Discussion 3

Operational Efficiency 2

Operational Efficiency General Motors

Name

Institution

Operational Efficiency General Motors

General Motors is a multinational corporation in the United States in the automobile industry. The company is the largest motor vehicle manufacturer based in the United States, dealing in manufacturing, designing, selling, and distributing motor vehicles and spare parts (Helper & Henderson, 2014). The company has manufacturing plants in various countries, including South Korea, Egypt, Mexico, Ecuador, Brazil, and the United States. The company is over a century old, having been founded in 1908. The company experienced financial woes and had to be bailed out in 2008. This was due to various operational issues like lack of innovation and poor strategies (Karen & Joe,2009).

Elements of Professional Efficiency

The success of General Motors has been credited to the company's strategic plan that includes improvement of operational performance by improving supplier relationships, increasing profitability, and delivery of high-quality and innovative products (GM, 2014). The three elements of the strategic plan that covers operational effectiveness include process excellence, where the ability to deliver high-quality and innovative products, lead in product development and technology and deliver core operational efficiencies. The three elements show the organization's operational efficiency and explain why the company has been successful for over a century. The three tasks that do not align with the operational strategy include developing high-performance work teams, delivering innovative products, and improving customer relations.

There are several weaknesses in the task that do not align with operational efficiency. The company wants to lead in product development and technology. This can only be achieved with high-performance work teams which are highly innovative. It is a weakness for an organization that has previously had employee issues, including talent recruitment. The company has to first recruit the best talent in the market before being able to develop high-performing teams.

There are weaknesses in the product development at the company. General Motors does not use a continuous improvement model when manufacturing its products. They have a system where the engineer improves the product, and the employees follow (Jindal et al., 2015). Continuous improvement helps identify problems while boosting employee engagement in the manufacturing process. Bureaucracy is another weakness among the tasks identified. The company should be able to change with the market. Other competitors have changed with the market by implementing strategies that make them more competitive. However, due to bureaucracy, the company is slow to make changes to make them more competitive in the market.

New Operational Strategy

Quality, cost, time, and flexibility are considered competitive priorities of any operation strategy. Quality is concerned with low defect rate, product performance reliability, certification, and environmental concerns (Abdulkareem et al., 2013). The operational strategy should reduce the number of recalls as General Motors will manufacture vehicles with a low defect rate. Some of the issues that have previously faced the company leading to the recall of various vehicles, will be addressed through the quality. Genera Motors can only become competitive when they can manufacture reliable vehicles in terms of performance, meeting all customers

' needs.

A cost leadership strategy will help identify areas where costs can be reduced (Jose & Reinaldo, 2005). The costs strategy will cover all the selling price, service cost, profit, value adds, running costs, and manufacturing costs. The company should also be able to manage the production cost, which will include all the relevant overheads, inventory, and value-adds. The cost strategy can help the company develop a competitive advantage. The company can only create a competitive advantage if the selling price of its products can compete with the competition.

The delivery aspect of the strategy will address how quickly the products will be delivered to the customer. Manufacturing lead time will be introduced to the company. This will require automating most of the functions at all the plants. The automation will include areas like inventory management, manufacturing, and sales. The system should be able to complete quick changes over operating instructions and the employees able to adapt to the physical setup of the assembly line. The company should be able to deploy resources in response to any changes in contractual agreements. The company has had a slow response to the changes in the market.

Structure of Competitive Priorities & Infrastructure of

The motor vehicle industry is highly competitive, with changes taking place. Three new enablers are aligned with the long-term plan of General Motors. These are innovation, quality products, and low cost. Innovation is critical for the long-term plan of the company. The consumer expects quality products at a low cost which can only be achieved through innovation. The pros of the enablers include ensuring productivity at the company, reduced costs in manufacturing, and an increase in turnover. However, the cons will include wastage of resources, costly and time-consuming.

References

Abdulkareem, Awwad, A. Khattab, and J. Anchor. (2013). Competitive Priorities and Competitive Advantage in Jordanian Manufacturing. Journal of Service Science and Management, Vol. 6 No. 1, pp. 69-79. DOI: 10.4236/jssm.2013.61008.

General Motor. (2014). GM Outlines Strategic Plan. Available at https://media.gm.com/Pages/news/us/en/2014/Oct/1001-gm-plan.html

Helper, S., & Henderson, R. (2014). Management practices, relational contracts, and the decline of General Motors. Journal of Economic Perspectives, 28(1), 49-72.

Jindal, S., Laveena, L., & Aggarwal, A. (2015). A comparative study of crisis management-Toyota v/s General Motors. Scholedge International Journal of Management & Development, 2(6), 1-12.

José Augusto da Rocha de Araujo & Reinaldo Pacheco da Costa. (2005). OPERATIONS STRATEGY AND COST MANAGEMENT. Journal of Information Systems and Technology Management. Vol. 2, No. 3, 2005, pp. 291-303

Karen Berman & Joe Knight. (2009). Why GM Failed. Harvard Business Review. Available at https://hbr.org/2009/06/why-gm-failed