PRETORIA, South Africa, 01 February 2023: Ford has commenced exports of the Next-Generation Ranger from its manufacturing plants in South Africa to serve the ever-growing customer demand. The South African-built Next-Gen Ranger is presently shipped to more than 100 global markets.

Late last year, the Silverton Assembly Plant in Pretoria became Ford's third manufacturing hub across its International Markets Group (IMG) to start production of this highly anticipated new global model, which went on sale in South Africa in mid-December 2022.

"We are proud to commence with Next-Gen Ranger exports to customers around the world from our world-class manufacturing facility in South Africa." "Having modernized the local production and increased the installed capacity to a record 200 000 units per year, we remain committed to delivering quality Next-Gen Rangers from our Silverton Assembly Plant and Struandale Engine Plant."

Monthly export volumes from South Africa operations are expected to be around two-thirds of total production, through the Durban and Gqeberha (formerly Port Elizabeth) ports, with Europe being the largest export market. This makes Ford one of South Africa's highest-volume vehicle exporters and a leader in the light commercial vehicle export category.

The two-port local strategy is essential for Ford's higher export volumes, with the Gqeberha route set to play a more instrumental role once a more efficient and reliable rail corridor between Gauteng and the Eastern Cape is developed.

"We are excited about the huge export potential and continue to work with authorities to address bottlenecks such as high level of congestion at Durban's roll-on roll-off (RORO) vehicle terminal, as well as lack of rail infrastructure for Ford to direct most of its export as well as import through Gqeberha," Berry added.

Making sure that Ford's South African operations are globally competitive and an integral part of the company's turnaround strategy for its automotive operations, the Silverton Assembly Plant was modernized and expanded through an investment of US$1.05 billion (R15.8 billion), announced in 2021. The extensive upgrades included building an on-site Stamping Plant, a highly automated all-new Body Shop, establishing the only Ford-owned Frame Line in the world, completely revamping the Assembly Line with the latest technologies and extensive investment in the latest tooling for supplier companies. The new and upgraded facilities were essential to unlock the plant's installed capacity of 200 000 vehicles per year, while consistently delivering world-class quality for Ford's customers around the world.

The expanded production for the Next-Gen Ranger also contributed to significant job creation, thanks to the addition of a third production shift at the Silverton plant in 2022. Photo by Ford SA

An additional US$34 million (R600 million) was invested in the Struandale Engine Plant for the launch of the powerful 3.0L V6 Diesel engine that headlines the Next-Gen Ranger line-up, along with upgrades for the latest-specification 2.0L Single Turbo and 2.0L Bi-Turbo engines.

The expanded production for the Next-Gen Ranger also contributed to significant job creation, thanks to the addition of a third production shift at the Silverton plant in 2022. This further reinforced Ford's commitment to South Africa as one of five global manufacturing hubs for the Next-Gen Ranger. A total of 1 200 jobs were added for the new shift, taking Ford's total workforce to 5 500 employees. Approximately 10 000 jobs were added at supplier companies, with local manufacturing for the Next-Gen Ranger now supporting around 60 000 jobs in the total value chain.

Source: https://www.thesouthafrican.com/motoring/ford-has-commenced-exports-of-the-next-gen-ranger-2-february-2023/

QUESTION 1 (20 Marks)

1.1. According to the article: "Late last year, the Silverton Assembly Plant in Pretoria became Ford's third manufacturing hub across its International Markets Group (IMG) to start production of this highly anticipated new global model [i.e., the Next-Gen Ranger]

...". The establishment of manufacturing hubs across its International Markets Group reflects a strategy to internationalise Ford's automotive operations. Critically discuss SIX (6) reasons why Ford has internationalised its operations to South Africa and other markets.

1.2. According to the article: "Having modernized the local production and increased the installed capacity ..., we remain committed to delivering quality Next-Gen Rangers from our Silverton Assembly Plant and Struandale Engine Plant."

Considering the statement above, discuss how each of the following seven (7) critical and strategic decision areas of operations management may have contributed to the modernisation of Ford's local production and the increased installed capacity, or how they will enable Ford to remain committed to delivering quality Next-Gen Rangers from the Silverton Assembly Plant and the Struandale Engine Plant:

Design of goods and services

Managing quality

Process and capacity design

Supply chain management

Inventory management

Scheduling, and

Maintenance You are required to extract relevant evidence from the article and theoretical points from the literature to buttress your discussion of each of the seven critical and strategic decision areas.

