Operations management assignment analysing the value chain of Ford Motor Company

Question

Task: Succinctly introduce the background of your selected organisation, e.g. products or services and elaborate value chain paradigms. Critically examine in your operations management assignment how value chain design can help the organisation to improve operational activities and why it is important. Recommend how the organisation’s operations strategy best responds to current trend by proposing and/or developing the scope of business performance measurement for organisation to monitor the effectiveness and efficiency in operations.

Answer

1. Introduction
Value Chain can be described as a business strategy that outlines all the steps required to produce a good or service. In business, the value chain consists of different steps that bring the product from conception to distribution. The current operations management assignmentaims to analyse the value chain for Ford Motor Company. Simply by understanding the fundamental concepts of the value chain the study will represent how the business can improve its value chain activities. Along with this, a few practical implications of the proposed improvement will also be demonstrated in the operations management assignment.

Background of the Business in the operations management assignment
In 1903, Ford Motor Company was founded. With the help of a growth strategy of mergers and acquisitions, the American Multinational Corporation has divided its activities into three particular regions, such as Latin America, Europe, and the Asia Pacific. The business has built an extensive global distribution and sales network. In the case of the business's diverse operations, Hertz Rental Corporation and Ford Credit Company can be identified as two examples. In 2021, the company announced a decrease of 6.8% in its sales (Cnbc.com, 2022). It is quite clear in the operations management assignmentthat the industry is going through a difficult time and in addition to increased competition, shifting market dynamics have also had an impact on global demand and sales of Ford products.

Figure 1: Ford’s Vehicle Sales Market Share in the US (2015-2021)
(Source: Statista.com, 2022)

2. Analysis and Discussion in the operations management assignment
2.1 Understanding the Key Concept of Value Chain
A value chain for businesses that manufacture things includes all of the processes involved in taking a product from conception to distribution, as well as everything that happens in between. A firm analyses its value chain by analysing the specific processes involved in each stage of its operations. A value chain analysis goal is to boost production efficiency so that a business can provide the most value for the least amount of money (Nagy et al., 2018). While discussing the concept of the value chain in the operations management assignment, it should be noted that the business activities can be categorized into two particular sections. The two categories have been mentioned below.

Figure 2: Value Chain Analysis
(Source: Abdullah et al., 2019)

Primary activities
In value chain operations, primary activities are involved in a product's direct manufacture. In this case, the activities include five components. Each and every component is essential for developing value and competitive advantage for the business. They are mentioned below in the operations management assignment:
Inbound logistics: Materials and other commodities are carried into a firm through inbound logistics (Irfan et al., 2020). The actions to receive orders, store, handle and transport incoming goods are all included in this process.
Operations: These can be identified as value-creating processes that steer the inputs toward the finished goods or services.
Outbound logistics: The demand side of the supply-demand relationship with the main focus for outbound logistics. The procedure entails the storage and delivery of commodities to the consumer or final user.
Marketing & Sales: These are the activities that incorporate strategies to improve target and visibility for potential consumers with the help of promotion, advertising, and pricing.
Service activities: Thesetypes of activities are usually programs that are responsible for maintaining the products in a way that can enhance the experiences of the consumers.

Support activities
The main purpose of support activities is to increase the effectiveness of the primary activities. Among the five major activities mentioned in theoperations management assignment, at least one activity benefits when one of the four supporting activities is more effective. For instance, on a company's income statement. The supporting operations can be identified as overhead expenses.

Procurement: The actor procuring products or services, usually for commercial objectives, is known as procurement (Nagy et al., 2018). Due to the requirement for businesses to request services or make purchases of items, typically on a somewhat large scale, procurement is most frequently linked with enterprises.
Technological development: A company's research and development team is responsible for technological developments. In this stage, the team is responsible for designing and developing the automating processes and manufacturing techniques. In simple words, it is a way for businesses to revamp their business communication.

Human resources management: The term human resource management describes the hiring and training of employees for businesses. The HR division is in charge of detecting talent gaps in the organization, posting job openings, screening applicants, and selecting top personnel (Abdullah et al., 2019). In this operations management assignment, the management supervises redundancies for businesses looking to scale back, in addition to managing the hiring of new staff. The HR department is also in charge of orientation programs that inform new hires about the AIMS, policies, and procedures of the organization.

Infrastructure: The activities incorporate company systems and the combination of the management team. It encompasses all of the tools, programs, and services needed to manage a farm, among other things.

