Analysis of Operations Management in ISTOBAL: Enhancing Quality, Supply Chain

Efficiency, and Inventory Control

Abstract
This paper seeks to evaluate the operations management practices of ISTOBAL, which is one
of the leading suppliers of car wash systems in the world. The goal is to assess some core
segments of the organization's activity, such as the management of business processes,
quality assurance, supply chain, and inventory, and pinpoint inefficiencies. By choosing the
production of the M'WASH PRO automatic rollover machine for analysis, the focus will be
on manufacturing innovation, where the paper will demonstrate that ISTOBAL's competitive
advantage in the global market is rooted in a distinct approach to manufacturing and quality
assurance. Supply chain plans are analyzed, and advice is given on how to manage and
reduce risks and enhance predictive accuracy. The inventory control system is evaluated in
the aspects of raw material acquisition, storage, and order plans. This report has made the
following general recommendations: To improve the quality checking processes, there should
be better training and increased staff. To improve inventory processing, some processes
should be automated and simplified. Some recommendations have been made to improve the
supply chain and thus increase efficiency. These enhancements are fundamental to
ISTOBAL's ability to sustain competitive advantage because the market remains saturated
with fierce and ever-changing competition.
Overview and Environment
Organization Description
ISTOBAL is an international manufacturer of car wash and care equipment and chemicals,
established in 1950. It has shown the capacity to notice the changing trends of the industry
and come up with products to suit consumers. With its operational base in Spain, the
company has rapidly grown and spread across more than 75 countries around Europe, North
America, and Latin America, with ten subsidiaries in total. ISTOBAL is a big car wash
solution company that has over 1,000 employees and operates through 3 production facilities
in its segment.
The distinctive growth strategy of ISTOBAL includes technological development,
environmental stewardship, and customer orientation. The company has been consistently
focusing on R&D spending, where it has allocated its revenues to be around 3% for creating
new technologies and products. It has allowed ISTOBAL to develop initiatives like water
recycling systems and energy-efficient car wash machines that are consistent with world
trends in sustainability.
Goods and Services
To satisfy commercial and industrial customers, ISTOBAL offers many car washes. The
company makes automatic rollover machines, jet wash systems, and high-throughput vehicle
cleaning tunnels. Their M'WASH PRO automatic rollover machine is known for its
versatility and ease of use. In addition to equipment, ISTOBAL makes highly renowned
esens® chemical products. These chemicals are effective and environmentally friendly at
various vehicle wash stages. Vehicle care and sanitation chemicals, shampoos, waxes, and
pre-wash treatments are included. By recycling 100% of washing water, ISTOBAL's cutting-
edge water treatment systems reduce water usage and environmental impact. The company
also cleans industrial and commercial vehicles. Their equipment is for trains, buses, and cars.
Ownership Structure
ISTOBAL is still a family company situated in Valencia, Spain. The legal system of the
company is that of a Sociedad Anónima (S.A.), which implies that a board of directors
manages it and has shareholders. Yet the majority of stock belongs to the owning family,
which determines clear-sighted approaches and stable long-term objectives. The U.S.
subsidiary is managed by a General Director who has a direct line of responsibility with the
headquarters in Spain.
Competitive Advantages
In this case, ISTOBAL operates with several competitive advantages, these being technology,
sustainability, and customer approach. For example, M'WASH PRO is designed to be energy-
saving. Thus, it integrates variable frequency motors to adjust energy use during the washing
process. ISTOBAL's ECO-sustainable technologies, such as its car wash system that can use
only half the water required by conventional modes of washing cars, is a product that can be
marketed to the green consumers and businesses that want or are forced to make a shift to
sustainable ways of operating.
Other strengths include the company's wider geographical coverage and customer service,
such as technical support, tutorials, and parts and service support. Regarding customer
loyalty, ISTOBAL sustains its competitive advantage by minimizing the total cost of
ownership of its machines and extending financing offers.
Operations’ Competitive Advantages
The competitive advantages of ISTOBAL operations originate from technological initiatives
and market adaptation. It comes up with products that meet specific markets, as seen in its
Extended Height & Width car wash system, which is local to America, a massive competitive
advantage. Having been established by the family, Istobal enjoys favorable family-controlled
dynamics whereby decision-making processes are efficient, thereby enabling the firm to
respond to strategic directions without much hindrance occasioned by bureaucracy.
Altogether, there is excellent provisioning of after-sale services and support that the company
can use to ensure that its customers' assets are always functioning and generating income.
Description of the industry
The global car wash industry is rapidly evolving thanks to changes in technologies and
preferences and increased environmental consciousness among consumers and authorities.
Automated car wash stations are quickly becoming popular as they save time and are more
