BMGT 364 Project 4 – Controlling

BMGT 364 Project 4 – Controlling

Introduction

After plans are made and strategies are set, the main task of the management is to make sure that formulated plans are effectively implemented, or plans are modified if the same is required. This is where the vital control function of management comes in as it mainly includes guiding the actions of others and to make sure that organizational members do what needs to be done (Laval & Stefea, 2018). Controlling seeks to confirm that the organizational operations are executed according to the plans and that organizational resources are being used to achieve predetermined goals. This function helps to measure the progress towards goals of the organization in order to identify any deviations and to indicate corrective action (Akhmetshin, Vasilev, Mironov, Yumashev, Puryaev & Lvov, 2018). This paper examines the first year’s production of Sleek Motors new electric car and analysis the production results. This is done to evaluate the areas of improvement in the production channel and to compare the actual performance of the organizational departments and pre-determined standards. On the basis of this analysis, the paper proposes whether the organization requires more control or it should change its standards. In addition to this, the paper suggests how the implementation of Total Quality Management can help the organization under consideration to resolve issues with meeting standards and/or implement changes in behaviours and processes. In order to do so, the paper reviews the performance standards and compared it with the organization performance, which helps to determine deviations. The underlying aim of this process is to ensure that Sleek Motors accomplishes organizational goals and make efficient use of its resources. 

Controls

In general, control is regarded as a mechanism or devise used to guide or govern the actions of a structure, machine or apparatus. However, is a professional setting, control includes the procedure and processes which protect, guide and regulate an organization. It is one of the 4 key managerial functions, namely, plan, organize, lead and control. Organizations mainly use financial policies for control purposes such as profit and loss statements and annual budget (Mullakhmetov, Sadriev, Gabidinova & Akhmetshin, 2016). Moreover, one of the most commonly used approaches in organization control is the top-down approach. In this approach decisions are made by high ranking officials and executive and the same is communicated to the lower level members of the organization. The effective performance of control function is vital for organizational success, as without the same organizations cannot ensure that they perform according to the desired standards and goals. In a business setting, control processes are followed for almost any application, whether it be reducing waste, improving quality of the product, or increasing sales (Malyarets, Draskovic, Babenko, Kochuyeva & Dorokhov, 2017). 

The basic process for managerial control includes setting up attainable, clear and measurable standards for performance and calculating the real performance and equating it against the desired standards. This is important because if performance is not monitored, one cannot determine whether standards are being met or not. Furthermore, deviations in performance are analysed to control why standards were not met. During this step, managers decide whether they should implement more stringent control or should change the organizational standards. Finally, after determining the reasons for deviations, management develops solutions for making changes to behaviours or procedures in order to meet the standards. In terms of timing, the control function includes feedback, concurrent and proactive controls (Sasidhar & Singh, 2020).

Need for control in Sleek Motors

Sleek Motors should be concerned with the results for the electric car as the company aims to deliver high-quality products in the market. In order to do so, it is necessary for the company to ensure that its products are manufactured according to the pre-determined standards. In addition to this, analysing the results for the electric car will also help the company to keep the costs down by mitigating the risk of product recalls and accidents (Laval & Stefea, 2018). Moreover, by doing so, the company can ensure that its cars enter the market faster by facilitating quality and consistency in the manufacturing process. This will also help Sleek Motors to deliver better products which can improve the organization’s bottom line by enticing consumers with better products. Analysing the production results of each department will also help to ensure that the company is in compliance with regulatory standards and can improve customer satisfaction by reducing the likelihood of product and performance issues (Dedy, Zakuan, Omain, Rahim, Ariff, Sulaiman & Saman, 2016). 

Additionally, such a process can contribute towards constant improvement in the manufacturing process by ensuring quality control and consistency of the deliverables to the end customer. Moreover, this is especially important in the automotive industry considering that substandard vehicles can not only result in damage to property but can also lead to loss of lives. Therefore, it is important for Sleek Motors to engage in analysis of the production results and to ensure compliance with quality standards (Kotler, 2017). 

Standard Specifications

Sleek motors use standard specifications for machines, processes, materials and components to achieve efficiency and uniformity. These standards also facilitate the evaluation of organization performance by providing measurable metrics for the production department. The below-mentioned chart describes the results of the 1st year’s production of Sleek Motors new electric car. 

