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RAMANDEEP SINGH
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SANDEEP KHURANA
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AMAR KUNAM
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Teaching Team:
TABLE OF CONTENTS:
Mitsubishi Situation
SECTIO
N
TITLE
PG.NUMBE
R
EXECUTIVE SUMMARY
1.0
INTRODUCTION
2.0
SWOT ANALYSIS
3.0
4.0
5.0
MANAGEMENT APPROACHES
6.0
10
CONCLUSION
11
APPENDIX:
REFERENCES
Mitsubishi Situation
Executive Summary
i
1.0 Introduction
Mitsubishi Situation
convenience,
1
2.0 SWOT Analysis: Mitsubishi Case
Mitsubishi Situation
Mitsubishi Situation
As Haunschild and Sullivan (2002); Miner et al. (1999) have aptly mentioned that
failures are often an opportunity for firms to learn. Accordingly, Mitsubishi should
have withdrawn defective products from the marketplace and repaired them. They
should have dug deep and learned through a root cause analysis by establishing an
understanding of the association between causes and effects of the product recall.
Liker (2004) has cited in his work an adoption of twin aims of edification from
mistakes and ensuing innovation, hence encompass dynamic competence that:
spurs the workers self-initiative, expedites cross-functional communication and
inculcate discipline into workers. Souiden and Pons (2009) have elucidated the
example of Chrysler, who in 1990s severed the odometers from its new vehicles
during trial testing. With this news becoming public, Chrysler apologized and
accepted the error, thus utilizing this crisis to its advantage and elevated its brand
capital by 20%.
Threats
MarketLine (2013) asserts that Mitsubishi is subject to the policies regarding smoke
generated by their plants, noise level, emissions, fuel economy and safety.
Manufacturing plant especially in Japan is in-danger to natural disasters like
earthquakes. However, the primary threat to the company is the stiff competition
posed by Toyota, Ford, Honda Motors and General Motors in relation to design,
quality, features, customer service and companys risk management. If the company
is not addressing the customers grievances, then overall sales & revenues will be
downsized.
3
3.0 MANAGEMENT AND BUSINESS ISSUES
Mitsubishi Situation
It is quite apparent that Mitsubishi has both management and business issues, which
were neglected and eventually jeopardized the whole organization. Nevertheless, it
was the defective gear system which contributed to Mitsubishis downfall and can be
categorized as a product-harm crisis. As defined by Dawar and Pillutla (2000),
product-harm crisis is an isolated, well-broadcasted incident wherein a product is
found to be defective or dangerous. There can be several reasons for this such as
manufacturers laxity, product misuse or sabotage. Kotzegger and Schlegelmilch
(2013) have discussed that past experiences have shown that no company is
impervious and a product-harm crisis can hit everyone, including high-profile
companies.
Managing and operations cannot single-handedly ensure product quality as
corroborated by Alfaro and Rabade (2008), who have proposed that a legitimate
traceability and recall plan should be in place for regulating supply chain risks, which
will also help in establishing trust and long-term relationships amid supply chain
partners
and
consumers.
Additionally,
Mitchell
and
Gruler
(2008)
have
The 4 dimensions of operations are Volume, Variety, Variation and Visibility (Four
Vs). Volume and Variety is said to be important when MMC contemplates issues in
its design, since it not only correlates with each other but also impacts the nature of
MMC services and products. This position for operations of volume-variety
influences quality, dependability, flexibility, speed and cost thereby enabling MMC
to sustain a Nature line of fit.
The type of manufacturing process for MMC could be categorized as Mass Line
processes, whereby the process task is not too much diverse or too repeats and the
process flow is almost continuous due to high volume and almost low variety. For
MMC the manufacturing process type is a mass processes therefore, the basic
layout type would be in-between a cell layout and product layout, whereas since
MMC focuses on providing quality after-sales services, the service process type
could be classified as professional services and service shops having a basic layout
of a fixed position for a process layout.
Location and Capacity:
Production capacity is being optimized by MMC worldwide, whilst in emerging
markets MMC is said to be boosting its production skill aiming to create a globalized
production structure for effective response to global demand. MMC in Japan has
boosted the operating rates and building supply systems in its factories. For averting
demand and capacity mismatch MMC needs to consider a chase demand plan since
it gives allowance to vary capacity at par with fluctuations of demand.
Supply-chain management of Mitsubishi:
Collaboration must exist across a supply chain or consequences could lead to the
bull-whip effect. Mitsubishi Motors is also said to have collaborated with its worldwide
dealers in order to reduce the lead-time of customers to two weeks.
