Read JLR background,then write Supply Chain Section 1500 words
Consider the start of the supply chain connecting suppliers and the manufacturing plant. How they are integrated within JLR to enable the flow of materials between them and the plant, what systems are in place, how suppliers are selected.
Read JLR background,then write Supply Chain Section 1500 words
Consider the range of suppliers needed for your product and the methods by which you will choose your preferred supplier. Utilise key models/ theories in selecting potential preferred suppliers.
Write and additional 500 word reflective statement covering the following points:
1.How useful you found the Integrated assessment
2.What benefits you think you have achieved in relation to skills and personal development in undertaking the Integrated assessment
3.How the Integrated Assessment may be useful to your future academic and professional career.
The below case study should be considered when beginning your research into JLR, it should however be noted that this information is relevant to the current state of JLR and does not reflect the future scenario that you need to consider for this assignment.
The Jaguar Land Rover PLC is a huge company and a key player within the automobile industry. The company operates indirectly and a wholly-owned subsidiary of Tata Motors Limited. Jaguar Land Rover is built around two iconic British brands, Jaguar Cars Limited and Land Rover, which invent, engineer and produce cars in the UK with different target market within the industry. The former is branded as one of the premier producers of sports cars and luxury sports saloons in the world and the latter is a renowned producer of premium 4x4s all-terrain vehicles (Jaguar Land Rover n.d.). In addition, the company has attained a unique global image through a defined sales and distribution network of cars, related parts and accessories. The two top brands merged together in one world-class business, offers a portfolio of cars that are highly recognised as leaders in their sector. As a result, Jaguar Land Rover continues to falsify ahead in design excellence and technological innovation with the launch of its award winning Range Rover Evoque deemed as the “Car Design of the Year” (Range Rover n.d.). Other countries accolade for the Evoque includes „Auto Design and Styling? and „Best SUV of 2011? from Czech publication and Motor Press Editorial Group in Portugal respectively (Range Rover n.d.).
Jaguar Cars Ltd
Founded in 1922 by Sir William Lyons as the Swallow Sidecar Company, Jaguar Cars Ltd simply named in 1945, originated from motorcycle sidecars before moving into passenger car productions. In 1968, the company merged with the British Motor Corporation of which expanded the business? operations. This gave Jaguar the opportunity to be listed on the London Stock Exchange in 1984 under the FTSE 100 Index, prior the acquisition of the company by Ford in 1989 for £1.6 billion. After the purchase, the company became part of the Premier Automotive Group in 1999 collectively with Aston Martin and Volvo Cars. Land Rover then joined the group after a year.
Jaguar has been known in recent years as a car manufacturer for prime ministers with the most recent one being the XJ model (Autoblog 2010). Also, the stylishly designed and luxurious Jaguar cars hold Royal Warrants from HM Queen Elizabeth II and HRH Prince Charles (Motor Quote Direct 2011). Currently, Jaguar operates from the Whitley plant in Coventry and the Gaydon site in Warwickshire where the cars are designed with a highly urbanized research and development centre since 1985 and the high-technology design and engineering centre since 2000 respectively. The Gaydon site also incorporate business functions such as Finance, Marketing, Sales, Human Resources and other services. The company manufactures from two plants which includes, Browns Lane which is known as the Jaguar veneer manufacturing centre since 1951and the Castle Bromwich which operates as the “Body in White Assembly and Paint, Trim and Final Assembly of all XJ, XF and XK model” (Jaguar n.d.).
The proximity of the plants enables the company to simply split the car body development from its assembly thereby creating a platform for a prompt manufacturing process. An additional plant which operates like the Castle Bromwich however, for Freelander 2 and X-TYPE models is the Halewood located in Liverpool. In order to offer an intriguing glimpse into the history of the company and create a positive public image, the company opened the Jaguar Heritage Museum which serves as a promotion centre and a home to about 160 Jaguar and Daimler displays from 1896 to the present (Jaguar n.d.). The museum was established in 1998.
One of flaws that Jaguar faced was the introduction of the X-TYPE to battle its rival, BMW 3 series, of which became a huge disappointment from their fans. The decision made by Ford to produce the car was based on Ford Mondeo? platform. Jaguar? X-type was described by customers as a re-modelled Mondeo but their major drawback was the conservative styling and an uninspiring interior compared to competitors (Auto Express 2011). This resulted in the lack of sales hence losses incurred. The company was founded by Maurice Wilks, chief designer at the Rover Company, who designed the original Land Rover through an inspiration from an American World War II Jeep used during his holiday (The Telegraph 2011). As a result, the first Land Rover was manufactured on a Jeep chassis. As part of its history, Land Rover was launched by Rover in 1948 and became part of the Leyland Motor Corporation in 1967 until 1968 when the British Leyland was formed after the merger of the British Motor Holdings and Leyland Motor Corporation. British Aerospace acquired the Rover Group in 1988 and six years after, BMW made an offer to overtake the company. The deal was successful and BMW became the sole owners of the company. The rapid change of ownership shows that the company was less profitable. To this effect, Land Rover was sold to Ford Motor Company in 2000 for £1.85 billion (3 billion euros) and became part of the Premier Automotive group (BBC 2010). Ever since Land Rover begun, the company has grown into a renowned brand which comprises of a range of four-wheel-drive models. The models include the series, defender, discovery, freelander, range rover, range rover sport and range rover evoque.
