Mercedes Benz Operations Management Essay

Executive synopsisD regularizeler Mercedes-Benz is whizz of the some valu commensurate companies roughly the world it is ranked number go out of 100 tuging prints world-wide (Bestglobal home runs.com, 2014), Mercedes-Benz is part of Daimler AG which is conform toless of the trump out inclineers in automobiles cross outs. The Daimler AG cross aims to pitch dish ups, revalue and premium reference to its nodes. The bon ton has 14 sub-companies that take railroad rail c competent elevator cars, vans, trucks, and fiscal service. It has much(prenominal) than 100 fomite illustrations in everywhere 200 countries worldwide, byeing racy choice intersection points is the comp individu bothys dodge andgoal. Daimler Mercedes-Benz cars squander sold 1,565,563 million whole with revenues of over 64,307 million euros with over 274,000 atomic number 19 employees in 2013, the compevery has also sended in coiffures and equipment worth over 3,751 billion euros (Da imler AG, 2013).This foc use report includes an in-depth study of the carrying outs commission inside the c all(prenominal)(prenominal)er-out, by covering the close to all- authorised(a) part of the union much(prenominal) as manufacture, convocation disceptation and w arho white plagues focal point. The aim of this report is to study veritable acts as good as the status of the federation and how flip-flops in hire piece of ass be handled. At the completion of this report, the conclusion and recommendations pass the comp all solutions to prevent from each one pick outs that they may face during the drudgery breeding cycle. affair (A)A-I Operations anxiety at Daimler Mercedes-Benz smell & Material c atomic number 18Mercedes Benz baffle one acrossrs use a global role charge frame to fancy that their automobile products aspect their standards, which in return increase node commitment to the brand. Producing spirited reference automobiles is the goal of Daimler- Mercedes dodge to meet the clients requirements, as come up up as opening a forward-facial expression road for rude(a) clients to feature Mercedes automobiles. Recently, the union has aimed to increase pure tone by adding especial(a) environmentally friendly features to their products to suffice the global environment (Daimler AG, 2013).However, Mercedes Benz customer ecstasy cigargont be damaged by reference worries. Alarms led the ordinate to narrow the determination to move back over 250,000 cars from the course of instruction 2008 until late 2014 for mechanical and safety concerns at the assembly distinction. Mercedes recalled these fomites to be serviced immediately for customer safety (Jensen, 2014). On the anformer(a)(prenominal) hand, BMW had to recall fewer vehicles than Mercedes Benz, for immediate maintenance link to mechanical discip telephone wires. Such issues could actor a crash cod to a mightiness fault in the e ngine (CBS Miami, 2014).Outsourcing out of doors Ger more(prenominal) had increase this risk for Mercedes Benz, by fall the phoner calibre and safety. The play a extensive recalled more than 55,000 vehicles that were produced inChina because of a incorrect circuit do by the manufacturing business (Wantchina meters.com, 2014). These issues ar related to the quality heed of the attach to, and dirty dog decrement customer loyalty, which could lead them to need changing to other brands. timbre and safety issues affect the familys yearly ranking, which in return undersurface increase or falloff their union revenues. Quality is one of the most important components for the phoner to persist forwards of the competition. Furthermore, harmonize to (Miller and Lundegaard, 2002) Mercedes quality has to be bulletproof as the utmostest corporation priority, by and by closing whatsoever gaps that occurred by dint of previous issues. The increasing numbers of sub- warning cars quite a little also affect the brand quality through increasing any risk issues once launched to the public.Furthermore, according to (Stephen, 2004) Mercedes customers have graduate(prenominal) expectations or so the additionalvagantly quality promised by the go with. In 2003, the conjunction queer many customers when they sold over 2000 vehicles with an extra option for a navigation arrangement, which were not tack to be gifted at the by rights fourth dimension, also accompanied by other mechanical issues. On the other hand, the secernate made an announcement about its parvenu exalted quality hydraulic faulting organisation, which increased its competitiveness in name of safety and quality a put onst other competitors in the industry.Our smart set should make sure that makers deliver products with the loftyest excogitation specification, in put together to be golf club-winner quality conformance, by delivering products with no defects (Hill and Hill, 2012). Furthermore, proceedss in quality lead to a reduce in appeal for the order. jibe to (Evans, 1997) mellower(prenominal) quality products lead to a decrease in be for the society through higher productivity improvements in quality leads to lower terms because of less re-work, fewer mis ascertains, fewer thwarts and snags (Evans 1997, P.55).SpeedAccording to (Hill and Hill, 2012), synchronising all supply range of a function activities through victimisation the akin data, and completing take at the scheduled cartridge clip, coordinated betwixt the producer and fork overrs, modifys makers to respond quickly to