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General Motors Company (GM) applies strategies that utilize available technologies to address

the 10 strategic decision areas of operations management (OM). In these 10 decision areas,
operations managers identify issues linked to productivity and overall business performance. The
strategic objective is to maximize operations management support for the achievement of
General Motors business goals in the automotive industry. This effort should also contribute to
the companys ability to counteract competition with other large automobile manufacturers like
Toyota (Read: SWOT Analysis of Toyota Motor Corporation). In addition, such maximization
should come along with the minimization of operational problems that hamper General Motors
productivity enhancement strategies. For example, operational problems in the decision area of
process and capacity design could prevent the company from becoming more productive. In this
regard, it is essential that General Motors operations management remain abreast with the latest
solutions, including technologies, to achieve optimal support for the business organization.

The issues and opportunities determined in the 10 strategic decision areas of operations
management should guide General Motors managers in strengthening competitive advantage.
Competitiveness is a significant concern in the business, especially because of the aggressiveness
of other firms. The Porters Five Forces analysis of General Motors Company emphasizes the
need for such competitiveness in the automotive business. For example, competitiveness based
on operational efficiencies can help protect the company from threats in its external environment.
General Motors operations managers are continually searching for better solutions to challenges
in the business. Such solutions must suit processes and productivity requirements in automobile
manufacturing and distribution. In essence, highly productive operations translate to greater
profits for General Motors.

General Motors Companys Operations Management in the 10 Decision Areas

1. Design of Goods and Services. The decision in this strategic area focuses on how to fulfill the
design requirements of products in the context of General Motors operations management. For
example, the specifications for automobile manufacture are included in human resource
planning, as well as cost effectiveness measures that operations managers implement in GMs
plants. Such specifications determine the applicable quality standards, as well as General
Motors operational sustainability. One of the operations management aims in this decision area
is to strategically maximize productivity within the operational limits based on product design.
Such design is linked to the product mix element of General Motors marketing mix or 4Ps.

2. Quality Management. General Motors vision statement and mission statementaddress


quality management by emphasizing value and technological breakthrough in business
processes. This strategic decision area of operations management deals with quality standards
and quality implementation based on customers expectations and automobile market conditions.
In this case, General Motors operations managers implement a general set of quality standards
for all products, with slight variations based on product types, models or variants. For example,
universal quality standards are applied in terms of margin of error and quality of raw materials
used in producing GM automobiles. High operational productivity is maintained partly by
integrating quality standards in HR training to minimize errors in General Motors Companys
production processes.

3. Process and Capacity Design. In this strategic decision area, operations managers are
concerned with optimizing resource utilization and standards implementation for effective and
efficient production processes. General Motors addresses such concerns through an operations
management approach involving cost minimization that does not reduce productivity in the
automotive business. Lower costs empower the company to set competitive prices and maximize
profit margins. This effort is possible partly because of General Motors generic strategy and
intensive growth strategies, which involve cost-leadership. The capacity design of a GM plant
depends on the product types, models, or variants that it manufactures. For example, the process
and capacity design for a Chevrolet plant differs from the process and capacity design for a
Cadillac plant. In this regard, General Motors has different sets of operational standards for
capacity. Flexibility is also included in this strategic decision area of operations management.
Such flexibility allows General Motors operations managers to ensure that manufacturing
processes are productive in consideration of changes in issues in manufacturing and the
automotive industry.

4. Location Strategy. General Motors Companys objective in this strategic decision area is to
optimize the location of operations based on the locations of resources and markets. The
companys operations management approach involves manufacturing hubs in strategic locations,
such as GM plants in key areas in the United States and Southeast Asia. Such locations are
selected based on a variety of factors. For example, General Motors operations managers use
talent availability, supply sufficiency, and operational costs, among other factors, in determining
the desirability of a location. Moreover, the company evaluates locations based on the costs of
transporting and distributing finished products. For instance, a location is more desirable if it
entails high productivity and lower costs of transporting automobiles from the manufacturing
plant to General Motors dealerships. Thus, GMs operations management is involved in cost-
optimization for a limited number of facilities for this strategic decision area.

5. Layout Design and Strategy. High-efficiency flow of resources and information is the
objective in this strategic decision area of GMs operations management. General Motors
Company addresses this objective through the integration of automation and carefully planned
spaces. For example, operations managers are among the personnel responsible for ensuring that
robotics are always available with minimal downtime in GMs automobile manufacturing plants.
In this way, General Motors productivity remains high through the automation of manufacturing
processes. The company designs the layout of its facilities around automation as a key
characteristic for this strategic decision area of operations management. For instance, basic
layouts of General Motors manufacturing plants require spaces that allow personnel to
efficiently move around. The same layouts allocate sufficient space for equipment involved in
automated processes. Furthermore, General Motors layout design and strategy include
operational considerations like assembly lines and corresponding movement of materials,
intermediary products, and finished products.

