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- Analyze the strategic role of operations management in terms of organizational and operational objectives.
To create the highest level of efficiency within an organization operational management is required. According to Plenert (2002), Operations Management is the management of actions that allows a company to convert their all inputs into outputs or we can say into finished goods and services. It helps to provide the organization’s main products and services to their end users. The size of any company is also affecting the actual tasks of an operational manager. Â (Investopedia, n.d.) .I am taking Tesla Motors as an example Tesla is a motor company based in America and their mission statement is very clear as they want to bring electronic cars to market in order to increase speed of the arrival of sustainable transport. (Musk, 2013)
If we talk about Strategic objectives they are long-term goals for any organization and these goals help to change a mission statement into exact plans and projects instead of broad vision. On the other hand daily, weekly or monthly goals known as Operational objectives and these are helpful to applying strategic objectives. The difference between these two is that strategic is long term and operational is short-term goals. (Petryni, n.d.)
If we talk about Operations management planning than it is the development of plans in order to proficiently use chances that helps to meet tasks. If a company wants proper implementation of these plans than they needs to check their achievements on regular basis use control to minimize any alteration from the plan. (Isaac, n.d.) But in case of Tesla motors there is a gap between their planning and implementation. As they are planning to make 500,000 cars every years but able to make only around 50,000. They are not using their current resources like they have a capacity to make 500,000 cars at CA plant. Instead of using that space they had open a new plant at Nevada.
Honda Motors they are also in the same field but they are able to understand their own capacity as well as environment. Honda motors are getting guidelines and directions from Strategic objectives plan which are made by their management like where to start and where the organization is going. But Tesla motor is not able to understand their resources and capabilities. Honda motor is also using rewards which is helpful to motivate their workers but in case of Tesla their two main mangers are leaving the company but CEO is not giving any importance to it. Honda motors have a very good product as they have good and strong management to control it. They are also conducting customer’s surveys every years which helps them to maintain their quality and reduce mistakes. But in Tesla motors their management is not as good as Honda as their thousand units of SUV has been recalled due to quality issues. (Management within Organization, 2015)
At the end I can say that operational management is the bone for any organization. Good management is required to plan a strategic and operational goals and a powerful and flexible operational management is required to implement all those plans. If the management is not working properly the that organization will face lots of problems and they will also waste money and other resources as we saw in case of Tesla motors it does not matter how famous you are and how much market share you have if execution of planning is not proper than you will definitely suffer.
Investopedia. (n.d.). Retrieved from Operational Management: http://www.investopedia.com/terms/o/operations-management.asp
Isaac, L. (n.d.). LeoIsaac . Retrieved from Implementing the Operational Plan: http://www.leoisaac.com/operations/top052.htm
Management within Organization. (2015, March 23). Auckland, New Zealand.
Musk, E. (2013, 11 18). Tesla. Retrieved from Mission of Tesla: https://www.tesla.com/blog/mission-tesla
Petryni, M. (n.d.). Small Business . Retrieved from Difference Between Strategic & Operational Objectives: http://smallbusiness.chron.com/difference-between-strategic-operational-objectives-24572.html
Q2. Analyze the production and service systems and its application to Tesla as an organization.
The production system is known as the methods or procedure which have all functions that is needed to accrue the inputs, process or reprocess the inputs, and brings the marketable output. Production system is very important because it use all inputs like materials, moneys, infrastructure, and labor to generate the desired output in form of goods and services. (Akrani, 2012). A formation of technology and organizational networks which is required to provide services is known as service system or customer service system. “Service system” is a term which is used very often in the service management. Service System is important because a company needs a perfectly designed service technology systems that allow even comparatively inexperienced people to perform very sophisticated tasks quickly. (Service System, 2017). In this easy I will explain who tesla case study is linked to these two systems.