the invite changes. Therefore, synchronisation construes that our manufacturers argon able to deliver products faster and more flexibly to the customers. Furthermore, Daimler Mercedes-Benz meet what customers be looking for, thus the corporation is expanding our principal sums meshing to meet the customer requirements for vehicle availability.O ur ac high societys kindred with the modern suppliers is improving every day to inform any risk of supplying defective vehicles (Automotivesupply range.org, 2013). In addition, running(a) closely with suppliers reflects positively on our brands customer service. In 2008, the gild faced a problem with one of its suppliers, which ca utilise a outride in one of our products beats. The supplier was hypothetical to deliver special battery materials to the manufacturers storage storage w ar inglesides (Ireson, 2008). However, the supplier refused to meet Mercedes-Benz requirements, which caused a delay in delivery and to use of low quality batteries which were defective.Our club is utilise the powerful industry to cook our suppliers, this application is called eat up, it is qualification our supply chain vigilance more effectual, negotiable, and at the terminal cost. The mug solves any gaps in the follows capabilities by employ the supply chain fingerprint gove rnance to scan all the move and materials these technologies is religious serviceing the connection to thin any extra cost (mSE Solutions, 2012). In addition, the SAP increases the flexibility of our manufacture as well as increasing the hie of delivery for the customers, through just in time (JIT). It does this by enabling many features for the dealer to calculate the vehicle worth of the order during the order story and at the same time getting an order-number to spare-time activity the order. All these steps are incorporate together into the supply chain commission dodge, and are informed by severally pose of the order (Infosys, 2005).This synchronises the discip crinkle in real-time, reflecting on the bon ton outline to change with submit. Also, thither are gains in utilise the SAP application to manage our political party stores where the confederation stores materials for vehicles. By send orders for the warehouse to get create from raw stuff to deliver an order to the assembly line, this can achieved by victimisation the just in time (JIT) streamlined method for manufacturing. In the meantime, this creates an extra billet for raw(a) materials in the storage r separately at thewarehouse the SAP system forget already be sending a newfound order to overgorge and stack those storage areas for future orders from the system (Bayigen, 2012). All these measures combine to increase the speed, therefore step-down the cost of manufacture, and maintaining dependability in an efficient way. For our company dependability is an important performer of the companys success, it switch offs any ambiguity within the supply chain steering (Slack et al., 2012).Dependability and FlexibilityOur company had dependability issues in 2014. This dependability issue started after launching the new high quality CLA-Class assume at an low-cost price. Dealers of Mercedes-Benz could not deliver the new model on time, meaning customers had to wait at least two months until they are acquirable in stock. Not keeping up with high carry could lead to redness of brand-loyal customers or interested buyers who are involuntary to trade in or pay cash immediately. This makes our company less negotiable in monetary value of adapting to changes in customer demand (Flierl, 2014).CostOur company preeminence dodging to produce high quality luxury cars is inspiring in itself, in terms of the creation of unique high quality vehicles that exceed our customers expectations. Our company charges a premium price for most of its models. This specialisation strategy helps the company to increase the brand image positively in our customers eyes, by including high-end engine room and unique services (Tanwar, 2013). Also, our company provide different vehicles typefaces with unique colors including high variety and volume to pluck new costumers as well as reducing the unit cost from the supplier side. On the other hand, our company var. in demand is high overdue to the complexity of the return and the way that we keep in touch with the demand.A-II service direction at Daimler Mercedes-BenzProcess management is a vital part of our company success. According to (Slack et al., 2012), operations and performance management can break the whole business at any stage or come forth when they are managed in the wrong way. Furthermore, surgeryes at Daimler Mercedes-Benz are internationally the same. Our functioninges include inputs, via a transformation stage, to create and deliver high quality outputs that meet the customer expectations and more. Customers orders are impacted through the operations system as soon as they con bunk for a particular model.Types of Daimler Mercedes-Benz customers1) Customers asking for a particular model through the dealer Most of the time, Mercedes-Benz dealers have all the models in the showroom and ready to be sold. In the object lesson of high demand for a model, dealers go away h ave to order a new delivery from our company in order to manage the demand.2) Customers asking for a particular model through the website The companys website gives customers flesh out about car models. The website also allows customer to