Comprehensive Case Study Analysis- BYD of China
Southern New Hampshire University
In this comprehensive case study analysis, the improvement of the company’s operations
will be addressed. Firstly, the critical elements of generating value for customers and theories
and techniques in operations management processes will be explained. I will use a time process
map to show the processes for producing one of our products and also a cause and effect diagram
that will assess why some of our supply chain partners might have struggle to implement
materials need for our manufacturing process. The new location will be analyzed based on
political risk, transportation costs, labor productivity, rental costs, labor costs and taxes.
Additionally, the inefficiencies of the company’s inventory management process will be analyzed
and recommendations made for improving inventory management. Also, I will describe how the
emerging concept of the triple bottom line can be used to enhance operations management at
BYD. I will explain how the company integrates ISO 14000 standards in its manufacturing
plants as well as ways in which the company can integrate corporate responsibility principles
into our operation.
BYD was established in 1995 by Wang Chaun-Fu with its head office Shenzhen, China.
Wang Chaun-Fu had a keen interest in finding ways to make batteries of great quality at a low
cost and did so by shifting the state-of-the-art technology into multiple business industries
(Rarick et al, 2011). The company started producing lithium batteries which are most popular and
used in laptops, cell phones and electric vehicles. The metal component can mainly found in
South America – Bolivia, Chile and Argentina. Also, there are significant deposits of lithium in
China. Although, lithium is the most popular choice for electric vehicles and store three times
more of the capacity of nickel metal hydride batteries, they are a bit expensive. In this regard,
,BYD moved to produce ferrous lithium ion batteries which were cheaper and safer on the
environment (Rarick et al, 2011).
With a 10 percent capital interest in the company by Berkshire Hathaway, BYD was able
to compete internationally (Rarick, et al, 2011). BYD prides itself in sustainability, low cost labor
for expensive machinery and attention to detail, proving to be a great success. With its batteries
being an innovative product, BYD moved to produce electric vehicles. Some of the earlier
models include F3DM, F6CTV and E6 (Rarick, 2011). Today’s models include the ProDM, DM,
and EV which are new energy vehicles, with a broad range of internal combustion systems,
hybrid and battery- electric passenger vehicles. In order to save more energy, reduce emissions
and improve quality of life for our customers, the company added innovative products to their
portfolio (BYD.com). With BYD’s share price of 246.40 CNY, the company is ranked second in
the Electric Auto Battery Industry (Bloomberg, 2021; GlobalNewsWire, n.d).
Generating Value
Competitive advantage is fulfilled when we are able to find creative ways to manufacture
our products or provide services that are second to none. Companies compete on differentiation,
cost and response to attain competitive advantage. Differentiation equates to providing an
exclusive product. It is going above and beyond both physical characteristics and service
elements to encompass everything about the product that influences the value that the customer
desires from it (Heizer et al, 2020). Competing in cost entails achieving maximum value as
defined by customers. Low value however, does not suggest low quality. Competing on response
demands reaction related to appropriate product improvement and delivery as well as consistent
scheduling and flexible performance. Flexible response is the capability to compete in a
, marketplace where design, innovation and volume rise and fall extensively (Heizer et al, 2020).
Reliable scheduling deals with proper communication about schedules to customers, letting them
know what to expect. This allows them to track orders against the information that was
communicated (Heizer et al, 2020). Our company prides itself in customer support and after sales
and is continuously improving to give its customers superb service allowing for economic
production and scheduling at our plants to ensure that customers’ orders are delivered with
minimal disruptions or delays (BYD.com).
In the production of goods which are standardized, there is limited customer interaction
as the customer only sees the end result (Heizer et al, 2020).Manufacturing operations at BYD
include acquiring raw materials, designing, completing the manufacturing process and quality
control. Service operations at BYD include trade services, maintenance and repairs, public
service to government and education (BYD.com). Services are intangible as it cannot be touched
or held. Service operations consists of working with individuals or companies that provide a
service such as repair and maintenance, government, food and accommodation, transportation,
insurance, shipping, real estate, education and so on. Services are consumed instantaneously, are
unique and have a high customer interaction. Services are usually knowledge-based, hard to
assess, unpredictable in any instance and cannot be resold. Though manufacturing operations and
service operations are different both operations rely on human and physical resources to deliver a
desired output in keeping with the mission and vision of the company, to provide value for our
customers.
