................4
1.INTRODUCTION .......................................................................................................................4
2.Operation, core and support functions in organization ............................................................4
3. Input transformation-output process........................................................................................6
4.The roles and importance of the operations' management........................................................7
5.Various challenges faced by the organization in operations management...............................8
6.Measuring operations performance...........................................................................................8
7.Recommendations ....................................................................................................................9
TASK 2..........................................................................................................................................10
1.Evaluation of different approaches to quality management...................................................10
2.Evaluating the organizational integrated philosophy in optimizing the organizational
performance...............................................................................................................................11
3.Role and scope of supply chain in supporting different organizations...................................11
4. The organization's supply chain performance objectives......................................................12
5.evaluating effective supply chain management options.........................................................13
REFERENCES .............................................................................................................................15

TASK 1
1.INTRODUCTION
Operation management play a vital role as it is the administration of business practices in
order to create the highest efficiency level in the company. Basically, it is concerned with
converting labour, raw material into services and goods effectively so that the company can
easily enhance and maximize the profitability (Farag and et.al., 2020).
The present report will be based on Volkswagen, vehicle manufacturer situated in
Germany. The company has achieved a title of the largest car maker in the world as it has
expanded its business in different countries and various new locations (Kumrai and et.al., 2018).
A Volkswagen has achieved various new strategies to achieve good market position in the world.
The major strategy used by Volkswagen is to develop sustainability, provide mobility solutions
for future generations and safe sound vehicle to customers. The company is well-known for its
remarkable quality of service in the world of auto-mobile, which has given them competitive
advantage in the market. In addition to this, Volkswagen looks to retain the customers the
highest satisfaction by providing them resolution with the help of feedback system to know what
are their concern and what more improvement is needed in servicing.
2.Operation, core and support functions in organization
Operations management is the function of business which is responsible for managing
and maintaining the process of creation of services and goods (Kumrai and et.al., 2018). By
having this the company can easily plan, organize and control all the responses which is needed
to produce a company's services. Operation management is well-known as a centre of the
company and it oversees various types of business functions and maintain coordination and
controlling between departments.
Operation function
Quality management- This comes under the category of function of operations in the company.
The operation management team of Volkswagen have a dedicated team member that ensures
consistency in the business. All the members focused on rectifying any errors, mistakes, defects
in order to make sure that the quality is consistent and maintained properly. The supervisor and
team head will ensure that each car is ready for sale. Core functions, operation function and
support function are interrelated with each other which can positively impact the business if
properly maintained.

Product design- this is important part for every organization, operation management
focuses on the different way the product is designed. It is essential to make sure that it suits
market and customer trends and meet the requirement of the customers. Nowadays, customer are
more concerned about how the company's production of services or product will impact the
surrounding environment (Kumrai and et.al., 2018). Hence, operation team of Volkswagen
design a product in such a way that it will meet customer trends and ensure that the production of
a product has a less impact on the environment. However, the company is focusing on
sustainability and making it more attractive to customers.
supply chain configuration- The major role of operation manager is to ensure that the
supply chain of the Volkswagen is properly set up. Essentially, it includes from purchasing raw
material to production to finished goods to customers (Gholizadeh and et.al., 2019). Volkswagen
manager ensure that every aspect of the supply chain is running effectively and correctly to meet
the requirement of customers. By having proper supply chain management, the Volkswagen
prevent delay and lead to faster production of cars and manage quicker sales.
Core functions
Planning- planning plays a vital role in the company in order to run business smoothly.
The planning needs to be done in proper manner to refine and implement strategies to maintain
stabilization and resolve problems related to vehicles.
Strategic communication- it means policy making process and overall guidance for
consistent information operations and activities in the company and between people working for
different department. By having this, Volkswagen is able to study the dynamics of customer
behaviour and their buying habits (Kumrai and et.al., 2018). With the help of strategic
communication, the firm is able to know about customer trends and market trends related to
marketing strategies. In addition to this, they can easily shift in global culture to make create
ideas which sound smart and effective.
Support functions- it plays an important and valuable roles in every business organization, so it
is mandatory to maintain these functions to achieve success.
Human resources and technology security- HR professionals plays a vital role in the
company, in this current scenario, the process of making a car, assembling a car and selling it to
the customer are the core processes function of the company. By this Volkswagen is generating
revenue and sales but there are multiple support service which plays a vital role that is human

