- New Operational Process
Management of operations is a key factor which determines the success of a company to achieve effectiveness, efficiency, sustainability, and strategy. Ford may improve on its performance across different functions, by implementing a new operational process, which is in line with current global practices in order to gain a competitive advantage over rival firms in the automotive industry, such as Toyota. An area to focus on, is its manufacturing department, because of the significant impact on the overall success of the business.
Ford may consider adopting the ‘World Class Manufacturing System’ to enhance its operational excellence(explain the World class manufacturing system). The system would yield numerous benefits including enhanced flexibility, quality improvement, innovation, and workforce empowerment, among others. The system will enable the firm to perform its operations, at a global-class (is this correct?), and permit the products to perform well globally. Consequently, the firm will increase its market share in the industry (Moore, 2014).
The manner, in which the firm will organize its resources and products to facilitate attainment of goals, will significantly impact its operational excellence. This will in turn, solve the various operational challenges it is experiencing. The SBU (write out what SBU stands for) structure would best fit Ford business operations, involving both the automotive and financial services industry. The structure would also necessitate effective management of its global operations, as a worldwide manufacturer of automobiles(Citation).
The approach of reorganizing parts of the business into autonomous groups would tend to reduce bureaucratic thinking, which may otherwise hinder effective decision making, as well as discourage innovation. Setting up the different units of the firm separately, would make them operate like distinct entities, with full responsibility vested upon top management of the respective units (Spanyi, 2010).
The firm should operate its financial unit of business separatefrom the automobile unit, under the responsibility of vice presidents (VP), who would report to the president in charge of the overall company. Each line of business would then form strategic business units, for different regions, to facilitate effective coordination and management of operations within those regions. The regions would be headed by regional C.E.O’s, reporting directly to the VP of their respective line of business.
Each regional unit would be organized into different functions, including: manufacturing, marketing, and finance, among others, to be headed by regional managers. The managers would oversee their respective functions, reporting to the regional C.E.Os. This would enable the firm to focus on different markets uniquely, by offering customized products, aimed at addressing their individual market needs(Citation).
The firm should encourage self-directed teams. The use of organic modeling is useful, for problem solving and innovation and enables the continuous flow and continuous improvement of the production system. The cross-functional teams would serve to motivate its workforce, achieving higher employee productivity (Wilson, 2014).
The inter-dependence of different strategic units will also be facilitated by a clear line of communication among them. This would enhance the process of making decisions, as well as reduce time taken to implement them. Consequently, some of the business challenges would be resolved, including: high cost, stiff competition, and technical issues(Citation).
Process Mapping of Operational Process
Process mapping involves defining the processes involved in the operation of the business, to achieve business success. It consists of defining what the company does, the standards of the process, and assessment of the process. This would enable the company to become more efficient in its operations and help to achieve its goal of success.
Ford should ensure that all its processes are aligned with the overall objective of the business, through assessment of the various processes involved in its operations. A key highlight is its problem solving process, which should be reviewed to ensure effectiveness, quality improvement, and minimum wastage. This would resolve some of the issues affecting the business, through effective development of solutions to the problems (Pastinen, 2010).
The firm should adopt the “Six Sigma Methodology”to enable the firm to reduce its costs of production, giving it an opportunity to set its prices lower than the rival firms. This would be identified through effective identification of problems and operational needs. It is important to have detailed descriptions of the needs, to enableappropriate solutions to be developed(Citation).
The process will enable the teams to identify areas having higher expenses, assess their impact on the cost of production, make improvements, and reduce waste. Effective metrics should be applied in analyzing operational success, in various projects, including ratio analysis, considering labor costs, scrap costs, and RTY(write out what RTY stands for?)(Citation).
The market needs should be identified as a problem that must be solved through product development. This will require the team to set project objectives, established to solve the situation at hand. The problem will be identified and described at all angles, enabling them to understand it clearly (Cordon, 2014).
