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It is beyond all doubt the operations management plays an important role in any company. It provides a systematic direction, control, and evaluation of the whole range of activities and processes that take place in the organization in order to insure the processing of inputs into the goods or services that can be delivered to the final consumer.
Micro Cars Limited is one of the companies that are a great example of successful operation management implementation. Micro Cars Limited is the only Sri Lanka automobile company. It was established in 1996 by Dr. Lawrence Perera who had a rich experience in automobile industry (Micro Cars Limited). The company represents on the national and world market a variety of products. The diversity of products varies from small cars to large vans and buses. There are also luxury SUV's represented in the range of Micro Cars Limited product (Micro Cars Limited).
The object of the research paper is the Micro Cars Limited operations management analysis.
Micro Cars Limited is rather young company that is represented on the automobile market since 1996. The first car was launched in 2001 as a result of winning an international patent for the certain design and construction. The first launched model of the car had met all the needs of the domestic market. The company managed to develop high quality vehicles within low prices that were reached by smart utilizing the resources and rather cheap labor force of Sri Lanka (Micro Cars Limited).
Today Micro Cars Limited remains the only national car manufacturer, assembling a full range of vehicles, from Compact Cars and Vans to Luxury SUV's, Buses and Prime Movers. The company has a large range of business relations with world known companies. In 2008, Micro signed the contract with SsangYong and started producing SUVs in Sri Lanka with a 35% value addition (Micro Cars Limited). In addition, in 2010 Micro tied up with Geely International in order to occupy small car segment and compete with other international successful brands (Micro Cars Limited).
Another stage of success of Micro Cars Limited was expanding the product range of the company on the foreign market. In 2011, the company started exporting vehicles into Pakistan, Bangladesh and Nepal (Micro Cars Limited). Another field of Micro Cars Limited activities is after sales service. The Micro Cars Limited Company managed to open the largest After Sales Centre in Sri Lanka's in 2012. In such a way, the company occupies the bigger markets share, earns higher profits and states the leading position not only in the automobile market, but also in the automobile industry of Sri Lanka (Micro Cars Limited).
Nowadays Micro Cars Limited is one of considerable payers on the international automobile market. During the years of development, the company managed to state many business relationships and forms of ownership. As a result, Micro Cars Limited has become a group of companies, namely Transmec Engineering, Transmec International, Micro Construction and Euro Sports Auto Lanka. At the same time, the company has created the workplaces for more than 1000 employees of Sri Lanka (Micro Cars Limited).
Therefore, Micro Cars Limited is not only an important company on the domestic market, but on global one as well.
The operation strategy is one of the main characteristics of the operations management of the company. It identifies the main direction of development, peculiarities of company activities implementation and other main characteristic. The operation strategy can be divided and characterized according to ten critical decisions.
The first criterion is design of goods and services. The Micro Cars Limited main activity is manufacturing the cars. The company suggested rather differentiated range of products with different types of vehicles, designs and purposes of usage. According to the official web-site of the company, there are cars, SUVs, MPVs, light trucks, buses and heavy machinery. In addition, each type of the automobile has different models. For example, cars are represented in Panda, Panda Cross, and Emgrand 7 models of the vehicles. In addition, each car can be ordered in different colors, different salon design and different equipment set. All other types of vehicles are presented within at least three models and different variations. The design of all vehicles is rather sophisticated and well-developed. It is obvious that the considerable job was done by the designers of the Micro Cars Limited Company.
Managing quality is another element of ten critical decisions that characterize the operation strategy. Quality is probably the main characteristic of any automobile company. That is why the Company is trying to ensure the best possible quality. Quality department is responsible for its assurance. However, according to different rates that are provided by research services, Micro Cars are not on the top list of the best quality cars. For example, according to the Telegraph survey, the most reliable car producer is Skoda. On the below stages are Suzuki and Kia. There survey was held on the basis of at least one problem with the car out of 100 vehicles. There are 22 producers presented and the Micro Cars is not on the list. The reason for that may be unreliability of the producer or less popularity among drivers (The 20 Best Car Brands for Reliability).
The process and capacity design of the Micro Cars Limited is rather complex and consists of numerous elements and stages as in any company of the automobile industry. The company is aiming to set new standards for perfect product in conventional construction. At the same time, Micro has managed to develop three revolutionary construction technologies (Micro Cars Limited).
As for the location strategy, the company is the only one located in Sri Lanka. Micro is always laying the stress that they are the only one national automobile producer. They are aiming at gaining the strategic benefits from its facility locations. The company’s strategy combines regional production of the cars for the home market and exporting the products globally.