resource department (Farag and et.al., 2020). For car manufacturing, it is important to have
support of manpower and robotics which needs proper management which also include payroll
of employees and benefits service to motivate them which would also keep them encourage and
secure in order to work effectively. On the other hand, technology security is also important
which needs to maintain with the help of IT support team who would try to understand the
problems and fix them within the right time so that it doesn't impact the core business function
and operation function.
On the other side, Nissan motor co.ltd is auto-mobile manufacturer, sells its vehicles such
as cars under the brands like Datsun, Nissan and infiniti to satisfy the needs of customers. The
company uses many types of operation management functions in its business activity it includes
staffing, leading, proper planning and controlling. The company focuses on auto mobiles
production with the help of operation function and support team and make sure to analyse risks
and threats in order to prevent losses. A major focus of this firm is to develop sustainable
mobility, focus on carbon footprints and reduce the use of resources which is not suitable for
environment.
3. Input transformation-output process
The company use this transformation process in order to take one or more inputs and then
transform it to add value so that it can provide best results and outputs for customers. It is the
critical model for the firm because by having this manager can determine how well the company
is producing products or services to meet the requirements of market trends. The business
operations in the company produce services and products are maintained by the operation
management team and all of these operations change inputs into outputs with the help of input
transformation output processes (Cano Marchal, Gómez Ortega and Gámez García, 2019).
Operation management team of the company used its operations function in order to make proper
processes that take a set of input resources which are utilized to transform into products or
services outputs. For example- the production system of cars in the firm is properly designed and
structured with the help of raw material, proper planning and layout, energy and information that
is used by humans. This is used by firm to produce cars so that it can design effectively to meet
the needs of customers and outputs for them (Chen and et.al., 2019). It is important to maximize
the quality of transformation processes so that they can meet the wants of clients with the help of
monitoring and controlling.

4.The roles and importance of the operations' management
Operation management is the systematic processes that transforms inputs such as raw
material, labour and capital into finished products or services that can add value for the potential
customer. The company can manage this in order to maximize efficiency while producing
services and products that can meet the needs of clients effectively without any issue (Farag and
et.al., 2020). The major role of this management is to make important decisions to achieve long
and short term goals. Also, maintain them to reduce the negative impact on ability of company so
that managers can focus on production process of goods and services that can give value to
customers. For example- Volkswagen operation manager has made mostly good operating
decisions related to cars in executing and designing its transformation system and processes in
order to achieve the customer satisfaction level. With this they can easily enhance their long term
survival in the auto-mobile industry. It is important for operation management team to support
overall organization strategy so that they can meet long term survival in the competitive world.
Company has prepared a proforma to assist in their operation planning in which they have used
past and current information both along with financial statements to know company's health. By
doing this they can predict future events such as capital investment, revenue and sales and help
the firm to achieve effective performance.
Challenges:
New technologies- nowadays, every sector is facing challenges like changing emerging
technology, cost based competition and rapid change in innovation. An increase in the new
processes of invention can lead to technical problems that can affect the business operations,
employee and customer satisfaction if not done properly by company (Gholizadeh and et.al.,
2019). Auto-mobile is important sector for world because manufacturers use equipments and
tools to streamline manufacturing processes and increase employee or workers safety and also to
reduce cost of manufacturing. However, changing new technologies and introducing new tools
consistently into business workflow can create complications.
Globalization- automotive industry is the fastest growing sector in the world, but it is
always under constant pressure to expand its business in other countries in order to gain
competitive advantage in the competitive world (Farag and et.al., 2020). The need for continuous
restructuring of production process motivates manufacturing companies to innovate and use high

