Real World Scenarios Midas and Genoa Ford, Same Service but Not Competitors

Business 644: Operations Management

Introduction

This paper will review a case study of Midas with a comparison of Genoa Ford and it will discuss the anticipated impacts, positive and negative, operating efficiencies, and recommend solutions to minimize the negative impacts of Midas. The paper will also discuss whether or not operating practices should be changed to accommodate the tune-ups, it will examine why input should be gathered from the shop owners, discuss the type of input that should be gathered from the shop owners and describe the processes and steps needed to launch this new program.

Vonderembse and White states in the article “Real World Scenarios Midas and Genoa Ford, Same Service but Not Competitors” that Midas is an automotive repair business that provides a narrow range of services at a lower cost. They primarily focus on muffler repair, brakes and shock absorbers (2013). Genoa Ford’s operates out of a Service Center and offers a wide variety of services such as transmission repairs, auto body work, engine repair and much more (Vonderembse and White, 2013). Each organization has a different advertising approach, employee skillset and operational objectives however both have their own efficiencies.

Operating Efficiencies

Organizations should always be assessing themselves and their structure to ensure they are meeting necessary efficiencies to meet the needs of the business, stockholders and consumers. When reviewing Midas’ operating efficiencies, the organization has national advertising so it allows for advertising to be easy and flawless. Some may think this is a positive and a negative. Some areas may need some adaptability to advertising and if it is a national advertising program, often corporations do not allow for adjustments for local markets. A solution for advertising would be to get local segments approved by the corporate marketing program for areas that need additional attention due to competitors or low-economic areas.

Midas is known for a few select repairs, mufflers, brakes and shocks therefore they are experts in this field and the employees are well trained in those areas. However, if a customer comes into the shop and has an issue in another area, they are not able to fully meet consumers’ needs and will have to refer them to another shop for more repairs. If they have to refer a customer to another repair shop, they could risk losing the entire sale as the customer may want all the work done at once versus having two separate repairs completed. This could place a huge risk on profitability. A solution for impact would be to partner with other local shops that could do the other work customer’s need done and offer shuttle service to other shop or to/from work similar major repair shops. This would allow for a competitive edge.

Due to the few areas that the shop offers repairs in, they are able to keep their rates low and competitive, so this is always a positive. In addition, this also allows inventory costs to remain lower as they do not have to keep maintain a high level of inventory of an array of parts and pieces of vehicles for other repairs.

In the automotive repair business, some tools can be extremely costly to use. With Midas having a limited amount of services they offer, this allows them to use the same tools for multiple jobs to keep costs low. Training on these tools as well as on different products can be costly so employee training can be kept at a minimum and be more efficient so employees can be more skilled in these areas allowing for consumers to get excellent repairs in a timely fashion.

Tune-Ups – To Include or Not

Tune-ups must be done on vehicles per manufacture specifications to keep vehicles in proper working order. In order for Midas to justify adding this as a program they will offer to their customers, they have to justify this as a strategy for their business and show where it will be profitable, long-term, for the business.

Given the outpouring of local shops and national retailers, Midas must remain competitive and without offering tune-up services, they will not continue to remain competitive and lose business rapidly. Midas will have to identify what shops will need to make the conversions to full tune-up shops first due to the associated costs and convert those shops first. Then the other stores will follow suite. This should be a 2-3 year plan for full conversion. During this period of time, Midas will have to train current employees and hire new employees. Everyone should be certified and ensure all training is complete and mechanics are ready to fully engage with vehicles because according to Automotive News, “Dealership service managers are complaining about a rusty old clunker that’s gumming up their operations: America’s vocational education system. Traditional schools are steering more students toward college with curricula heavy on science, math and technology. Meanwhile, service managers say, neglected vocational and industrial arts programs are turning out a generation of auto mechanics whose skills aren’t keeping pace with the cars they’re assigned to fix” (Thurlow, 2014).

Beginning this process would be extremely difficult and change is always extremely hard. Midas would need to get buy-in from shop owners and employees in order to get this change to stick otherwise they may have resistance.

Shop owners, as well as employees, should have focus groups and town hall meetings with regional and corporate leaders to discuss the changes in the service model before implementation. A great model to follow to implement this major change would be the ADKAR model. ADKAR is a goal-oriented change management model to guide individual an organizations to change (Hiatt, 1994). This model understands that everyone has resistance to change and accepts the changes at different levels so it is a constant cycle that is followed through a change process. ADKAR in short put a change through the process where you initially introduce a concept or change plan and bring awareness to the audience (A) regarding the change. Once awareness is there, then you introduce the desire (D) for participation in the change. Once desire is there, then you identify if the employees have the knowledge (K) for the change. Is additional training needed? Once the knowledge is there, then you ensure the employees have the ability (A) to make the change. Last comes reinforcement (R). You constantly reinforce the change. We understand that every employee can be at different levels at different times during the change and that is okay. It allows the organization to identify where each employee is at and helps us adjust and bring our awareness to their level of understanding to fully implement the change and be successful. Utilizing this model will allow each person going through this change an opportunity to go through the change at their own pace.

Input should be gathered at every step of the process whether it be, what tools the organization needs, training needs or hiring needs. Communication is probably the largest input needed. The organization needs to identity a strategy and a step by step guide on each step that needs to be taken and before proceeding to ensure success and profitability.

In conclusion, making this change to Midas’ business model is necessary for their future however there are very rigorous steps that need to be taken throughout the process that need to be taken and taken very strategically to ensure success. Each stakeholder has a key piece to the success of the project to ensure success of the launch of the new program.

References

Hiatt, J. (2006). ADKAR: A Model for Change in Business Government and our Community.

Loveland, CO: Prosci Learning Center for Publications.

Thurlow, A. (2014, May 19). New Techs Don’t Have Training They Need, Service Managers

Say. Automotive News. Retrieved from http://www.autonews.com/article/20140519/RETAIL05/305199975/sputtering-auto-education-leads-to-skills-breakdown

Vonderembse, M. A., & White, G. P. (2013). Operations management. Retrieved from

https://content.ashford.edu/