Operations Management & Digital Business Assignment Sample

Exploring Operations Management in Digital Business: Assignment Sample

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Introduction of Supply Chain, Operations Management & Digital Business Assignment

Supply chain management is centralized management in which there is a stream of goods and services and the process which transforms raw materials into finished goods is involved. By managing the supply chain, companies can cut out the excess costs and delivers the goods and services to customers fast and efficiently (Hugos, 2018). Good supply chain management helps the company to keep out the headlines and expensive lawsuits and recalls. Supply chain management has five most serious elements which are developing a strategy, arranging raw materials, production, returns, and distribution of goods and services to customers. Every supply chain management has a supply chain manager whose responsibility is to control and reduce costs and also focus on avoiding shortages in supply.

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Tesla

For understanding the digital technologies and supply chain in brief the report is considering Tesla an automotive company as the case company. Tesla, established back in 2003, the main central point was to design a electric vehicles which can be as great and fully automatic. Elon Musk the owner of company Tesla became the CEO and started to carry out a process in which Tesla can have a path through cost cutting with other vehicles on the viewpoint (Motors, 2015). For particularly that reason, the prime vehicle of Tesla was sent off as game vehicle, its approximation was succeeding the market. Tesla has successfully earned around $24.5 billion, but has also lost $69 million in production and working, and overall has lost $862 million in deficits.

(Source: Joseph Foley, 2021)

Operations management practice

Operational management is business practices that created the uppermost level of competence conceivable in an organization. Operation management is conscious with the alteration of material and labour into finished goods and services as fast as possible.

Operational management and supply chain

A function of operational management relates to the management of the inventory of the company by managing the supply chain. This is the process which is known as operation and supply chain management. To understand properly the operation management a manager must be able to understand the process which is important to know about what the company is doing. An operation management manager develops an understanding of global as well as local trends by considering the demand and needs of customers (Anand and Gray, 2017). Operation management approaches the attainments of material and uses labour very effectively; they use a cost-effective manner to fulfil customers' expectations. The operational manager is responsible for the arrangement of vendors which supplies the good and appropriate goods at a reasonable price.

Operational management practices of Tesla

Tesla's operations manager regularly conducts a quality check and implements the required manufacturing enhancements in the process. In the response to the quality issues with its suppliers, the company has shifted towards manufacturing more of its parts of vehicles instead of outsourcing them (Fisheret. al. 2019). This shift in operation has shifted the managerial workload but also improves control of the quality of the overall product. This operational management decision is focused on the business process including the investment, resources, and standards. The company is famous for its automation; company has also involved automation in manufacturing and supply chain management with a mix of human intervention which makes the work easy and fast for the company. Through this, the company has reached high productivity through operational efficiency in automotive and energy business solutions.

Theories

Hayes & Wheelwright 4-stage model in the digital era (SMART Operations to be competitive)

Hayes & Wheelwright 4-stage model in the digital era

(Source:Nigle Chetty, 2022)

Stage 1: internal neutrality – this stage of the model refers to the operations functions trying to attain a minimum standard and is usuallymeasured to be the lowest level of contribution by the operational function. The other business functions view it as interference when it states about delivery of competitive advantage. The main aim at this stage is to be focusing on avoiding mistakes.

Stage 2: external neutrality –it is the foremost step in breach out stage 1, it states that operational functions must compare their performance with their competitors' companies (Colla and Afonso, 2019). Doing so will bench-mark its presentation against its competition which further allows the business to classify its place in the market and adopt industry practice.

Stage 3: internally supportive –in this the business operations will be briefly achieved the first stage in the market and also by connecting the strategy through operations the company need to have an aspiration to improve to be more unambiguous in the market.

Stage 4: externally supportive –the last level of the model states that the company looks at the upcoming future this stage provides the base for future achievement by taking a key in the market through strategy formulation. In a particular period, it will help to develop operation-based capabilities by arranging resources creatively and innovatively and also by delivering strategic flexibility that further allows the business to accept changes in the market.