According to the given information, the production of Sleek Motors new electric car is evaluated on 11 distinct metrics. Each of these metrics has a predetermined standard and the performance of each branch is compared to the metrics for evaluation. The first metric is the total cost to manufacture a single unit, and the standard cost is 13,500. In comparison, apart from Koenigsegg which produces a single car for 12,750, every single branch manufactures a unit at more cost than the set standard. Fort Wayne branch manufacture a unit at 15,250, Georgetown at 14,100, Kansas City at 16,000 and Lingotto at 14,250. 

The second metric is of manufacturing cycle time which denotes the time taken by each branch to complete a single vehicle, the standard for the same is 15 hours. Fort Wayne branch produces a car in 18 hours, Georgetown in 16, Koenigsegg and Kansas City in 12 and Lingotto in 14 hours. Koenigsegg and Kansas City are able to reduce the manufacturing cycle time and perform better then standards and Lingotto is also performing better than the desired standard. The only problem is with Georgetown and Fort Wayne as both of them take more time than desired, especially Fort Wayne branch.  

Sleek Motors also measures the yield, which represents the percentage of cars manufactured according to specifications without any reword, 98% is the standard for yield. In contrast to this, Fort Wayne has 99% yield, Georgetown has 97%, Koenigsegg has 96.50%, Kansas City has 97.50% and Lingotto has 95.15% yield. Fort Wayne branch takes more manufacturing cycle time but is able to produce better yield, while on the other hand, Koenigsegg, Kansas City and Lingotto take less time but produce substandard yield.

Moreover, the next metric used for monitoring and evaluation is of defective rate/recall rate of vehicles, and management expects that it should be around 2%. However, the defective rate/recall rate of Georgetown is 3%, for Koenigsegg, it is 3.50%, Kansas City 2.50%, Lingotto’s recall rate is 4.85%, and the same rate for Fort Wayne is 1%. The analysis suggests that a production branch with better yield also has less defective rate/recall rate and branches that take less time to produce a unit are prone to produce defective units.  

Scrap rate is another metric for evaluation which refers to the percentage of failed assemblies which cannot be restored or repaired and thus discarded. While the standard for the same is 2%, Fort Wayne has 3% scrap rate, Georgetown has 4%, Koenigsegg 2.50%, Kansas City 2% and Lingotto has 1.90% of scrap rate. Scrap rate is higher in branches with less defective and recall rate as these branches tend to have better quality management and produce better cars by scraping the defective ones. 

Furthermore, the standard for average production downtime is 0.50%, and the Fort Wayne branch has 1% average downtime, Georgetown has 1.50%, Koenigsegg has 0.75%, Kansas City has 0.50% and Lingotto has 0,75% average downtime rate. Apart from Kansas City, every branch experiences more downtime then desired, with Georgetown being the branch with highest recorded production downtime.  

The seventh evaluation metric is of training time, for which the standard is 8 hours. Yet, Fort Wayne branch has 6 hours training time, Georgetown has 3 hours, Koenigsegg branch has 5 hours, Kansas City has 7 hours, and Lingotto has 4 hours. Here, Georgetown is the most poorly performing branch with 3 hours per month training time which also explains its high production of low-quality vehicles and high cost. 

In terms of shipping problems/damage, the standard is 1 in every 10,000 units, while the actual results for Fort Wayne, Georgetown, Koenigsegg, Kansas City and Lingotto are 2, 4,2,1 and 3 respectively. Georgetown also experiences the highest rate of shipping problems and damages related to the same.  

The next metric is of safety incident per employee. The standard for the same is 1.50%, but Fort Wayne branch has 2.25% safety incidents, Georgetown has 0.75%, Koenigsegg 3%, Kansas City 2% and Lingotto 1.90%. Even though Fort Wayne branch provides more training as compared to other branches it has the highest rate of safety incidents per employee, other than Koenigsegg. 

The tenth metric on the list is a number of units manufactured per year, and management expects it to be 45,000 units. But apart from Kansas City with 48,000, and Lingotto with 45,500 manufactured units, every branch is performing below standard with 43,000 units of Fort Wayne, 27,000 for Georgetown, and 42,500 of Koenigsegg. 

The last metric is of utilization rate which denotes the capacity rate a given facility is utilizing during available production time. The standard for this metric is 81.82%, and the actual performance of branches is 78.18% for Fort Wayne, 49.09% for Georgetown, 77.27% for Koenigsegg, 87.27% for Kansas City and 82.73% for Lingotto. 

