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Operations, Information and Knowledge Management at Rolls Royce
Management, Organization, Information and Knowledge
Table of contents
Topic Page No
Executive summary——————————————————————– 2
Role of operation management——————————————————-3
Objectives of Operation Management———————————————-5
OM leads to competitive advantage————————————————-5
Information and Knowledge Management—————————————-7
Research and Development———————————————————–8
Rolls Royce is being one of the best for over 100 year in the world of luxurious car. Rolls Royce has maintained to be the most profitable car company in the world from more than 100 years due to its brand recognition.
This given report will enable us to apprehend the execution of operation system, and by closely monitoring the management of information system in product development and getting ahead of the competitors. Further, this report will present the evidence of different features of the automobile company Rolls Royce and will explain as how the company Rolls Royce has used its strategic operation system and information management system to keep the company’s rank highest among the others in the industry world.
Rolls Royce has come up with the innovation and development for their new products, innovative supply chain, and the efficient usage of information management using Information system (IS) and Information and communication technology (ICT). In Addition this report will illustrate as the methods Rolls Royce used to transform data into useful information through the process generated by information management. This given data of information and operation management help in developing different strategy like pricing strategy, marketing strategy, and operational strategy.
Later in this report, we will be discussing, recommendation for Rolls Royce, which can be used to benefit the product to operate in the market in the long run. The Ideas will benefit them in gathering more value and create opportunities available in the business market
Rolls Royce luxury car manufacturing company, founded in 1904 by Henry Royce and Charles Rolls. Their car range mainly includes the sedan cars with a highest usage of technology. During the financial year 2017 underlying revenue 15,090 million pounds and the profit before tax is 1,071 million pounds. (Annual Report, 2019) By focusing on design, innovation, and usage of technology Rolls Royce has been able to position themselves globally, and is today most recognized brand in the world and even these segment cars are to be considered as a prestigious cars.
Rolls Royce current strategies are to improve operational performance with the focus on product reliability for their customers and on cost competitiveness and cash flow generation for long-term prosperity. The company has initiated a simplification of group into three different businesses and is embarking upon a fundamental restructuring. Currently Rolls Royce is facing issues into service fleet issues and in the civil aerospace department manufacturing of large engines. Rolls Royce operates in more than 50 countries, but have their customers over 150 countries, (Rolls-royce.com, 2019) In this report we are evaluating organizational operations and the role of information system in the field of supply chain, quality management and all other aspects that have made the Rolls Royce as the best of among all other companies over the world.
Role of operation Management in achieving competitive advantage:
Operation management role is very crucial and important, as they have to satisfy the production requirement in order to achieve efficiency and effectiveness. OM particularly deals with the management of resources, which involves process within the organization in order to achieve maximum value from customer and provide high quality transformed product in return to customer. (Barnes 2008)
The core point of every organization is its operation and management practice in the long run, on which the company spends the most. The main reason for high expense on operation department is because they are responsible for the process in production of a product. Not only this the operation management roles are widely extended to supply chain, and the services management in the company. The current situation describe the increase in demand, thus which leads to higher expectation by the customers in terms of high quality product, lower cost, and feasible deliveries across the world, with the increase in competition with their competitors in the market and globalization. The competition has eventually increased. Now the formulation of new strategy has to be implemented by the company to compete with their competitors like Audi, Mercedes Benz, BMW.
Evidence given of the Operation system in Rolls Royce has spotted more on the basic functions. This starts from planning, organizing, leading and controlling the resources that is essential for the production of a product. Rolls Royce has focused on the resource management as well to decrease the extra cost. The resources that Rolls Royce require include materials, top quality management and human resource which could work together for the development of the new strategies to bring changes.
The operation management system of Rolls Royce highlights more on high efficiency, low labour cost, low unit cost, and high cost on human resources system. The methodology to Rolls Royce in their operation strategy is to invest in development of art manufacturing and product efficient that will enable them to reduce environment and its impact on the organizational operation strategy. Rolls Royce focused in the production of automobiles and the most impressive factors of Rolls Royce are the customer and supplier. Operation management strategy deals with manufacturing and deliver high quality and highly durable luxury automobile, along with this the operation management system ensure to reduce the cost and risk associated with manufacturer.
Some of the key points of Operation system that gives them competitive advantage are:
- High customer satisfaction , by lowering environmental impact on products and services
- Developing new innovations and technologies for the coming changes in the product
- Making innovation and developing new technologies for the future of our products.
- Production of new innovative products
(Anupindi et al., 2005) (Operations and facilities, 2019)
The management of information assist any organization in some of factors of a business. It can guide in deciding the certainty of financial goals, decision making process, product controlling criteria, product manufacturing etc.
