Case study
XYZ Company is the fifth biggest player in the global motorcycle market. The company is known for manufacturing heavyweight motorcycles. For example, the company focused on motorcycle enthusiasts, especially those who are interested in the chopper biking culture. However, as its mission statement now indicates, the company now offers more products. The mission statement shows the company’s aims and approaches to develop its business. Also, the company’s vision statement emphasizes leadership in stakeholder management. It’s vision statement is as follows:
“XYZ Company is an action-oriented, international company, a leader in its commitment to continuously improve mutually beneficial relationships with stakeholders (customers, suppliers, employees, shareholders, government, and society). Our company believes the key to success is to balance stakeholders’ interests through the empowerment of all employees to focus on value-added activities.”
XYZ Company’s operations management (OM) ensures that the company maintains effective and efficient business activities to support resilience and competitiveness. Company’s managers must determine the best options for the 10 strategic decision areas of operations management. These 10 decisions cover the key business areas that involve suitable operations management approaches. To optimize the productivity of its facilities, the company continues to develop its operations management practices to suit evolving business needs. For instance, motorcycle designs are regularly tested to determine satisfaction of customers’ expectations and regulatory requirements.
XYZ Company’s motorcycles are known for their unique and handcrafted designs. In this strategic decision area of operations management, the company’s objective is to support its brand image based on available resources. This brand image emphasizes motorcycles’ quality and high-end chopper design. The company aims to maximize output quality that matches the company’s brand image and customers’ expectations. The company has strict requirements for suppliers to ensure high quality motorcycles.
The strategic decision always involves high quality and new technologies. Optimal production process is an objective in this decision area. At XYZ Company, operations managers automate processes for maximum efficiency in producing motorcycles and related products. Also, the company’s production facilities address demand and cost considerations in the global market. Most of Company’s authorized dealers are located in town and city centers. Many of these dealers are involved in deciding the location of the dealerships. Thus, Company’s operations management addresses this strategic decision area through partially decentralized decision-making for dealership locations. In addition, the locations of the company’s warehouses are based on the locations of authorized dealers to optimize the transportation efficiency of motorcycles and related products. For company-owned facilities like motorcycle production buildings, the company’s operations management approach for this decision area involves traditional models adjusted to suit the facility’s purpose. Also, a standardized set of layout design requirements are implemented for authorized company’s dealerships. The company maintains a Supplier Diversity policy and ensures optimal productivity and capacity of its supply chain based on the availability of a wide variety of suppliers. Operations managers focus on inventory adequacy and timeliness. The company addresses these concerns through automated inventory monitoring in company-owned facilities. The company also has an online system for orders and requests involving authorized dealers. It has streamlined schedules for its business activities. It addresses such concern through automated schedules for the supply chain and orders involving authorized motorcycle dealers. Traditional operations management approaches are also used for scheduling employees’ activities at company’s offices. The company’s motorcycle production processes are standardized with redundancy measures. For example, the company coordinates the activities of production facilities, which minimize stock-outs by supporting each other during demand peaks. The company also has maintenance teams for buildings and equipment.
Questions:
1. What are the 10 strategic decisions in Operations Management? Briefly explain each.
2. Discuss how XYZ Company addresses each of these 10 strategic decisions?
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Strategic decisions in Operations Management:
Design of Goods and Services. This decision area focuses on the design of products and services that meet the needs of customers and are profitable for the company.
Quality Management. This decision area focuses on ensuring that products and services meet or exceed customer expectations for quality.
Process and Capacity Design. This decision area focuses on designing processes and determining the capacity of those processes to meet customer demand.
Location. This decision area focuses on selecting the best location for facilities and warehouses.
Layout Design and Strategy. This decision area focuses on designing the layout of facilities and warehouses to maximize efficiency and productivity.
Human Resources and Job Design. This decision area focuses on recruiting, hiring, and training employees, and designing jobs that are both challenging and rewarding for employees.
Supply Chain Management. This decision area focuses on managing the flow of materials and information from suppliers to customers.
Inventory Management. This decision area focuses on managing the level of inventory to ensure that the company has enough inventory to meet customer demand without overstocking.
Scheduling. This decision area focuses on scheduling the production of goods and services to meet customer demand.
Maintenance. This decision area focuses on maintaining equipment and facilities to ensure that they are operating at peak efficiency.
XYZ Company addresses each of these 10 strategic decisions in a variety of ways. For example, the company focuses on designing high-quality motorcycles that meet the needs of its customers. The company also has strict requirements for its suppliers to ensure that the motorcycles it produces meet its high standards for quality. In addition, the company uses automation and other technologies to improve the efficiency of its production processes. The company also has a decentralized decision-making process for dealership locations, which allows it to better meet the needs of its customers in different parts of the world. The company also has a supplier diversity policy, which helps to ensure that it has a reliable supply chain. The company uses automated inventory monitoring and an online system for orders and requests to ensure that it has enough inventory to meet customer demand without overstocking. The company also has streamlined schedules for its business activities and uses traditional operations management approaches for scheduling employees’ activities. The company’s motorcycle production processes are standardized with redundancy measures, which helps to minimize stock-outs and ensure that the company can meet customer demand during peak periods. The company also has maintenance teams for buildings and equipment to ensure that they are operating at peak efficiency.
