Effective Operations Management In Automotive Industry Commerce Essay

October 6, 2017 Commerce

“ PSA Peugeot Citroen is a France based car maker. It manufactures autos and light commercial vehicles under the Peugeot and Citroen trade names. In add-on to its car division, the company besides comprises Banque PSA Finance, which supports the sale of Peugeot and Citroen vehicles by financing new vehicle, replacing parts for traders and offering funding and related services to vehicles purchasers. Faurecia is an automotive equipment maker under PSA Peugeot Citroen which focuses on four components- seats, vehicle inside, front terminal and exhaust system. Gefco is another division which offers logistics services covering the full supply concatenation, including overland, sea and air conveyance, industrial logistics, container direction, vehicle readying and distribution, and clients and value added revenue enhancement ( VAT ) representation. Peugeot Scooters division designs and manufactures scooters and bikes. PSA Peugeot Citroen acquired EMCON engineerings in November 2009. ”

Reuters, profile: Puegeot SA ( PEUP.PA ) ( Online )

hypertext transfer protocol: //www.reuters.com/finance/stocks/companyProfile? symbol=PEUP.PA ( Accessed: 5 June 2010 )

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“ PSA Peugeot Citroen is figure two in footings of gross revenues in Europe. But it has faced a series of troubles in recent times. It is remembering 100,000 autos across Europe to alter gas pedal pedals on two theoretical account designed and produced in a joint venture with Toyota. The callback involves Citroen C1 and Peugeot 107 theoretical accounts produced in the Czech town of Kolin in the 50-50 venture with Toyota and the autos built between mid- 2005 and mid-2009. ”

Coast Reporter, Voice of the sunlight seashore. Toyota ally PSA Peugeot Citroen of France recalls 100,000 autos in Europe to alter gas pedals. ( Online )

hypertext transfer protocol: //www.coastreporter.net/article/GB/20100131/CP07/301319980/-1/SECHELT/toyota-ally-psa-peugeot-citroen-of-france-recalls-100000-cars-inHYPERLINK “ hypertext transfer protocol: //www.coastreporter.net/article/GB/20100131/CP07/301319980/-1/SECHELT/toyota-ally-psa-peugeot-citroen-of-france-recalls-100000-cars-in & A ; template=cpArt ” & amp ; HYPERLINK “ hypertext transfer protocol: //www.coastreporter.net/article/GB/20100131/CP07/301319980/-1/SECHELT/toyota-ally-psa-peugeot-citroen-of-france-recalls-100000-cars-in & A ; template=cpArt ” template=cpArt ( Accessed: 5 June 2010 ) .

19.1.1 The function and importance of effectual operations direction in automotive industry

Today, the car industry is a major constituent of economic growing in all industrialised states. Operation direction is seen as a critical portion in any organisation and it is a widespread activity encompassing all sectors of the economic system. “ Operation direction trades with determination doing related to productive procedures to guarantee that the ensuing goods and services are produced harmonizing to specifications, in the sums and by the agenda required, and at minimal cost. Inputs of stuffs, labors, and resources are used to obtain goods and services utilizing one or more conversion/ transmutation procedures, thereby adding value. ” Shim & A ; Siegel ( 1999:2 ) .

Shim, Jae K & A ; Siegel, Joel G. 1990. Operation direction. ( Online ) Available at:

hypertext transfer protocol: //books.google.co.uk/books? id=AbFUpMcYPZUCHYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” printsec=frontcoverHYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” dq=operation+managementHYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” hl=enHYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” ei=50sXTNfZOaKmsQaR2ZHiCQHYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” sa=XHYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” oi=book_resultHYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” ct=book-thumbnailHYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” resnum=1HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” ved=0CDAQ6wEwAA # v=onepageHYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” q=operation % 20managementHYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” & amp ; HYPERLINK “ # v=onepage & A ; q=operation % 20management & A ; f=false ” f=false ( Accessed: 15 June 2010 ) .

There are different factors that affect organisational success, they are: Summers, Donna C.S ( 2009:8 )

Strategic factors

Market, Product, Technology, Customers, Suppliers, Vision, Value Creation Strategy

Organizational factors

Strategy Deployment, Effective Leadership, Policies, Procedure, Processes, Continuous Improvement Culture, Problem-solving, Commitment, Culture, Measurement of Performance ; Trust, Honesty and Ethical Behaviour

Peoples factors

Employee Involvement, Education, Training, Internal Supplier-customer Relations, Motivation, Teamwork, Communication, Safety

Environmental factors

Social, Economic, Competitive, Technology

Effective operations direction is must in every organisation and the function and importance of effectual operations direction in automotive industry are summarized below: Summers, Donna C S ( 2009:16 )