effective with less effort on the environment. Alternatively, the market is believed to register
a CAGR of 3.2% within the next five years, between 2023 and 2028.
Due to these trends, ISTOBAL further developed and incorporated contactless payment and a
remote diagnostic solution that will enable operators to check on the machines' performance
even when outside the machines' location. However, customer needs in sectors across the
globe, and the push for environmentally sustainable options to fulfill these needs propel
ISTOBAL to adopt sustainable washing procedures and reuse water.
As more electric cars are on the market, ISTOBAL is preparing its machines for different
types of surfaces. The designs of electric vehicles require more careful cleaning. They make
foresighted changes, hence enabling the company to remain relevant in a changing market
environment.
Primary Competitors
As a company, ISTOBAL is surrounded by astonishing competition with other sectors in the
vehicle wash business. Some of its main competitors in the car wash sector would be
National Carwash Services (Ryko), Mark VII (WashTec), PDQ/Belanger (OPW),
Washworld, and Autec, which has well-developed networks in the market. ISTOBAL major
competitors include Whiting Systems, Westmatic, N/S Wash, Interclean, and American
Truck Wash Systems, all of which focus on large commercial vehicles and truck wash
systems. The tunnel wash segment rivals: Other market leaders that operate within this
market segment are Sonny's, Motor City Wash Works, Tommy Car Wash Systems, Coleman
Hanna, and AVW Equipment. These competitors hold a lot of power in the North American
market, which forces Istobal to constantly adapt its products in a way that can carve out a
niche for itself.
How does the competitive environment affect its operations?
The pressure of competition in the North American market has made Istobal concentrate on
innovation and customer solutions. Competitors have started attaining leadership positions in
the market, which has given rise to the necessity of Istobal to design equipment that caters to
the needs of U.S. consumers. In my opinion, the strategy of having the essential product
come in extended height and width is very relevant in North America because of the large
vehicles in the region. In addition, based on the fact that Istobal is a family-owned company,
it can afford the luxury of making long-term strategic plans instead of needing to make quick
bucks in a highly competitive industry.
SWOT ANALYSIS
Strengths Weaknesses
Family-owned, focusing on long-term Limited market penetration in North
relationships and reinvestment. America compared to competitors.
Custom solutions (Extended Height/Width I was focused mainly on vehicle wash
systems for the U.S.). systems, limiting diversification.
Reputation for high-quality equipment and Smaller scale compared to larger
customer service. competitors.
Opportunities Threats
It is expanding the North American market, Intense competition from established brands
especially for truck wash systems. like Sonny’s and Mark VII.
Environmental regulations favoring Economic downturns are affecting vehicle
sustainable car wash technologies. wash demand.
Growth in automation and A.I. for Technological disruptions require constant
innovative wash systems. innovation.
Product location in the product life cycle
Istobal's vehicle and truck wash systems are growing in North America. Due to increased
demand, automated, eco-friendly wash solutions have significant growth potential. Due to the
high number of commercial vehicles on the road, Istobal is well-positioned to capitalize on
this growing phase, especially in truck washes. Continuous innovation and tailored solutions
for regional markets like the U.S. help them do this.
Process Description
Selected Product: M’WASH PRO Automatic Rollover Machine
M'WASH PRO is one of the most spectacular car wash machines developed by the company.
It offers high performance and an individual approach. The machine works for car wash
business people who wish to work smart and fast. It can also be blended with different wash
selections, including express wash, intensive wash, car wash with soft wax plus, and soft wax
plus, which uses less water and detergent.
Process Strategy
ISTOBAL uses a repetitive focus strategy that provides economies of scale and ensures it
adapts to the market and offers products to and provides consumers in large quantities. This is
another advantage of this approach because it is both efficient and flexible, which is
necessary when satisfying the diverse needs of their clients all over the world. High volumes
of standardized elements are produced where items like the structural steel frames and motor
systems are incorporated, but client-distinctive features are added later.
For example, customers can select wash brush combinations or water reclamation options,
which are fitted towards the end of the production line. This allows ISTOBAL to design a
range of products with a balanced product mix without much disruption of its block
processes.
Inputs and Transformational Activities
Raw materials and pre-assembled components make the M'WASH PRO machine. High-
quality stainless steel structural parts, electrical wiring, and water-resistant coatings are
essential. ISTOBAL employs only high-quality, environmentally friendly materials from
trusted manufacturers. Adding pre-assembled motor units, dryer systems, and control panels
later in manufacturing minimizes assembly time and increases design options.
Raw material preparation, component assembly, machine testing, and product customization
are critical elements in ISTOBAL's major manufacturing factory's transformative process. A
dedicated quality control team inspects the equipment at each step before shipping it to
clients to ensure it meets the company's high standards.