The measurement phase involves evaluating the problem through the involved metrics, to understand its impact, magnitude, relevance, and ultimately how it may be addressed. The problem teams would engage in teamwork, to measure the extent to which problems need to be solved. This may involve case studies, identification of causal effect, the modeling of situations, and other activities. The analysis stage also focuses on delving deeper into a specific issue, to develop possible solutions. This stage may involve designing models, applying FMEA(write out what FMEA stands for), and other variables(Citation).
The improvement stage will involve further analysis of the problems, involving the employees in the exercise, as well as advanced statistical tools, to acquire a thorough understanding of the problem. It may also involve experimenting, especially with product development needs, to meet market needs. Innovative teams may apply modeling and simulation tools to design high quality cars, which would compete fairly with key rivals (Truscott, 2013).
Control phase is vital to ensure that the improvements are consistent with the objectives, as well the business goal. It will evaluate procedures and processes, to make sure they are in line with business strategy. Adjustments will be made where needed, including automobile designs. This will enable the company to reduce the cost of production, enhance quality, and manage its overall processes effectively.
Layout mapping of operational process
The firm should take into account the product application and commercial environment.The design will provide usage method, which meets market demand, through ensuring innovative appearances of the customer (I don’t understand the sentence). The layout should be mapped to conception of a series of related parts, in order to realize each function, while considering the beauty, duration, safety, and smooth flow of production. It should address the requirements of customers, through realization of designs, controlled schedule, material, cost, and production process reliability, to ensure operational excellence.
It should develop a schematic design, on the basis of the manufacturing goals and facility requirements; such as designs, specifications, and detailed plans. The process of manufacturing automobiles and the requirements of the process would be transmitted to structural engineers, mechanical, electrical, and design architects. The layout should consider material handling needs, design impacts, WIP (write out what WIP stands for, is it work in progress)storage needs, equipment’s mechanical and structural designs, and system design, among others (Markus, 2010).
The logistic and production layout depicts all warehousing and production equipment, with the exception of racking, enabling maximum utilization of building size, flow of process, and operational flexibility. The layout of some processes will be based on limited flow, unique products, and high skills, such as innovative processes. The layout of other processes will involve continuous flow with limited flexibility and skills, in order to enable mass production, which will meet product market demand. Warehouses should be located next to the assembly area, to reduce the cost of transporting finished products, from factory to the storage (Citation).
Channel mapping for operational process
The process of channel mapping of the operational process would benefit Ford significantly, enabling it to achieve sustained growth and profitability, especially with regard to its key business units. It will provide an opportunity to implement a sound product differentiation strategy, which will fight competitive forces, from the rival products. It will also achieve a reputable business image, through positive customer relationships(Citation).It will focus on the flow of cost variables throughout the process, as well as through the customers’ usage of the products manufactured. The major objective is to reduce costs, while improving efficiency. The system will also be applied to coordinate procurement operations, in order to decrease costs of inputs. This will enable the manufacturer to reduce its cost of production, increasing profitability (Chrysler, 2015).
Products will be traced throughout the process, identifying the key points of leverage, in order to detect costly redundant functions. The process will involve suppliers, partners, and customers, to provide information on the same. This will serve as an eye opener, demonstrating to everyone, the value of the process(Citation).The costs of each step throughout the process will be estimated, in order to identify the areas where high costs are incurred. The company should apply at least 70% accurate information, in order to have a credible process. This process should reveal all the hidden costs, to get a relevant estimate, of their product.
It should progressively map their products, integrating it as a core element of its profitability management operations. This will enable the firm to grow and secure its profits. Business management should build close relationships with customers, which will lead to customer loyalty, as well as enhance future management of the business.
The channel should also focus on recalling the ineffective products, and compensate the victims of such manufacturing mistakes. This has worked positively for Toyota, and others, and can help to develop a cordial relationship with customers, as well as a reputable business image. The consumption of new models will be tracked throughout the lifespan, to evaluate its efficiency and the need for improvement. Consequently, the firm will offer high quality products to the market, which will help secure a significant market share(Citation).
Project management involves the activities undertaken to attain planned goals that are defined in terms of outcomes, outputs, or benefits. It is used in projects within businesses, since projects are unique from routine business activities, thus requiring separate management. A key factor that distinguishes projects from usual business activities, are the unique objectives of the project (Citation).