Improve in profitableness

Addition in client keeping

Reduce in client ailments and guarantee claims

Reduce in cost through less waste, rework, and so on

Greater market portion

Addition in employee engagement and satisfaction, lower turnover

Increase in ability to pull new clients

Improve in fight

Improve in client satisfaction

Improve in management-employee dealingss

Improve in focal point on cardinal ends

Improve in communicating

Improve in teamwork

Improve in employee morale

Improve in company image

Improve in gross

Improve in service to internal and external clients

Improve in effectivity

Greater adaptability

Improve in planning

Improve in work environment

Improve in determination devising

19.1.2 Strategic Aims

“ Strategic aims are used to operationalize the mission statement. They help to supply counsel on how the administration can carry through or travel towards the high ends of their mission and vision. As a consequence of which they tend to be more specific and cover a more chiseled clip frame. Puting aims needs a yardstick to mensurate the fulfillment of the aims. Most of these aims are directed towards bring forthing greater net incomes and return for the proprietors of the concern, other aims are directed at clients or even at society. Therefore, those aims need to be:

Measurable: There must be at least one index that measures advancement against carry throughing the aim.

Specific: The aim should supply a clear message as to what needs to be accomplished.

Appropriate: It must be consistent with the mission and vision of the administration.

Realistic: The mark must be accomplishable with respect to the administration ‘s capablenesss and chances in the environment and it must be disputing.

Seasonably: There must be a clip frame for carry throughing the aim. ”

Strategic aims. ( Online ) Available at:

hypertext transfer protocol: //www.sbaer.uca.edu/publications/strategic_management/pdf/08.pdf ( Accessed: 15 June 2010 )

PSA Peugeot Citroen is seting sustainable development at the bosom of its scheme, by set abouting to construct even safer, environmentally friendly vehicles. There are 10 sustainable development aims steering its squads ‘ action in each country of duty:

CO2 emanations objective

It aims to go on to be the taking manufacturer of low-emission vehicles.

Eco- design aim

It aims to aggressively increase the proportion of green stuffs in Peugeot and Citroen vehicles.

Environmental direction aim

It aims to cut down the energy consumed per vehicle produced in all PSA Peugeot Citroen fabrication installations.

Social duty aim

It aims to widen PSA Peugeot Citroen socially responsible attack worldwide.

Supplier duty aim

It aims to circulate the PSA Peugeot Citroen societal and environmental duty demands guidelines.

Socially responsible puting aim

It make certain PSA Peugeot Citroen continue to be listed in the chief extra-financial indices.

Stakeholder duologue aim

It aims to come in into constructive duologue with civil society representatives during theme-based Sessionss.

Road safety aim

It aims to loosely deploy informations communicating services ( such as the exigency call system ) to better rider safety.

Urban mobility aim

It aims to finance advanced mobility solutions.

Customer regard aim

It aims to implement the PSA Peugeot Citroen Responsible Communications Charter.

PSA Peugeot Citroen. 2010. ( Online ) Available at:

hypertext transfer protocol: //www.sustainability.psa-peugeot-citroen.com/vision/commitment/action-plan.htm ( Accessed: 15 June 2010 )

19.1.3 Operations aims and Organisational Aims

PSA Peugeot Citroen could run into their organisational aims if they manage to acquire their operations aims right sing the five following competitory aims:

Quality: In the context of operations, quality means what enables you to make things right. It means error free procedures and mistake free merchandises and services. Quality has several significances. The two most common are:

Quality as the specification of merchandise or service

Quality as the conformity with which the merchandise or service is produced.

So, we can specify quality as consistent conformity to client ‘s outlooks.

Speed: In the context of operations, velocity agencies which enables you to make things rapidly. It means speedy bringing and fast throughput. Speed has different readings. Externally, it means the elapsed clip between a client inquiring for merchandises or services and acquiring them that excessively in satisfactory conditions. In other words, it enhances the value of merchandise or service to clients. Internally, velocity reduces the demand to pull off transformed resources as they pass through the operation, thereby salvaging cost.

Dependability: In the context of operations, dependableness agencies which enables you to make things on clip, that is, bringing or doing available merchandises and services when they were promised to the client. It means reliable bringing and dependable operation. Dependability prevents late bringing and lateness doing break and otiose clip and attempt.

Flexibility: In the context of operations, flexibleness agencies which enables you to alter what you do. It means ability to alter and offer frequent new merchandises with maximal picks. Flexibility has several distinguishable significances but they are ever associated with operation ‘s ability to alter. It is the grade to which an operation ‘s procedure can alter what it does, how it is making it, or when it is making it:

Product/ service flexibleness: ability to alter the merchandises and services it brings to the market.

Mix flexibleness: ability to alter the mix of merchandises and services it produces at any one clip.

Volume flexibleness: ability to alter the volume of merchandises and services it produces.

Delivery flexibleness: ability to alter the bringing clip of its merchandises and services.