Organization- Rolls Royce PLC
Public limited Company, shares are traded on LSE, Governed by Board of Directors , Head office London, UK.
Profit before tax is 1071 million pounds, 55000 employees are employed worldwide.
Affluent buyers seeking luxury cars
Audi, Mercedes Benz, Bentley, etc.
Cars, Marine, Aero Space, nuclear and power,
Manufacturing and selling luxury cars to its potential buyers.
Operates in more than 50 countries, but have their business worldwide in different industries.
Source- (Annual Report, 2019)
OBJECTIVES OF OPERATION MANAGEMENT
1-Cost– Rolls Royce is a high-end brand car, which takes high amount in its manufacturing and much more to get launched into the market. Keeping everything running smoothly Rolls Royce across manufacturing to further facility keeps its cost high. Cutting edge technology which means most of the parts of Rolls Royce are handmade which make its price high on sky. These strategies pursue customers to get attracted towards new technology and they wills to pay higher amount in order to get this car. (Rolls Royce in Contemporary Business Environment, 2019)
2-Quality- Objective of Rolls Royce is to continue establishing themselves as a leading supplier in the fast growing industry. To maintain its ranking, Rolls Royce incur high amount to give the best quality to its valuable customers. They focus much on its quality, which is Tangible because it is a renowned brand of across the world. First technique Rolls Royce use for quality management is that, before launching car model into the market, cars has to undergo their product testing for quality checkup. Secondly, when passed by first stage Rolls Royce car comes for quality assurance, however this stage is also used when in manufacturing the cars. Extra effort is exercised on quality checkup because maximum time is spend on manufacturing the product. Total Quality Management (TQM) the most important stage of quality management checkup which is proceed by Rolls Royce. (Rolls Royce in Contemporary Business Environment, 2019)
3-Speed– Owing a Rolls Royce is a dream come true for many. Although owing Rolls Royce is an effort full pleasure. The time gap between the first deposit of upfront and getting the ownership has become easier by high standard authorized network, or dealer offers. However, Rolls Royce manufactures only 4000 units in a year, where their customer can avail the key with the waiting period of minimum 8 months. (Rolls-roycemotorcars.com, 2019)
4-Flexability- (competitive Advantage) Rolls Royce has invested a lot in transformation from an automobile company that manufactures nuclear energy oriented automobiles, and Aerospace products. this civil Aerospace, nuclear energy products and defensive products are extended by rolls Royce that has given a chance to be multibillion manufacture. The innovation of Rolls Royce is their (power system) this provides a huge variety of power systems and high speed engines for various machinery like ships, rail, defense industry and gas refineries all over the world (Innovation leader 2019)
OPERATION MANAGEMENT LEADS TO COMPETETIVE ADVANTAGE
Competitive Advantage is what makes the organization and its activity different, unique, and superior from their competitors who are available in that same industry. The strategies are for any organization, company in a competitive environment (Porter, 2018).Rolls Royce has unique and differentiation strategy that they follow. They have also created opportunities from the physical sustainable features of the product, and from the nature of the customer and markets. As we have noticed “Quality’’ and “Innovation” is the key factor that gives the success to the company Rolls Royce and this can be known as differentiation they are making in the automobile industry. Rolls Royce captures the technological dimension and “customer responsiveness” to make itself unique in the market. (Differentiation Strategies, 2019)
Let’s have a look on the competitive advantage that is evaluated from the operation management strategies :
1-Rolls Royce a super high end brand that manufactures expensive products that is different which makes it symbol of Royal, Lavish and famous pride.
2- Rolls Royce has been manufactured totally handmade and hand finished
3- Rolls Royce operation management offers personalized car supply, as per the customer wish. During the manufacturing Rolls Royce gives a luxurious aura that come from the finest wood, leather assembled with the pride of English Craftsmanship.
4-Psychological expression “higher the price, better the car”, this gave Rolls Royce the competitive advantage.
