Three Fundamental Functions Of Business Organizations Management Essay

leash Fundamental Functions Of Business Organizations Management EssayBMW stands for Bayerisch Motoren Werke AG established in 1916. The beau monde was first known as a manufacturer of aircraft engines. In 1928, it started focusing on political machine manufacturing with the purchase of the Eisenach motor vehicle factory. The BMW 3/15 which was a version of the capital of Texas Seven, from British automaker Austin was the c individuallyers first passenger car. It operated with a 15 horsepower engine and had a top speed of 45 miles per hour. BMW began to design and work up its own cars in the 1930s. The company grittyly-developed its own engine nominate that on the wholeowed BMW to build both(prenominal) sports cars and pubs without using engines do by former(a) companies. The 327, 328 and 335 models were advanced technologically that made BMW be recognized as a major European automaker. During WWII BMW was pressure to produce motorcycles and engines for the German army. They had to stop car business until the 1950s. After WWII, BMW had to take up their car takings from zero. In 1952, they began producing the large 501 luxury sedan. It was the first car to be mass-produced in the West Germany. The successful 501 was followed by the 502 sedan in 1954 and the popular 507 roadster in 1956. This series help the company regain the prominent position for sports and luxury cars. Today BMW cars is recognized as a worldwide luxury brand with a utmost reputation for feel and by their marketing slogan, The Ultimate Driving Machine. BMW, MINI and Rolls-Royce ar three of the strongest premium brands of BMW nowadays. BMWs car is a superior crossway in basis of aesthetic appeal, dynamic performance, technology and prime(a). It underlines the companys leading position in innovation and technology. BMW Group Production Ne 2rk currently embarrasss 29 labor and assembly proposets in 14 countries on four continents with a vane of much than 12,000 supplie rs all over the world. The integration of issue and logistics system of ruless within the single BMW Group spots provides advantages for the guest. Higher efficiency in the supply of production materials helps further the delivery of cars to customers. from each one works contributes to the smooth accomplishment of the global production ne iirk.The main reparations of BMW Group Production Network includeUSA Spartanburg, southwestern Carolina.Germany Dingolfing, Berlin, Eisenach, Landshut, Munich,Regensburg and WackersdorfBrasilia Manaus.Italy CassinettaIndia ChennaiGreat Britain Goodwood, Hams Hall Oxford SwindonAustria Graz, Steyr.Indonesia JakartaRussia KaliningradMalaysia Kuala Lumpur Tai shoot RayongSouth Africa RosslynChina Shenyang (Dadong) and Shenyang (Tiexi)(Adapted from www.bmw company.com BMW group (2011) http//www.ehow.com/ active_5145304_bmw-cars.html )Operations counseling as a set of ending make2.1. What picks will be compulsory and in what amount?2.1. 1. What resources will be ask?The production help is concerned with transforming a range of inputs into those outputs that atomic number 18 postulate by the market. This involves two main sets of resources the transforming resources, and the transformed resources.Transformed resources include those that argon transformed in some way by the operation to produce the goods or dos that argon its outputs. Three types of resource that may be transformed in operations arematerials the physical inputs to the branch (manufacturing)information that is being touch oned or utilize in the processcustomers the people who are transformed in some way (common in the service business)Transforming resources include those that are apply to perform the transformation process. The two types of transforming resource arestaff the people involved directly in the transformation process or actualiseing it (labour)facilities land, buildings, machines and equipment (capital)(http//www.differenc e among.com/difference- in the midst of-transformed-resources-and-vs-transforming-resources)In the case of BMW group, the resources requirement for their car production can be summarized in table1 preferencesTypesNotesTransformed Iron, Steel, Aluminum, guard etc Energy Car Body Paint engine Other separate For the production of car proboscis, bolt, rivet, wire, seat and opposite parts etcTransforming Land Engine production plants, body shops, paint shops and assembly plants Automated machines and other connect machines Equipment and tools-Computers and supportive software Workers, managers, supervisors, inspectors-To build different types of car manufacturing plants2.1.2. In what amounts?The amounts of resources required for car manufacturing largely depends on the requirement of the product. The number of the goods/ services the company intends to produce and deliver to customers and the potpourri of products to be produced will tempt the amounts of resources dealed within a defined production system. To make decisions on the amounts of resources needed for manufacturing the product(s), operations