QSO 300 Operations Management
BYD Co Ltd is a Chinese manufacturer of automobiles, battery powered cycles and buses. BYD China is pursuing electric cars and hopes to become the world’s largest car company. The below paper describes how proper OM practices will help propel BYD to the forefront of the not so distant future of the auto industry. This paper has discussed about the seven steps of forecasting in BYD. The supply chain faced by BYD and how the company manages such risks have been described.
I. Generating Value A. Evaluate how the company (BYD) in the case study uses operations management functions to provide products and generate value for its customers. Support your claims with examples from the case study or outside sources.
BYD has focused on the pollution free environment in China. The company has focused on a sustainable operational strategy for providing products and generating value for customers. The company has been producing rechargeable batteries that has been successfully implemented in their electric cars. BYD has also focused on price of cars to be cheap and affordable which will create a value for its customers. For example, the F3 model of BYD car has a range of 7000 RMB. The model is very spacious and equipped with high quality electronic equipment (Heizer & Render, 220).
I. Generating Value B. Assess how this company achieves a competitive advantage using operations management. Provide examples found in the case study or outside sources to support your reasoning.
BYD has been focusing on demand of customer in the market. It has been concentrating on innovation in their operational management. The low-cost labor has contributed a lot in the growth and expansion of economy in China. BYD has captured the battery market in China and neighborhood countries including Japan. The core competency of BYD has been related to original product entrepreneur and creating barrier to entry for BYD. It has focused on the low-price product strategy for creating competitive advantage in the market. Due to low cost labor and manufacturing cist, the prices of BYD electric cars have been cheap and affordable.
I. Generating Value C. Compare and contrast service operations and manufacturing operations at the company in the case study. How are they the same? How do they differ? How does each of these operations provide value for their customers?
There are some differences in service operation and manufacturing operations in company. In case of service operations, these are produced and consumed simultaneously. There is a high customer interaction and inconsistent definition. However, in case of manufacturing operation, products can be easily kept in inventory. There is a limited customer interaction in this case and products are standardized. In case of BYD, it has been providing both operations to their customers.
Theories and Techniques
II. Theories and Techniques A. Compare and contrast the critical path method (CPM) and the program evaluation and review technique (PERT). What types of projects at this company would favor PERT over CPM? Why? What types of projects at this company would favor CPM over PERT? Why?
The PERT system has been using a network diagram which consist of events which have been established for research towards objectives. The CPM networks are referred to activity-oriented diagrams in which an arrow represents each activity and sequence of arrows shows sequence in which activities are performed.
The CPM has been a statistical technique related to project management which manages well defined activities of a project. The PERT is used to manage uncertain activities of a project. CPM helps in controlling cost and time whereas, PERT helps in planning and controlling time of project. In BYD, the project requiring focus on planning and time complexity, PERT can be used in such projects. Project requiring budget and time complexity can be used with CPM technique (Zhilong et al., 2015).
II. Theories and Techniques B. Explain the steps used to develop a forecasting system. How would these steps be specifically utilized by this company? What do you predict would be the result of implementing a forecasting system for the top-selling product line at this company?
Step 1: Determining the use of the forecast: BYD announces an electric SUV for forecasting its customers in the market.
Step 2: Selecting items to be forecasted: BYD announces a new small sized electric SUV car named as Yuan EV360.
Step 3: Determining time horizon of the forecast: BYD determines a long-term forecasting for this small sized electric SUV Yuan EV360.
Step 4: Selecting forecasting model: BYD uses a statistical model which discusses about regression analysis of the sales of the product (Jin & Li,, 2012).
Step 5: Gathering data needed for making forecasting: BYD employs a team of sales and marketing which helps in gathering data from market related to customer demand in the market.
Step 6: Making forecast: BYD makes forecast about a new electric SUV YuanEV360 car.
Step 7: Validating and implementing results: BYD analyses forecast at highest level to ensure that data are valid.
II. Theories and Techniques C. List the major categories of supply chain risk and associated risk reduction tactics. How could the company mitigate exposure to supply chain disruptions caused by natural disasters?