1.0 Introduction
At the beginning of this century, the United Nations called upon all countries in the world to promote sustainable development. It has stipulated 17 sustainable development goals (SDGs) and expects that the proposed goals will be achieved by 2030. Goal 13 states that the world continues to experience rising sea levels and extreme weather conditions (United Nations, 2016). Last year, the registered temperature broke historical record and was 1.1oC higher than pre-industrial period. Hence, the U.N calls upon actions to regulate Green House Gases (GHGs) emissions(Biermann, Kanie&Kim, 2017). In the automotive industry, technological revolution is now taking places in areas such as Electrically powered vehicles, driverless cars and shared mobility models. Particularly elective vehicle is the most effective and realistic method to reduce the GHGs emission from various transportation tools. It is because conventional vehicles are powered by fossil fuels. Electrically powered vehicles will reduce the amount of carbon dioxide, carbon monoxide, sulphur dioxide, etc. Tesla, for in stance, is now leading the automotive industry by producing electric vehicles. It aims to “Create most compelling car company of the 21st century by driving the world’s transition to electric car.” Many people perceive electric vehicles as the only viable solution as the resource of fossil fuel is depleting very fast and non-renewable in nature. However, electrical vehicle technology itself has faced many different kinds of problems and challenges. For instance, many EV companies are still focusing on enhancing the energy storage capacity of the powertrain system(Lv et al, 2018). In addition, as compared to gas stations, power stands and electricity charging stations are not so readily available. Hence, if automobile companies wish to produce EV products, it is very necessary and essential for them to implement effective operation management strategies to transform inputs into outputs.
1.1 EV Industry (How are they doing EV)
Currently, even though EV shows the future direction of automotive industry, electric vehicle producers do not intend to solely produce EV products as it is highly risky for doing so. One major concern is that the electricity storage capacity and maximum covered distance are still quite limited for electric vehicles. For instance, EV users may have to frequently charge their cars otherwise it is not very easy to sustain a long distance journey. Thus, some EV producers decide to make a comprise by producing hybrid electric vehicles. Some automakers also keep on producing traditional vehicle types in order to secure the sales performance. However, major automobile brands such as Toyota, Tesla, Ford, etc, have invested heavily on designing and renovating the powertrain system of EVs and trying desperately to improve the energy storage capacity.
2.0 Operations Managements in EV manufacturing
As the aforementioned, in order to produce EV products with promising quality, it is necessary to implement effective operations management strategies. By definition, operation is a function or a system to transform input into output of greater value(Slack, Chambers&Johnston, 2010). If production activities do not add value, they should be eliminated from the transformation process. Operations management is closely associated with product design, quality management, process and capacity design, location strategy, layout design, human resource management, supply chain management and scheduling(Kleindorfer, Singhal &Van Wassenhove,2005).
2.1 Design of Goods and Services
In EV industry, the products and services of EV firms need to be innovative. Tesla company has employed a concurrent innovation strategies in its product design by simultaneously innovating its car batters, powerstrain system, energy storage capacity and power stands (Trott, 2008). So far, EV products have the problems of covering very short distance due to limited charging capacity. EV companies have to continue to do research on this section.
2.2 Quality Management
Quality management is also relevant in optimizing the operations management effectiveness and efficiency in the EV industry(Kaynak, 2003). Many companies have employed total quality management (TQM) to satisfy customers’ quality expectation. TQM describes a management approach to secure long-term success through achieving customer’s satisfaction(Kaynak, 2003). Operations manager of EV companies should be fully aware of customer expectation on electric vehicle products. So they have to conduct regular quality review, quality check and implement quality improvement initiatives. Besides, it is also not advisable to outsource some of the vehicle parts to a third party. Instead, EV companies should manufacture the automobile parts by themselves. Even though management workload may increase accordingly, it will be easier for the operations manager to control the whole production process and the overall quality of products.
2.3 Process and Capacity Design
In addition, in order to achieve operational efficiency, the production process and capacity should be optimized(Stevenson, 2005). For instance, it is highly recommendable for EV companies to introduce automated production line into the manufacturing activities(Stevenson, 2005). Tesla now is using an automated production process combined with human intervention. It will significantly enhance the overall productivity. Moreover, vertical organizational structure is also recommended to be designed in a way to facilitate the management of the production process and capacity. Through automating the producing process, more human resources could be allocated to inspect defects, check the quality and some other areas.