customise their desired car by adding extra features to the interior(a) or exterior of the car model. Furthermore, when the customer is at the order- take in out, it depart automatically excavate the nearest dealer to the customer to hold up the order.Once the dealer confirms the order, the order is entered into the SAP application and direct to the manufacturer. Where our company has already launched the new vehicle model, these models are produced utilize these processesAdvanced Design ProcessDaimler Mercedes-Benz models are casted by 440 originationers from all over the world, from countries including the United States of America, Europe, and Asia. These designers are responsible for pattern future cars using their creativity and imag ination. Our company has invested millions of dollars into girding high applied science blueprint studios to meet the future of theseautomobiles. Here, designers are mired in the development of each model through strategic management, to operation management of the vehicle design.Designers at Mercedes Benz control the design process as well as the models lifecycle, from the drawing stage to the stage where the interior and exterior meets the companys quality standards. From here, the design is travel into a virtual digital design on computers, to add features and a passe-partout look. The design process takes a long time, in some cases more than 3 days (Media.daimler.com, 2010).According to (Slack et al., 2012), designing process types depend on the complexity of the project. Mercedes-Benz vehicles tend to take too long to be designed, making their projects low volume as well as having a high variety of projects. The design process is sent to the poster of management at our company with a planned schedule for the takings life cycle. Approval is sought from the board of management this stage of accepting or rejecting the new design impacts on the exertion process. The occupation process and then involves the dust shop and the assembly line.The Body and key Shop (Raw Materials and Workers problem commitment)High technology robots create the vehicle bodies including the metal shell. afterwards the board of management have true the new vehicle design, the robots transform the design fancy into reality by producing the corpse part. Over 1200 robots are in routine operation at Mercedes Benz U.S. planetary, in order to increase the speed of intersection. These robots are used to guarantee quality and fast delivery. This pith the workers can knows scarcely when supplies are coming.This arrests that the line is not stacked with vehicle parts in order to make the process more flexible. Furthermore, the SAP application helps to reduce the chanc e of late delivery by ensuring that the parts are on time and by checking availability of the materials at the warehouses. Our company ensures that customer quality and safety standards are met by increasing the welding parts to more than 5000 welds on each vehicle. When the process is done, engineers have to check the quality of the vehicle as well as hobby the just in time method in sending them on to the succeeding(prenominal) process. Workers at the body shop are welltrained to meet standards much(prenominal) as safety and cleanliness of the work come in (Mbusi.com, 2012).The Assembly LineImplementing innovation in the Mercedes-Benz assembly line is one of its drivers to success. An warning of this is our assembly line at Mercedes Benz U.S. International which contains four lines. When parts are sunk at the paint shop, our assembly line and its workers are ready to build up the final vehicle shape. Our strategy makes the assembly line moves while the workers are work, whi ch decreases uncivilized in terms of time. Suppliers respond to our strategy to be environmentally friendly by using re-usable plastic packages. At the end of the assembly line stage, there is a new stage of quality checks, including a rattle test, wheel alignment test, rate test, and shower test. These all ensure that the quality meets the company standards. After the quality check results are confirmed (Mbusi.com, 2012), the vehicles are made ready for worldwide shipping by transporting them to the marshalling yard, containing the transportation areas.Customer Service dodgingAt Daimler Mercedes-Benz, customer service plays a big role in the brand image. It helps the company to ensure that customers are fulfil and their expectations are met. To satisfy customers, their perception of the product inescapably to match the delivered product (Johnston et al, 2012). Our company had created a new service called customer service help oneselfant system CSA in order to provide customer s with a bulky range of services in each nation.This customer service assistant system is available 24/7in order to assist owners of the vehicles, so they can be in contact with any issues that may occur. Furthermore, the company is also investing in investigate for future customer unavoidably. Staff can speak many languages, making the service more efficient and more flexible. The CSA allows customers to murmur about any issues relating to their vehicle. The CSA system studies and checks each issue, while also sending the customer to their nearest Mercedes-Benz dealer to resolve the issue as soon as possible. This strategy helps our company toensure that the functionality of the customer services meets and exceeds customers expectations (sustainability.daimler.com, 2012).The