Exploring issues on managing quality | My Assignment Tutor

1Exploring issues on managing quality, people and ensuring sustainability: the case ofJaguar Land RoverPutting global operations, logistics and supply chains in motion in the automotive industry requiressophisticated preparation and significant decision making at various levels, and which have asignificant impact on a company’s performance (Matopoulos and Banaszewska, 2016). This essaywill consider quality management and managing people at Jaguar Land Rover (“JLR”). It willargue that there are actual and potential issues in these areas that JLR needs to address, in order todevelop a highly effective strategy for producing quality cars and focus on employee motivation.This essay will take account of total quality management perspectives, including motivationtheories and triple bottom line, to address the issues facing JLR and identifying practical solutions.Although reputed for its luxury brand premium cars, JLR has historically been the subject ofproduct quality issues in the design and production of cars. JLR was acquired by way of adistressed sale in 2008 by Tata (a multi-national automotive company) from Ford. The acquisitiondecision was a strategic move by Tata to diversify its product segments internationally, improvequality and reduce productivity and supply chain costs (Laddha, 2016). The acquisition is againsta background loss of USD 715 million in 2006 and quality issues with JLR cars inherited fromFord, based on lax quality control (Kiley, 2008). JLR’s main focus has been on producing largecars such as Range Rover, without considering the market for medium size cars produced by itscompetitors Mercedes, Audi and BMW (Jian, 2019). This has resulted in lower profitability in JLRcar sales with an impact on reduction in productivity.Despite some quality cars produced by JLR, sales of its low emission cars have fallen since 2018,with the UK government’s focus on zero emission models and electric vehicles (EV’s) (Society ofMotor Manufacturers and Traders, 2018). JLR has party addressed this issue with production ofJaguar “E-Pace” and “I-Pace” models (JLR, 2019). The I-Pace is battery operated cross-over SUV.JLR has made significant investment in building a range of EV’s at its Castle Bromwich site inBirmingham with employment for 2,700 employees, as part of managing people strategy, andcreation of a sustainable environment (JLR, 2019). However, a report suggests that introductionof EV’s will not address issues such as traffic jams and may lead to an adverse effect on theenvironment (Centre for Research into Energy Demand Solutions, 2019). These are potential2issues which JLR will need to address going forward, particularly since JLR has been subject topoor quality car production issues (Automotive News Europe, 2019).Quality is one of the key factors underlying success of car manufacturers in the operations process(Stylidis et al, 2015). The perspectives on defining “quality” in the automotive industry differ intheir approaches. A car product manager’s focus will be on ensuring that the car meets stringentproduction standards by producing the car “right first time and every time” (Zeithmal, 1988). Froma car marketing perspective, the emphasis is on quality aesthetic and performance aspects of theproduct enhancing car brand (Garvin, 1984); while a product-based perspective considers qualityas a precise and measurable variable (Aaker, 2009). Consumers purchase JLR cars because ofaesthetic appeal, durability, quality, appearance and value for money. The high quality standardexpectations under these perspectives are reinforced by JLR’s approach to quality, which puts thecustomer “at the heart of everything we do” and meeting customers’ expectations as the entry point(JLR, 2019). JLR’s primary objective is exceeding customers’ expectations, and inspiring loyaltyin the JLR brand, including enhancing every aspect of their experience (JLR Annual Report, 2019).To this end, JLR uses advanced problem-solving techniques and key metrics to ensure qualitylevels in its process, products and customer service. The emphasis is on perfection based on qualityassurance, quality engineering, quality operations, quality strategy and quality compliance. JLRoperates under the slogan “quality, dependability and reliability” paying attention to detail in everycar involved in manufacturing process (JLR, 2019). However, despite JLR’s adherence to highquality standards through ISO 9000 and 9001, it has faced ongoing quality issues and damage toits reputation.JLR’s poor quality control management has been highlighted in its operations in China. Its salesin that region have decreased significantly owing to ineffective quality control (Wilde, 2019),compared to increasing sales growth in China for Audi, BMW, Mercedes-Benz. A J.D. PowerSurvey revealed that JLR’s brand came last out of 31 cars brands (J.D. Power, 2018). Issuesrelating to quality in the manufacturing process have led to 106,000 recalls of JLR vehicles inChina in 2017 (70% of JLR’s local sales). This has jeopardised consumer confidence, JLR’sreputation and brand value with negative publicity for lack of reliability and dependability (Jian,2019). These aspects have placed pressure on local dealers with large inventory, to effect quick3sales of JLR cars by offering discounts of up to 30%. All the recalls have involved engine,instrument panel, airbags, and battery defects (Traugott, 2019). JLR’s quality control, capabilityand