technology to meed the needs of market trends. Businesses need to respond immediately to solve
issues related to vehicles and work flexibly to achieve global changes.
5.Various challenges faced by the organization in operations management
 Volkswagen's profitability has impacted due to change in operations management system
during the pandemic time. Due to this, the company has to face global shortage of chips
which is needed production and operations management in various markets.
 The company faces tough competition in developing new technologies which is used by
its competitors such as self driving cars and electrified vehicles (Rangarajan, and et.al.,
2018). Along with this, the company also faced issue during pandemic that is global
transportation networks issues because with the increase in market demand for cars there
has been increasing trends in the use of fuels which contribute higher exertion of
greenhouse gases. Due to this, the company has to make more investment in production
process such as in labour cost, raw material and fuel.
 With regard to sustainability, the company also face issues when it missed target of EU
on carbon emissions from its one of customer due to this the Volkswagen has to pay more
than 100 million euros. Due to this, they have to focus on high investment to meet the
customer needs again and work effectively which can help business save on
environmental costs. Globalization is driven by a reduction in advancement of new
information technology, trade barriers and transportation technology. Hence, operation
manger of the firm face competition because of these factors across the world.
6.Measuring operations performance
The most important business metrics for operations managers includes net profit, sales,
loss and total profit margin and revenue (Zhen and et.al., 2019). The best way to measure
operational performance and efficiency of the firm is to calculate the ratio of output gained to the
input expended. Volkswagen company use key performance metrics to measure the effectiveness
which include customer satisfaction, quality and operational expenditure and resources.
By calculating the market share and cash flow of the company, operation manager is
evaluating the efficiency of an entire process of production.
While on the other hand, Nissan measure its cash flow and material flow with the point of
view such as time of delivery, cost of products and quality. The firm accomplish its operational
objectives using KPIs.

On the other side, Audi focus on using benchmarking for future technology and ensure its
operational suitability for operational use in a wide range of cars and other vehicles.
7.Recommendations
 Efficiency plays a vital role in the company to achieve success and produce the maximum
amount of products or services. Thus, it is recommended to improve efficiency in the
business to deal with challenges and gain opportunity lie in technology and innovative
ways.
 It is advisable to improve communication system within operational department and other
function so that the firm can provide update on their work to each other (Zhen and et.al.,
2019). It is also suggested to focus on automation and project management system in
order to enhance the customer services and gain competitive advantages.

TASK 2
1.Evaluation of different approaches to quality management
There are different approaches that might be adopted to ensure quality management
within operations of any business activity. Moreover, in context of Volkswagen it can be said
that the approaches that are been followed are as follows:
Cost effect approach: This approach states that there need to be complete balance
between the cost, time and effort that is spent on conduct of any activity. Also, in Volkswagen if
there is not the balance between all these then there are chances that there might be losses to the
firm. Also, the major benefit of this model is that the Volkswagen is able to conduct the risk
analysis in the proper manner so that there is no wastage of the resources (Ruan and et.al., 2020).
Moreover, this analysis helps in identifying what are the ways that might be helpful in
redirecting the resources to achieve the more out of it. However, the major limitation of this
approach is that it does not take into account all the variables in term of unforeseen costs that are
hidden for the company.
Product based approach: It reflects the major product attributes that are either existing
or absent in delivering any kind of product by the company. Furthermore, the attributes might be
in form of performance, durability, features and perceived quality and much more. Also, the
major merits of such approach in Volkswagen is that it focus on delivering the high quality
goods and services (Wilson, 2018). Moreover, better market research leads to less wastage of
resources for the company that adds in the profit of the company. However, the major
disadvantage is that even after the market research the customer would not be interested in
buying the services of the Volkswagen. Also, if the quoted firm reputation is not established in
any particular target market than customers might not trust to deliver the goods.
User based approach: It is more centred around the end need of the customer and thus
more focused on providing better satisfaction to the customer. Furthermore, it is more dependent
on that every customer has its own characteristics and quality properties that need to be taken
care by the company. Moreover, the major benefit of such type of approach is that it helps in
boosting the competitiveness against some competitors. However, the major demerit is that it is
very time-consuming approach and it might not be applied when the company need immediate
results within short span of time.