2.2 Analysing the Value Chain in the operations management assignment
Primary Activities
Inbound logistics
The production network of Ford spans the whole world. Its production and assembly facilities may be found all throughout the world, from China and U.S to Africa. While discussing its responsible material sourcing, it has been observed in the operations management assignmentthat the business collects raw materials all around the world. In 2020, Ford chose “DHL” as the global provider of driving standardisation, freight management, and efficiency throughout the company (Supplychaindigital.com, 2020).

Figure 3: Worldwide Locations of Ford Motor Company
(Source: Corporate.ford.com, 2022)

Operations
Currently, the business is located across almost 125 countries around the world (Corporate.ford.com, 2022). Needless to say in the operations management assignment, it has built an international presence with the help of its foreign branch in Canada. Among the various properties of this business, Only the major properties include distribution hubs, manufacturing and assembly facilities, sales or administrative offices, warehouses, and engineering centres. Additionally, Ford owns a large portion of its production and assembly facilities in the US and abroad. However, suppliers either lease or furnish the majority of its part distribution sites outside of the US.

Outbound Logistics in the operations management assignment
The effective and profitable operation of Ford's supply chain depends heavily on logistics. Whether for inbound or outward traffic, logistics play a crucial part in preserving supply chain effectiveness. Ford's production facilities distribute the assembled cars to its dealerships. In addition to environmental sustainability in theoperations management assignment, Ford has adopted a well-balanced combination of transportation options that emphasise minimising the number of miles travelled while also increasing efficiency.

Marketing and Sales
Companies have increased their attention and expenditure on marketing and the use of both online and offline sales channels as a result of increased competition in the automotive sector. Every year, the Ford Motor Company spends a lot of money on advertising and sales incentives. In 2021 the business has invested around 3.1 billion U.S. dollars in advertising activities. Considering the sales of the business as per the operations management assignment, the investments in advertising have grown slower than in previous years.

Figure 4: Ford’s Advertising Spending Worldwide (2015-2021)
(Source: Statista.com, 2022)

Service Activities
Ford has introduced a wide array of goods and services to the marketplace. Through a persistent emphasis on research and development, the firm has continued to enhance its product lineup. In addition to selling Ford vehicles, the firm also carries luxury goods under the Lincoln name. In 2021, 86,929 units are sold. However, there is an 18% decline in sales compared to previous years (Autoworldnews.com, 2022).

Support activities
Procurement
Ford Motor Company purchases a variety of raw materials from suppliers all across the world (Sec.gov, 2021). In the United States, there are around 5,300 suppliers of the business who are supporting business in 47 states. The global procurement system used by the business as per the operations management assignmentenables it to support regional economies, promote entrepreneurship, and improve the standard of living in the areas where it works and where its suppliers are situated. For instance, the company has been observed to be employing more hourly workers than any other automaker. In the United States, it has more than 57,000 hourly workers (Corporate.ford.com, 2022).

Technological Development
The majority of this decade's development in the automotive sector is being driven by technology. It serves as a source of competitive advantage and the key differentiator for vehicle brands, assisting them in gaining a greater competitive edge and expanding their market domination. The business as per the operations management assignmenthas developed great technology skills that boost productivity throughout its supplier chain and production network. For instance, the research lab in the business conducted computational intelligence for more than 20 years (Forbes.com, 2019). The company uses artificial intelligence to understand inventory data.

Human Resource Management
As workers may be a significant source of competitive advantage for any brand in the fiercely competitive auto sector, businesses pay particular attention to strategically managing them to support their professional development. Ford Motor company is no exception as per the analysis of operations management assignment. In the case of talent attraction and growth, the business is mainly focusing on key segments such as electrification, software, and data science. In order to support the developing sectors of the business, the organization has increased the number of salaried employees since January 2020 and invested additional resources in hiring those workers (Annualreports.com, 2021).

Infrastructure
In order for businesses to be managed and expanded, infrastructure is crucial as per the operations management assignment. The corporation oversees both its regional and worldwide business activities. Each area is led by a Vice President and CEO who are responsible for managing the local company operations. Ford Motors' management is split up into a number of different departments, including manufacturing, government relations, finance, marketing, and sales. For instance, The Sustainability, Innovation, and Policy Committee of the business are responsible for advising the management on Human rights, sustainability strategies, and working conditions. The implementation is responsible for developing the value consistent with the long-term enhancement and preservation of shareholder value.