after-sales network in China have not been resilient enough to support its volume expansionwith competitors such as Audi, Ferrari, Porsche and Aston Martin (Jian, 2019). JLR has attributedthe decrease in sales to a poor choice of joint venture Chinese partner, Chery Automobile.However, JLR needs to regain its credibility with consumers, including choice of potentialsuppliers in the supply chain, logistics and manufacturers, otherwise JLR is likely to sustain afurther decrease in sales both nationally and internationally (Sen et al, 2008). Product quality,therefore, needs to be addressed by JLR.By focusing on producing quality cars in a reliable, dependable and efficient manner, JLR shouldconsider proactive operations strategies such as responsiveness (Heizer et al, 2017), particularlyin the recall of some of its cars. A flexible response is required which would allow JLR to quicklyredesign cars which are faulty. Responsiveness would result in regaining consumer confidence inJLR’s cars and rebuild a competitive advantage. Responsiveness also involves reliability ofscheduling. JLR needs to demonstrate it has effective mechanisms in place to attend to any repairsor customers’ concerns, by adherence to its schedules in a timely manner. Quickness in theproduction operations will also assist JLR in quality management issues. JLR can demonstrate itscompetitive advantage and quality products through speed in product development, production anddelivery of the cars through one of its reliable supply chain partners, DHL. This would have theeffect of speeding up and improving the delivery of JLR cars in response to customers’requirements.Given the ongoing quality issues, JLR should engage in continuous improvement as part of thetotal quality management (“TQM”) process (Juran, 1992; and Crosby, 1979). JLR’s productionprocesses are defective in places and t need to be rectified. JLR could benefit from applying the“PDCA”, “Kaizen” or the zero defects model (Shewhart, 1939; and Deming, 1986). This involvespreparing a plan identifying quality issues. The plan must then be tested. The plan is then checkedand applied in practice. Linked to this, JLR should implement the “Six Sigma” process to ensurethat its cars are produced to a high quality, thereby reducing customers’ complaints. The effect of4continuous improvement would be to minimise any defects, save time and reduce costs therebyimproving customer satisfaction of JLR cars.Improving quality in the production of cars involves application of “just-in-time (“JIT”). Bydeveloping JIT systems, JLR could produce and deliver goods just when they are needed in atimely manner. JIT reduces the expenses of quality by exposing bad quality through inventory. Italso improves quality by addressing errors and sources of the errors. JIT systems promote betterquality products with less inventory (Heizer et al, 2017). Effective JIT systems at JLR could becomplemented by implementing some “Taguchi” concepts in practice. These include qualityrobustness so that JLR cars are produced uniformly and consistently. A target-oriented qualitywould allow JLR cars to be produced on time. JLR could also focus on quality loss function, whichprevents deviation from the target value and reduces costs in car production. By implementing JITtechniques, JLR would produce cars tailor-made to customer’s requirements in a timely manner.Quality management in the production of JLR cars involves the practical application of the“DMAIC” process. JLR should define the project’s purpose at the outset. It should set out thescope and outputs. The process is then measured through collection of data which is then analysedwith a view to effecting improvements and modifications in car production. The final stageinvolves controlling the new process so that performance is elevated and maintained. Various toolsto implement the DMAIC process can be used by JLR including Ishikawa’s cause-and-effectdiagrams, histograms, check sheets, scatter diagrams, Pareto charts and flowcharts (Heizer et al,2017). This will be a major commitment for JLR and the initiative must come from its executivemanagement. The effect of implementing some of these processes is to ensure the production ofhigh quality cars which are free from defects.The process of continuously ensuring that JLR cars are produced to a high standard can be effectedthrough benchmarking as part of TQM. Benchmarking involves JLR determining what tobenchmark; forming a team (Belbin, 2010; and Tuckman, 1965). JLR should identify a target tobenchmark. Thereafter, JLR should collate and extrapolate the information obtained, and takeaction to exceed or match the benchmark target. JLR could use the benchmarking in relation to itsEV’s which are being developed, rather than JLR’s diesel cars. Once the standard of benchmark5has been developed, JLR could use that as a target to develop high quality cars in the productionprocess. The effect of benchmarking would strengthen JLR’s position in the market for itsreputation in producing premium cars, as well as medium range cars.Producing high quality premium cars requires an experienced, skilled, effective and motivatedpersonnel as part of managing people at JLR. Empowering JLR’s employees would allow them tobe fully engaged in every step of the production process, particularly in designing JLR cars tominimise defects. JLR’s employees would be best equipped to locate quality problems andpromptly resolve them thereby enhancing quality products. The