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Case study analysis of automotive manufacturing industry

Category: Management Paper Type: Case Study Writing Reference: APA Words: 3900

Table of Contents

1.0 Introduction. 4

2.0 Main body. 4

2.1 Selection of supplier and safety. 5

2.2 Risk management. 5

2.3 Quality assurance. 5

2.4 Contracts and agreements. 5

2.5 Cost and efficiency. 5

3.0 Benefits of JDPi for competitive tendering approach. 6

3.1 Benefits. 6

3.2 Challenges. 6

3.3 Strategies to minimize challenges. 7

4.0 Terms and conditions that govern the contract 7

5.0 Legal rights and obligations of JDPi 8

6.0 Advise for Capgemini UK PLC.. 9

7.0 Different possible sources to be approached. 10

8.0 Conclusion. 11

9.0 References

Figure 1:  Procurement Stages. 4

Figure 2: Contracting Issues. 9

Figure 3:  Supply chain conceptual framework. 10


 

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1.0 Introduction of automotive manufacturing industry

The report is based on the supply chain management of the JDPi automotive manufacturer and there is complete discussion about the challenges and to control the risk in the market. There are strategies to deal with the challenges that could be used to minimize the risk of the challenges. It is about the procurement laws and regulation that are governed by the contract and how these could term and conditions to be implemented in the contract. In the contemporary business world, it is necessary to implement the strategies in the business to save the cost of purchasing and implement the strategies that could be agreed upon the terms and conditions of the supply chain management. There are different kinds of procurement and supply chain management that is implemented on the project to gain the competitive advantage in the market.

There are trending challenges that could be faced by procurement supply chain management that could be used in the responsibility and the liabilities of the company that could make development and overcome the challenges faced by the procurement supply chain management. There are legal rights and duties of JDPi that are enforced in the company. In manufacturing industry there must be proper implication of safety measures.

2.0 Main body


Figure 1:  Procurement Stages

In the potential working environment, there must be proper enforcement of the rules and regulations that are arranged in the JDPi manufacturing industry. Procurement supply chain management has to face different kinds of the challenges in the manufacturing industry. In context of JDPi automotive manufacturing industry, there are some challenges that could be faced by the procurement supply chain management explained as follow:

2.1 Selection of supplier and safety of automotive manufacturing industry

There is requirement of delivering the cost of the product in the quality to determine the cost and scope of the product. There are different approaches that work with the best practice in the selection of the negotiation of the benefits in the procedure of the security and quality of the manufacturing of the vehicle. Quality product could be helpful to gain the sustainability of the business in the market. The manufacturing industry is based on the quality of raw material and machinery that is purchased by the company. Therefore there must be proper selection of the suppliers as performance of the company is based on the quality of the machinery and raw material used in the manufacturing industry. All the safety measures and regulations must be followed that are difficult task to implement and select the supplier for the raw material.

2.2 Risk management of automotive manufacturing industry

When the company is working in the competitive market, there must be proper allocation and settlement of the risk that could be faced y the procurement supply chain management. In the case of JDPi there is need to mitigate the risk as there would be stability in the prices of the vehicle but quality is required from the product. So company could not take the risk in the settlement of the quality. The Government procurement supply chain management must to have evaluated the danger of using a Single Source provider and the picked supplier's account exhibition. The gracefully methodology may have been de-gambled had the Government surveyed the relationship risk and considered conditions inside the agreement for non-execution, entitling them to send for the elective supplier or look for cures.

2.3 Quality assurance of automotive manufacturing industry

Procurement supply chain management must examine the supply chain of the standards that are determined to check the capability of the JDPi in the standards of industry. There are a number of ranges that are implemented in the manufacturing industry that are necessary to gain the quality in the manufacturing. Procurement supply chain management has to work according to the standards and rules that could be difficult to handle the quality and the regulations both at the same time.

2.4 Contracts and agreements of automotive manufacturing industry

Procurement supply chain management should examine the contract with the suppliers that are based on the agreements of the services to manufacture the vehicles according to the legal standards of regulations. The agreements are required to be understand the according to the legal implications of rules that is a hard task to do by procurement supply chain management.

2.5 Cost and efficiency of automotive manufacturing industry

The procurement supply chain management drive is to diminish cost and improve productivity of the flexibly chain by evaluating the through life cost of an item. It could be implemented from beginning to removal, by inspecting the Total Cost of Ownership. This allows complete expenses to be resolved, empowering an actual existence cycle cost-based choice to be applied. The Government may include different kinds of taxes that increase the cost and it could impact on efficiency of the production. In spite of the fact that the underlying expense may be higher it gives some adaptability, which was required when a change to the degree was presented.