QUESTION 2

(20 Marks)

2.1. According to the article: "The extensive upgrades included building an on-site Stamping Plant, a highly automated all-new Body Shop, establishing the only Ford-owned Frame Line in the world, completely revamping the Assembly Line with the latest technologies and extensive investment in the latest tooling for supplier companies". Whereas the statement above provides a snapshot of the critical structural elements of the modernisation and expansion of Silverton Assembly Plant's operations, the phrase: "...completely revamping the Assembly Line with the latest technologies..." provides some useful information about the central piece of the process strategy at the Assembly Plant. By drawing on the phrase: "...completely revamping the Assembly Line with the latest technologies...," provide a brief discussion of the process strategies that manufacturing firms employ in their operations and with the aid of a diagram comprehensively discuss the type of process employed at the Silverton Plant. (10marks)

2.2. Based on Hitt, Ireland, and Hoskisson's (2017:243) framework of international strategies, discuss the four main global operations strategy options by which multinational corporations exploit global opportunities, and identify and elaborate on the strategy by which Ford Motor Company approaches opportunities across international markets. In your discussion, extract evidence from the article to buttress your arguments. (10 marks)

QUESTION 3

(20 Marks)

Study the information provided below and answer the following questions. INFORMATION According to the article, "The new and upgraded facilities were essential to unlock the plant's installed capacity of 200 000 vehicles per year...", and "The expanded production for the Next-Gen Ranger also contributed to significant job creation [with] the addition of a third production shift at the Silverton plant in 2022. A total of 1 200 jobs were added for the new shift, taking Ford's total workforce to 5 500 employees." Each employee at the Silverton plant worked 8 hours per day for 300 days during 2022. Required:

3.1. Suppose that 5 000 employees were directly involved in the production of the 200 000 at the Silverton plant during 2022, calculate the expected labour productivity at the Silverton plant in terms of vehicle per labour hour (round off answer to four decimal places).

3.2. The information provided below relates to the operations at the Silverton plant (after the expanded production) during the 2022 financial year: INFORMATION

Production volume	200 000 vehicles
Total labour cost	5 500 workforce @ R200 per hour each
Material cost per vehicle	R15 000
Total manufacturing overhead	R9 000 per vehicle
Design and other production expenses	R3 000 per vehicle

If the average ex-factory price of the Next-Gen Ford Ranger vehicle produced at the Silverton plant in 2022 was R400 000, calculate the multifactor productivity after the expanded production (round off answer to two decimal places).

3.3. Suppose that the multifactor productivity at the Silverton plant before the expanded production was 9.25, determine the multifactor productivity (MFP) growth rate (round off answer to two decimal places).

3.4. By extracting relevant evidence from the article, suggest TWO possible reasons for the productivity growth that has taken place at the Silverton plant as evidenced by the answer obtained in question 3.3 above

QUESTION 4

(20 Marks)

Use the information provided below to answer the following questions.

INFORMATION

Ford's Struandale Engine Plant in Gqeberha (formerly Port Elizabeth), which assembles the 3.0L V6 Diesel engine for the Next-Gen Ranger and the range-topping VW Amarok, uses 900 000 units of a certain component in the production of engines annually. The components are purchased from suppliers at R200 per unit. It costs the Struandale Engine Plant R500 per order and the carrying cost is 5% of the purchase price.

Required:

4.1. Determine the economic order quantity (EOQ) of the component. (5marks)

4.2. The current ordering policy at the Struandale Engine Plant is to order 100 000 units of the components every time it places an order with suppliers. By calculating the total annual ordering cost and the total annual carrying cost, evaluate the optimality of the current ordering policy. (8marks)

4.3. Determine the saving that can be made by the Struandale Engine Plant if it switches the ordering policy to the EOQ model. (7marks)

QUESTION 5

Using the information provided below, answer the following questions.

INFORMATION

The data in the table below shows the number of Next-generation Rangers exported to over 100 countries through Durban's roll-on roll-off (RORO) vehicle terminal during 2022 and the first quarter of 2023.

Month	Jan22	Feb22	Mar22	Apr22	May22	Jun22	Jul22	Aug22	Sep22	Oct22	Nov22	Dec22	Jan23	Feb23	Mar23
Export, units	7000	9000	8600	9500	10200	12000	11000	12500	12000	12600	12800	13000	10800	12600	14000

A demand planner wants to compare the relative performance of the weighted moving average method against the simple exponential method in forecasting the volume of export of the next-gen Ranger from the Silverton Assembly Plant.

Required:

5.1. Using the simple exponential smoothing method (SESM), compute the forecasts for the February 2022 to March 2023 period. Use a smoothing constant of 0.2 and assume a forecast of 7 000 units for January 2022. (5marks)

5.2. Compute the three-month weighted moving average (3MWMA) forecasts for the April 2022 to March 2023 period, using weights of 0.2, 0.3, and 0,5 (oldest data to newest data, respectively). (5marks)

5.3. Using the forecasts calculated for the April 2022 to March 2023 period, calculate the Mean Absolute Percentage Error (MAPE) of the simple smoothing method and the MAPE of the three-month weighted moving average method. (8marks)

5.4. Which of the two methods should the demand planner use to forecast the volume of export of the next-Gen Ranger. Explain why? (2marks)