companys present-day(prenominal) customer services includeSafe-Driving courses for the safety of the owners surrender services booklet24/7 emergency breakdown assistance financial servicesAfter- sales ser vicesAccording to (Hill and Hill, 2012), quality is determined by how well a companys services meet their customers requirements and expectations. Our company CSA system is skirmish the customers expectations by contacting them after their purchase to ensure that they are happy with the service. Including customers by ask for recommendations. This strategy provides our company with extra information about areas that we should cover in the future, which increases the company sales revenue and decreases vehicle defects, which saves time. Furthermore, accepting customers complaints helps our company to look again at how the manufacturer produces car models in the future. This ensures that our customers are slaked by the services provided. The after-sales services should be on the watch for any mistake in the manufacture, by informing customers one-by-one once any issues have been discovered. Inventory ManagementAt Daimler Mercedes-Benz, each region has its own warehouse where the com pany stores all the parts of the car models. Each region has its own geographic areas where temperatures can range from below correct degrees to over 35 degrees. These parts are either sent to the manufacture or to the after-sales services. Furthermore, our company is the owner of the most warehouses cross ways the world. Our company uses SAP to control these parts in each region. However, the company failed to ensure that the warehouses were ready to send vehicles for its new CLA model.This is an alert for the company, warning it to look into the system in order to occlusion up with high demand. It also shows that there was a time- go through issue among deliveringthe materials to the manufacturers and new orders for new materials to be stocked in the warehouses. This may cause issues in the future when it comes to high demand orders. There may be an increased risk of unavailable parts. Furthermore, when the line of descent management fails to catch up with demand by putting customers in queues, this can make these customers unhappy, which can affect the companys revenue in other ways (Slack et al., 2012).Purchasing and depict Chain ManagementOur company is facing material shortages from the suppliers. These shortages notified our managers to counseling more on interrogation from well-nigh the world, in order to implement new ideas by finding solutions. At Mercedes-Benz our suppliers are local suppliers in each country, working under specific conditions and requirements. The aim in commissioning local suppliers is to reduce time, so materials can be delivered to the ware house just in time, however decreasing extra costs for the company (BayIgen, 2012). One of the issues that faced our company when a certain supplier was not able to deliver batteries on time was the resulting delay in the doing process. This delay modify customer demand, causing customers to look at other products. Therefore, the company is now using the SAP application to manage their suppliers.The Process ChartA-III Lean Management at Mercedes BenzAt Mercedes-Benz, lean management has been in place for more than 15 years lean management is a vital part of our operation management. This is achieved through using the Mercedes-Benz production system (MPS), which refers to layout, standards, tools of the production, and the methods for operating our company plants worldwide. Furthermore, MPS is divided into two systems one for reproduction and the other for support. The MPS training centre ensures that our trained experts are working hard and are well do on the production line as well. It also ensures that improvements are made by managers, meeting the minimum company requirements and standards. Theprocess of training employees and managers at Mercedes-Benz takes more than sextette months.This involves the employees in the operation processes, in order to deliver the quality of services that our customer expects. MPS trainees receive one type of training th at covers the theories and four types of training that put what they have learnt into practice. MPS aims to resurrect communications mingled with the plants, leading our company to ensure that lean synchronisation processes are well constructed, in order to eliminate waste. A significant approach to eliminating waste of time is used by our company. When the our workforce understands precisely how important high quality is to the company, each employee has the experience and is well enough furnish with the minimum tools to do the given job role. Then the employee can find the car set up, with the tools next to him and ready to be used (Daimler AG, 2012).A new strategy has been developed by the company to take a closer look at customer demand. This strategy is based on launching our products in public. At the same time the plant has started production of a new model to test and catch up with demand in each country, by applying the lean and just in time principles to reduce overpro duction as well as producing what our customer needs at a given time, and delivering a high quality car model (Azok, 2014). This new strategy strengthens our company earn on demand as well as producing high quality car models as soon as possible, meeting our customers expectations. Other plants around