Submission Coversheet

Student ID Number and

Name NIC16438474

Programme Title BSc Business Management

Understanding Operations Logistic and Supply Chain

Module Title
Management

Module Code (listed on

Moodle and in LTAFP) QAB020N502A

Module Convenor Xheladin Pira

Seminar Tutor Umair Tanveer

Academic Declaration:
Students are reminded that the electronic copy of their essay may be checked, at any point
during their degree, with Turnitin or other plagiarism detection software for plagiarised material.

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Operations management is a large term for several smaller subjects. According to
Cooke (2012) When a company wants to operate smoothly, grow their business, satisfy
customers and make a profit, operations management is at work. Similarly, ecommerce,
global competition, customer service, productivity and quality are all parts of operations
management. Without globalisation it is impossible for a company to expand to a larger,
more beneficial market. Also, if a company does not have a good customer service,
then it will not have satisfied customers and therefore no business and no profits.
Moreover, productivity and quality must be at a maximum in order for them to make the
most money for a business.

Logistics management it is the part of supply chain management that plans, implements
and controls the efficient effective forward and reverse flow and storage of goods,
service and related information between the points of origin and the points of
consumption in order to meet customers’ requirements. In contrast, transforming a raw
material into products and transferring it to consumers is defined by supply chain.

Company chosen for this assignment is Groupe Renault, which is a French

manufacturer of cars that has five brands Renault, Alpine, Dacia, Lada and Renault
Samsung Motors (2019). The company was founded in 1898 by brothers Louis,
Fernand and Marcel Renault (2019). Moreover, the company brought Romanian brand
car Dacia in 1999 which was a great success becoming a best-selling car in Europe and
Russia in 2004 (2018). In 2012 Renault launched a car called Zoe which responded to
consumer needs by offering one hundred percent electric mobility solution. However, in
2012 Renault sold only 12 electric cars which made them to redesign and configure
Renault Zoe which brought them by 2018 a total sale of 38.000 cars (2019).

Although Renault invested a vast amount of capital within this particular model, buying
Romanian car manufacturer Dacia brought them a substantial profit. Similarly, having
sold over 5 million vehicles since 2004 until 2018, Dacia sets a new sales record within
competitors. According to Statista (2017), within United Kingdom Renault has 151 car
dealerships in franchise network, on top list being Ford with 506 car dealerships and on
last place is Mercedes with 38. As this assignment requires two topics to be selected
and analysed thoroughly, firstly, it was chosen to be analysed Managing Quality,
covering different aspects of Total Quality Management and secondly, Location and
Layout.
Firstly, we will discuss about Managing Quality, which is extremely important for
Renault Group company. According to Heizer (2016), “Total quality management
(TQM) refers to a quality emphasis that encompasses the entire organisation from
supplier to customer.” In other words, Total quality management are used worldwide as
tools to increase quality, reduce costs and to ensure that customers are satisfied with
products and services. According to Slack et. All. (2013) the focus of Total Quality
Management is divided into three types of tools: For generating Ideas which includes:
Check Sheet, Scatter Diagram and Cause and Effect Diagram; Tools to Organise the
Data: Pareto Charts and Flow Charts and Tools for Identifying Problems which includes
Histogram and Statistical Process Control Chart.

Check Sheet is a tool which supports Renault company to identify, confirms and solve
any issues that can be identified between production and sales, meanwhile keeping
their top priority quality of the final product. Also, it is used for histogram and future
references. Some of employees of Groupe Renault which are working on production of
Dacia cars are facing a state of anxiety because of job insecurity. Moreover, some of
them are not willing to work overtime as they are not motivated to do so (2013). Scatter
Diagram or scatter plot is supporting the company to identify potential root cause
between employees and employer or employees and customers or to determinate
objectively whether a particular cause and effect are related as well as providing a good
follow-up to a Cause and Effect Diagram. Cause and Effect diagram helps in elimination
process of root cause of a problem and serves as a guide for discussion and frequently
inspires more ideas within Renault employees, then are moved into Tools to Organise
the Data which include Flow Charts and Pareto Charts that are used by Renault to
describe each step into production process and to identify and plot defects or problems
in descending order of frequency. Last, are tools for identifying problems like Histogram
and Statistical Process Control Chart that helps in analysing the properties of data in
statistical process control helping the company to take the right decision and
accomplish continuous improvement.

As an example, in 2016 Renault had to recall over fifteen thousand vehicles for the
emission system to be checked as apparently it could be malfunctional when it reaches
high temperatures (Hull, 2016). Apparently, it was found that the quantity of nitrogen
oxide emissions was above legal limits. As a solution to this problem, Renault had to
use Total quality Management tools to check and adjust accordingly each vehicle, so
that the filtration system to be functional when the temperatures are high as well as
bellow 17 degrees. The company used a plan to upgrade software to address the
problem and correcting engine processor fault. After fixing this problem the company did
not had any other major issues within this problem. In the same way, Volkswagen group
had a similar problem with emissions, however, as stated by Bartlett et. All (2017)
worldwide were affected around 11 million vehicles which makes more difficult for
Volkswagen group to solve this issue. Also, Brignall (2017) states that more than 40
thousand customers which had their cars fixed by Volkswagen had brought a class
action against the manufacturer mentioning lack of performance, inferior fuel
consumption and no compensation whatsoever.