Flowchart Representation
The appendix includes a detailed process flowchart outlining each step of the manufacturing
process for the M'WASH PRO machine, from procurement to final testing. This flowchart
helps visualize how ISTOBAL manages both mass production and customization within a
single production line, highlighting key areas where quality checks are performed.
Quality
Quality Control Approach
Quality control at ISTOBAL is guided by the ISO 9001:2015 international quality
management system and the ISO 14001 Environment Management System, both of which
were introduced in 2015. These certifications represent the company's goal of achieving
consistent operations performance and reducing its negative impact on the environment.
Adherence to these certifications also assists ISTOBAL in capturing a global market that is
trending towards being environmentally conscious and concerned with company
responsibility.
ISTOBAL's method of quality control starts with a supplier audit to ensure that the company
receives only high-quality materials that respond to all its requirements. Quality assurance
check is done at different stages when constructing the final product, including inspection of
the material, work in progress, and inspection of the finished products before they are
released to the market. The specific goals of process control systems are to control different
parameters during production and identify behaviors that are likely to affect the quality of the
final product by using data collected from ISTOBAL’s manufacturing facilities.
Quality Tools and Inspections
ISTOBAL conforms to high production standards by employing a number of quality tools,
such as Statistical Process Control (SPC), to closely track manufacturing processes to
ascertain conformity to the required quality standards. Failure Mode and Effect Analysis
(FMEA) is also an important tool, where a company is able to identify the points of failure
and rectify them before they occur.
Further, after the manufacturing process, each M'WASH PRO machine is subjected to
performance tests. During this phase, the parameters of the machines are tested under
conditions of simulated use of different stress factors. The said tests assist ISTOBAL in
confirming that the machines are not only fit to meet customer expectations but also conform
to safety operational standards.
Continuous Improvement Initiatives
Kaizen is the concept that guides ISTOBAL in undertaking the improvement of all processes
that enable operations in the organizational structure. There is a culture of reporting waste or
making suggestions on how new ways to work can be done. This philosophy also creates a
favorable workplace relationship and allows employees to play a role in improving the
operations of the company. For instance, some of the suggestions collected from the
production line have influenced the better organization of assembly line machines as well as
lesser material usage.
Customer Feedback Loop
Hence, while executing its operations, ISTOBAL pays much attention to customer feedback
and market research. Surveys, recurring visits, and records of the machines' performance
offer a rich source of data to the company, enabling it to be a better product designer,
especially where there are flaws. This feedback loop is crucial because ISTOBAL needs to
guarantee that customers receive a quality product from the company.
Supply Chain
Supply Chain Overview

As the ISTOBAL subsidiary that distributes and sells the ISTOBAL Group's products, our

supply chain is designed to focus on the acquisition of equipment and supply mainly from

Spain. Many times all the equipment that is required for the significant functioning of our

company is bought directly from there. Nevertheless, to control expenses and project

duration, some parts and materials are purchased domestically in the United States. This lets

us take into account, for example, variables such as the cost of their delivery and the need to

have some particular elements, which can be obtained from local sources much earlier.

Along with the leading car wash systems, ISTOBAL offers ancillary equipment necessary for

running car wash sites. This covers dryers, chemical arches, pay stations, menu boards, and

all other accessories, which, although ISTOBAL may produce them, may only be sourced

directly from different suppliers and then sold to our clients.

Key Suppliers

The most crucial and relevant suppliers are those offering the additional products associated

with car washing. Indeed, these suppliers are vital for providing our customers with all the

necessary equipment for site operation, even though Istobal does not manufacture many of

these components itself.