Digital Transformation/ Strategy & Innovation

In today's world digital technologies plays a very important role digitalization has taken over every sector of business from manufacturing to management. In supply chain management digital technologies plays an important role. Industry 4.0 which is known as the digital era has created a disruption and encourages companies to rethink their working design and supply chain management (Blanchard, 2021). Several technologies have emerged which are successful in altering the tradition of working in the organization. Above all these the megatrends and customers' expectation from the company has changed the full game, the companies have only one option of adapting digital technologies in supply chain management which also provides opportunities to approach the next horizon of operational success in the company, to convert the company into a digital supply chain system (Agrawaland Narain, 2018). Digitalization in supply chain management helps increase the efficiency of the company and customer satisfaction, it further empowers the planning, and logistics teams to merge, source, and also efficiently leverage analytics.

Lean Business Model/ Manufacturing (quality, sustainability, efficiency/effectiveness,)

Lean business model is a business strategy that attempts to remove waste in products and procedures while prioritizing customer satisfaction. By satisfying customers' needs and demand the business will attain more positive outcomes in increased sales and building a great image in the market (Ramoriet. al. 2021).

A traditional lean business model includes lean practices which are like continuous improvement in working, quality management, sustainability, and effective inventory management. All these practices help the company to remove waste spending and focus on improving quality and efficiency in productivity. A lean business model is a good option for companies that produce better quality at cheap prices with small shipping in long run. The end goal of this business model is a positive return.

Total Quality Management (strategic level quality culture, focusing on performance objectives and agility and customer satisfaction)

It is described as management approaches to long-term achievement with help of customer's satisfaction. All the members of the organization contribute in the development of procedures, products, services and organizational culture. The prime element of the business is referred to as the management system for the customers-focused company whose main focus is on the satisfaction of the customer (Ngambi and Nkemkiafu, 2015). It involves data, strategy, and actual communication to apply quality discipline into the culture of the organization. The principles of TQM are:

  • Customer-focused
  • Total employees participation
  • Integrated system
  • Continual improvement
  • Fact-based decision making
  • Communication
  • Process-cantered
  • A strategic and systematic approach

Sustainability (3BL) and Circular Economy (Reuse, Reduce, Recycle, Remanufacture) and the link to digital technologies and competitive advantage

Circular economy and sustainability aim at bringing new approaches to the concepts by linking scientific disciplines of economy, engineering, technology, management, society, and the environment (Walkeret. al. 2022) A circular economy is very important to promote the goals of supportable development. It is a markedly different form of doing business, which forces companies to rethink from designing to manufacturing products and also the relationship with the customers. The circular economy is all about retaining value by preserving the integrity of the product of the company. The circular economy has 4 loops which are

  • Repair maintenance and upgrade
  • Reuse
  • Remanufacturing
  • recycling

Analysis/Findings

Importance of digital technologies

The importance of digital technologies for efficiency and customer satisfaction is as follows:

  • Flexibility in the company: with help of the digital operating model management of the company will get full freedom regarding the selection of the suitablegrade of centralization which is required to sustenance specialization and minimalize the costs of local workforce and output across every location of the company. the major benefit is that after digitalization company's value will be increased through better productivity.
  • Fast and effective Decision making: The supply chain is converted into digital technologies, the company will be able to make a fast and effective decision for every specific function regarding supply chain and operational management (Rantaet. al. 2021) Also, the company will be able to analysis the performance precisely by averaging dealings and all the obtainable information at the macro level which will further help in making effective decisions. This last improve the level of customer satisfaction and the fast delivery of goods to the customer makes the customer happy and satisfied.
  • Increased automation: a digital platform develop the data accuracy, and enhance supply chain effectiveness all by mechanizing and facilitating the decision-making process at various stages in the company. Automation regulates the most efficient and appropriate carrier, and schedules in view of the speed, time, and priority of deliveries (Holmströmet. al. 2019). Through this manufacturing and delivery of goods and services becomes fast which is a very great step in customer satisfaction.
  • Accelerates innovation and uniqueness: every digital transformation procedure is focused on a goal which is innovation and uniqueness. This helps the chain management of the company to strengthen the company's business model and also helps in building a relationship with its supplier and customers.

How LEAN and Total Quality Management can be applied in the manufacturing automotive industry to achieve a sustainable competitive advantage

For attaining competitive advantages LEAN model can be used as its main benefits is to reduce production cost and helps in increasing output, the major goals of the LEAN model are

  • It helps in reducing unnecessary physical wastage
  • Reduce manufacturing which leads times and also the production cycle times
  • It helps in minimizing inventory levels at every level of production
  • This model uses equipment and manufacturing methods more efficiently
  • A major factor is that it helps in increasing the output
  • It helps to increase the ability of the company to produce a more flexible range of products with very less change over costs.