2.Evaluating the organizational integrated philosophy in optimizing the organizational
performance.
Volkswagen being the best in the automotive industry had adopted the approach of being
customer centric so that better quality products might be offered in the short period. Also, the
organizational performance is ensured through setting the measurements criteria so that there is
no compromise of the quality of the services that are offered to the targeted customers (Chen,
Dong and Shi, 2020). Furthermore, the organization is able to meet the business objectives
through setting clear roles and responsibilities for each level of employee so that there is no
confusion in delivering the proper work within the specified time frame. Also, the quoted firm is
involved in continuously innovating and creativity within the workplace so that new models of
the cars and services might be provided to attract the large number of customers.
Furthermore, integrated philosophy of the Volkswagen is to sustain in the market for
longer time and to increase the market share through systematic efforts. Moreover, the
performance of the Volkswagen employees is done through setting the key performance
indicators so that the past performance is evaluated based on the current performances
(Magnaye, SSC and Varma, 2020). Also, the business also set the short term and long term gaols
on the basis of which each employee is supposed to input its work to achieve certain target on
time. Furthermore, the close observation on the supply chain and the delivery system is analysed
regularly so that if any corrective actions required might be taken on time. Also, various training
programmes are developed on timely manner so that skills and competencies of the Volkswagen
employees might be developed to overcome certain challenges in the future in positive manner.
3.Role and scope of supply chain in supporting different organizations
Supply chain plays important role in managing the demand and supply of the
Volkswagen in actual business market where there is intense competition (Craighead, Ketchen
and Darby, 2020). Also, in context of quoted firm it might be said that the supply chain is every
effective in analysing the total demand of the particular model in the market so that
manufacturing process than might be undertaken. Furthermore, the suppliers of company helps in
acquiring and managing the resources that are very essential for the operations of the business
(Hasle, Madsen and Hansen, 2021). Also, all types of information that is helpful for the
Volkswagen to grow and sustain in the market is provided timely so that accordingly the policies

and strategies might be undertaken for the smooth operations. Moreover, the major difference in
the supply chain and supply network is that network is developed through connecting various
supply chains so that best value might be delivered to the final customers. Also, it is through the
network the firm is able to get various information, people, design activities and gather resources
for the business. Furthermore, the supply network mostly focus on the testing, planning and
packaging and conducting sales activities for the business so that people are able to consume
different varieties of the good in specific time frame (Rangarajan and et.al., 2018). Moreover,
different organizations focus on optimizing the supply chain so that maximum revenues might be
generated through avoiding duplication of resources and services. Also, supply chain also helps
the Volkswagen in identifying what are the best levels where the firm is performing
extraordinary well and what are the areas where the output is low so that more efforts might be
put in to increase the sales of the business.
4. The organization's supply chain performance objectives.
As discussed above the major purpose and goals of managing the supply chain
management is to fulfil demand, improve value of customers and increase responsiveness. It is
important to meet the supply chain performance objectives for successful business. For every
business, it is essential to manage the supply chain effectively in order to build a competitive
infrastructure. With the help of supply chain performance and effective management the firm can
ensure efficiency and improve quality. The Volkswagen is able to optimize transportation so that
it can deliver on time service to customers (Ketchen Jr and Craighead, 2020). By having this, the
company also increase profitability and even help themselves to gain competitive advantages in
the manufacturing industry. In addition to this they can also manage optimum inventory
maintenance to avoid excess stock. By doing so, they are able to save a lot of money for future
requirements. For example- Volkswagen manage its supply chain performance in effective
manner : when customers place an order for car, they deliver as per their desire and provide them
on time delivery. By doing proper planning company is able to meet customer goals and
objectives. The best way Volkswagen used while managing supply chain is information as it is
critical component of supply chains. Without having proper flow of information, the firm won't
be able to work correctly (Saberi and et.al.,2019) They provide detailed information about
market demand and pass it to the operation team so that they can easily make plan for rest work

