Production Operations Managament

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A Case Study in Supply Chain Management Using General Motors.
Abstract.
Supply chain management refers to the streamlining of the supply side of the business to build on its competitive advantage and maximize the value to consumers. The primary focus of this paper is to take a case study of a company’s supply chain management system and the products it offers are sustainable, suggest an approach to increase sustainability in the organization using the 10 step method. The company selected is general motors. The next step then entails coming up with a detailed implementation of the 10 step method to GMC thus help in maximizing the value to the organization. General Motors primarily deals with the sale and distribution of motor vehicles to the consumers through their various dealerships all around the world. Among the major brands in under General Motors include Chevrolet, Buick, GMC, Cadillac, Opel and others. Accordingly, using an organization of its magnitude as a case study of supply chain management would provide a good platform that can be utilized by other organizations to streamline their supply chain management system.

Given the changing industrial environment, which has become more complex and less predictable, practices and research have shown that production management systems cannot be considered independently of management control systems. This paper has progressively evolved towards an interrogation on the links and the ability to separate between production management systems and management control systems.

The paper also focuses on dashboards and inter-organizational systems. Our work first focused on the study of production planning systems, of the MRP type, whose design and organization of implementation then came mainly to engineers. The latter were considered to be the most suited to propose production and supply plans to minimize costs which, in a stable environment that was predictable and not too complex, characterized by a lower supply than demand, were mainly direct and Variables. Moreover, management accounting was called industrial accounting, a sign that management control was rooted in the logics of production management. Engineers, because they were most familiar with the operating conditions of the production system, were deemed to be best able to calculate and analyze costs. In our first work, management control was therefore identified essentially from an instrumental point of view, i.e., in the form of calculations of costs, budgetary system and calculation of variances. However, the evolution of the industrial context towards more complexity and uncertainty revealed the impossibility of designing a perfectly planned production system and the limitations of the single analysis of variable direct costs. Beyond that, the introduction of more flexible production technologies and the gradual expansion of production targets to the criteria of quality, timeliness, and variety have led to the development of new production-oriented production methods based on responsiveness. These methods can be grouped under the generic expression “Just-in-Time.” This approach has been reflected in the designation of production management, which, originally called “industrial management,” has gradually evolved into “flow management” or “industrial management” and, more recently, “Integrated Flow Management” or “Integrated Supply Chain Management.” Its goal is to base production and supply decisions on the clients’ real demand and to aim at quality, timeliness, and cost. As a result, performance analysis could no longer be restricted to cost control by engineers alone. The decision to transit from the MRP to the tight flows and the choice of the dosage between the two methods are not solely the responsibility of the engineers and therefore of the production management. They relate to all the functions that interact with each other and that require management control to represent and manage globally the increasing complexity and uncertainty, thus ensuring organizational coherence. This development has resulted in the jargon associated with management control, which was originally identified by the term “industrial accounting” and has gradually evolved into “analytical management accounting”, “budget management and control”. More recently, to “management accounting” and finally “steering and performance control”. For the organization of production in “Just-in-Time” to be possible and legitimate the principle of economic performance ought to be the improvement of the overall coherence of decisions so that the duration of the decision-making process is shorter.
General Motors is a well-known company due to its making of products that are of high quality thus meeting the consumers’ needs in the automotive industry. Last year, GM was ranked the 2nd largest automaker in the world after Toyota. GM also integrates efforts of environmental sustainability through the complying with the regulations and laws about the environment and business, monitoring the performance of GM to its criteria of environmental performance, and conforming to other dominant performance indicators. Other primary practices carried out by GM to enhance sustainability include waste and pollutant reduction, recycling materials and conserving resources, and continual assessing the impact of the products and manufacturing plants to the communities and environment thus operating with the aim to improve these plants and products (Environmental Principles & Management). These points portray General Motors as a company that is quite sustainable.
The chains of supply are built on trusted, transparent, and strong partnerships that are paramount in ensuring product availability, affordability, and quality to the end consumers (Waters p.37). These partnerships help build competitiveness in business and also lower the risks in business. The basic supply chain flow of General Motors is from the parts suppliers, followed by the GM’s module and component suppliers, and then the car assembly plants, the GM’s car dealerships, and finally the consumers who are the car buyers. This chain of supply is quite sustainable both in the procuring process and the distribution of the product down to the final consumer.