empowerment process wouldallow JLR to introduce better communication networks for its employees to allow for speedydecisions with supportive supervisors. Production responsibility should shift from JLR’smanagement to its employees to give them autonomy, as employees are involved in the productionprocess. Finally, it should also establish teams and quality circles to resolve work-related issues(Feigenbaum, 1961). Tuckman’s (1965) five stage model of forming, storming, norming,performing and adjusting can be used to build an effective team. The effect of employeeempowerment and creating specialist cross-functional teams leads to specialist skill sets foremployees, and enables quality issues at JLR to be addressed quickly (Trist and Bamford, 1951;and Herzberg1968).Managing people is also about ensuring employees remain motivated. Despite the 40,000 UKactive workforce at JLR plants, JLR has made a number of employees redundant. JLR shouldengage in labour planning by handing redundancies sensitively. In 2019, JLR announced 4,500redundancies in order to reduce inefficiency (with savings of £2.5 billion) and lack of demand inits diesel cars (Autocar, 2019). This compares with the loss of 1,500 jobs in 2018. The effect ofredundancy creates a lack of motivation at the workplace, particularly where employees haveexpectations of securing long term employment (Vroom, 1964). These aspects can be mitigatedthrough proper labour planning and, where appropriate, offering employees alternativeemployment by learning new skills.6The need to ensure a proper job design is also a critical in managing people in operations andsupply chain process. JLR should consider labour specialisation roles allowing employees tocomplete their work in a timely manner in the assembly line of producing cars (Smith, 1776;Babbage, 0000). This, in turn, can lead to the development of a job expansion strategy for trainingits employees in a variety of jobs, to give them overall skills required through either jobenlargement or job rotation leading to job enrichment. There are also psychological componentsof the job that JLR should consider to ensure that employees stay motivated (Hawthorne Studies(1920). As part of job design, JLR should focus on frequent motivation which can result in jobsatisfaction, performance and improved labour relations (Condly & De Pietro, 2001). This in turncan lead to less absenteeism and reduce complaints from JLR’s customers (Kavanaugh andNinemeier, 1995; Samuels, 2013). An improvement in motivation levels reduces high turnover ofstaff (Barrows & Bosselman, 1999; and Cundy & Bosselman (1992). If the working conditions ofemployees are of low standard, employees will be demotivated (McGregor, 1960; and Maslow,1970). . JLR should lessen the impact of redundancies through offering its redundant employeesalternative employment. Hackman and Oldham (1986) identified five core job characteristics of ajob design that could assist in maintaining employees’ motivation levels: skill variety; job identity;job significance; autonomy; and feedback. JLR should build these attributes in the job design phaseand consider rewards and incentive schemes as additional benefits for its employees.As part of the triple bottom line (“TBL”), JLR needs to ensure sustainability of people,environment and economy in which it operates (Elkington, 1994). UK company directors areobliged to take account of the interests of people such as employees, consumers, suppliers, andwider “stakeholders” in determining the long-term success of the company (s.172 Companies Act2006). JLR operates various programmes and apprenticeships for people globally as part of its2020 measures for creating job opportunities (JLR, 2019). In respect of the environment, JLR uses“Life Cycle Assessment” to create environment-friendly EV’s. One effect has been to reduce theweight of a car’s body components, making cars more efficient and high-performance (JLR, 2019).JLR is also reducing its manufacturing of diesel cars with focus on EV and battery-operated carswith fierce competition from Tesla, Toyota, Nissan. JLR contributes to the economy throughexercise of its corporate social responsibilities in maximising profits for its shareholders, anddischarging its social obligations towards society.7In conclusion, JLR has product quality and managing people issues that need to be addressed. Onthe issue of quality, various TQM perspectives have been considered that could assist JLR inensuring reliability and dependability in the production of top quality cars. It is recommended thatJLR engages in continuous improvement and responsiveness, including using JIT techniques inpartnership with its supply chain suppliers to regain customer confidence. Design defects need tobe rectified to prevent further recall of vehicles as they impact on quality. While JLR is creatingnew jobs for its battery powered vehicles, it has also made employees redundant. It isrecommended that JLR engages in proper labour planning and empowers employees at theworkplace, to ensure motivation, as demotivation has a significant impact on productivity and highturnover of personnel. JLR also needs to remain competitive, and it is recommended that it reducesits dependency on sale of diesel cars and focus on EV’s for future survival and to ensuresustainability.8REFERENCESAaker, D.A. (2009) Managing brand equity, Simon and Schuster.Autocar (2019) Jaguar Land Rover confirms 4,500 job cuts. 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