The LEAN model has various tools and methods which are as follows

  • Standard work
  • Visual management
  • Value stream mapping
  • The Five Ss
  • Total productive maintenance

TQM can also be very helpful for the company to attain competitive advantage as its offers various benefits which make the company the best out of all, the benefits and impacts of using TQM are as follows:

  • It offers employees participation in the decision-making process of the organization which motivates employees
  • The major benefit is that it ensures customers satisfaction
  • TQM strengthens the relationship between employee and manager
  • It helps in improving the quality of service or product
  • There is a huge enhancement in productivity because of quality maintenance
  • This method helps in creating good communication by use of scientific techniques
  • It also helps in shifting the market share positively
  • And the major benefit of TQM is that it helps the company to generate great profits.

TQM consists of four major processes which are

  1. Quality assurance
  2. Quality control
  3. Continual improvement
  4. Quality planning

Conclusion & recommendation

Digitalization has touched every aspect of business whether operational or supply chain management. Technologies like GPS, entrenched sensors, and RFID helps companies to convert their current traditional paper method into a digital method which is more convenient than old methods. These tools and techniques make the supply chain more flexible, agile, open, and elaborate for employees and the manager. Digital transformation of supply chain management enables the organization to flexibly run its business and makes business procedure automation and acceleration innovate supply chain management. To maximize the advantages of digitalized supply chain management it is very important that companies be part of the internal part of the business model and also the origination structure.

Reference

  • Agrawal, P. and Narain, R., 2018, December. Digital supply chain management: An Overview. In IOP Conference Series: Materials Science and Engineering (Vol. 455, No. 1, p. 012074). IOP Publishing.
  • Anand, G. and Gray, J.V., 2017. Strategy and organization research in operations management. Journal of Operations Management, 53, pp.1-8.
  • Blanchard, D., 2021. Supply chain management best practices. John Wiley & Sons.
  • Colla, J. and Afonso, P., 2019, July. Towards the Integration of the Production Function in Strategic Management of Industrial Organizations to Avoid the Efficiency Trap. In International Joint conference on Industrial Engineering and Operations Management (pp. 133-142). Springer, Cham.
  • Fisher, M. and McCabe, M.B., 2019. Tesla: Accelerating to Market. Journal of Strategic Management Education, 15.
  • Holmström, J., Holweg, M., Lawson, B., Pil, F.K. and Wagner, S.M., 2019. The digitalization of operations and supply chain management: Theoretical and methodological implications. Journal of Operations Management, 65(8), pp.728-734.
  • Hugos, M.H., 2018. Essentials of supply chain management. John Wiley & Sons.
  • Joseph Foley, 2021. We still can't get over this hilarious Tesla logo resemblance. (Online). Available through :<https://www.creativebloq.com/news/tesla-logo-secret>. (Accessed on 23/11/2022)
  • Motors, T., 2015. About Tesla. Retrieved November, 22, p.2015.
  • Ngambi, M.T. and Nkemkiafu, A.G., 2015. The impact of total quality management on firm's organizational performance. American Journal of Management, 15(4), p.69.
  • Nigle Chetty, 2022. Four-Stage model of operation and competitiveness. (Online). Available through :<https://nigelchetty.com/new-blog/2020/3/3/four-stage-model-of-operationcompetitiveness>. (Accessed on 23/11/2022)
  • Ramori, K.A., Cudney, E.A., Elrod, C.C. and Antony, J., 2021. Lean business models in healthcare: a systematic review. Total quality management & business excellence, 32(5-6), pp.558-573.
  • Ranta, V., Aarikka-Stenroos, L. and Väisänen, J.M., 2021. Digital technologies catalyzing business model innovation for circular economy—Multiple case study. Resources, Conservation and Recycling, 164, p.105155.
  • Supply chain
  • Walker, A.M., Opferkuch, K., RoosLindgreen, E., Raggi, A., Simboli, A., Vermeulen, W.J., Caeiro, S. and Salomone, R., 2022. What is the relation between circular economy and sustainability? Answers from frontrunner companies engaged with circular economy practices. Circular Economy and Sustainability, 2(2), pp.731-758.
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