1.2 JLR Today
Jaguar Land Rover has undergone structural changes during its growth and development coupled with the rapid ownership changes elaborated above. The era has seen a recent divestiture by Ford when Jaguar became a financial drain on the company for years hence, making loss despite the £4 billion invested in Jaguar and Land Rover (AutoMotto 2006). Following the closure of Jaguar? plant at Browns lane in Coventry, which led to unemployment issues, Ford decided to sell off Jaguar so as to reduce its costs and keep up with the rising competition in the US market (AutoMotto 2006). Although Land Rover was profitable, it did not have a huge impact on the company. In effect, Ford intended to use a „OGOF?strategy by selling Jaguar and throwing in Land Rover so as to attract buyers.
When the deal was announced, Tata, India? biggest car vehicle maker showed an interest and negotiated based on the price and supply network systems. Ford and Tata agreed on a half price deal of £1.5 billion ($2.3 billion) for the two British marques in June 2008 (BBC NEWS 2011). The sale was crowned with a satisfactory statement from the executive chairman of Ford that it was “not a mistake” since there were rumors regarding the deal (BskyB 2011). Apart from these rumors and the widespread skepticism in the market regarding an Indian company possessing Britain? luxurious brands, other stakeholders were concerned about the takeover? impact on the economy. This was partly due to the cost cutting measures taken by Ford, during the recession such as downsizing. However, Tata confirmed that there will be no significant changes instead, the takeover would enhance and expand their international presence and competition especially in the market of passenger cars. At this stage it is important to realise that although JLR was loss making company, Tata had 90% of their sales in the Indian market and looked to expand its market concentration internationally across different and customer segments and geographies. As a result, the company has penetrated into the UK market and emerging ones by acquiring the loss making firm. Aside the opportunities and strengths of the takeover, there were challenges faced by the entire Tata Group. Although the long term profitability of JLR seemed feasible to Tata? management, a conflict of interest was demonstrated by shareholders?dissatisfaction. This was mainly due to the negative market reaction of value investors when the takeover deal was announced.
Also industry analysts predicted that the major issues that could disturb the foresight of the company were the funding risks, currency risks and economic downturn in markets in Europe and America (IBS Centre of Management Research n.d.). In response to the issues at hand, the global investment bank UBS stated that “This (the debt) could increase Tata Motors?interest costs by Rs 650-700 crore per annum and reduce the earnings per share for 2008-09 by Rs 12-13, or 19-20 per cent (Business today 2011).” Standard & Poor? assessment of Tata? outstanding debt of $850 million for JLR purchase resulted in a downgrade of its credit ratings from B+ to B (Bloomberg Business week 2011).
As employees of JLR were not happy about the takeover due to the risk of downsizing, the company revived their confidence by signing an agreement with Unite, JLR? trade union group, with the intention of safeguarding jobs for three years till 2011(Business today 2011).
The agreement included other packages such as pensions and sourcing agreements of which are very beneficial to the UK automotive industry. After some time, the company was at risk of shutting down some of its plants such as those in solihull, Halewood, Castle Bromwich and Coventry due to the 10 months loss of about £280 million in 2009 which is 32% fall in sales. Consequently, the government expressed its willingness to support JLR,stating that the company is a viable business with future prospects (BBC NEWS 2011). The management of the company, therefore, requested for £1 billion bailout.
This request was subject to the government? scrutiny of which the business secretary Lord Mandelson added his thoughts stating that “The car sector – car manufacturing – is a centre of real excellence and competitive strength in our country” (Haymarket Media Group 2011). It is apparent that, the company could not withstand the competition at hand and was dramatically facing cash flow problems with the inability to meet their debt obligations as they fell due such as payment to suppliers and lenders.
The crowning victory that has long been waiting for was the renaissance of the JLR brand. Following a high degree of investment in research and development to rebuild the brand image, the classic and luxurious Jaguar XF and XK was revealed. JLR has invested more than £1 billion per year over the five forthcoming years to create thrilling and contemporary models that will, ultimately, fortify JLR? position internationally. Subsequently, signs of immediate results were reflected where sales were up 95% and 25% for the XF and XK models respectively. This comprised of an increase in sales in emerging markets like China and India recording a 43% sales rise in China. Overall, JLR sales rose by 51% from £6.6 billion to £9.9 billion which was aided by a favourable foreign exchange rates. Annual profits of more than £1.1 billion were recorded. Ralf Speth, chief executive of JLR, said: “This is a solid performance but we must remain focused on delivering a strong, sustainable business model for the future (Dennis Publishing Limited 2011).” Professor Bailey of Coventry University Business School also added that JLR is focussing on doubling production over the next four years.
He also stated that car productions target for JLR has been set at 300,000 rather than 150,000 by 2015 (Birmingham Post.net 2010). This creates a platform for low-cost importers from India to penetrate the market.
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