The layout design and strategy of Micro Cars Limited are rather well organized. The company has developed a number of actions to maximize the efficiency of workflow and resources. The maximum of atomization is trying to be reached by the enterprise.
Taking into account the fact that Micro has over 1000 employees, a considerable human resource development plan need to be implemented. Company is aiming its strategy on constant increasing the productivity and efficiency of human capital.
Supply chain and inventory management is also an important part of running a company. The process of automobile production is constant and the factory produces different types of machines, the department of supply is always tracking the inventories via specially developed software.
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In the sphere of scheduling in operations management, it is important to lay the stress on the fact that Micro Cars Limited applies the short-term and intermediate schedules while completing the tasks. In addition, automated and semi-automated scheduling is implemented in offices.
The last element of 10 critical decisions is maintenance. The main goal of the operation strategy of the company is maintaining the most suitable business process that provides high quality products and satisfies all the needs of company’s customers. Taking everything into account, the conclusion can be made that operation strategy of the Micro Cars Limited Company is rather well developed, which may lead the company to become a considerable player on the global automobile market.
One of the main characteristics of the Micro Cars Limited Company is its macro functionality. As it was previously mentioned, the company is engaged in various fields of automobile industry. The core function of the company is car manufacturing, which is presented in 6 different vehicle types from small cars to heavy machinery. Moreover, there are 28 models of vehicles that can satisfy the needs of any client (Micro Cars Limited). Another profitable field of company’s running is after sales service. The service centers provide customers with high quality pre and after sale service. There are 57 service centers that are aimed at different directions, for example spare parts or whole vehicles (Micro Cars Limited). Moreover, the sales services are presented in different large cities of Sri Lanka, namely Colombo, Kandy, Kurunegala, Matara, and others (Micro Cars Limited).
Another function Micro Cars Limited is car lubricants production and sales. This is done through cooperation with the company Motul. The Motul Company is rather well known and the best world vehicle producers use the lubricants of this company, namely Mercedes Benz, BMW, Porsche, Subaru, SsangYong, and Honda among most of others. As for the cooperation with Micro Cars Limited is Motul has a special supply of lubrication for all Micro Cars Limited range of vehicles, namely SsangYong, Geely, Renault, Scania, Yutong & Sinotruck, etc. (Micro Cars Limited).
Building construction is another field that the Micro Cars Limited is engaged in. In spite of the fact that Micro Cars is the representative of the automobile industry, it is rather successful in construction of buildings (Micro Constrictions). The construction division of the company has rather wide range of products, namely pre cast houses, precast wall, pre cast slab and boundary wall (Micro Constrictions). Moreover, the company provides different technologies such as 3D panel technology, FAN sandwiches panel technology zinc and aluminum curve roofing system (Micro Constrictions).
In the context of cross-functional processes, it is important to say that the construction division of the Micro Cars Limited can be sub-divided into various construction services that the company provides. They are architectural and structural design and build projects, building services and engineering design, quantity surveying, material and equipment, planning and project management, construction supervision (Micro Constrictions).
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Thus, from the point of view of the operations management, it is important to say that the complex cross-fictional processes have both advantages and disadvantages. First, it is rather hard to operate and manage different fields and various processes. However, in spite of the complexity fact, multi-functionality is very beneficial for the company. It gives the possibility to stay always profitable. Considering the fact that the company is represented in different industries, namely automobile and construction, Micro Company can avoid crisis that may be caused be the overall industry profitability decrease.
One more important fact in terms of cross-functional processes is the conversion of inputs into outputs. The scheme 1, describes the input-output process of car production. There are many other processes needed that go alongside with the input-output process of car production. Such activities as marketing, distribution, promotion, logistics, accounting, banking and other elements ensure successful production of high quality cars and making high profits of selling them.
The input-output process of car production
Painting and polishing
|High quality cars|
Considering everything, a conclusion can be made that the cross-functional processes of the Micro Limited Company are rather complex and multifunctional. In spite of the fact that such structure of the company is rather hard to manage, it is very beneficial.
Capacity management is the process that ensures an organization to customers’ requirements with the help of all available resources. The machinery, factory, human capital, raw materials, inventory refer to the resources that provide effective production in terms of capacity management. Definitely, it should be planed correctly and wisely. It is doe on the basis of future product demand and resources requirements. The main components of the capacity management are time and capacity (Capacity Management).
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In terms of Micro Cars Limited capacity management, it is important to say that the company is run according to the developed strategy that defines the human capital usage and capacity norms. As for the human resource capital, taking into account the fact that Micro Cars is one of the largest companies in Sri Lanka employees more than 1000 workers, the company is a considerable player on the national human resource market. The employees are treated well and they receive rather high work remuneration.