Cost: In the context of operations, cost is which enables you to make things cheaply. It means minimal cost, maximal value and minimal monetary value, highest value. The cost of bring forthing merchandises and services is influenced by many factors. The most of import is 4 V ‘s: volume, assortment, fluctuation and visibleness.

LSBM, drop.io. 2010 ( Online ) . Available at:

hypertext transfer protocol: //drop.io/lsbm_apdms_qsm ( Accessed: 29 June 2010 )

Undertaking 2

19.3.1 Analyze the countries of good patterns and system used in bettering organisational public presentation

There are legion methods to increase the public presentation of any organisation. Each method includes regular repeating activities to set up organisational ends, proctor advancement toward the ends, and do accommodations to accomplish those ends more efficaciously and expeditiously. The undermentioned attacks improve organisational public presentation merely if they are implemented comprehensively and remain focused on organisational consequences.

Balanced Scorecard: It focuses on four indicators- client position, internal-business procedures position, larning and growing position and fiscal position, to supervise advancement toward organisation ‘s strategic ends.

Benchmarking: It is used as the criterion measurings in a service or industry in comparing to other organisations in order to derive position on organisational public presentation. It is frequently perceived as a quality enterprise.

Business Procedure Reengineering ( BPR ) : It is a direction attack taking to better by agencies of promoting efficiency and effectivity of the procedure that exists in an administration.

ISO 9000: It is an internationally recognized criterion of quality, and includes guidelines to carry through the ISO 9000 quality criterion. Organizations can be optionally audited to gain ISO 9000 enfranchisement.

Entire Quality Management ( TQM ) : TQM is defined as a set of direction patterns throughout the organisation to guarantee the organisation systematically meets or exceeds client demands. TQM is a quality enterprise and is slower and cheaper procedure.

Six Sigma: It is a choice direction enterprise that takes a really data-driven, methodological attack to extinguishing defects with the purpose to make six standard divergences from the coveted mark of quality.

19.3.2 Recommendation on betterment

Like the other taking companies, the PSA Peugeot citroen should concentrate on many activities to raise the degree of its concern. Some companies adopt the schemes like enlargement of the merchandise class, market cleavage and regional enlargement. These schemes help them a batch to accomplish their needed mark. Likewise, PSA Peugeot citroen should follow different types of new scheme which will be on the favor of both company and consumers. Some of the stairss of betterments are as follows:

PSA Peugeot Citroen should follow the best and effectual scheme to get the better of its jobs.

It should convey new engineering like other companies which is in favor of the clients and the company itself.

Good and effectual communicating within the members of the company should be maintained.

A circle should be implemented to analyse its selling and operational activities.

The senior directors should win the belief of the lower degree employees.

It can besides alter the trade name name and capture the market with new trade name name.

It should widen its market globally. i.e. , all over the universe.

It has to concentrate on invention, strategic advantages and available resources within the organisation.

Administrations do non travel frontward unless their schemes are formulated and implemented, So the chief thing is to develop action program and public presentation.

19.3.3 Wider deductions of proposed alterations

As we know that PSA Peugeot citroen has been confronting jobs, they can work out the jobs if they follow the operational and direction scheme efficaciously by maintaining the quality issues. So PSA Peugeot citroen should screen out its failures and jobs by inspecting at intermediate phases, since work-in-process undergoes many runing stairss and command the state of affairs. The findings give statistical information necessary to find the cause of the quality job, which can be prevented in the hereafter. So the PSA Peugeot citroen has to set up proper system and processs that would ensue in alteration within the organisation. They should concentrate on engineering holding latest machinery and tool to transport their operation activities. They should border a policy based upon their resources and set maximal attempt to accomplish it.

19.3.4 Implementation and Evaluation of Changes

PSA Peugeot citroen should concentrate on quality issues, which is really of import to be and vie in the market by utilizing assorted tools and technique of choice direction like set uping quality circle and entire quality control and so on. PSA Peugeot citroen can follow benchmarking procedure which allows them to do comparings with other companies. This procedure is really of import for the company to cognize its rivals and it is really important to capture the market. It is cheaper procedure and they can easy implement this procedure within the organisation. It besides has to concentrate on work force direction which seems to be really hapless in this organisation. So the success of company depends upon how the organisation manages its work force to accomplish organisational and personal success.

PSA Peugeot citroen is a big auto fabrication company so it has to keep its quality and it can follow the entire quality control and quality circle to guarantee the quality merchandise. For the betterment of organisations operation activities, it should utilize tools and techniques which enables the organisation to go more antiphonal and worthy to their clients. Entire quality circle, benchmarking, etc patterns cut down the procedure flow times and extinguish waste. These tools and technique helps to better the organisations operation activities and quality control. The isolation and analysis of job and the development of lasting solution, is an built-in portion of betterment in effectivity of organisation. Therefore, company should ever first place the job and kind out jobs consequently.


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