2.3 Improvements in the Current Value Chain
Maintaining supply chain efficiency for rising costs
Recently, the business has estimated a loss in the fourth quarter. In the fast-moving world, it is quite obvious that due to the price increase the business can face difficulties in obtaining a profit. In order to solve these issues mentioned in the operations management assignment, the business is advised to use cash flow reserves to absorb costs. The business must act swiftly to secure commodities that are in high demand. The strategy should be developed, assist, and modified in accordance with service requirements and corporate objectives. Here, the flexible design will support a dependable carrier and shipping network. Zhao et al. (2019) have opined that this creates little risk or mistake, and one that analyses productivity and efficiency measurements is all desirable. In this operations management assignment, the business can also discover and cut costs by supporting the supply chain components while setting new standards and adopting alternate practices. However, in order to maintain efficiency in the supply chain management, the business has aid continuous improvements. Nagy et al. (2018) have stated in the operations management assignment that this can be identified as a practical implication that requires power metrics to develop understanding. Here, the only limitation of adopting the strategy is the lack of knowledge.

Investing in industry 4.0 technology
This can be identified in the operations management assignmentas the fourth industrial revolution, business uses advanced technologies to blur the lines between the biological and digital, and physical world. Here, the business is advised to incorporate Bigdata, IoT, and Blockchain.

In the case of incorporating big data, and business strategy, the business is advised to set clear objectives. For instance, in this operations management assignment, the Ford Motor Company will aim to improve its sales performance in the current year. Grabs & Ponte (2019) have opined that the foundation of creating a seamless big data company strategy is comprehending the corporate and commercial demands. Therefore, it is quite obvious that the business should learn as much as it can about the company's Success Factors and short, medium, and long-term objectives. With the help of this incorporation, the business will be able to identify potential machinery breakdowns. As production can be subject to delays, with the help of the robotics expert, the business will be able to improve its sales by identifying any slowdown in the machinery.

The blockchain is a collection of connected data blocks, as its name suggests. The audit trail and ledger cannot be altered in any way, however additional blocks of data can be added to add extra information. Mellado& Lou (2020) have opined in the operations management assignmentthat reduced operational expenses are the distributed ledger's most important benefit. In this case, the business can eliminate the middleman or the administrative burden of record keeping and transaction reconciliation and improve the current processes to be more cost-effective.

Search engine optimisation marketing to improve service activities
In order to increase the presence on search engines, marketers that utilize SEO or search engine optimization incorporate particular keywords into their content. Although it takes effort, SEO is a viable strategy for boosting organic search traffic. Irfan et al. (2020) have opined in the operations management assignmentthat major businesses and corporations have long utilised search engine optimization as one of the most successful ways of advertising. In terms of acquiring more exposure, the optimization marketing will help the Ford Motor Company to generate inbound and organic traffic. It will eventually secure qualified leads for the business. On the other hand, this will be cost-effective for the business as well. With the minimum investment, the business can expect an exceptional return on investment by reaching the right consumer at the right time. The business will obtain the ability to communicate with the target audience and offer a steady stream of marketing strategies for the products. As a result, the new leads will grow the sales of the business. Simply by expanding the entire customer base the individuals will become more interested in the products.

Building our brands, reputation and trust take time. The development of brand authority can benefit the business. Fortunately, SEO allows is the business to quickly do this by enhancing the Internet presence and developing a reputation. Zhao et al. (2019) have opined in the operations management assignmentthat there will be an automatic rise in queries in case the goods show up in the first few pages of search engine results. It has been observed that websites with Good SEO perform better in terms of page load speed, domain authority, and bounce rate.

3. Conclusion
In conclusion, it can be stated in the operations management assignmentthat among the top automakers in the world, Ford Motors has a huge global footprint. In addition to having a broad range of products, the business is renowned for its emphasis on innovation and client satisfaction. In order to assist the corporation to achieve worldwide expansion, Ford has also built a robust global production and sales network. The car industry has become extremely competitive, and in order for a business to develop more quickly, it must place more emphasis on factors other than product quality, passenger safety, and technical innovation. In a very demanding industry climate, supply chain and human resource management have also become crucial for achieving sustainable growth. However, in the fourth quarter of 2021, the business faced certain difficulties in the lower levels of revenue. By analysing the value chain of the business in the operations management assignment, certain recommendations have been provided.

References
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