Production system has three main components, Inputs, Conversion Process and Output. Inputs means all raw-materials, machines, man power, timing, commands, building and other paper works. Conversion process works as a convertor as it is clear from its name it convert input into output. And Output means finished products and services. And on the other hand Service system” is a commonly used term in the service management, service operations, services marketing, and service design literature. Production operations produce tangible goods, means a physical product that can be held and seen. We can divide Production into two parts: process and discrete manufacturing. If a company is producing a goods that normally use a formula and ingredients, like soda pop or pharmaceutical drugs than it comes under process production and discrete production use parts to produce goods like electronics, appliances and automobiles. On the other hand, service operations gives certain intangible services that may not be easily recognizable like a Doctor, Teacher etc are providing there services. It can be classified into many businesses, such as banking, hospitality, advertising and consultancy. (Schieltz, n.d.)
Here I am going to talk about tesla’s production system. In 2011 Tesla established Fremont plant. They are producing different type of models like Tesla Roadster, Model S, Model X and Model 3. They produced Model S full-sized battery electric sedan as there first series production vehicle. Tesla expected to make about 5,000 Model S sedans in 2012, with production increasing up to 20,000 in 2013 if required. In June 22, 2012 on special event at Tesla factory the first retail delivery of the Model S took place. Production of the Model X which is very popular model joined the Model S during 2015. To produce these models at mass production Tesla has raised $1.46 billion in stock in May 2016. They are working with robots as they are using around 160 robots for their production process. Their plant has a high level of integration as they are producing most parts inside that same plant.(wekipedia, n.d.). Tesla’s service system is also very good. They have a very good system as they are selling their cars online, servicing their own cars and regular over-the-air updates. They are using a system called Warp system and this system is became central to the company’s operations and distinctive business model. Vijayan reportedly made and implemented the system in just 4 months with the help of 25 software engineers. This system allows Tesla to create a short feedback loop to engineers and quickly push updates back to customers. This system is able to manage everything from the ordering processing to the manufacturing workflow and also supply chain management. Tesla is doing deliveries vary between months due to local issues like ship availability, registration and so on.Â (Lambert, 2016). Like other companies Tesla has not a big budget for advertisement they are not doing any multinational marketing but they are using word of mouth marketing and shopping malls for selling its cars. In last year they conduct a customer survey and they got almost 100% satisfaction from customers. Tesla motors is emotionally attached to their customers as they are trying to save planet’s energy by producing electric vehicles. They are communicating with consumers on social media if they got any negative sign from in their services they tries to solve it quickly. They are hiding nothing from customers and customers feel they are personally attached to Tesla. (Rutter, 2014)
If we studied give senior about Tesla motors we found some week points in their production and services. They are very good in their service and production but still they have some limitations. In terms of production they are not able to produce vehicles according to orders. They have a order around 375,000 for Model 3 but they are able to make only around 50 000. So there is a gap between these two systems. They also have some quality problems with SUV which means they are not getting proper information from customers feed backs. From Tesla’s situation it is clear that they are very popular brand name. They hold a big portion of market share around 25%. They are trying to save energy as they are producing electric cars. But at this time their production and service system is not working together so they have some week points as their CEO is not giving much attention to these problems.
In the nutshell I can say that both Production and Service system are working as a back bone for any company. These two systems are connected to each other and for a proper working in an organization these two must work together. A company needs a proper input like raw material and good planning and a quality output in terms of productions. And you needs a proper service system is required to deal with your customers and to sell your services. If there is any gap in these two systems than a company will must face some problems like Tesla.
Akrani, G. (2012, 21 17). Kalyan City Life. Retrieved from Production System Meaning and Examples: http://kalyan-city.blogspot.co.nz/2012/02/what-is-production-system-definition.html
Lambert, F. (2016, 2 13). electrek. Retrieved from service system of Tesla: https://electrek.co/2016/02/15/tesla-3dx-model-3/
Rutter, T. (2014, September 6). Tesla motors Customer services . Retrieved from http://www.usatoday.com/story/money/cars/2014/09/06/why-tesla-has-the-most-loyal-customers/15139377/
Schieltz, M. (n.d.). smallbusiness . Retrieved from Service Operations vs. Production Operations: http://smallbusiness.chron.com/service-operations-vs-manufacturing-operations-25843.html
Service System. (2017, 2 28). Auckland, New Zealand.
wekipedia. (n.d.). Retrieved from Tesla Factory: https://en.wikipedia.org/wiki/Tesla_Factory#Production
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