Operations Management Coursework

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Operations Strategy of manufacturers’ changes from region to region, Europe and North American manufacturers give high priority to Quality, Performance and on time deliveries while keeping Rapid design & volume changes, after sales service at low priority. In contrast, Japanese manufacturers give high importance to dependable & on time deliveries, rapid design changes and after sales service while keeping cost and volume changes at low priority.

Indian manufacturers have changed their operations priorities over the years, following is the list of priorities for an Indian manufacturer and the rationale behind it:  Considering example of automobile manufacturer Tata Motors.

Priority 1: Conformance Quality

Conformance quality is the ability of product to meet its design specifications which are based on industry standards, competitive standards, local laws and regulations and customers’ expectations.

Rationale: Indian manufacturers because of their smaller factories and lack of economies of scale are not cost focused, rather they are consistently trying to improve their process to meet quality goals. This has also improved perception about Indian products in the global markets. Compared with low cost manufacturing nations like China, Indian products are far more superior and thus quality is the most important priority for a manufacturer. This has led to Indian products being exported to various countries.

Priority 2: Product Reliability

Product Reliability is the probability that a product will perform its required function, subjected to designed conditions, till its lifetime.

Rationale: Increased focus on quality has also reflected in product reliability. Indian manufacturers are trying to attract global customers by adhering to international standards also the government is encouraging quality production to attract foreign investors in the country. This has made product reliability the second most important factor.

Priority 3: On time delivery

On time delivery is the event in which product is delivered to the customer on or before the promised delivery date.

Rationale: With the increasing practices of processes like just in time in the industry, industrial customers are demanding on time deliveries from the manufacturers. Customers are also more cautious about time and the cost attached with it. This has increased the focus of manufacturers on ‘on time deliveries’.

 Priority 4: Low Price

Prices are often driven by cost, low cost can be achieved by cheap labor, cheap supplies, higher efficiency, economies of scale etc.

Rationale: Due to lack of enough participation in increasing productivity through automation and other techniques and also due to high margins price has not been an area of focus for Indian manufacturers. They are also unable to extract benefits of economies of scale due to smaller factory sizes which is also the result of lack of cheap capital availability. These problems have shifted the focus on cost below in the ladder.

Priority 5: Product Customization

Product customization is the ability of manufacturers to satisfy the distinguishing needs of specific customers using alterations in the product.

Rationale: Indian manufacturers are not flexible enough to provide product customization, factories are designed for mass production with very little customization choices, this is done to sever larger portion of customers. Large number of customers with similar needs is also leading to the lesser focus on product customization in Indian industry.

Priority 6: New Products

It is the ability of manufacturers to introduce new products quickly in the market.

Rationale: Manufacturers are introducing limited products per year, this is to avoid confusion among the buyers. Also because of relatively smaller Research and Development budgets, Indian manufacturers fell short on innovating their products and thus limiting their ability to come up with new innovative products.