2.6 TENDERING

The project tendering is actually a process in which the companies bid to carry out the particular packages essential to the complete the project. The tendering principle is to make sure that it achieves the true competition and tenders received which will be evaluated by making the particular criteria for the project. Furthermore, the development competitive equilibrium means that the project tender as the addition of the strategy to complete the project in effective manner and the project valuation at the basic theories of tendering that can be supported. Although, there are serious empirical, methodological as well as theoretical inconsistencies are in the theory. The tendering has also the advantage that it can stimulate the innovation to provide the service as well as it also gives the opportunity to evaluate the incentives and the pricing structures again. The main benefit of the tender is that it gives the best value for outcome in the form of money from activity of procurement.

2.7 PESTEL ANALYSIS of automotive manufacturing industry

Several types of problems may exist in the project but some external factors can also be very influential on the project and can be the reason of success and failure of the business. In this section, the political factors are discussed which can have the high impact on the project.

·         Political Factor

The political factor is very influential on the project and the workability of the company. In the political factors, some rules and regulations have been included and legislation is telling that the government is favoring the low emission vehicles. But it is also shown a high increase in the taxes of luxury vehicles.

·         Economic Factor

The economic crisis has damaged the vehicle manufacturing industry and due to this reason, the demand for the luxury vehicles is also affected in the critical financial conditions time.

·         Socio economic

The people in the country are giving preferences as well as the cultural trends are also affecting the automotive vehicle industry. Furthermore, JDPI should adopt the socio-cultural value or forces including the preferences of people by introducing the vehicle quality. Although, the specific styles and core values in the culture of United Kingdom are preferred but some regions in the United Kingdom has the high demand for the vehicle such as London, Manchester and other cities.

·         Technological

It is the very influential external factor which can business of company successful and the main bridge towards success. There are many companies in the world that are using the new technology to increase their growth and business. The company has also take this fact serious, so the system for the business is being developed by contracting with the development company. It is necessary because the more technology the company has, it will have the more market share.

·         Environmental

The environment is changing day by day due the carbon emission and cause of the pollution. The government is focusing more on the sustainability of the environment, so the companies are also focusing to manufacture the electric vehicles which can support in sustainability.

·         Legal

Some the legal factors are also discussed in this section. The automotive vehicle manufacturing companies are expanding regulations on safety of vehicle, regulations for emissions and the environment sustainability regulations.

3.0 Benefits of JDPi for competitive tendering approach

JDPi can access multiple benefits and competitive tendering approaches that can provide the source to the IT system. although different common challenges are faced by procurement and supply chain managers and the requirement is to find the solution and possible alternatives so that the managers can overcome the challenges. There are different possible ways and strategies that can be used for the minimization of these challenges.The competitive tendering approach in the present case involves the advertisement interest of the company to acquire the supplies and services and to respond the tender in the business (Winch, 2012).

3.1 Benefits

The competitive tendering in JDPi will promote the business, competition and provide transperancy to the suppliers. the situation can tern as price tags are driven down but the question here is what may be cost. The people and companies will further meet the lower requirement of price and it will cut the commers. The present condition of JDPi for cutting the corners will eventually result as losses (Cambini & Filippini, 2003).

3.2 Challenges

In our country, the procurement guidelines are designed to allow the suppliers for the tender to be considered for the decision of procurement. As JDPi is the leading supplier and tender are not often not given to suppliers. In this process, only purchasers can consider the bids from the suppliers. suppose the leading suppliers are not considered then the purchaser may end up for buying inferior product or services (Gómez-Lobo & Szymanski, 2001). the possible disadvantages for JDPi are listed below,

1.    JDPi may face barriers to communication between customers and suppliers.

2.    The cost-plus phenomenon can be used to bear trap in the purchase of services and goods.

3.    Sometimes, the leading suppliers may not be getting the tender.

4.    The supplier is forced to use the poor-quality materials, cheaper and labor conditions. If the cheaper materials and labor are poor it will affect the product and services.

5.    The buyers are urged to put the tendering process, checks and balances.

6.    It is possible that the competitive tendering can be extremely slow process for the agencies, suppliers and tendering process.

7.    The low margins in JDPi can cause insufficient profit margin that allow the investment, research and development, equipment, and new technology (Carter, Kirby, & Oxenbury, 2012).