5- Operation management has also the reasonability to make sure that their customers are being treated effectively after the sales. (Das, 2019)
Rolls Royce consists of 950 purchasing global employees and 18000 active suppliers across. Purchasing is at the center of external supply chain management in complex international environment and their role is for the selection of suppliers while meeting our customers. Rolls Royce has purchasing employees in over 10 countries across Europe, Asia and North America. (Rolls-royce.com, 2019)
Supply chain deals between the parties who provide supply inputs who are the resources provider and in return achieve outputs during the operation of the production in the company. Along with the resources, it also involves distribution to customers. (Barnes 2008)
The supply network of the Rolls Royce consists of the complete manufacturing process and distribution of the products in the market as well. The procedure of supply chain begins with the allocation of resources that are required in manufacturing the final product of Rolls Royce. Logistic parts that qualifies the delivery conditions of its final products of potential buyer of the RR being distributed. Maximum profits that maximize the sale demands depend on the generating and delivering the goods through following the supply chain procedure. Supply chain deals with the upstream of the supply network where RR gets the direct order of their potential buyers through electronic trade. Whereas to talk about downstream supply network in which authorized agent is prescribed to place the order of the car and supply of information. The factor that gives Rolls Royce an edge over its competitors is the supply of information through information management. RR keeps themselves aware about their customers, potential buyers and their feedback, which helps them to evaluate, is value chain performance Rolls Royce keeps the information of its customers and potential buyers, which helps it enhance its value chain performance. Some of the exclusive features of Rolls Royce are:
- Supplier engagement and development
- Strategic sourcing
- Quality Logistic management
- Total cost management
- Quality management
- Tracking order
- Providing post order services to its customers
(Supply Chain 2019)
INFORMATION AND KNOWDELGE MANAGEMENT
The success of the operation management strategy of RR it does with conjunction with mainly on their information and knowledge management that is gathered from various processes. Information management can be briefly described as the process where organization’s data is collected, gathered, stored and can be used for future development. (Detlor, 2010).
Detlor (2010), Additionally explains the process as the managing the information flow within the organization and through that its believed that more competitive and strategic approaches can be developed, thus that makes them stand out from competitors. RR uses various Management Information Systems (MIS) (Barnes, 2008) and it is of highest importance to understand what information is considered important for revenue data.
In today’s competitive world, companies try to create advantage, flexibility and are able to adopt the cloud enterprise software. This outdated and traditional ES System was heavy and expensive to implement. For further development and to improve the situation Rolls Royce implemented ES Software SAP r3. This SAP in improving profitability and making more Return on Investment and it minimize the total cost of supply value chain to achieve the goal of the company, company must seek to reduce the cost on internal and external resources. By providing the resources in standardized way through cloud service. (Enterprise Resource Planning, 2019)
Research and Development: (R&D)
The success story of Rolls Royce has one more factor, which is their (R&D) as part of their business strategy. From last 20 years, Rolls Royce is coordinating with some leading institutions and industries of the world. While there alliances were forming, RR was helped by their knowledge that they gathered and ideas and innovations for their product to develop a unique and core finalized product. For instance, RR has incurred 795 million pounds that helped them to gather information and developed new ideas to create better product. Managing the information system, RR has collaborated with 31 well renowned research universities with 7 research centers. This strategy gives advantage and stand RR out of their competitors in the market .Through R&D, Rolls Royce has transformed into a automobile and machinery manufacturer among all others competitors in the world and have employed more than 16000 employees from universities around the world that helped them in gaining innovation (Statista 2016)
1- Rolls Royce should focus on making a delivery faster to the potential buyer. Normally RR takes 8 months’ time in manufacturing the car and providing to their customer.
2- The Rolls Royce should develop approach to sustainability; they should now focus making more environment friendly cars. The government initiatives for reducing CO2 emission might hinder the sales of Rolls Royce, so it should start emphasing on its research and development and should come up with the ideas of Eco friendly cars especially electric cars like Tesla.
3- Rolls Royce should focus on making a sports type car and should attract new customers towards them, which are under the age of 35 in this way they can compete with competitors like Lamborghini by promoting their sports yet luxurious cars for more enthusiastic consumers.
The final end of this report of Rolls Royce shows that they are dominating the car industry from over 100 years. Rolls Royce has developed various operation systems in collaboration with information management. It has developed such operation system in collaboration with information management that has helped them in maintaining their pride on sky. From the case of Rolls Royce, it was evaluated that RR did not only paid attention to their car manufacturing but also on new industry such as ships, aeronautics and high quality engines. Their R&D department have helped immensely to RR and engineers, Rolls Royce successfully launched new product full of which indeed have given them new status of being most versatile automobile company in the whole world. Rolls Royce has tough competition in the car sector from competitors like Mercedes, BMW, Audi and Lamborghini, but none of them are as versatile automobile producers as Rolls Royce. With the passing time, RR has changed their products into the most durable and reliable automobile as well as engine manufacturer that provide the world with luxury cars, jets, planes, rails, ships, yachts etc. These innovative ideas were the result of proper management of information flow within an organization through SAP and ICT has enabled Rolls Royce to maintain its status as one of the best automobile manufacturer around the world.
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