Value creation in the organisation
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Course : Master of Business Administration
Module Code and Title : PGBM146 Value Creation in Organisations
– Managing Operations and Marketing
UOS Module Leader : Maria Parker
Assessment : Individual Assignment
Due Date : 7th September 2020 by 2359 hours
Word Length : 4000 words +/- 10%
(Please refer to AQH-F15 Guidance for Students on the Penalty for Exceeding the Limit for Assessed Work)
Module weighting : 100%
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Your completed work MUST be submitted electronically via the PGBM146 Module Canvas site (under Assessment tab).
The work will be assessed and marked and returned electronically, within 4 weeks. The assignment covers 100% of the overall course module mark.
The assignment must be submitted to Canvas as detailed below and contain:
a front page with your name, student number, the module number, the programme and the assignment title
a reference list
a bibliography
a appendices of relevant information.
This business report based is based on a case study organisation. The case study will be provided to you in the first week of April 2020. The content of the report will demonstrate learning undertaken during the module and apply analytical models appropriate to inform business strategy on where value creation can be applied for competitive advantage.
The work based report must demonstrate coverage of the module learning outcomes:
Knowledge
K1. a critical understanding of operational and marketing theories, concepts and strategies and how these impact on value creation in organisations.
K2. a critical understanding of the contemporary challenges relating to value creation in a range of organisations.
K3. a critical understanding of the major decisions confronting managers in the management of value creation.
Skills:
S1. relevant transferable skills relating to the cross cultural management of value creation in a professional context including: problem solving, creativity, communication, and working collaboratively.
S2. how to conduct research using relevant journal and business documentation
Your task is to research the market sector in which the case study organisation operates and produce a business report that delivers a critical evaluation of the value chain activities of the case study organisation. The report must identify opportunities for value creation in the marketing and operations management activities of the business and suggest how this will support the organisation in gaining competitive advantage within the sector. The report must use detailed and referenced analytical models, appropriate to the case study organisation.
The business report must cover the points listed below.
Carry out detailed research to provide you with up-to-date information appropriate to delivering a strategic level investigation on the case study organisation. The research information should enable you to carry out a critical evaluation of the businesss value added strategy reviewing the marketing and operations activities and analysing how these deliver strategic goals.
Demonstrate critical understanding of how the case study organisation co-creates value for customers through the integration of core aspects of marketing and operations management. This includes how value is created holistically through the market research, product development, prototype, supply chain, production, and diffusion into the related markets
Deliver a critical appraisal of the organisations practice to related marketing and operations management theory.
Synthesise suitable recommendations for the case study organisation to improve marketing and operations management strategy and deliver enhanced value creation and competitive advantage. Your suggestions for implementation must be supported by relevant theoretical underpinnings, research into the sector and application to analytical models.
Submission of Assessment:
One electronic copy of the work should be submitted via the Canvas Turnitin submission area in the assignments tab on the module space, prior to the deadline.
Formal feedback and results will be provided 4 weeks after the submission date on Canvas. Please note that if marks are released prior to assessment boards students should be aware that they are subject to ratification and may change depending on the outcome of the assessment board.
The University’s Post Graduate Generic Marking Criteria attached will be used to assess the work.
Referencing your work
In this institution the Harvard method of referencing is used.
The Harvard method of referring to publications and of arranging references uses the author’s name and the date of the publication. References are listed at the end of the text in alphabetical order by author’s name. The general format of a journal reference is shown below:
Smith, J. (1999) How to succeed! Journal of Entrepreneurs, 1(2), p. 34-56
Authors name and initials are listed first, followed by year of publication in brackets. Then there is the title of article and the journal where article appears, which is in italics. Finally, state the volume and issue Number (in brackets) along with the pages where article can be located.
A short guide to Harvard referencing is available on the library site.
Academic Integrity and Misconduct:
Your attention is drawn to the Universitys stated position on plagiarism. THE WORK OF OTHERS, WHICH IS INCLUDED IN THE ASSIGNMENT MUST BE ATTRIBUTED TO ITS SOURCE (a full bibliography and/or a list of references must be submitted as prescribed in the assessment brief).
Please note that this is intended to be an individual piece of work. Action will be taken where a student is suspected of having cheated or engaged in any dishonest practice. Students are referred to the University regulations on plagiarism and other forms of academic irregularity. Students must not copy or collude with one another or present any information that they themselves have not generated.
For further information on academic integrity and misconduct see https://my.sunderland.ac.uk/display/AQH/Academic+Integrity+and+Misconduct
Moderated by Kris Woods, 31 March 2020 NISSAN MOTOR MANUFACTURING UK LIMITED CASE STUDY
This information sheet provides an overview of the Nissan Motor Manufacturing UK business. Links to further resources to support your research and developing a strategic understanding of the business required to complete the PGBM146 assignment.