managers should consider guardedly two elements selection of production process (operations strategy) and forecasting of collect of products/services.Selection of production process There are three basic types of production orders or processMake-to-stock (mass production) this method normally goes along with line- hightail it strategy in which high volumes of products of relatively few govern products are construct base upon relatively accurate anticipation of proximo demand for those products. This requires the firm to hold products in stock for immediate delivery. The war-ridden priorities of this method are stable tint and low cost. Since the demand for the products own been well anticipated so does the amounts of required resources (Krajewsky et al, 1999).Make-to-order this method is commonly used by firms with flexible flow that produce low-v olume, high-variety of goods/services according to customer specifications. In this direction, high level of customization is the major private-enterprise(a) priority of this method (http//www.web-books.com/eLibrary/NC/B0/B66/098MB66.html)Assemble-to-order (mass customization) this method is used to produce goods/services with many options from a relatively few number of assemblies and components in line with the customers specific order. Assemblies and components are held in stock until specific orders arrives. Then respective products will be assembled with reserve assemblies and components. This method is relevant to high volume and relatively high variety of good/services (Krajewsky et al, 1999). expectingIn order to determine more accurately the amounts of resources needed for the product/service the organization is to offer to the market, it is life-sustaining to forecast the demand of this product/service. Demand forecast is usually developed by the marketing department an d its accuracy will be the all important(p) element of the success of strength wariness plans implemented by operations. Forecast provides a strong basis for determining the capital invested in the plants, machines and equipment, get the office amount of materials and employing the skilful amount of labour (Albert Porter, 2010).Production methods and capacity planning of BMW group as means to define amounts of resources needed.In price of production method, BMWs leading production principles includes horizontal and vertical integration of functions, police squad work organisation, visual management, built in quality processes, pull system of procurement and continuous improvement. This can be seen as a cross production system with a strong German element in product, production technologies and quality standards, a strong part of Japanese principles in process and work organisation and an American part of vertical management hierarchy. BMWs production greet is characterize d with high quality, high productivity and high product flexibility which is closed to the mass customization model of production (Ludger Pries, 2002). With this production approach today BMW produces at least 80 percent of its vehicles to customer orders.(http//www.bmwgroup.com/e/nav/index.html?../0_0_www_bmwgroup_com/home/home.htmlsource=overview).With regards to capacity planning BMW develops a well-elaborated strategical-planning process where products and sales are forecast beforehand production capacity planning. Derived from the results of market research, planners decide on the set of next products and estimated sales figures during their life cycle for different geographical markets with the necessary flexibility reserves (i.e. difference between expected demand and available capacity based on their experience). This serves as data for plant loading in which planners allocate the products to the plants and determine the required production capacities including future am ount of resources needed and the way to procure them (Bernhard Fleischmann, 2006).2.2. When will each resource be needed? When should the work be scheduled? When should materials and other supplies be ordered? When is corrective action needed?All those above questions are connected with materials management, scheduling and quality laterality the operations manager should carefully consider once the production process is put in place. tame Scheduling Plan and Work SchedulingForecast of future demand of sales helps companies set up an overall production capacity plan which in turn tailored into Master Scheduling Plans (MSP) with an intermediate timeline where the total of specific end-products and the time to produce them are defined. It is the major view as of all production activities. To create an MSP, it is important for managers to know where materials are located and how they flow at every step in the production process. For this purpose, they determine the routing of all mat erials-that is, the work flow of each item based on the period of operations in which it will be used ( indigo plant Kumar et al, 2009). On the other hand, as it is necessary for managers to fudge the timing of all operations, they have to build work schedules for this