BYD China

QSO-300 Final Project Milestone Three

Introduction

BYD China is Chinese based company that majorly engages in the sales and manufacture of transportation equipment. The company has also engaged in the sales and manufacturing of other products such as rechargeable batteries, automobile products, and photovoltaic products. The company mainly operates in United States, China, and Europe. This paper will focus on proper operations management practices that will enable BYD to improve its performance in the auto industry.

Theories and Techniques

Just in time (JIT)

The Just in time is an inventory management system that focuses on increasing efficiency and minimizing inventory. The JIT system cuts the inventory costs since the company receives the materials and parts they require for production in time rather than paying for storage costs (Pinto et al., 2018). This means that the company is not left with unwanted inventory if an order is not fulfilled or canceled. Ideally, for a car manufacturing company such as BYD China, JIT will enable the company to operate with low inventory levels and rely on its supply chain to deliver the required parts after an order is received. JIT is a problem-solving and improvement approach for companies. BYD China will use JIT to improve its quality and reduce the number of resources used in the inventory. However, the main limitation with this process is that the company might experience delays in manufacturing in case of delays in shipment, thus failing to deliver the order in time. The company may lose profit due to a general shortage of supplies, lack of shipment, and delays in shipment.

Toyota Production System (TPS)

The Toyota production system is a social, technical system that entails the management of practices such as manufacturing, logistics in automobile manufacturing, and the integration of customers and suppliers to minimize waste and cost (Stevenson, Hojati, and Cao, 2014). The philosophy of TPS is to eliminate waste and work intelligently to reduce inventory costs. This lowers the physical space needs, cash flows and makes it easier to deliver the right results effectively through a single piece flow to the end customer. BYD would benefit from the TPS system since they will save money, reduce production costs through low labor hours, less time and machinery used in production. TPS will also improve quality in processes and products since it will help the worker identify the potential defects, inefficiencies thus reducing errors. However, the main limitation of low labor and less machinery might affect the ability of the company to adapt well during a sudden increase in the levels of demand. Supply chain failures may result in great losses for the company.

Lean Operations

Lean operations entail running a company focusing on offering greater customer satisfaction while relying on minimal resources. The objective of lean is to eliminate waste and create value for the consumers. Organizations that rely on lean operations are highly concerned with efficiency. Ideally, the lean operation is a strategy driven by a minimalist approach of doing more with less. BYD will increase their customer relation and satisfaction due to positive outcomes in customer service. Lean will lower all forms of waste from material defects to material defects, thus improving the quality of products at BYD China.  However, lean operations will leave the company vulnerable to supply delivery issues and systemic bottlenecks, interrupting the production flow. BYD China may find it difficult to balance the system waste and margin of error, thus reducing the production throughput.

Sustainability

Triple Bottom Line

The three P’s of the triple bottom line can be utilized to enhance operations management through focusing on quality values, customer satisfaction, and product quality management system. According to Henriques (2013), the decisions of the organization influence planet, people, and profit. The triple bottom line is a framework that incorporates three performance dimensions; environmental, social, and financial. The triple bottom line has been one of the main strategies used by companies to assess their growth through corporate sustainability solutions. The social bottom line enables the business to strategize on human capital in the local society. BYD China increases its social bottom line through beneficial and fair labor practices and community involvement.

The environmental bottom line focuses on reducing the environmental impact of a business to increase success. Environmental bottom line control entails monitoring, managing, and reporting waste, consumption, and emissions. Sustainable business models communicate sustainability solutions and goals within the organization, facilitating the adoption of green corporate policies. The economic bottom line is concerned with the financial standing of the organization. This bottom line enables companies to generate wealth and stimulate economic growth through innovation, ethical practices, and supporting local suppliers.

ISO 14000 Standards

Iso 14000 standards entail a set of guidelines developed by the International Organization for Standardization to be considered sustainable through their standards. BYD has met these guides through effective environmental management practices and thus is ISO 14000 certified. The environmental standards set by BYD have ensured that they comply with ISO 14000.

Corporate Responsibility

BYD has integrated principles of corporate responsibility in its operations by the societal, environmental, and financial impact that can be utilized in making decisions within the organization. BYD has a sustainable CSR management which includes social responsibility communication and stakeholder engagement. They have maintained responsible operations such as supply chain management and safety production management to protect investors, customers, and employees (Choi, 2014). BYD has focused on creating a more sustainable and better world by actively participating in public efforts such as education support, disaster relief, and social welfare contributions. Additionally, Green technologies and products have been implemented to facilitate environmental and social responsibility.

Conclusion

Enhancing operations management requires drawing a strategy that looks into external and internal processes, which can be used to improve operational efficiency. Improving operational efficiency requires BYD to look into concepts such as Just in Time, Toyota Production System, and Lean operations, which can allow changes in their internal lead times, thus improving production and operations. BYD should also focus on enhancing social, ecological, and economic sustainability in its operations and manufacturing processes to improve operations management.

References

Choi, B. H. (2014). SR (Social Responsibility) Report Analysis for Chinese Automobile Makers: Comparison with Global Standard, GRI G3. 1. Chinese and China Studies (23), 297-336.

Henriques, A. (2013). CSR, sustainability, and the triple bottom line. In The triple bottom line (pp. 48-55). Routledge.

Pinto, J. L. Q., Matias, J. C. O., Pimentel, C., Azevedo, S. G., & Govindan, K. (2018). Introduction to lean and just-in-time manufacturing. In Just in time factory (pp. 1-4). Springer, Cham.

Stevenson, W. J., Hojati, M., & Cao, J. (2014). Operations management (p. 182). McGraw-Hill Education.