3.3 Strategies to minimize challenges

The appropriate type of the solution for the competitive tendering can vary based on type and complexity of the product provided by JDPi. The other factors that can affect it are price of the purchase, one-off, long term supply relationship and other principles of the contract (Stanley, 2011). Different strategies can be applied by JDPi for most procurement decisions and these strategies are listed below,

1.    Open the communication sources for potential and current suppliers.

2.    Even the research of the purchasing requires some alternatives, but it is important to find the possible solutions.

3.    The purchasing decisions for the customers, suppliers and contractors of JDPi are based on the strong trust relationship.

4.    The profit margin must be paid fair.

5.    It is important to develop healthy and long-term relationship between the suppliers and particularly in the reputable suppliers.

4.0 Terms and conditions that govern the contract

Capgemini UK PLC compiled the report that was developed to confirm the system and it could  upgraded to meet the requirements of the company. Considering the situation, JDPi developed a formal invitation for the tender and the work was involved for the upgradation of the system (Robertson, 2003). The invitation of tender (ITT) was issued on the basis of standard terms of IT services ofJDPi. The standard terms and IT services are that govern the contract are listed below,

1.    Terms that bind the customers and suppliers of JDPi can only be changed after having the consent of the customers.

2.    The customers will be provided by the facilities and information and there are necessary steps for the suppliers to take for the improvement of services.

3.    The responsibilities of the customers are based on the operational and environmental conditions and the system can only be used for the usage, testing, controlling, and modification of the system. the process is designed to ensure that customers are adequately trained the users in an appropriate way to use the system (Estlund, 2006).

The contact for the project are essential to bound the parities on the agreed points. The main benefit of the contract is that the constructor or the service provider cannot break the rules in the project and the same thing is also applied on the clients. Every type of regulations and rules related to project will be mentioned on the contract. So, the work will be done by the contractors will purely be legalized.

5.0 Legal rights and obligations of JDPi

There are different aspects of contract and negligence of business and it can be analyzed on the basis of legal patterns. The law and procedures are designed to reduce the aspects of contract and negligence for the business. the case is extreme important and business issue the cropped-up conditions in the performance. According to McKendrick (2014) there are multiple types of obligations and contracts that are related to the business and the practiced regulations and norms are defined for the specific business. the rules and legal laws can vary in terms of intensity but the overall rules and regulations for business contracts are almost same in nature. JDPi automotive manufacturers are operating number of IT systems, therefore the legal rights and obligations are also under the designed rules of artificial intelligence. Since JDPi decided to replace the previous version to the new version it is important to select an appropriate level of management and discard the existing system in a most effective way. the legal considerations are to make improvement in the previous work with general efficiency and effectiveness, response time must be speeded up, and integrated system in the company must be designed in such a way that it can work under the rules and regulations defined by company and government (Augenstein & Kinley, 2013). The competitive tendering offers are created for the development and implementation of new software system under the defined resources. JDPi is not in position to deal with the Capgemini UK PLC. The focus of JPDi case study is to appraise the main contract issues and find the alternative implications under the legal conditions for major programs and project. JDPi is required to reconsider the legal issues that are linked with the formation of supply chain. Even JDPi is facing challenges in operating the IT system but still new strategies and implications are supposed to be under the legal and law aspects. For the contract, the contributor content is developed for preservation and disclosure is reasonable for the legal process, claims for the content violation, rights for the third party such as Capgemini UK PLC, and protection of rights, personal safety, property, and public. In case of any provision, the terms are held for the not performable and illegal and the validity of the remainder will not be affected (Stanley, 2011)


Figure 2: Contracting Issues

Source: (Li, et al., 2003)

6.0 Advise for Capgemini UK PLC

In this section, some advisory comments are given for the Capgemini UK PLC because it has faced several types of the problem and failures into the software. Due to the failure on the software, the company has to loss the very important and sensitive data including staff demotivation.The software should be replaced and upgraded because the technology in the world is consecutively changing day by day. The new software which will beimplemented in the company,Capgemini should have to make deal the JDPi and this thing should also be added in the contract paper along with the signature of the stakeholders of JDPi, and ensureJDPi that the software will be delivered byCapgemini UK PLC timely after making some amendments to the company in exchange of agreed payment amount and method.It should also be mentioned clearly in the contract that the payment will be given to PLC for the changes or upgradation will be extra amount in the project.