Nissan (NMUK)
Nissan (NMUK) is one of the most productive car plants in Europe, producing more than half a million cars a year and exporting to over 130 global markets. The plant has grown from 1,100 in 1987 to supporting more than 6,700 jobs in 2018. Currently the Sunderland car plant produces the Nissan Qashqai and Nissan Leaf (Electric Model).
The plant supports a major Tier One supply chain ofover 30 companies, and has recently invested 420m into its battery plant and 100% electric LEAF model production at Sunderland.
North East England road vehicle exports have trebled, from just over 1.5bn in 2000 to 4.8bn in 2014; with one in every three cars made in the UK, now being made in North East England.
The following case study is taken from the Times 100 Business Case Studies 2019.
Why locate in Sunderland?
One key decision with a car plant is where to locate it. For its UK factory, Nissan chose in 1984 a 300 hectare former airfield near Sunderland. Sunderland’s attractions included:
a) Skilled labour force
Manufacturing has a long tradition in the area. A decline in other local manufacturing meant that skilled labour was readily available.
b) Communications
Sunderland has good road and rail links to all major UK areas. This makes it relatively easy to bring in supplies from 105 separate UK component and sub-assembly suppliers, and also to distribute completed vehicles. A nearby deep water port (Port of Tyne) gives ready access to export markets and for the import of vehicles to the UK.
c) Government support
The government provided financial and other incentives to manufacturers who set up in an area where employment opportunities had reduced sharply and new jobs were needed.
Since 1984, Nissan has increased the scale of its Sunderland operation; almost 3.5 million cars have already been made.
Production
Car assembly is a complex operation with many components requiring skilled assembly. For example,
That’s a crude indication of what is involved. Management are particularly keen to monitor total machine-hours and total labour-hours that each vehicle requires.
So far, Nissan has invested over 2.1 billion in the Sunderland site, taking its production capacity to 500,000 vehicles per year.
Production methods must be able to produce what customers want, in the quantities customers require, at a price consumers are willing to pay, and at a cost that yields a profit to the business. That means that being efficient is vital to success.
In some industries it is possible to carry out individual job production to meet a particular customer’s request e.g. a wedding dress, a birthday cake, a fitted kitchen. However, very nearly all of the world’s car manufacturers mass produce standard models, with individual consumer choice being accommodated by offering various colours, interior designs, and optional extras within a limited flexible production process. People can still personalise their cars further e.g. by choosing a particular car registration or accessories.
In pursuit of high output at low average cost, car manufacturing typically uses a continuous flow production method, where sub-assemblies are brought together in a final assembly area. This is the most cost effective and efficient method of production and the speed of the final assembly line can be adjusted to match consumer demand. If demand picks up, the production line can be accelerated, within predefined limits.
At NMUK, the production flow draws on three main production shops, as well as support areas. The three main shops are:
body assembly
painting
final assembly.
Supporting manufacturing areas are:
Supporting manufacturing areas are:
press shop – produces panels for the vehicles
plastics shop – makes bumpers (fenders) on site
castings shop – makes engine parts e.g. cylinder heads
engine shop – assembles engines, installs oil, coolant fuel
axle plant – produces axles that are joined to engines in final assembly.
Widely different processes generate different jobs across three main broad areas.
The machinery is scheduled to work at a given level although when demand requires it; there is flexibility in regard to both the machinery and the workforce of 4,300. At the moment, with a two-shift pattern, NMUK has a total production capacity of around 360,000 units/year – a third shift can be introduced which would take production up to 500,000 units/year if and when required.
Flow production
Nissan’s Sunderland plant is technically highly advanced. It uses sophisticated robotics and computer integrated manufacturing techniques to create a carefully monitored production process that reduces errors to an absolute minimum.
Automated machines can only do so much however; the human element remains vital. Organising an effective flow of production at Nissan has involved developing a way of doing things and an attitude towards work based on giving responsibility to employees at every step. This approach raises employees’ morale, and reduces absenteeism, which could severely impact on continuous flow production.
Nissan expects and requires its employees to become multi-skilled decision makers. Most employees also want that for themselves. Reaching that goal involves:
training employees to develop their skills
encouraging them to make decisions
organising employees into participative teams
developing open-channel, multi-directional communication systems
placing quality at the heart of flow production
flexible working practices
providing the employee variety within his/her role.
The open communication policy includes daily face to face meetings between management and employees, a company council, employee surveys, and employees having ready access to the company’s intranet system.