purpose. Scheduling allocates resources over time to perform specific line of works (Krajewsky et al, 1999). Managers determine jobs to be performed during the production process, allocate tasks to work groups, set timetables for the accomplishment of task and ensure that resources are to be adequately provided when and where they are in need. both most popular techniques used in scheduling are Gantt and orthogonal charts (http//www.webbooks.com/eLibrary/NC/B0/B66/098MB66.html)Inventory controlIt is disastrous if a manufacturer runs out of the materials it inescapably for production. However, keeping large inventories of materials is wasting money because the firm has to pay for those materials in stock and find places to store them. Therefore, to remain competitive, firms have to manage inventories efficiently. They need to ensure the availability of materials for production and at the same time non to waste money due to large inventory. Achieving the balance between those two risks rests on the inventory management and control. There are three types of inventories including (i) rough materials (ii) purchased goods and (iii) finished parts and components. The various types of inventory to maintain the continuity in the production process is illustrated in fig 1.InventoryRaw materials physical processInventoryParts + Purchased itemsProcessFinished productsMarketInventory frame 1 Inventory of materials (www.newagepublishers.com/samplechapter/001386.pdf)There are two common inventory-control methods as followsJust-in-TimeIt is seen as the modern concept of inventory planning where the materials should be purchased and brought in the stores just before it enters the production or sold out s o that inventory cost is negligible. The zero inventories are the ideal planning because the cost of holding inventory are significantly cut. JIT, however, requires considerable communication and cooperation between the manufacturer and the supplier. The manufacturer has to know what it needs, and when. The supplier has to commit to supplying the ripe materials, of the right quality, at exactly the right time (Albert Porter, 2010)..Material Requirements planHowever, in the present situations in any of the organization particularly manufacturingorganization, it is not absolutely possible to keep no inventory of materials required for production. another(prenominal) inventory control method is commonly used called Material Requirements plan (MRP). The MRP is a technique relies on a computerized program both to direct the amount of materials needed for production starting from the raw materials, finished parts, components, sub-assemblies and assemblies as per Bill of Materials (B OM) and to determine when they should be ordered or made to support a Master Production Schedule (MPS) (Krajewsky et al, 1999 Anil Kumar et al, 2009).The basic MRP focuses on material planning, but there is a more sophisticated system-called Manufacturing Resource Planning (MRP II)manufacturing resource planning (MRP II)System for coordinating a firms material requirements planning activities with the activities of its other functional areas.-that goes beyond material planning to help supervise resources in all areas of the company. Such a program can, for instance, coordinate the production schedule with Human Resource managers forecasts for needed labor (www.newagepublishers.com/samplechapter/001386.pdf)Quality controlQuality control of materialsThe quality of the product largely depends upon the quality of the materials used to produce that product. Therefore, it is a very important for the firm to purchase the right quality of materials. Quality control of materials aims at del ivering product at high quality with lower cost. It in like manner helps decide the selection of suppliers and the relationship between buyers and suppliers. In quality control, the quality assurance is decided by revaluation and checking. The various properties of materials are decided by the standards they should follow.(www.newagepublishers.com/samplechapter/001386.pdf) add quality managementToday, quality is an efficient weapon firms use to compete with their rivals in the market. Total Quality Management (TQM) or quality assurance includes all managerial steps that firms take to ensure that its goods or services are of high quality to adequately meet customers need). TQM encompasses the following three principlesCustomer -driven commentary of quality firms encourage customers to tell them how to make the right product. Firms also atomic number 82 customers feedback about their products (via surveys and other methods) to know what they need to improve.Employee involvement c ommitment of employee in ensuring quality of their tasks and in detecting and correcting quality problems is very important. Training and other tools will help employee be actively involved in quality assurance process.Continuous improvement the commitment to making constant improvements in the design, production, and delivery of goods and services ((Krajewsky et al, 1999).A range of tools have been developed to control quality and indentify areas of improvement much(prenominal) as Statistical Process Control, Benchmarking and Taguchis Quality Lost Function method.In addition, a set of standards called ISO has been devised by the International Organization for Standardization to help companies comply with quality credentials standards and get recognition worldwide. There are a set of standards ISO 9000 family for quality management and ISO 14000 for environmental management.