The wave of green sourcing begun when several electronic companies decided to abide by the environmental regulations, consumer needs, and competitive realities that impact their businesses in this new era. The ten steps process can be helpful in improving the sustainability of the company even further than where it is currently. The first step is to know where the organization stands. In this step, the company ought to keep abreast the facts of spending patterns, consumption patterns of the target market, and the supply chain concerning sustainability practices. When looking at GM under these aspects, the majority of the company’s expenditure goes to the procurement of parts to be used in the assembly process. The rest of the expenditure goes to the distribution of the assembled cars to the various dealerships across the board, the salary payment of the vast staff that GM employs, and the marketing and advertisement costs. The supply chain is basic starting from the sourcing of parts, down to the assembly lines, and finally the distributions of the finished products to the dealerships where the consumers have access to test drive and buy the automobiles. Determining the consumer patterns is done in the consumption stage by keeping a record of the bestselling products in the market, whether it is the SUVs, coupes, or sedans thus making an informed decision on the number of units to be produced to meet the consumer demand.
The second step is to have the plan to achieve the pre-defined sets of goals and also monitor the metrics to track the progress being made by the company. Some of the goals may include: waste reduction, source reduction, increasing efficiency, and even incorporating the element of going green to the company (Kenny p.24). General Motors can also manage the lifespan of their vehicles through increasing the available and modular components of the vehicles, and also creating a simple path to upgrade the vehicles that the consumers have already purchased. The third step in the process is for General Motors to have a single point of sustainability. GM ought to have officers whose primary duty is to check on the sustainability of the company’s supply chain (“Environmental Principles & Management ”). These officers are paramount in managing the procurement functions and monitoring the supply chain to improve the strategies of the supply chain and also the procurement function thus resulting in the maximizing of the organization’s value. This single accountability point also needs to be given the relevant powers to effect the required changes thus increasing the company’s sustainability.
The 4th step involves communicating the company’s progress both externally and internally. This step involves getting the word out and thus encourages people to get involved. It comes about from sharing the company’s goals, the metrics for tracking progress, also the failures and successes that the company gets both with the organization and to the world (Crane, Andrew, and Dirk p.98). The 5th step involves incorporating the plans for sustainability into the organization’s existing processes. Sustainability can be increased in the procurement and sourcing processes via including some green criteria in the procurement proposals. These proposals should be detailed meaning they should disallow harmful chemicals, specify preferred materials that help in source reduction like recyclable and rechargeable batteries, and also products that are biodegradable to assist in waste elimination. The cars made during the assembly process should also have features that reduce the emission of carbon gasses and manage the consumption of fuel thus assisting in the increasing of efficiency and reducing pollution.
The 6th step involves educating the suppliers of GM on the sustainability practices of the company. This step involves giving the suppliers clear expectations of the supply base and continually monitoring the compliance of the suppliers to said expectations. This can help in eliminating the incompliant suppliers and getting suppliers that adhere to the pre-set expectations like conserving materials, using less toxic chemicals, and supplying of easily disassembled products for reuse, recycling, waste reduction, and waste elimination via scraping and dumping.
Step 7 involves staying updated with global regulations. General Motors ought to keep aware of sustainability regulations like the RoHS in Europe tends to impact the functions of GM’s supply chain. Other regulations to be aware of include the bans of PBDE and mercury in many states with Seattle having regulations about the reduction of paper-based manuals and recycling that is mandated. Since GM is a multinational organization, it should have a team that knows about all the relevant regulations in various zones it conducts business.
The 8th step involves knowing the new technologies, processes, and materials. Significant actions are being taken come up with better approaches to address the opportunities for green initiatives in a cost effective manner. General Motors should increase its investment in R&D activities and employ more qualified staff in this department to formulate better systems for their vehicles thus reduce the emission of carbon compounds and come up with materials help in waste management. Step 9 requires General Motors to start with the easy processes first but also not forget the hard stuff. This step would help GM avoid an overhaul of the supply chain to measure the gains resulting from the efforts of sustainability. This process of focusing on quick wins first would include GM improving its energy efficiency and even negotiating buy back or leasing options from the provider of electronics to ensure that the computer hardware returns to the manufacturer for recycling during instances of upgrades (Aras p.56). Thus, this step ensures the building of momentum for GM when it checks on the metrics of performance leaving only a few rigorous processes that it can focus on later in time.
The final step of this process is for GM to get people involved in its initiatives. When any broad initiative is rolled out, it is next to impossible to accomplish and impact the whole organization if it depends on only the efforts of one area. GM should involve all its branches and departments including sales, design, finance, and engineering to achieve the pre-set goals.
In conclusion, General Motors ought to act on this detailed ten step process to make sure that it will be well-placed to minimize the risks, maximize the returns, reduce waste, increase the efficiency, and also increase sustainability through the green initiatives it takes.

Works Cited
Aras, Gu. Business Strategy and Sustainability. Bingley, U.K.: Emerald, 2012. Print.
Crane, Andrew, and Dirk Matten. Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. 3rd ed. Oxford: Oxford UP, 2010. Print.
“Environmental Principles & Management.” GM Sustainability Report. General Motors. 14 Dec 2015. http://www.gmsustainability.com/approach/environment.php
Kenny, Michael. Planning Sustainability. London: Routledge, 2002. Print.
Waters, C. D. J. Global Logistics New Directions in Supply Chain Management. 6th ed. London: Kogan Page, 2010. Print.