2.4 Location Strategy
Moreover, operations manager should also make sure that its logistics and factories are close enough to the end market and have a good accessibility to raw materials and suppliers(Krajewski&Ritzman, 2001). It is not just about to save cost. Operations manager should smooth the whole process of raw material purchases, transportation of goods, warehouse management, and so on. The location of the manufacturing factory is thus highly important. Besides, EV firms are advised to have company-owned stores and galleries in high-density area such as shopping mall to display their products. It will remarkably increase the overall sales performance.
2.5 Layout Design and Strategy
Operations management is also concerned with a company’s layout design and aims to optimize the flow or resources in order to enhance the overall productivity(Stevenson, 2005). In order to achieve this aim, EV companies are expected to build highly efficient internal communication networks such installing tele-conferencing system. Besides, operations manager is also advised to shorten the distances among intermediary processes in the whole manufacturing operations especially for companies which employs backward vertical integration(Lafontaine&Slade, 2007).
2.6 Job Design and Human Resources
As electric vehicle technology belongs to new technological frontiers, high-end talents and technicians will be in a huge demand. As such, EV companies should implement competitive compensation strategy to attract high-tech talents. They could be provided with bonuses, salary increases, promotional opportunities, if they have made a great contribution to the company. From resource-based view (RBV) in strategic HRM, human resource is perceived as an important strategic resource of a company. Thus, EV firms have to provide incentives to attract and retain high-end talents in this industry.
2.7 Supply Chain Management
Beside, Operations managers should also make sure that the supply chain system could support its manufacturing process. It means that once the products are produced, they should be properly stored in warehouse or shipped to local or global markets(Jacobs, Chase& Lummus,2014). Timely shipment of raw materials from overseas will also enhance the efficiency of the whole manufacturing processes(Jacobs, Chase& Lummus,2014).
2.8 Scheduling
Market-based scheduling is also highly essential for conducting effective operations management(Lee&Ritzman, 2005). In fact, in the short-term, even though the demand of electric vehicle products is increasing, it still could not compare with conventional vehicle products. The fundamental reason is that the power stands and charging stations are not readily available. It requires the operations manager to approximate and decide the number of manufactured vehicle units based on the market prediction. Thus, EV firms should have a very accomplished market data-base so operations manages could make accurate and precise prediction to schedule the company’s production capacity.
3.0 EV’s uniqueness in Operations Management
Electric vehicles, as compared with traditional vehicles, do not have a standardized operations management system. Even though the vehicle products of Toyota, VW, BWM, and other brands are different in terms of design, the manufacturing lines, strategies, cost structure, supply chain management and so on, are more or less the same. However, EV industry has its own uniqueness in operations management. First, the quality management standard is much higher. EV is considered as a high-end technology. It requires accurate and precise product planning process. For instance, the whole production process should be automated. Customers are demanding higher product quality. Otherwise, if their EVs could not have promising energy story capacity, they will have problems with charging or looking for charging stands. It will result in a huge inconvenience for customers. Operations managers have also arranged budgets for doing R&D as compared with other traditional automobile companies.
4.0 New Methodologies transferred to other companies
EV’s operations management methodologies are also applicable for other high-tech industries or companies. For instance, Google together with other high-tech firms from Silicon valley is now promoting Driverless cars. Driverless cars will tremendously save labor cost and prove to be much safer than driving cars. The new products also have potential in car-sharing, which will also promote sustainable development. Hence, Google could learn the operations management experiences from EV companies such as Tesla. Major lesson learned from Tesla is vertical integration. Unlike conventional car producers, both Google and Tesla have a higher demand of raw materials. It is also difficult for them to outsource the processing or intermediary products to other companies as the final products are considered as high-techs. It is better for them to integrate the supply chains as a whole. It will not only save cost but also improve the final product quality.
5.0 Conclusion
In conclusion, the global electric vehicle industry is far from being accomplished. It is still developing but on the rise. As fossil fuels are depleting very fast, it is predictable that EV is going to be the future options. However, in order to transform inputs of human resources, raw materials and other resources into the final products, effective operations management is certainly required. In order to survive and stand out form competitors in the global market, it is advisable for operations managers to consider seriously about the above-mentioned total quality management and other key processes.
Reference
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