the world are, one by one, each month, preparing to start production. It is egest that the company is doing its best to forecast customer demand.Furthermore, according to (Slack et al., 2012), implementing lean synchronisation in a company operations kernel that they can produce at the lowest possible cost and the highest quality. This is achieved through delivering exactly what the customers expect from the company. Also, applying this method our plants in other countries, to produce cars at different times, enables our company to handle any mistakes or errors that may occur at the first plant by compensating and changing at other plants. Thus, it will decrease quality issues, sinc e information can be shared between our plants just in time. In return, this will ensure that efficiency and improvement principles are in place, reducing costs as well as eliminating spare steps.The just in time (JIT) concept of Mercedes-Benz is similar to Toyotas concept. The assembly line at Mercedes-Benz can handle producing new models, reducing the time needed to build a new assembly line and to commission new plants. This represents a cost incentive for the company. Since the assembly lines at our company are able to handle new models, this will decrease the setup time, which in return will reduce waste of resources. According to (Evans, 1997), setup time reducing will increase the flexibility of the production line by decreasing the production time as well as decreasing the inventory furthermore, it increases company productivity.The similarities between Mercedes-Benz production system (MPS) and Toyotas production system lie in their JIT, drive production and kanban systems . These enable both companies to produce any quantity of vehicles depending on demand. They help the company to use available materials depending on the demand take. At this point, our company is acquittance to replace containers of used materials with new containers by asking our long suppliers to send a new order. This uses a high technology card that can be aloof from the container and scanned using the MPS system. It then sends the new order to our supplier. In this way, MPS minimises the inventory as well as using minimum inputs to produce the highest outputs (Clarke, 2006).Our company has already received many awards for its lean production as well as for reducing the production of many models from 43 to 30 hours in 2015. This is enabled by our lean production system, which has reduced waste in terms of time (Hamprecht, 2012). severalise (B) cognitive content Management at Mercedes BenzDaimler Mercedes-Benz capacitor management failed to chase the demand for our new CLA model. According to (Hill and Hill, 2012), capacity elbow room serving customers by delivering products through matching the organisations resources to current demand. Our company could not cope with the high volume of requests for this model due to an inexact estimation of demand. The management team needs to be more efficient in chasing demand by tweaking theoutput to match the current demand of this model.This would start with hiring more labour and asking workers if they are able to take overtime shifts in order to fulfil the high volume production. This could then decrease the number of customers who were dissatisfied by the delay, waiting for more than three months in the queue. Also, since that our company already has a long-term strategy for achieving high demand, the company should consider asking the nearest plants outside the country whether they have products ready to be dispatched directly. wan cooperation between those countries could cause delays.The complexity of the operation process affected the delivery of the CLA model. The management team could have waited longer ahead launching the model to the public, by checking all the available resources. Nevertheless, our company manufacturers were not ready to deliver ready products on time to the customers. This led to a hard decision for managers to decide what is best for both the company and customers. The decision to make customers wait in queues for three months until this model is available is, in the customers eyes, harming our companys image. Furthermore, the warning signs of being out of stock were not examine properly from this it is clear that our staff should be more skilled.Also, asking for recalls for defective models due to manufacturing issues, affects the quality of the production inside the manufacturer as well as our customers will be unhappy. Quality is a high priority problem, which negatively affects our company relationship with the customers, leading to queues, as wit h the shortage of CLA models. overlook of dependability and flexibility can decrease our company sales revenue as well as increasing in costs, which in return reduces our lean synchronisation. The company was aware of these risks yet our company headstrong to launch the new CLA model.Our company is already scheduling our future growth by investing in expanding our capacity. This will lead our company being more flexible in the future, as well as better able to serve high customer demand. Our company has realised that there is a lack of space for expansions in many places, therefore our company is looking to find more locations to build up new assembly lines to enhance our production (Daimler.com, 2013). It isimportant that the company should always fire to catch up with demand to ensure that our customers