An analysis of operations management at Micro Cars Ltd Sri Lanka PDF

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Micro Cars Ltd

Contents Executive Summary.....................................................................................................................................3 1.

Introduction to the company...............................................................................................................3

2.

Key operations functions of the company...........................................................................................4 2.1 Planning.............................................................................................................................................4 2.3 Scheduling.........................................................................................................................................5 2.3 Organizing..........................................................................................................................................5 2.4 Purchasing.........................................................................................................................................5 2.5 Controlling.........................................................................................................................................5 2.6 Quality controlling.............................................................................................................................6 2.7 Inventory controlling..........................................................................................................................6

3.

Roles and responsibilities of the managers and leaders in the key operational functions...................6

4.

Key operational approaches to operations management and their value...........................................7 4.1 Lean Manufacturing...........................................................................................................................7 4.2 Six Sigma............................................................................................................................................7 4.3 Business Process Redesign.................................................................................................................8

5.

How the decision making is influenced by external environment.......................................................8 5.1 Political..............................................................................................................................................8 5.2 Economic...........................................................................................................................................8 5.3 Social.................................................................................................................................................9 5.4 Technological.....................................................................................................................................9 5.5 Legal...................................................................................................................................................9 5.6 Environmental...................................................................................................................................9

6. The ways operational efficiencies can be improved using appropriate management and leadership approaches................................................................................................................................................10 6.1 Just-In-Time (JIT)..............................................................................................................................10 6.2 Total Quality Management (TQM)...................................................................................................10 6.3 Continuous Improvement (CI)..........................................................................................................11 7.

Conclusion.........................................................................................................................................11

References.................................................................................................................................................12

Executive Summary This report has been prepared with an intention of analyzing the operations management of Micro Cars Ltd, Sri Lanka. Operations management is a process of planning, organizing and supervision of manufacturing goods or delivering services. Accordingly, this report is an attempt to investigate operations management process at Micro Cars Ltd with respect to key operational functions, roles and responsibilities of managers, and key operational approaches. The report also discusses the external environmental factors and the ways operational efficiencies can be improved.

1. Introduction to the company With a vision to "to evolve in to one of the best and preferred business brands and service providers in Sri Lanka, through continuous improvement", Dr. Lawrence Perera, a renowned vehicle engineer, founded Micro Cars Limited in 1999. The goal was to design and manufacture Sri Lanka's first entirely indigenous vehicle. The business intended to create a low-cost production and design process that could deliver high quality vehicles with the resources and labor force within Sri Lanka. Micro Cars Limited is still the sole national automobile producer with a patent for small city automobiles. From little cars and vans to luxury SUVs and prime movers, we construct a wide range of vehicles. All Micro cars are built to international standards with components supplied from industry leaders. They're accompanied by extensive warranties and a wide network of suppliers and distributors throughout the country. The company’s product portfolio includes the products such as Micro Panda, Panda Cross, Micro Impreza, Micro Chairman W, Micro Actyon and Micro Duo Deck bus. (Micro Cars Ltd, 2021). At present, Micro has grown into a group of companies, with subsidiaries Transmec Engineering (which operates Sri Lanka's largest automobile after-sales workshop), Transmec International (which operates low-floor buses, prime movers, and rent-a-car services, among other things), Micro Construction (which manages construction projects), and Euro Sports Auto Lanka (Franchisee of Lamborghini and many other luxury automobile brands) (Linkedin, 2021).

2. Key operations functions of the company Operations management is a process of transforming raw materials into final products or services (Wolniak, 2020). Simply, it is responsible for producing goods and delivering services.

In the context of Micro, the key functions of operations management can be identified as planning, scheduling, organizing, purchasing, controlling, and controlling of quality and inventory. They can be further explained as follows.

2.1 Planning This is process of planning Micro’s site and arranging production. The location of a corporation has a significant impact on its performance. This is applicable for both new businesses opening their first facility or showroom and existing businesses moving into new markets. Market proximity, raw materials, supply of labor, and logistics should all be evaluated.

2.3 Scheduling Micro Company's activities include determining the start and end periods for each stage of the production process. To guarantee that production goes smoothly, it requires planning and monitoring personnel, machinery, and materials consumption. The use of a schedule ensures that work is done on time.

2.3 Organizing The set of actions that defines a work and accountability structure is referred to as this. Operational management creates an organizational framework and flow of information inside the operations segment. They establish the tasks required to achieve the goals and assign duties and responsibilities for carrying them out.