Project management would enable Ford to effectively manage its projects, including: innovation, product design, and process design. Project teams will start by identifying the reason for carrying out the project, which will act as a guideline to planning and implementation. The requirements of the project will be identified, which ensures that the project meets customers’ needs, for which the project is carried out. This will involve identifying budget resources, quality of the output, and timescales for delivering on the objectives (Flynn, 2013).
Effective management of the project necessitates a committed and motivated team. The manager can help motivate a team through reward and recognition for good performance, effective allocation of resources, and ensuring a comfortable working environment. This will make it possible to meet project requirements, by increasing project team productivity(Citation).
Communication is a vital element in project management, for effective coordination, conflict resolution, and the overall success of the project. Effective communication channels should be put in place, and strategies established to enhance communication among team members. This will involve internal as well as external, and informal versus formal channels of communication. Clear lines of authority should be developed, where everyone knows the office above his/her position(Citation).
Project management also involves cost control, to maintain the operational costs within the budgetary limits. This requires planning for the operations and tracking the implementation of the plan, to identify the shortcomings early, before incurring huge losses. The deviations are identified, analyzed, and rectified, to bring back progress as planned. Project management will ensure that the project is completed on time, and the quality of output is as planned, thus meeting the needs of customers.
Cost, efficiency and productivity
Efficiency entails achieving the best possible resource use, which involve maximizing output produced from a given level of input applied in a production process. The concept of efficiency involves reducing the costs incurred in a production process. It is a two-edged sword, involving reduction of costs, and maximization of output(Citation).
Productivity focuses on the level of output, over a given period of time, with regard to a firm, employee, or a business unit. Ford Motor Company would be more efficient than its rival firm, if it is able to increase the number of vehicles produced from a given level of inputs, above the number of similar vehicles that the rival can produce from the same level of input. This would give Ford a competitive advantage over the rival firm (Markus, 2010).
The company would have increased its efficiency, if the level of production rises without increase in total costs incurred to produce them. This would mean that the firm is maximizing on its resource utilization. Such efficiency may have resulted from new technology, highly committed workforce, and cheaper raw materials(Citation).
Productivity of the workforce measures the level of output, over a given period of time. It may be improved by enhancing their skills, motivation, equipment, and abilities. Productivity of the production system would increase through adoption of advanced technology, effective management of production, as well as the workforce involvement in the production process(Citation).
Leaders like Henry Ford saw the need for greater quality consistency, speed within the production line, and the reduction of time and material waste. Such pressing issues created the opportunity for the development of tools to leverage proven processes in order to increase productivity and efficiency. Still today, some of these tools are being used as part of Six Sigma and Lean Six Sigma principles. (Sherman, 2014)
Ford Motor Company already adheres to Six Sigma principles. Although Six Sigma methodologies contribute to improve and accelerate manufacturing processes and reduce waste, they can also be highly complex. Furthermore, these methods offer limited options for the incorporation of innovative information technology tools and produce large amounts of statistical information. The statistical information is easy to collect, but very hard to manipulate and convert into useful and practical evaluation results to be used by the company to obtain higher positive outcomes. (Davenport, 2008) According to Michael Cavaretta, PhD, technical leader of the Predictive Analytics for Ford Research and Advanced Engineering, just to perform research, collect data and manipulate statistical information, Ford Motor Company has to employ around thirty people. This team of thirty, focuses primarily on Big Data collection and predictive analysis(Gardner, 2013).
Six Sigma principles are also centered on colored-belts, with black-belts being the experts for problem-solving and to train project teams. This makes the business process improvement exclusive. The participants of a process cannot collaborate as improvers, analyzing and re-engineering their own process. As a result of the elitist role approach within the Six Sigma principles, employers cannot contribute as much with significant innovation and inventions, and with better ways to perform their processes. They do not possess ownership and autonomy of their processes. Thus, the system itself determines the pathway to incremental improvement, leaving little space for business breakthroughs(Davenport, 2008).