and manufacturing process. After that they inform production team to plan about machinery
availability to make the required products or services available.
Use of lean vs agile supply networks
An agile supply chain networks focuses on responding to the demand in the market with smaller
batches of products (Ketchen and Craighead, 2020). While on the other hand, a lean supply chain
networks focuses on lower down costs by producing high volume of goods with low variability.
With the help of lean supply chain the company can add more value for customers, this
can be done via eliminating wastage and identifying factors that can impact operations.
Volkswagen can eliminate those items which doesn't add value. While on the other side, in agile
supply, the Volkswagen adopt new innovative items so that they can work flexibly and manage
unpredictability to gain competitive advantages. By evaluating, it is noted that lean supply chain
is more effective in nature and more predictable.
5.evaluating effective supply chain management options
As mentioned above, an effective supply chain management play a vital role for the
business activities because it includes the flow of services and items in an efficient manner to
achieve customer satisfaction (Pettit, Croxton and Fiksel, 2019). It encompasses all the types of
steps which includes raw material, production and finished goods. By maintaining proper supply
chain management the Volkswagen can provide value to its customers.
Supply chain management used by Toyota company is lean supply chain to satisfy needs
of customer. By having automation systems, the company used real time adjustments in maintain
its supply chain operation and business activities.
While on the other hand, Nissan uses effective sustainability practices by conducting
socially, ethically and environmentally responsible business and focused on using inventory
management system in order to identify which and how much stock to order at what time and
how to control unnecessary stock to fulfil customer orders and provide them details about
availability (Naderi and et.al., 2019).. The company believes in work with other suppliers to
promote principles set with regard to sustainable world.
On other side, Honda is focusing on reducing wastage from packaging material to
maintain environment. For example- disposable transport packaging that uses boxes and steel
cases is being switched over to plastic which can be reused. In addition to this, the company is
working to improve transportation efficiency in the shipping of vehicles and its equipments.

Plus, it also focuses on reducing co2 emission in the auto-mobile production parts transport
service. Also, the company has provided personnel development programs in each region to
enhance motivation of employees and ensure that every associate promotes fair and honest
initiatives. This has provided them a long term relationships with suppliers and customers both.
Recommendations for Volkswagen to enhance customer satisfaction
 To conclude, with the emerging technology and an increasing globalized supply chain,
the company can improve its evolution of supply chain processes by hiring skilled
workers and professionals to run their business operations effectively.
 Plus, it is essential to align the supply chain management team effectively to run business
smoothly (Lee and Tang, 2018). By improving communication system in the company
managers can enhance team work so that information gaps can be controlled. Constant
communication with team members, timely update about customer needs and reliable
documentation are important to an efficient supply chain management.
 In addition to this, it is suggested to establish a good relationship with suppliers and work
in partnership to save expenses and improve reliability (Ketchen and Craighead, 2020).
With the help of accurate demand forecasting company can enable correct quantities so
that they can meet current and future requirements into account.
 As per the high demand about social and environmental sustainability, it is recommended
that the company needs to invest, more in such elements . The major goals here is to
actively minimize the social and environmental impact of supply chain on surrounding
world. It means Volkswagen needs to focus on solutions to evolve issues and meet
regulations related to it.
 Plus, also follow various rules and regulation to work effectively and be a leader in the
auto-mobile market.

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