Based on the given information it is inferred that Sleek Motors should implement more control in the poor performing branches rather than changing the standards. This is recommended mainly due to the fact that while Georgetown branch is consistently poor-performing, Kansas City branch is performing better than expected on most standards. This means that branches are not struggling to meet a specific standard, they are performing poorly in a consistent manner. Also, the desired standards for each metric are related to each other, for instance, and improvement in training time can help branches to improve the quality of end product and can reduce the total recall and defective rate. Therefore, it would be better for the company to implement more control in order to improve performance. Moreover, the company can also take insights from branches to improve the performance of other branches, such as Kansas City is able to utilize more capacity during the available production time than expected from standards. Management can analyse the way this facility does this and can implement the same strategies in poorly performing facilities like Georgetown.  

Corrective Action

Based on the abovementioned evidence it is clear that Sleek Motors should improve controlling measures in the organization to improve the quality of its deliverables and to meet the desired standards. In order to do so, the Total Quality Management approach is recommended for the company as it can support continuous improvement of products and can reduce losses due to wasteful practices (Pambreni, Khetaibi, Azam & Tham, 2019). 

The recommended quality management strategy will help the company to integrate all functions of the organization ranging from marketing to design and from production to customer service, in order to improve organizational performance. This strategy is also easier to implement in the company as Sleek Motors has a previous track record of operations, also the company can conduct a management audit to support the implementation of quality management strategy (van Kemenade & Hardjono, 2019). In order to implement the Total Quality Management strategy, the company first needs to clarify its values and mission as it helps employees to know what they are expected to do and gives proper direction to organizational efforts.
Next, critical success factors need to be identified which will help the organization to meet its objectives such as financial performance, process improvement, product quality and employee satisfaction. Furthermore, based on the data metrics should be formulated, Sleek Motors can use this step to cross verify the standards that are already implemented in the organization. The company can also use feedback from customers to support this step. Based on the desired standards and performance deviation, an improvement plan should be formulated with SMART goals to improve the performance of each branch. Finally, after a set period of time, the organization should once again survey the performance of each branch to monitor and evaluate whether the improvement plan has been effective or not (Modgil & Sharma, 2016). 

Conclusion

In conclusion, the control function of management seeks to ensure that the organizational activities are executed according to the plans and that organizational resources are being used to achieve predetermined goals. The basic process for managerial control includes setting up attainable, clear and measurable standards for performance and measuring the actual performance and comparing it against the desired standards. In Sleek Motors, such a process can contribute towards constant improvement in the manufacturing process by ensuring quality control and consistency of the deliverables to the end customer. Considering the performance of the Sleek Motors production branches, the paper suggests that the company should implement more control in the poor performing branches rather than changing the standards. In order to do so, the company can use the Total Quality Management strategy to integrate all functions of the organization ranging from marketing to design and from production to customer service, in order to improve organizational performance.

References

Akhmetshin, E. M., Vasilev, V. L., Mironov, D. S., Yumashev, A. V., Puryaev, A. S., & Lvov, V. V. (2018). Innovation process and control function in management.

Dedy, A. N., Zakuan, N., Omain, S. Z., Rahim, K. A., Ariff, M. S. M., Sulaiman, Z., & Saman, M. Z. M. (2016). An analysis of the impact of total quality management on employee performance with the mediating role of process innovation. In IOP Conference Series: Materials Science and Engineering. Anais.

Kotler, P. (2017). Customer value management. Journal of creating value, 3(2), 170-172.

Laval, V., & Ştefea, P. (2018). The competitive challenge of controlling. Procedia-Social and Behavioral Sciences, 238, 624-631.

Laval, V., & Ştefea, P. (2018). The competitive challenge of controlling. Procedia-Social and Behavioral Sciences, 238, 624-631.

Malyarets, L., Draskovic, M., Babenko, V., Kochuyeva, Z., & Dorokhov, O. (2017). Theory and practice of controlling at enterprises in international business. Економiчний часопис-XXI, 165(5-6), 90-96.

Modgil, S., & Sharma, S. (2016). Total productive maintenance, total quality management and operational performance. Journal of Quality in Maintenance Engineering.

Mullakhmetov, K. S., Sadriev, R. D., Gabidinova, G. S., & Akhmetshin, E. M. (2016). Control in marketing-based management. Academy of Marketing Studies Journal, 20(2), 13-19.

Pambreni, Y., Khatibi, A., Azam, S., & Tham, J. (2019). The influence of total quality management toward organization performance. Management Science Letters, 9(9), 1397-1406.

Sasidhar, P. V. K., & Singh, P. (2020). Unit-3 Functions of Management. Indira Gandhi National Open University, New Delhi.

van Kemenade, E., & Hardjono, T. W. (2019). Twenty-first-century total quality management: the emergence paradigm. The TQM Journal.

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