Although Renault had a major issue which had an impact not only on their budget, but
also affected their image, the company had a great success when they launched Dacia
new models which covered all customers needs, from family cars, sports cars and
SUVs. MAI IMI TREBUIE 150 CUVINTE
Secondly, the main objective of location and layout is to maximise the effectiveness
of the production process as well as supporting the needs or requirements of
employees (Am, 2019). Also, location has a significant impact on fixed and variable
costs and is one of the most important decision that a company makes. Moreover, there
are different possible layouts, like fixed positions, cell or product. However, Renault
Group operate from a fixed position layout as processes, resources are stationary, and
people come to the service to any nearby dealership. As a disadvantage of fixed
position layout is that it has very high unit costs and an accurate scheduling of space
and activities is required. The importance of a layout is it critical to organize everything
in a good way to increase the flow of the movement and helps when things comes to
material handing (2013). Renault had to organise each location facilities as efficient as
possible in order to ease material handling.

According to Slack et all (2016), there are many factors which effect location decision
like an environment that encourages investment and local presence of related and
supporting industries, and a sophisticated local market. On the other hand, the
importance of a layout will be better appreciated if everyone understands the key factors
under manufacturing function which it makes smooth and efficient operating efficiencies
such as economies in the course of handling materials minimization of production
delays and avoidance of hold-ups. All this dependent properly out and ideally laid out
plant reduces manufacturing cost row, reduce materials handling verges personnel,
equipment requirements and reduce process inventory.

As stated by Heizer et. All. (2016), maximising the benefits of location can be express
by expanding existing facilities. Furthermore, by 2005 Renault Group invested in
expanding three regional training academies in United Kingdom (2005). By the same
token, Toyota and Vauxhall companies were into negotiations with Welsh Development
Agency for the same expansion but only Renault had signed the project which was
launched in July 2005. As an advantage for Renault to expand some of their facilities
should reduce the training costs as employees will have to travel only nationwide not
international to main Renault training centres in Europe as well as developing several
apprentice training programmes within these academies.

On February 1997 French chief executive of Renault, Louis Schweitzer announced the
closure of a production plant in Belgium by the end of July same year leaving around
3000 employees without a job (1997, Hans). Although it was a difficult decision, it was
based upon maximising the benefits of location. However, the decision to close the
existing production plant in Vilvoorde, Belgium was based on cost requirements as
these were fixed and difficult to be reduced. mai imi trebuie 300 cuvinte

According to Slaper et. All. (2019) Triple Bottom Line is an accounting framework
incorporated into financial, environmental and social dimensions of performance.
Additionally, Moosmayer et. All. (2016) stated that all companies should take into
account reducing the environmental impact as well as trying to develop different ways to
minimise the side effects of their machineries.

As stated on their website, Renault is focusing on three leadership areas which will
transform their industry in the next decade: Electric cars, the circular economy and
mobility uses like autonomous driverless vehicles that results in zero carbon emission,
increasing the amount of material that is recycled and minimise waste.

Circular economy is represented for both environmental and economic performance,

also it is the only model which can manage the consumption of raw materials
meanwhile having a positive impact on air quality and climate. From social perspective,
Renault uses equal opportunities to embrace and sustain diversity among workforce,
meanwhile all employees are encouraged to maximise their potential through regular
trainings, sessions and celebrating together different occasions to create a strong team
and a positive working culture.

Renault understands that long term sustainability of their business requires more than
just a financial equity. It also helped to clarify that when the company were considering
what sustainability meant for them, it didn’t mean they had to give up the notion of
financial success. In contrary, these overlapping circles image of the triple bottom line
helped them to convey a lot more.

Renault Group is going in the right direction by using thoroughly Total Quality
Management tools. On the other hand, there are opportunities like creating more
efficient ways to improve relations with their suppliers by using digital channels and
focusing more on customers engagement to increase their market share.

Renault created a strong brand image by focusing all the time upon technological
innovation and quality, avoiding any short cuts as well as focusing on turning their waste
into resources which
To sum up, the concepts and theories discussed in this assignment are followed by
Renault Group company, but they should learn from the major fault which happened
when they had to recall thousands of vehicles to be checked. As an example of how to
avoid these kinds of incidents is to invest in latest technology, where any vehicle should
pass rigorous tests. Managing the company waste it is a major challenge, but it is also
an opportunity as the resources it contains can recycled and reused to overcome the
environmental impacts of waste disposal and reduce the needs for primary raw
materials.