2.4 Purchasing Raw materials are required for a company's daily operations in order to manufacture items or deliver services. Must also be equipped with the essential technology, office equipment, as well as other items. Obtaining raw materials, machinery, and materials is an important element of the production process, and it involves determining the best value for the company.

2.5 Controlling Controlling refers to set of operations that ensure actual performance matches anticipated performance. The operations manager must exert control by assessing actual outputs and comparing them to planned operations management to guarantee that the plans for the operations subsystems are carried out. The main functions here are cost control, quality control, and scheduling control.

2.6 Quality controlling The process of ensuring that the commodities produced are of excellent quality is referred to as "quality control." It comprises examining products for quality or quality, durability or practicability, artistry or layout, security, compliance with government or industry standards, and a number of other factors. Therefore, the quality control function of Micro Company ensures that all vehicles produced by them comply with the anticipated quality.

2.7 Inventory controlling Inventory control is the process of having the necessary number of parts and products on hand in order to minimize shortages, overstocking, and other costly issues of the company. Inventory control is to reduce the quantity of slow-selling products purchased by a corporation while increasing the amount of high-selling products. This saves time and money for businesses and avoids allocating valuable storage space to those products, lowering carrying costs and making room for faster-selling items.

3. Roles and responsibilities of the managers and leaders in the key operational functions The role of managers and leaders in the key operational functions of Micro can be identified as the planning, managing, and overseeing the organization's procedures in order to generate the best feasible operational profit by balancing revenues and costs. An operations manager is responsible for ensuring that the organization's inputs, such as resources, labor, and technology, are efficiently converted into outputs. Also, responsibilities of an operations manager can be recognized as follows. 

Carrying out all operations in a cost effective way.

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Improving systems, processes and operational best practices.

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Establish strategic and operational objectives.

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Undertake procumbent, inventory planning and warehousing.

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Conducting quality controlling and monitoring KPIs.

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Asses and implement budgetary requirements.

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Absorb, educate and supervise operational staff.

4. Key operational approaches to operations management and their value As an automobile company it is vital for Micro Company to use different operational approaches in the operations management function. This section of the report has been dedicated to identify and analyze these operational approaches and their importance to the company.

4.1 Lean Manufacturing A system of strategies and practices for operating a manufacturing or service operation is known as lean manufacturing or lean production. The techniques and practices vary depending on the application, but the underlying concept is the same: eliminate all non-value-adding activities and waste from the company. The central concept of lean manufacturing is to remove waste in order to optimize a process over time (Wilson, 2010). As explained by Santos, Vieira, and Balbinotti (2015), the implementation of Lean Manufacturing inside an automobile company would enhance manufacturing processes, integrate its key suppliers, maximize utilization of input materials, and ensure successful functioning from the start of production to the completion of their finished products.

4.2 Six Sigma Six sigma is an operational approach that focuses on key outputs to detect and remove sources of errors, defects, and malfunctions in business processes. It is also a measurement of quality that uses statistical approaches to eliminate flaws as much as possible. A fault is something that could cause a client to be dissatisfied. The six sigma methodology's fundamental goal is to develop a measuring system strategy with a focus on quality assurance and deviation minimization (Antony, 2004). According to Venkatesh, Gowrishankar, and Sumangala, (2014), six sigma offers a feasible means of fostering a continuous improvement culture within a business, making the manager's work easier. Usually, productivity increases when the quality of the production is higher. As a result, the company meets its financial goals, resulting in overall success. Six Sigma thrives on removing roadblocks and innate resistance to change.

4.3 Business Process Redesign Mansar and Reijers (2007), explains that Business Process Redesign (BPR) is a business management technique that focuses on the study and design of workflows and business processes inside an organization which was first founded in 1990. BPR sought to assist businesses in fundamentally rethinking how they do business in order to enhance productivity, reduce operational costs, and compete on a global scale. This is involved in drastic restructuring of business operations to generate major improvements in important factors such as quality, output, cost, service, and speed. Business process redesign (BPR) strives to drastically reduce company costs and operational inefficiencies.

5. How the decision making is influenced by external environment The ways in which the decision making process at Micro Company is influenced by the external environmental factors can be explained by PESTLE analysis. Accordingly, the impact will be elaborated under Political, Economic, Social, Technological, Legal and Environmental factors.

