Audi :On target to become number one Business & Marketing Essay

Audi: On Target to Become Number One
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Audi: On Target to Become Number One
Operations, logistics, and supply chain management are significant activities in modern economies. These activities play an integral role in improving the standards of living in the society. It is through these activities that consumers can receive quality products and services promptly. According to Zijm et al. (2019), a supply chain incorporates all the activities required to convert raw materials into final products. According to the authors, these activities range from “sourcing through component manufacturing and final assembly to distribution to end-markets, and including all necessary materials handling and storage (in short, logistics) activities” (p.33). It is evident that supply chain management involves the overseeing of a myriad of activities and processes that are necessary for availing the final product to the consumer. Logistics refers to the storage and transportation of materials, parts, and products throughout the supply chain (Zijm et al., 2019). Operations are activities and processes necessary for the conversion of raw materials into final products. These activities are particularly relevant in the automotive industry where numerous raw materials and processes are needed in making the final product. This essay examines quality management and new product development and process are relevant in the case of the automotive manufacturer Audi.
Audi is a brand of the Volkswagen Group, and it is one of the top manufacturers of luxury vehicles in the world. Headquartered in Ingolstadt, Germany, the company operates in more than 100 markets around the globe, including the UK (Audi, 2019). The company has over 90,000 employees that managed to help it deliver 1,878,105 cars to consumers around the globe in 2017. In addition to its two production sites in Germany in Neckarsulm and Ingolstadt, the company has production facilities in countries such as Belgium, Mexico, Hungary, Spain, Algeria, Slovakia, Brazil, India, China, and Russia (Audi, 2019). The Ingolstadt is the firm’s largest facility, and it attracts around 400,000 visitors annually. It is through these facilities that the company manages to deliver up to 380 units of cars to the customer per day. Quality management and new product development and processes are extremely relevant concepts in the operations of Audi. The quality of products and services determine to a great extent the success of a firm. According to Boyer and Verma (2010), quality refers to the ability of a product or a service to meet or exceed the expectations of customers consistently. Quality is a major determinant of success, particularly in the automotive industry that is extremely competitive. Quality management is thus an essential part of operations as it helps a firm attain goals such as customer satisfaction and loyalty, cost reduction, and better financial performance (Boyer & Verma, 2010). New product development, according to Boyer and Verma (2010), encompasses the organization, concept generation, marketing plan creation, and evaluation, as well as the commercialization of a new product. New product development process refers to the set of tasks and steps that a company employs to consistently convert new ideas into products that can be sold (Boyer & Verma, 2010). Quality management and new product development process form key parts of Audi operations.
The major quality management tools are total quality management (TQM) and Six Sigma (Boyer & Verma, 2010). High performing companies are increasingly utilizing these quality management techniques in the wake of intense competition in the global marketplace. TQM is an important quality management tool, particularly in automotive manufacturing. According to Boyer and Verma (2010), TQM seeks to address all areas and members of the organization and emphasizes customer satisfaction and the utilization of continuous improvement techniques. There are five elements under TQM according to Boyer and Verma (2010). First, TQM emphasizes on top management commitment where the highest level of management deploy goals and values that consistent with the organization’s objectives. Second, there is an emphasis on employee participation. Here the framework requires the participation of well-trained employees whose efforts are reinforced by recognition and reward systems (Boyer & Verma, 2010). Third, TQM requires a focus on the needs of the customer.
Quality is defined by the customer, and the highest priority of the organization is attaining the highest customer satisfaction level. The fourth element is management by fact where the use of objective data for managerial decision making rather than subjective perceptions is emphasized. Finally, TQM emphasizes continuous improvement since the needs of customers are always changing, and there exist other players in the market ready to offer customers new products and services. As informed by Boyer and Verma (2010), there is an emphasis on improvement cycles for all activities of the company including production, marketing and finance, product development and support services. While Audi does not explicitly recognize that it employs TQM, it observes all of the elements under the framework. According to its website, the management uses its leadership and expertise to promote the interests of the company’s customers. This shows that the top management of the company is involved in activities necessary for customer satisfaction. In regards to employee participation, the company trains its young people and creates the best possible condition that allows them to be creative and innovative (Audi Media Center, 2019). In regards to customer focus, quality is the firm’s highest priority. For the company, quality is a combination of robustness and reliability (Weizenecker, 2017). There are 2,800 employees in the company that is specifically dedicated to the maintenance and control of quality (Weizenecker, 2017). Also, quality is one of the company’s core competencies. The focus on quality means the company takes the needs of customers seriously. In regards to management by fact, Audi utilizes big data analytics to refine its key activities such as marketing (Dremel et al., 2017). Continuous improvement is also a part of the operations of the firm as evident in its new product launches and electric battery options (Ludwig, 2018). It is evident that while Audi does not explicitly say it utilizes TQM, its practices are consistent with the elements of the tool. Therefore, it is deducible that there is no significant difference between the company and Toyota, which is a pioneer of TQM, in regards to the employment of the framework.
Six Sigma is another significant tool that is used by companies to manage quality. According to Boyer and Verma (2010), Six Sigma is heavily based on statistics, and it is increasingly becoming a popular quality management framework among manufacturing firms. The authors point out that the framework has some aspects that are in common with other tools such as TQM. The tool is driven by an understanding of the needs of the customer and methodical use of data, facts, and statistical analyses, as well as a commitment towards reinventing and improving business process. It is evident that these aspects are covered under the TQM elements examined previously. However, it is apparent that there is an extreme emphasis on data, facts, and the use of statistics in the business process. The major themes of Six Sigma include a genuine commitment to understanding the needs of the customers, management by fact, process approach, proactive management, teamwork, and striving for perfection (Boyer & Verma, 2010). These aspects characterize the operations of Audi to a great extent. With the use of big data analytics in its operations, it is evident that Audi emphasizes the use of statistical analyses; however, it focuses majorly on sales and marketing (Dremel et al., 2017). The company thus uses some aspects of Six Sigma, and thus the framework is not fully integrated into the operations of the firm. Six Sigma has been successful in big corporations such as Allied Signal, General Electric, and Motorola (Boyer & Verma, 2010). While some aspects of Six Sigma are present at Audi, the framework is not fully implemented or recognized.
The new product development proces...