Figure 3:  Supply chain conceptual framework

Source: (Ivanov & Sokolov, 2009)

7.0 Different possible sources to be approached

The procurement problems are very challenging which must be resolved as well as must be by using different types of sources in the procurement procedures. The good approach for the procurement in the company is the use different types of sources. So, some different possible source which should be approached are discussed in this document. The first source is developing a governing supply chain council that will have the purpose to give appropriate direction through instructions as well as provide help to align the strategy of the supply chain with the overall strategy of the company. Secondly, the company must need to properly align and staff the supply chain organization which can be the very difficult as well as very challenging task for the company to organize the supply chain function in a way that enhance the effectiveness as well as bring corresponding benefits to the company. Another source for the procurement is very important as well as can be placed at the level of essentials for the company that technological work. The information technology should be introduced in the company which can increase productivity as well as enhance the progress and performances of the employees and overall company. JDPi should to replace the current system with the new technology and must focus on the new hardware or system for upgraded technology (Canova & De Nicolò, 2003).

8.0 Conclusion of automotive manufacturing industry

It is concluded that the it must be proper enforcement of the rules and regulations that are arranged in the JDPi manufacturing industry. Procurement supply chain management has to face different kinds of the challenges in the manufacturing industry. Hence, there must be proper selection of the suppliers as performance of the company is based on the quality of the machinery and raw material used in the manufacturing industry. Procurement supply chain management should examine the contract with the suppliers that are based on the agreements of the services to manufacture the vehicles. In this process, only purchasers can consider the bids from the suppliers. The other factors that can affect it are price of the purchase, one-off, long term supply relationship and other principles of the contract. Considering the situation, JDPi developed a formal invitation for the tender and the work was involved for the upgradation of the system.There are different possible ways and strategies that can be used for the minimization of these challenges. The case is extreme important and business issue the cropped-up conditions in the performance. JDPi is not in position to deal with the Capgemini UK PLC. JDPi is required to reconsider the legal issues that are linked with the formation of supply chain.

Recommendations of automotive manufacturing industry

Followings are the suggestions made according to the case study analysis:

·       JDPi must continue to undertake different efforts to strengthen the sustainability in the management of the company. It should promote different methods such as the cost and benefit structure to realize that management is working according to the competitive market requirement.

·       JDPi must accelerate its business expansion and to implement growth in the monitoring of market conditions to gain the new products and quality of the product according to the requirement of customers.

·       It should consider making different priority product according to the market. That makes it possible to gain the competitive advantage among the other core manufacturing in the segmentation of market. With the increasing production and facilities increase to the customer, it have to take different decision about the minute middleman management to show that engineers are more accurately working according to the instruction of authorities.

·       There must be support to consolidate management on the global level so that the power of workplace and diversity of the human resource management could be dwelled on international level.

·       As concerned with the instructions and infrastructure safety measures, there must be compliances and observations of laws and regulations that actively participate in the manufacturing of vehicles.

Bibliography of automotive manufacturing industry

Augenstein, D., & Kinley, D. (2013). When human rights ‘responsibilities’ become ‘duties’: the extra-territorial obligations of states that bind corporations. . Human rights obligations of business: Beyond the corporate responsibility to respect.

Cambini, C., & Filippini, M. (2003). Competitive tendering and optimal size in the regional bus transportation industry: an example from Italy. Annals of public and cooperative economics, 163-182.

Canova, F., & De Nicolò, G. (2003). On the Sources of Business Cycles in the G-7. Journal of international economics, 77-100.

Carter, R., Kirby, S. K., & Oxenbury, A. (2012). Practical contract managment. Liverpool Academic Press. Retrieved from https://www.abcassignmenthelp.com/aspect-of-contract-and-negligence-for-business

Estlund, C. (2006). Something Old, Something New: Governing the Workplace by Contract Again. Comp. Lab. L. & Pol'y J., 351.

Gómez-Lobo, A., & Szymanski, S. (2001). A law of large numbers: bidding and compulsory competitive tendering for refuse collection contracts. . Review of Industrial Organization, 105-113.

Ivanov, D., & Sokolov, B. (2009). Adaptive Supply Chain Management. Springer Science & Business Media.

Robertson, M. (2003). "Is Assent Still a Prerequisite for Contract Formation in Today's E-Conomy. Wash. L. Rev, 78, 265.

Stanley, M. B. (2011). Seven Reasons Competitive Tendering Fails (And What You Can Do About It). Retrieved from https://www.processexcellencenetwork.com/innovation/columns/seven-reasons-competitive-tendering-fails-and-what

Winch, G. M. (2012). Managing Construction Projects. John Wiley & Sons.

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