Running Head: FINAL PROJECT MILESTONE ONE 1

QSO-300 Final Project Milestone One

Briley Gonzalez

January 13, 2022

Final Project Milestone One- Module Two

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Introduction

BYD China is making attempts to become the world’s largest car manufacturer,
specializing in the electric car. While many options of the electric car have been talked
about, BYD China hopes to change the industry with its higher quality, yet less expensive
batteries. The paper below describes how Operation Management practices will best aid
BYD China in obtaining the upper hand at becoming the leading manufacturer in the
industry.

Generating Value

I. Generating Value A. Evaluate how the company (BYD) in the case study uses
operations management functions to provide products and generate value for its
customers. Support your claims with examples from the case study or outside sources.

BYD’s operations function creates customer value by using advanced technology to

produce quality batteries at a much lower cost than that of Japan and other competitors.
The product is “safer and cost about half of those of the competition, according to BYD’s
general manager of its Export Trade Division, Henry Z. Li.” (Journal of the International
Academy for Case Studies, Volume 17, Number 1, 2011) In the production of cars using
these batteries, BYD can offer competitive prices for its vehicles over the Western
competitors. With reverse engineering of the Japanese batteries and using much cheaper
materials in production, BYD has a strategy that reduces its manufacturing costs, which
aids in creating value for its customers. Being able to produce these batteries at a low cost
means BYD has a record of “low labor costs, little outsourcing, and successful
innovation.” (Journal of the International Academy for Case Studies, Volume 17,
Number 1, 2011) With the company using operations management to be cost conscious,
it can create a product that has value to its customers.

I. Generating Value B. Assess how this company achieves a competitive advantage using
operations management. Provide examples found in the case study or outside sources to
support your reasoning.

The OM functions of BYD help it to achieve an advantage over its competition in the
creation of batteries. The Japanese batteries that were available for purchase in China
were pricy, so to satisfy a need for lower costs and quality product, BYD’s founder
“found his competitive advantage by studying Japanese batteries and finding creative
ways of making similar batteries at a lower cost.” (Journal of the International Academy
for Case Studies, Volume 17, Number 1, 2011) To create a competitive advantage, he
produced the ferrous lithium-ion batteries. This battery is created to be safer and more
efficient than others within its competition, and much lower in cost. This alone gives
BYD the advantage. The company does better than its competitors in the industry by
manufacturing with cheaper substitutes for its batteries. While many other car
manufacturing companies have picked up on the idea of electric cars, BYD has achieved
the advantage by being cost-conscious and using its low cost of production as its
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advantage. The company’s response to creating safe, cheap, and efficient batteries is what
allows it to do better than the others in its industry.

I. Generating Value C. Compare and contrast service operations and manufacturing

operations at the company in the case study. How are they the same? How do they differ?
How does each of these operations provide value for their customers?

Service Operations are those that support a team or company to create a better daily flow
of operations to provide good quality services. Manufacturing Operations are the
“monitoring and improving of the production processes.” (Kokemuller) While they are
different, they do flow together. “Services have also enabled manufacturers to grow the
value of their operations from the initial stage of designing their products to the final
stage of getting their products to their customers.” (Stephenson. 2017) BYD uses services
and manufacturing operations to provide value for their customers through the utilization
of technology. They offer safe, long lasting, and great reliability when it comes to the
production of their electric vehicles. BYD uses Service Operations, such as service
centers, to compete the mission of quality services and customer value.

Theories and Techniques

II. Theories and Techniques A. Compare and contrast the critical path method (CPM) and
the program evaluation and review technique (PERT). What types of projects at this
company would favor PERT over CPM? Why? What types of projects at this company
would favor CPM over PERT? Why?

PERT: Project Evaluation Review Technique. PERT is used to evaluate and manage the
tasks within a project to make sure that they are completed in a timely manner. CPM:
Critical Path Method. CPM is used to find the tasks needed to compete a project and to
control the cost and time of those tasks. PERT and CPM are alike in that they both
require an evaluation of the project at hand to establish the time the project will need for
completion. The two are different in that “PERT deals with unpredictable activities, but
CPM deals with predictable activities.” (Surbhi. 2019) A project at BYD that would have
benefited from PERT is the very first manufacturing of its electric car using the BYD
battery. PERT would have been a great tool in planning the project and assuring that each
step of the process was completed in precise manner because this had yet to be done
within the company. BYD would now benefit from CPM for the manufacturing of its
electric cars, trucks, etc., because this technique is a system that “helps to identify critical
and non-critical tasks from projects’ start to completion and prevents temporary risks.”
(Kukhnavets. 2018)

II. Theories and Techniques B. Explain the steps used to develop a forecasting system.
How would these steps be specifically utilized by this company? What do you predict
would be the result of implementing a forecasting system for the top-selling product line
at this company?
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Write 1-2 paragraphs answering the above. The seven steps come from your OM
textbook (page 110), no need to be creative with the internet. The best replies that I have
seen list out the step and then how BYD would apply then, moving consecutively through
the list.

Step 1-determine something. During this step, BYD would…

Step 2-another thing. During this step, BYD would…
Step 3….
Step 4….
Step 5…
Step 6…
Step 7…

Please be sure to predict the likely result of implementing a forecasting system for the
top-selling product line at BYD ex. Yuan EV360 Model.

II. Theories and Techniques C. List the major categories of supply chain risk and
associated risk reduction tactics. How could the company mitigate exposure to supply
chain disruptions caused by natural disasters?

Write 1-2 paragraphs answering the above. The categories (supply chain risk and
associated risk reduction tactics) come from your text (page 450), no need to conduct any
additional outside research here. Some of the best responses I have seen were charted
out:

Any company that uses outside suppliers incurs some level of risk. Below is a list of
risks and what companies, BYD specifically, can do to help mitigate or reduce the
associated risk.

Risk How BYD Can Mitigate the Risk

Supply Risk 1 BYD would mitigate this by…
Supply Risk 2 BYD would mitigate this by…
Supply Risk 3 BYD would mitigate this by…
Supply Risk 4 BYD would mitigate this by….

The above OM processes and strategies help to make BYD the cutting edge of electric
car production. With implementing new and advanced technologies, BYD will continue
to hold an advantage over its competitors.
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Be sure to include an APA formatted reference page. The reference page should include
all sources used in your assignment (including our OM textbook, BYD Case Study along
with any additional outside sources introduced). Please make sure most of your paper is
original thought and do not copy/paste more than 20% from other sources.

Please make sure that you include a comprehensive Reference List. Also, an in-text
citation needs to be included in the body of your word document where the source is
used. If you didn’t “think-it”, “say-it”, or “write-it” please be sure to cite it! 😊

The proper reference for your OM textbook:

Heizer, J., & Render, B., Munson C. (2020). Operations management. Sustainability and
supply chain management. (13th ed). Upper Saddle River, NJ: Pearson.

For information on how to reference your sources in the APA format refer to the
following website:

https://owl.purdue.edu/owl/research_and_citation/apa_style/apa_formatting_and_style_g
uide/general_format.html

In addition, I recommend utilizing the “Citing your Sources Guide” which can be
accessed via “Quick Links” on our Brightspace Course Landing Page.

Warm Regards,
Junie Fairchild