Reference

Group.renault.com. (2019). The beginning - The History of Renault - Groupe Renault - Groupe Renault.
[online] Available at: https://group.renault.com/en/our-company/heritage/the-beginning/ [Accessed 9 Aug.
2019].

Dacia.co.uk. (2019). Dacia History - Dacia Cars - Dacia UK. [online] Available at:
https://www.dacia.co.uk/dacia-story.html [Accessed 9 Aug. 2019].

Cooke, J. (2012). Operations management. Herts: Ecademy Press.

carsalesbase.com. (2019). Renault Zoe European sales figures. [online] Available at:
http://carsalesbase.com/european-car-sales-data/renault/renault-zoe/ [Accessed 9 Aug. 2019].

Automotiveworld.com. (2019). Dacia hits 5 million global sales | Automotive World. [online] Available at:
https://www.automotiveworld.com/news-releases/dacia-hits-5-million-global-sales/ [Accessed 1 Aug.
2019].
Statista. (2019). Size of car dealership networks in the UK 2014-2017 | Statista. [online] Available at:
https://www.statista.com/statistics/312034/size-of-car-dealership-networks-in-the-united-kingdom-uk/
[Accessed 9 Aug. 2019].

Heizer, J., Render, B. & Munson, Ch. (2016). Operations Management. (12th Global Ed.) New Jersey:
Pearson Education Inc. Chapter 6.

Slack, N., Brandon-Jones, A. and Johnston, R. (2013). Operations Management. (7th Ed.) Harlow:
Pearson Education Limited. Chapter 6.

Isac, N., Isac, T. and Crenguta, I. (2013). THE IMPACT OF SUSTAINABLE DEVELOPMENT ON
ORGANIZATIONAL CULTURE AT S.C. AUTOMOBILE DACIA S.A. Management of Sustainable
Development, [online] 5(1), p.34. Available at:
https://www.researchgate.net/publication/274104490_The_Impact_of_Sustainable_Development_on_Org
anizational_Culture_at_SC_Automobile_Dacia_SA [Accessed 2 Aug. 2019].

Rob, H. (2019). Renault to recall 15,000 cars to check emissions systems. [online] This is Money.
Available at: https://www.thisismoney.co.uk/money/cars/article-3406182/Renault-recall-15-000-vehicles-
check-emissions-systems-work-temperatures.html [Accessed 17 Sep. 2019].

Bartlett, J., Naranjo, M. and Plungis, J. (2017). Guide to the Volkswagen Emissions Recall. [online]
Consumer Reports. Available at: https://www.consumerreports.org/cro/cars/guide-to-the-volkswagen-
dieselgate-emissions-recall- [Accessed 27 Sep. 2019].

Heizer, J., Render, B., & Munson, Ch. (2016) Operations Management (12th Global Ed) New Jersey,
Pearson Education Inc

Am-online.com. (2019). UK-based training from Renault. [online] Available at: https://www.am-
online.com/amp/news/2005/7/1/uk-based-training-from-renault/9235/ [Accessed 10 Aug. 2019].

Slaper, T. and Hall, T. (2019). The Triple Bottom Line: What Is It and How Does It Work? [online]
Ibrc.indiana.edu. Available at: http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html [Accessed 6 Aug.
2019].

Group.renault.com. (2019). Groupe Renault's commitment to corporate social responsibility - Groupe

Renault. [online] Available at: https://group.renault.com/en/our-commitments/our-corporate-and-social-
responsibility/ [Accessed 11 Aug. 2019].

Dacia is an automotive company which was a Romanian car manufacturer, that was launched in United
Kingdom in 2012. Moreover, in 1999 Dacia become a Renault Groupe brand and in 2004 with their new
saloon family car named Logan, managed to become the best-selling car in Europe and Russia.
However, as stated by Brignall (2018) Dacia had serious problems with rust on one of their models, and
for that reason first topic chosen to be analysed in this essay is Managing Quality.

Second topic chosen is Location and Layout as Dacia has about 150 location within United Kingdom,
which is for Dacia a long-term decision with fixed and variable costs.
How do you resolve the particular issue?

Issues: employability, sustainability, recycling, think from manufacturing point of view ex cost of raw
materials, the outsourcing costs; poor quality these are operational issues.

Not enough demand? The nature of customisation is changing so what we need to do is to understand
the audience, what we can do in order to increase sales.

IN CONCLUSION How business can improve in performance; we look at triple bottom line:
economical, environmental and social expect.

Reference List

Cooke, J. (2012). Operations management. Herts: Ecademy Press.

Brignall, M. (2019). Why isn’t our rusting Dacia Duster suitable for the UK? The
Guardian. Available at: https://www.theguardian.com/money/2018/jan/28/dacia-duster-
renault-rust-model-india-romania [Accessed 31 Jul. 2019].