As for the capacity rate, the Micro Cars Limited shows rather high results. For example for Micro Panda car manufacturing, the month capacity is production of 500 cars, which gives about 40 cars per day (Padmasiri). There are four assembly lines in the manufacturing facilities and one of them is fully automated, which gives the possibility to implement high productive manufacturing and reach high levels of capacity (Padmasiri).
There are a lot of other processes that take place on the enterprise and the management of the company need to take care of. The enterprise wide-processes include supply chain management, inventory management, quality management, knowledge management, customer service management and innovation management. All of them are preliminary activities; however, they are equally important to the core ones.
Well organized supply chain management is extremely important on the large enterprise. Taking into account the fact that the Micro Cars Limited Company’s capacity is rather high in 40 cars per day, there always need to be spare details and components of the vehicle production available (Padmasiri).
The company is following the strategy of “providing low cost cars for mass market” that is why the management of Micro Cars Limited is trying to find the best suppliers for the cheapest prices. For example, rubber hoses, cables used and other parts used in vehicle production are not imported but they are bought from the local Sri Lanka suppliers (Padmasiri). In such a way, a low-cost strategy is follows and the national producer is supported.
However, the Micro Cars Limited Company is trying to deliver high quality cars for the customers, so that is why some parts needed for the production are imported from abroad. Body shells and engine parts are imported by the Micro Company from countries such as China, Korea.
Inventory management is one of the core elements and basis that gives the possibility for smart supply chain management and as a consequence an effective production and capacity. Considering the fact that the range of information is very wide, there are a lot of models, types of vehicles and their spare part, the software support is needed on the enterprise. The Micro Company is using special equipment and software for them that helps to acquire an overview of inventory levels and expected supplies whining the certain period of time. It helps inventory managers to providing an accurate delivery for the exact date for multiple of items.
Taking into account the fact that quality is vitally important criteria in the automobile industry, Micro Cars Limited pays especial attention to the quality. The quality management of the company is basing in the quality control department. It states and controls quality criteria that each vehicle need to match. In addition, often inspections on all stages of production are hold in order to check whether all the requirements are followed.
In addition, in spite of company’s internal standards followed, there are global standards that the Micro Cars Limited is following. One of them is ISO/TS 16949, which is an international standard, establishes the particular requirements of the implementation of ISO 9001:2000 in the automobile production (Goicoechea, Fenollera).
Customer service is paid especial attention in Micro Cars Limited. They are very serious about customers' satisfaction and fulfillment of their expectations. They are willing to provide the high quality service during pre-sales as well as after sales. As the company is stating on their official web-site, they are trying to launch “the ultra-modern state-of-the art service facilities, high caliber technical crew, infrastructure facilities and process improvement projects” (Micro Cars Limited).
The company is laying the stress on the fact that they provide the best service to the customers of the automobile industry, because of the wide experience, factory trained mechanical and technical staff, good equipment, in time service and special attention to service quality and customer loyalty (Micro Cars Limited).
In order to be competitive on the global automobile market, the Micro Cars Limited needs to update to the world circumstances fast and smart. That is why the knowledge and innovation management need to be well developed.
First of all, the knowledge management has to search and develop clever human resources that would constantly improve the production. In addition, in order to be competitive, the company needs to come up with new products and equipment. It will let the company stay interesting for the customers and occupy large market shares.
As a proof of effective innovation management, there is the fact that Micro Cars Limited launched an international patent for the unique design of the cars in 2001 (Micro Cars Limited). Moreover, due to the effective innovation and knowledge management, the company has managed to receive many international awards. They include the Presidential Award for Best Innovation in 2004, presented by Sri Lanka Inventors Commission (SLIC), the Award for Best Innovation in Institute Category in 2004, presented by Sri Lanka Inventors Commission (SLIC), and the Award for the Best Innovation of Transport Business in 2004, presented by the Chartered Institute of Logistics and Transport.
The research paper covers the operations management of The Micro Cars Limited. Micro Cars is the only one automobile company that represents the whole automobile industry. The research paper shows that the company has managed an effective operations management. The Micro Company has rather wide and differentiated range of products, which vary from small cars to heavy machinery. In addition, the company has developed many modifications and models of each vehicle type.
Another important characteristic of the company is wide cross-functional processes. The Micro Cars Limited has wide range of activities, namely vehicles production, per-sales and after-sales service and buildings construction.
With the help of qualitative capacity management, supply chain management, inventory management, quality management, innovation and knowledge management, the Micro Cars Limited Company managed to expand its activity on the international market and become a considerable payer on the global market.