(http//worldacademyonline.com/book/applied_operations_management_manufacturingand_services/).Materials Manag ement and Quality Management at BMWBMW forecasts their new products and demand of sale for capacity planning and allocate the products to their plants worldwide. Each plant then develops the MSP based upon the new orders and demand of sales. The MSP determines explicitly the quantity and the time of the resources (materials and capacity) needed based on the sequence of operations. In terms of inventory management, since BMW adopts a hybrid production system, MRP is used to calculate the quantity of materials needed for production and to determine when they should be ordered or manufactured with the integration of JIT principle to reduce inventory. In each location, BMW manufacturing plant establishes a network of first tier suppliers located nearby, for instance the Spartanburg plant has 18 first tier suppliers that are located in the nearby industrial park and committed to provide ordered materials and components with high quality and right in time. E-orders and purchasing are use d to communicate and do the doing with its suppliers. As a result, buffers between body shop and painting is18 units and between painting and assembly is120 units. The suppliers are forced to recompense the rigidity of the production system with their own and extensive buffer (Ludger Pries). This mixed inventory control method allows BMW to develop a mass customization production system characterised with high quality, high productivity but also high flexibility.Quality is the strongest competitive advantage of BMW cars. For BMW to achieve premium quality, it is important to recognize any defects/mistakes before production begins and to correct them. Therefore the company has adopted sophisticated computer-aid quality inspection technology to control the quality of purchased parts, engines and all the semi-products and components going from the press, body shop to the final assembly with start-of-the-art inspection device such as 3D CAD, mobile optical TRITOPCMM system (http//www.c apture3d.com/file-capture3d-bmw-assemblyline.pdf). Computer-aided inspection systems contribute significantly to saving rework time, optimizing processes and thereby reducing production costs. BMW group also complies to ISO 9000 and IS014000 for quality and environmental management system ((Ludger Pries, 2002).2.3. Where will the work be done?The selection of plant location or facility location is a key strategic decision for an organization. The location decision is pricey and time consuming to change. This is because large investment is made to buy the land and to construct buildings. Companys competitiveness will be affected by its location since it will impact costs such as transportation and labour. faulty location of a plant may lead to loss of competitiveness, and lastly waste of all investments put in land, buildings and machinery. Therefore, before making decision for the selection of a plant location, long range forecast about the future demands should be made. The plant location should be based on the firms expansion plan and policy, diversification plan of products, changing market conditions, changing sources of raw materials and other resources and many other factors.The key following factors are seen important for location decision law of proximity to customers (extremely important in service business)Proximity to suppliersProximity to labourInfrastructure and transportation availability (Albert Porter, 2010 Anil Kumar et al, 2009).BMW group and its worldwide plant locationsNeedless to say, BMW group has seen the development of its plant location worldwide network as a key strategic planning to enhance its competitiveness in the automobile global market. From their prevalent position in Europe with their plants located in strategic countries such as Germany (its headquarter), Britain, Austria and Italia, the company spread their manufacturing to strategic countries of all over other continents (except Australia) for instance the US for North America, Brasilia for South America, South Africa for Africa, Malaysia, Indonesia, Thai for Southeast Asia, India for East Asia and recently China for North Asia. In each country, BMW has meticulously identified most suitable area for the location of their strategic manufacturing plant corresponding to their expansion plan and policy and the diversification of their products. Proximity to suppliers, labour and the land, infrastructure and labour availability are factors the group unceasingly considers when making plan location decision.