Operations Management LongXi Manufacturing

0 Comment

LongXi under the management of Zhang Lin is faced with important problems in line with product quality and its team. LongXi is faced with this significant problem that specifically tries to hinder its long-term goal for the future. It is important to address this problem so that it will not hinder its potential to create high standard quality management in the future. LongXi and its quality management problem absolutely encompassed the issue of how the company should obtain its competitive advantage. In the midst of on-going competition, LongXi remarkably needs to compete with significant quality in its product offerings. The issue is not just on quality improvement of its offerings and restructuring its quality improvement team, but the problem itself boils down to how LongXi should survive in the midst of highly competitive environment with too many choices for the customers to choose from. How then should LongXi differentiate its product offerings even if it has significant quality improvement is the most specific issue aside from the issue of quality improvement management. Situation Analysis LongXi’s position in the Chinese small diesel engine market LongXi’s position in the Chinese small diesel engine market is heading to international scope. As the demand for product offerings within diesel engine industry increases as far as the Chinese economic reform is concerned, competition increases within the international business setting. China is competitive enough to go for low-cost production which gives the ability of the Chinese market to have at least around 25% less cost in production compared to Japan. However, prior to this significant market trend, LongXi has been creating a major market share considering that small diesel engine market particularly in the agriculture and machinery sector was pushed to pursue even more due to Chinese economic reform. This economic reform paved way for LongXi to promote product offerings that cater the needs and increasing demand in the market. However, competition within its industry has become too intense as the demand increases. As a result, there is a need to augment production. The capacity of production needs to be improved as the demand continues to reach an upward spiraling growth. However, LongXi is willing to invest in new improved technology to ensure quality and stretch its production. It is not going to help on its part to rely on other organizations producing duo-gear shaft (DGS) because there is just limited number of them and are already having their production over-stretched. Thus, in house management is necessary. As a result to this, LongXi has remarkable market share in China as it overstretched production. Furthermore, as the country continues to lead economically, there is a good chance to expose produced product offerings of the said company into the world. This particularly is a promising output considering that LongXi is aiming for low-cost production with high standard quality. As a result, there is going to be a low-cost price of its product offerings at a reasonably high market demand. This ensures high revenue and eventually obtaining LongXi’s corporate objectives. In Comparison with Chanchai Changchai is LongXi’s ultimate competitor in China. In Appendix Table 7, LongXi and Changchai are compared based on production volume by product, revenues, proportion of export sales, profits, gross margin per unit, extent of vertical integration, external partnerships, ISO 9000 certification, and technology investment. In 1996, LongXi was able to target production of multi-cylinder diesel engines which is higher than Changchai. This is a remarkable figure and it is in this product offering that LongXi is creating a significant competitive advantage considering that there is a great market opportunity for multi-cylinder diesel engines not just in China but in the international market. This is due to the fact that the said product offering has remarkable and practical applications. However, it