6
Inventory and Logistics Management:
Mitsubishi Situation
As mentioned earlier, Mitsubishi has quite a few management and business issues
which need to be amended. The first and foremost approach deals with the product
design. There might be a problem in the design criteria of Mitsubishi Diamante.
There are several techniques that can be followed in the design of a product. Heizer
and Render (2011) have alluded two different designs, modular design and the
virtual reality technology. In the modular design, the parts or components of a
product can be altered or displaced, whereas the virtual reality technology allows the
user to interact directly with the concerned technical expertise.
Second area concerns with the service design. Mitsubishi should have a pool of
competent technicians well-versed with dealing any kind of product failure. It is in the
hard times that the relationship with the customers is under scrutiny and a company
has to reciprocate with an excellent customer service. As exemplified by Heizer and
Render (2011) the technicians should have been sincerely concerned and apologetic
about the problem. They should be flexible and value the time of the customer and
most importantly make the consumers acquainted about the prevailing problems and
ways to avoid them in future.
Quality as delineated by American Society of Quality (ASQ), is The totality of
features and characteristics of a product or service that bears on its ability to satisfy
stated or implied needs. It is very imperative for a company to sustain the quality of
their product as quality augments profitability. Quality is foremost and is unified
around a single quality standard with international recognition, ISO 9000. Mitsubishi
should have undergone a 9 to 18 month process that entails documentation of
quality procedures, on site assessment and series audits of their products, services,
suppliers, retailers and dealers. Mitsubishi experienced a severe product-harm crisis
as defined by Dawar and Pillutla (2000). Consequently, there was a need of risk
management to cease these erroneous things to happen. Slack, Chambers and
Johnston (2010) have proposed risk management as, The process which aims to
help organizations understand, evaluate and take action on all their risks with a view
to enhance the probability of their success and abate the likelihood of failure.
8
Mitsubishi Situation
Hence, the prime business is to minimize the negative consequences of failure (also
called as risk mitigation). Finally, last but not the least endeavour is to materialize
the blueprints elaborated to recover from failure.
PREVENT
FAILURE
OCCURIN
G
FAILURE
MINIMIZI
NG
FAILURE
EFFECTS
RECOVER
FROM
EFFECTS
OF
FAILURE
NEGATIVE
CONSEQUENCE
S OF FAILURE
Source: Slack, et.al (2010) figure 19.2: Risk management involves failure
prevention, mitigating the negative consequences of failure and failure
recovery. Pp.573
Mitsubishi Situation
Management
Companys
Explanation
Management
Maintenance Management
Supplier Management
10
CONCLUSION:
Mitsubishi Situation
11
Appendix: Figure 1: Cause and Effect Diagram for MMC.
Mitsubishi Situation
Material (Automobile)
Method (Process)
Technical centres
Secret repairs and
replacements
Reversing unexpectedly
Training
Skills and Knowledge
Motivation
Accelerator
Engine
Dissatisfi
ed
customer
s of
Mitsubish
Mitsubishi Situation
Unexpected
acceleration
Brakes
Manpower (Engineer)
Appendix B:
Sudden veering
Gear Box
Expertise
Concentration
Machinery (Internal
Systems)
North
East Asia
America
Latin
Oceania
Africa
Europe
Middle
America
Motors Corporation
has
consolidated
subsidiaries and
affiliates
References
Mitsubishi Situation
Mitsubishi Situation
11. Miner, A.S.; Kim, J.Y.; Holzinger, I.W.; and Haunschild, P.R. (1999). Fruits of
Failure: Organizational Failure and Population-Level Learning. Advances in
Strategic Management, 187 220.
12. Mitchell, E.; and Gruler, S. (2008). Total recall. Canadian Underwriter, 75(10),
76 78.
13. Mitsubishi Motors Corporation. (2011). Annual Report. Data Monitor, 1-10.
14. Nigel, S. et al. (2010). Operations management. 6 th ed. England: Pearson
Education Limited.
15. Souiden, N.; and Pons, F. (2009). Product recall crisis management: the
Impact on manufacturers Image, consumer loyalty and purchase intention.
Journal of Product & Brand Management, 18(2), 106 114.
16. 2013 Production, Sales and Export Figures [WWW]. Available from:
http://www.mitsubishimotors.com/publish/pressrelease_en/ir/2013/news/detail
0867.html [Assessed: 22 April 2013].
17. 2013
Mitsubishi
Motors
North
America
[WWW].
Available
from:
Motors
Homepage
(2013)
Global
Network.
Available
Mitsubishi Situation
at:
Mitsubishi Situation