6. Job Design and Human Resources. This strategic decision area focuses on operations
management activities involved in maintaining sufficient human resources that effectively
address General Motors automotive business needs. The objective is to use appropriate job
design and HR programs to attract talent and develop the resulting human resources to support
the business. For example, General Motors Technical Education Program attracts qualified
workers who want to pursue their careers in an organization that supports continuing education
and skills development. The implementation of job designs and human resource programs
determines the interconnections among the companys employees and helps define the
organizational structure (Read: General Motors Organizational Structure). In relation, efforts in
this strategic decision area of operations management are aligned with strategies for cultural
support within the organization. For instance, General Motors organizational culture reinforces
business goals while boosting employee morale and productivity. In implementing such job
designs and HR programs, operations managers ensure that employees are highly productive and
effective in contributing to GMs operational success.

7. Supply Chain Management. In this area of operations management, the strategic decision
focuses on maintaining adequate supply to General Motors Company. The objective is to
maximize supply chain effectiveness and efficiency by solving operational barriers and
bottlenecks. These barriers or bottlenecks limit or reduce productivity and capacity in automobile
and parts manufacturing. In this regard, operations managers implement strategies that enhance
General Motors supply chain. For example, programs for transparency and cooperation align
suppliers growth and capabilities with GMs growth and supply needs. Such programs are
included in General Motors corporate social responsibility strategy, with suppliers considered as
a stakeholder group. In addition, the companys supply chain is highly productive through a
proactive approach that addresses issues associated with external factors in the automotive
industry. The PESTEL/PESTLE analysis of General Motors Company provides useful
information for such proactivity in this strategic decision area of operations management.

8. Inventory Management. Operations managers deal with maintaining sufficient inventory that
supports operational goals. In this case, the operations management objective is to ensure that
General Motors inventories reinforce strategies for customer satisfaction and manufacturing
schedules, while considering the limits of the supply chain. For example, the company must have
sufficient inventory that anticipates fluctuations in market demand for GM automobiles, to
satisfy customers purchases and contribute to customer satisfaction. In this strategic decision
area, General Motors also determines inventory levels based on productivity requirements.
Considering the assembly line processes in the automotive business, the company uses various
inventory management methods, such as inventory serialization, the perpetual method, and the
first in, first out (FIFO) method. These methods facilitate the fulfillment of General Motors
goals and objectives in this strategic decision area of operations management.

9. Scheduling. Operations management processes must optimize resource utilization to satisfy


customers demands. Thus, General Motors Companys objective in this strategic decision area
is to develop and implement suitable short-term and intermediate schedules for resource
utilization. For example, operations managers implement intermediate schedules for adjusting
the capacity and productivity of GMs automobile manufacturing plants to match actual and
forecasted demand. In relation, General Motors develops and implements human resource
schedules to ensure that various processes of the automotive business are highly productive. The
companys operations management approach in this strategic decision area emphasizes the
importance of flexibly scheduling resource utilization and business processes. Such flexibility
enables General Motors to achieve high operational efficiency.

10. Maintenance. In this strategic decision area, General Motors operations management
objective is to maintain processes for the achievement of business goals. For example, the
companys operations managers are concerned with maintaining automobile production
processes and corporate office processes that satisfy productivity requirements. Process
maintenance is partly achieved through the use of business strengths, such as economies of scale
identified in the SWOT analysis of General Motors. For instance, economies of scale enable GM
manufacturing plants to support initiatives for maintaining operational capacity that satisfies
market demand. This strategic decision area of operations management presents General Motors
with challenges, especially when implementing downsizing strategies that potentially reduce the
productive capacity of the automotive business.

Productivity at General Motors Company

General Motors measures its productivity based on the operations of corporate offices,
production facilities, the dealership network, and GM Financial. Each of the strategic decision
areas of operations management employs a set of measures or criteria for evaluating productivity
levels. The following are some of the notable productivity criteria used in the operations
management of General Motors automotive business:

1. Units produced per day (GM automobile manufacturing plant productivity)

2. Units sold per month (Productivity in GMs dealership network)

3. Contracts per month (Productivity of GM Financial)

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