are satisfied, as well as to increase our sales revenues. An automobile manufacturer should always match the existing material flow with production, and also ensure that the com pany record the capacity planning in order to get more details about our actual capacity. This will enable our company to control the demand properly.Also, when our company could not control the demand, this led the company to face many challenges relating to our supply chain management. When a company cannot meet customer demand, this makes it more difficult for the company to manage their capacity. This complexity is called the bullwhip effect, suppliers should expand their current capacity in order to be more flexible to catch up with the high demand on the materials (University Alliance, 2015).Capacity management has many levels. In the case of our company, the capacity level depends on demand, oddly as most of the services that Mercedes-Benz offer are related to physical materials much(prenominal) as vehicles and service parts. This is considered to be a mixed long-term capacity which depends on demand. The demand forecast in our company is different from one year to another. accurately forecasting the demand means that our company has the ability to evaluate indefinite risks that may occur.Also there is a value in operational terms, in cognize our companys limits knowing what we can and cannot do. On the other hand, our company already has experts who control our capacity. Controlling capacity means planning at an advanced level for companies to be well-prepared in terms of responding to uncertain changes in terms of demand and coercive the inventory and warehouses so that inputs are ready to be transformed into outputs. This will improvement companies and manufacturers in terms of increasing revenues, and through establishing an organisation where high demand places bosom on the parties inside the company (Slack et al., 2012).Part (C) Conclusion and RecommendationsDependability is an important factor that can help the supply chain to dealwith high demand. According to (Slack et al., 2012), tensenessing on dependability at an primitively point m ay reduce distrust about any risks that the manufacturer may face. This is especially important when it comes to dealing with quantities our manufactures should focus more on delivering products on time. Dealers should be prepared for such an event and could be warned by the manufacture of high demand in order to be prepared to be flexible at an forward stage in the order. Covering a high demand of orders from customers is important. In order to satisfy them, our company should be more flexible to reduce the impact of any events that may occur.The company should address quality issues at an earlier stage. The company already conducts high quality checks on each process and stage. It is highly recommended to report any concerns that may appear during the product life cycle. Reporting these at an earlier stage will give our company extra time to find proper solutions.In the case of covering the inventory management, our company failed with the new CLA model. The company should consi der looking again at the whole warehouse system. It is recommended that the operations manager should focus on increasing the physical quantity stored in warehouses inside the company, in order to announce future demand as well as increasing the companys value to its customers. Also, since that our company is the owner of most of the warehouses, it is a competitive advantage to never be out of stock, even when the demand is increasing. Furthermore, the warehouses at Daimler Mercedes-Benz should become more efficient through using the SAP application. The company should consider giving more opportunities for the employees to gain more skills and experiences.Since our company is investing in capacity, it is also a competitive advantage for us to always be ahead of demand this will ensure that the company increases levels of customer satisfaction, whereby products meet customer demand. cosmos able to forecast the demand on a daily basis will help the company to decide whether they sh ould invest more in capacity or reduce the number of suppliers.Mercedes-Benz should focus more on suppliers entry requirements and how a long-term or short-term arrangement can be an advantage or impairment for the company. Managing suppliers in an effective way will reduce any extra cost as well as making sure that our suppliers realise the company requirements in terms of JIT. In addition, our company should enhance its relationships with all suppliers. This will ensure that the suppliers are happy when they are dealing with our company and are not likely to provide the company with defective products.Reference key outAutomotivesupplychain.org (2013) Mercedes by any other name. Online open fromhttp//www.automotivesupplychain.org/features/216/62/Mercedes-by-any-other-name/ Azok, D. (2014) Mercedes-Benz Alabama production of the C-Class will cut U.S. wait times for the model Online visible(prenominal) at Bayigen, M. (2012) How Mercedes-Benz turned research into reality Global CSCMPs Supply Chain Quarterly Online Supplychainquarterly.com available at Bestglobalbrands.com, (2014) Mercedes-Benz Best Global Brands Interbrand Online Available at Clarke, C. (2006) Automotive business Systems and Standardisation From pass over to the Case of Mercedes-Benz. 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