5.1 Political Political influences are largely outside the control of enterprises. Thus these factors play a significant role and have a direct impact on the Micro’s profitability. Environmentally friendly vehicles have becoming increasingly popular around the world. They're also getting more government funding because of their low environmental impact. As a result, government rules and regulations have a significant impact on automobile industry. Unstable governments, as well as political intention to the market can generate positive or negative impact on the company.

5.2 Economic One of the major economic concerns for Micro Company is the economic condition of the country. During an economic boom the sales of vehicles will be much higher than in an economic slowdown. Also the demand for vehicles are comparatively high in developed countries than in the under developed or developing countries. This is a consequence of elevated purchasing power of developed nations compared to that of under-developed or developing nations. Apart from these factors, the decisions of managers are heavily influenced by increasing price levels, interest rates and fluctuations of exchange rates.

5.3 Social In consideration of Micro Company, the impact of socio cultural factors cannot be neglected. The changes in socio cultural trends in the country require managers of the company to be vigilant in absorbing the new market trends. Specially, at present there is a huge trend for environmentally friendly electronic cars. Also there is an increase of middle income earners who demands more affordable vehicles like Micro’s. Furthermore, the preferences of customers as well as the improvement of living conditions of people also affect the decision making process of Micro’s leaders.

5.4 Technological Usually automobile industry is largely influenced by the changes in technological environment. From internet to driverless to smart cars the automobile industry confronts various challenges. Given this background a local company like Micro will not be able to keep up with the new technological advancements.

5.5 Legal Automobile manufacturers like Micro are continuously under the pressure of various laws. Such as environmental laws, consumer protection laws and intellectual property laws. These rules and regulations may generate both opportunities and threats to the Micro Company. For instance, Micro always has the option of producing higher-quality products that meet or exceed environmental regulations. Furthermore, the business can take use of the chance to provide safer and more satisfying products in order to comply with or surpass consumer laws.

5.6 Environmental The automobile sector has one of the biggest carbon footprints of any industry. Environmental destruction continues to be a source of concern for manufacturers including Micro, as most vehicles continue to run on fossil fuels. The worldwide automotive industry is shifting towards electric and hybrid vehicles, which are more environmentally friendly and appealing to eco-cons, as governments impose harsher restrictions and tax-norms.

6. The ways operational efficiencies can be improved using appropriate management and leadership approaches Any company's success depends on its operational efficiency. Measuring and improving processes, workers, technology, and financials are all part of the process of improving efficiency. Accordingly, an organization can utilize different approaches in improving operational efficiency in their organization. Some of them are Just-In-Time (JIT), Total Quality Management (TQM) and Continuous Improvement Process. This section of the report further unveils these three techniques.

6.1 Just-In-Time (JIT) JIT is a method of inventory control, and the Japanese auto industry is credited with inventing the JIT inventory and management concept. It's a method of reducing inventory by only having goods arrive at production and distribution sites when they're needed. JIT production is a philosophy for lowering work-in-progress (WIP) inventory, assisting operational excellence, and reducing variation in processes. In terms of manufacturing, it can be viewed as a new basis for planning, organizing, and performing (Singh and Ahuja, 2012). Yasin, Small, and Wafa, (2003) explains that firms that implementation JIT practices have less issues in achieving high level of efficiency. Also Danese, Romano, and Bortolotti (2012), suggest operational efficiency and delivery are positively influenced by the production strategies such as JIT.

6.2 Total Quality Management (TQM) According to Talib (2003), Total quality management (TQM) is a strategic approach that allows every employee of the organization to engage, participate and offers to provide proposals for improvement. It is aimed to encourage continuous and persistent improvement in quality and performance, and promotes an attitude of quality culture. TQM focuses on the total performance of an organization and emphasizes the role of procedures. Kumar et al. (2009) found that there is a positive impact of TQM on various aspects of organizational performance such as enhancing employee engagement, improving product and service quality, enhancing customer satisfaction and improved profitability. This notion has also proved by Brah and Lim (2006), by stating that TQM plays a significant role in improving operational efficiency.

6.3 Continuous Improvement (CI) Bhuiyan and Baghel (2005) have defined CI as a process of continuous improvement that aims to eliminate waste in all of an organization's systems and processes. It entails everyone working together to improve things without having to invest a substantial investments. CI can develop as a consequence of evolutionary improvement, in which case gains are incremental, or as a result of abrupt changes brought about by a novel idea or new technology. Over the years number of CI methodologies came into practice with the improvements of large scale businesses. Some of ...