Theories and Techniques
Materials Requirement Planning (MRP)
Southern New Hampshire University
In this comprehensive case study analysis, the improvement of the company’s operations
will be addressed. Firstly, the critical elements of generating value for customers and theories
and techniques in operations management processes will be explained. I will use a time process
map to show the processes for producing one of our products and also a cause and effect diagram
that will assess why some of our supply chain partners might have struggle to implement
materials need for our manufacturing process. The new location will be analyzed based on
political risk, transportation costs, labor productivity, rental costs, labor costs and taxes.
Additionally, the inefficiencies of the company’s inventory management process will be analyzed
and recommendations made for improving inventory management. Also, I will describe how the
emerging concept of the triple bottom line can be used to enhance operations management at
BYD. I will explain how the company integrates ISO 14000 standards in its manufacturing
plants as well as ways in which the company can integrate corporate responsibility principles
into our operation.
BYD was established in 1995 by Wang Chaun-Fu with its head office Shenzhen, China.
Wang Chaun-Fu had a keen interest in finding ways to make batteries of great quality at a low
cost and did so by shifting the state-of-the-art technology into multiple business industries
(Rarick et al, 2011). The company started producing lithium batteries which are most popular and
used in laptops, cell phones and electric vehicles. The metal component can mainly found in
South America – Bolivia, Chile and Argentina. Also, there are significant deposits of lithium in
China. Although, lithium is the most popular choice for electric vehicles and store three times
more of the capacity of nickel metal hydride batteries, they are a bit expensive. In this regard,
,BYD moved to produce ferrous lithium ion batteries which were cheaper and safer on the
environment (Rarick et al, 2011).
With a 10 percent capital interest in the company by Berkshire Hathaway, BYD was able
to compete internationally (Rarick, et al, 2011). BYD prides itself in sustainability, low cost labor
for expensive machinery and attention to detail, proving to be a great success. With its batteries
being an innovative product, BYD moved to produce electric vehicles. Some of the earlier
models include F3DM, F6CTV and E6 (Rarick, 2011). Today’s models include the ProDM, DM,
and EV which are new energy vehicles, with a broad range of internal combustion systems,
hybrid and battery- electric passenger vehicles. In order to save more energy, reduce emissions
and improve quality of life for our customers, the company added innovative products to their
portfolio (BYD.com). With BYD’s share price of 246.40 CNY, the company is ranked second in
the Electric Auto Battery Industry (Bloomberg, 2021; GlobalNewsWire, n.d).
Generating Value
Competitive advantage is fulfilled when we are able to find creative ways to manufacture
our products or provide services that are second to none. Companies compete on differentiation,
cost and response to attain competitive advantage. Differentiation equates to providing an
exclusive product. It is going above and beyond both physical characteristics and service
elements to encompass everything about the product that influences the value that the customer
desires from it (Heizer et al, 2020). Competing in cost entails achieving maximum value as
defined by customers. Low value however, does not suggest low quality. Competing on response
demands reaction related to appropriate product improvement and delivery as well as consistent
scheduling and flexible performance. Flexible response is the capability to compete in a
, marketplace where design, innovation and volume rise and fall extensively (Heizer et al, 2020).
Reliable scheduling deals with proper communication about schedules to customers, letting them
know what to expect. This allows them to track orders against the information that was
communicated (Heizer et al, 2020). Our company prides itself in customer support and after sales
and is continuously improving to give its customers superb service allowing for economic
production and scheduling at our plants to ensure that customers’ orders are delivered with
minimal disruptions or delays (BYD.com).
In the production of goods which are standardized, there is limited customer interaction
as the customer only sees the end result (Heizer et al, 2020).Manufacturing operations at BYD
include acquiring raw materials, designing, completing the manufacturing process and quality
control. Service operations at BYD include trade services, maintenance and repairs, public
service to government and education (BYD.com). Services are intangible as it cannot be touched
or held. Service operations consists of working with individuals or companies that provide a
service such as repair and maintenance, government, food and accommodation, transportation,
insurance, shipping, real estate, education and so on. Services are consumed instantaneously, are
unique and have a high customer interaction. Services are usually knowledge-based, hard to
assess, unpredictable in any instance and cannot be resold. Though manufacturing operations and
service operations are different both operations rely on human and physical resources to deliver a
desired output in keeping with the mission and vision of the company, to provide value for our
customers.
Theories and Techniques
Materials Requirement Planning (MRP)