The emphasis placed on ‘going for quality’ means that each employee is responsible both for their own work and the standards of their co-workers. By ensuring management recognises that individuals have this control results in everyone taking the culture on board.
Going for quality’ emphasises ‘building good quality in’ rather than ‘inspecting poor quality out’. Each employee controls quality by checking that the previous job has been done properly.
Total Quality Management
Total Quality Management (TQM) is a key feature of Nissan’s way of working. TQM involves making customer satisfaction top priority. Given this goal, everything the organisation and its people do is focused on creating high quality. To achieve this, Nissan has to:
understand customer requirements
consider the processes involved in providing quality, not just the end result
prioritise and standardise tasks to deliver quality
educate all employees to work in this way.
In practical terms TQM involves:
identifying customers and their requirements
establishing and using objectives (targets) for all areas of activity
basing decisions on researched hard facts rather than on hunches
identifying and eliminating the root causes of problems
educating and training employees.
TQM is an ongoing process; a way of thinking and doing that requires an ‘improvement culture’ in which everyone looks for ways of doing better. Building this culture involves making everyone feel their contributions are valued and helping them to develop their capabilities.
A cycle of Plan, Do, Check, Action becomes part of every employee’s thinking, because it represents Nissan’s way of working.
Just-in-time technology
With a just-in-time approach, specific vehicles and their components are produced just-in-time to meet the demand for them. Sub-assemblies move into the final assembly plant just as final assemblers are ready to work on them, components arrive just in time to be installed, and so on. In this way, the amount of cash tied up in stocks and in work-in-progress is kept to a minimum, as is the amount of space devoted to costly warehousing rather than to revenue-generating production. Nissan’s just-in-time process depends not on human frailty but on machine precision.
Every vehicle is monitored automatically throughout each stage of production. A transponder attached to the chassis leg contains all of a vehicle’s production data e.g. its required colour, specification and trim. This triggers sensors at various points along the production line thus updating the records.
When, for example, the transponder sends a message to the production system at a supplying company to produce a seat in a particular colour and trim, this triggers the relevant response and a seat to the required specification is produced. Further along the production line the specifically produced seat arrives to meet the vehicle to which it belongs – just in time.
The importance of training
It is vital to train people to work in such a hi-tech industry with such sophisticated quality systems. NMUK’s training department conducts a training needs analysis to assess individual employees’ needs and to organise training programmes.
The department concentrates on five main areas:
1. technical development – e.g. teaching skills relating to robotics and electrics, plus the required knowledge e.g. wiring rules/regulations.
2. people development – identifying employee needs and ambitions; providing courses to help personal development e.g. in team building and communication skills
3. understanding processes – workshops covering safety, production operations etc
4. computer skills and graduate training – from basic to highly technical
5. trainee development – courses for graduate trainees ranging from accountancy to team building.
Kaizen
Nissan is famously associated with ‘Kaizen’ or continuous quality improvement. Nissan states: ‘We will not be restricted by the existing way of doing things. We will continuously seek improvements in all our actions.’
Kaizen can be applied everywhere, any time, any place. It can involve the smallest change in everyday working practice as well as a major change in production technology. Typically these improvements are initiated by teams of employees sitting down together and sharing ideas for improvements. Small steady changes are maintained to make sure that they actually work. No improvement is too small. Everyone at Nissan is responsible for thinking about the current way of doing a job and finding a better way of doing things.
Kaizen improvements can save:
money
time
materials
labour effort
as well as improving quality, safety, job satisfaction, and productivity.
Kaizen permeates the NMUK suggestion scheme, which offers not financial or individual rewards but items that benefits the whole team e.g. a microwave for the staff kitchen, a pool table for the canteen.
ADDITIONAL RESOURCES
2019 Nissan Sustainability Report – https://www.nissan-global.com/EN/SUSTAINABILITY/REPORT/NS2022/
Nissan Corporate Website with company details, Company Library and Annual General Report. https://www.nissan-global.com/EN/COMPANY/
Nissan Motor Manufacturing UK, Mid-term Business Plan 2019
Nissan Motor Manufacturing UK, Monozukuri Launch Programme 2019
SMMT (2018) SMMT Motor Industry Facts 2018
www.smmt.co.uk/wp-content/uploads/sites/2/SMMT-Motor-Industry-Facts-May-2019-V2.pdf
www.
Automotive Vehicle Assembly Processes and Operations Management
Series:
Society of Automotive Engineers. Electronic Publications
Authors:
Tang, He
Society of Automotive Engineers
Publication Information:
Warrendale : SAE International. 2017
ORGANISATIONS
North East UK Automotive Alliance https://northeastautomotivealliance.com/
https://www.northeastautomotivealliance.com/the-ne-automotive-industry/supply-chain/
