Sitting Pretty Managing Customer Driven Innovation At Faurecia Car Seating Case Solution

Major Issues

Faurecia was facing several issues in managing its operations which collectively created a huge problem for the company. The prime issue was that the process involved in the product development task of the company were old and they could not keep up with the growing automobile market, the intensity of competition and the demands of OEMs. It tried to keep its logistics efficient in the sense that it had good supply routes for procurement of raw materials but it could not reduce the costs even when there was visible room for improvement. Then they also faced several ergonomics issues which coincided with the product development flaws, so the company had to work on them too.

Objectives

This research shall endeavor to analyze the case of Faurecia and study its processes. It shall assess the company's problems and use scholarly literature on operations management to find out the roots of these problems. In the later part, it shall draw recommendations based that could integrate with the company’s business strategy and improve its competence.

2. Analysis

The automobile industry is a very demanding sector and a company which do not adhere to the customers’ ever changing and increasing demands will find itself out of the competition in no time (Orsato & Wells, 2007). This, in turn, translates to the automotive components suppliers who actually initiate the value chain of automobiles. The changing industry trends have forced OEMs to outsource their major portion of manufacturing to other parties which had further intensified the pressure on parts suppliers and the industry conditions got a lot more challenging for them (Novak & Stern, 2008).

Faurecia, until 2002, provided one part structures to the OEMs. It then decided to employ “just in time” philosophy in its business which resulted in the supply of a complete seating product to the customers. Just in time strategy brought, along with it, many new implications for the company which were both good and bad. The company needed to have impeccable logistics support for the procurement of raw materials (Wang & Sarker, 2006), very highly efficient workforce and exactly defined processes that are easy to perform and leave little room for mistakes (Kaynak & Hartley, 2006). This business strategy allowed it to expand to different regions and become a globally significant name in automobile components market.

Just in time philosophy, in essence, refers to the making of goods exactly when the customers demand them and produce high quality products in high quantity in time (Shah & Ward, 2007). To understand the implications of this strategy, let’s see how the OEMs interact with tier-1 and teir-2 suppliers. The tier-1 suppliers, which deliver directly to the OEMs are under very strict requirements of production by their customers. They even have to fulfil several obligations which are beneficial to the car manufacturers but detrimental to their well-being. For example, in this case, they are forced to accept the prices dictated by the OEMs. Tier-2 suppliers, on the other hand, are the suppliers to the teir-1 producers. These are the firms which are pampered and stimulated by the OEMs as they could not function very well on their own.

There are several strategies; a business can employ to facilitate the Just in time policy. The preventive maintenance strategy helps a company ensure that its equipment and machinery is in perfect working condition to avoid any last-minute pitfalls (Aghezzaf, Jamali, & Ait-Kadi, 2007). The combination of talent is very necessary for this kind of business policy as there is a very small time frame in which operations have to be performed, therefore, different types of expertise need to be present to solve any problem which arises (Monden, 2011). As the delivery of products to the customers need to be adherent to the just in time demand and supply rule, a delivery mechanism which entails many customers at one go should be employed minimize the freight costs (Swafford, Ghosh, & Murthy, 2006).