Customer Base

The clientele of ISTOBAL comprises both persons and any company or organization that

might be interested in using car washing equipment and systems for washing commercial

vehicles, such as semi-trailer trucks, garbage and tank trucks, etc. Our largest customer
groups are very diverse and cover retail car wash owners, operators of maintenance

convenience and gas stations, car dealers, and food transportation and storage facilities. This

broad customer base provides the company the flexibility to offer customers customized

washing needs for different markets while providing effective washing solutions for all types

of vehicles.

Outsourcing Strategy

ISTOBAL uses a few-supplier method for components, working with one or two vendors.
This method allows us to maintain strong partnerships and quality. However, we can deal
with alternative vendors if a client wants specialist machinery that our leading suppliers need.
Proactive supplier management allows Istobal to meet client requests with minimal supply
chain disruptions.
Inventory
Inventory Management
Inventory control is one of the critical components of ISTOBAL's general operations
management plan. Organization inventory comprises raw materials, Half Finished Goods (HF
GG), Manufacturing Suppliers Industries (MSI), finished products, products in the production
line, products in the production process, products in stores, products in transit, and in other
stores. However, it is not easy to manage such an inventory because most components, such
as steel frames, are big and bulky. In managing inventories, ISTOBAL applies the Economic
Order Quantity (EOQ), which is a mathematical model that provides the order quantity,
which has the lowest total cost of ordering and holding inventory. Continuous Order Models
support this since the inventory levels are closely monitored and replenished immediately
after they reach their reorder point.
Warehouse Optimization
As a result of some of its vast and bulky appendages, warehousing has emerged as a
significant concern to ISTOBAL. The problem with traditional storage approaches is that
they take up a lot of space. To counter such a challenge, ISTOBAL is considering the vertical
storage methods of inventory to make use of space from top to bottom without encroaching
on side space. Further, the company is exploring the possibility of AGVs that can move
heavy components in the facility far more efficiently and accurately. The latter, accompanied
by the integration of contemporary stock monitoring, helps ISTOBAL avoid overstocking
and attain a low probability of experiencing stockouts.
Inventory Forecasting and Lean Practices
Another important component of ISTOBAL's inventory management is accurate forecasts.
This offers the company more precise information on customer demand which is something
achieved by incorporating the best predictive analytics. This means that ISTOBAL reduces
lead times and matches inventory to actual consumption, thereby allowing the company to
offer the required materials in time. Although JIT for significant components is not too easy
because of its size and manufacturing intensity, ISTOBAL has excellently implemented ss,
which is intended to eliminate more inventory for the small peripheral products. This is not
only wasteful but also optimizes the flow of procedures within an organization, improving its
functionality.
Recommendations
Enhancing Quality Control
One of the major factors in which the organization can find a way to enhance quality control
is the issue of quality; the company already enjoys very high-quality control standards;
nevertheless, the infusion of the Small Changes Big Results program can only be beneficial.
There is nothing entirely as wrong with the production line as arriving on the work floor and
discovering that a particular part is missing or that the assembled products are faulty in some
way; it would thus be advisable to increase the quality control measures in various phases of
the production process. When ISTOBAL recognizes potential issues during the production
process, it will, in the long run, eliminate or minimize the occurrence of some of these
problems, which could lead to rework since they are a clear violation of customer
expectations. Another area of investment for the company is the installation of an automatic
quality check system. Such systems apply sophisticated technologies, including machine
learning and computer vision, to identify defects and perform a more efficient and
dependable comprehensive inspection by human eyes. Moreover, ISTOBAL should conduct
more frequent randomized quality audits for different production lines. It would also improve
the quality of the products that are prepared and determine any areas that may require some
improvement since, if corrected when they are small; they do not become significant issues.
Supply Chain Efficiency
Another way that ISTOBAL can improve supply chain efficiency even more is by expanding
the list of suppliers. Although the current situation of sourcing a few trusted suppliers
provides the company with various benefits, such as regarding the quality factors and the
coordination factors, which are… In the same manner, if ISTOBAL broadens its list of
suppliers and includes locally-based suppliers for second-line materials and components, the
company could minimize lead time, transportation costs, and risks resulting from geopolitical
tensions. Further, improvements should be made using predictive analytics tools to improve
ordering for suppliers to ISTOBAL. If the consumption estimation were precise, the company
would only order materials that are required at a certain time, thus avoiding cases where
excess stock is accumulated or when a particular component is required, but the company had
ordered it at the earliest time.
Optimizing Inventory Management
An organization such as ISTOBAL could enhance the inventory through automated inventory
tracking systems. These systems would also give an opportunity to the company to increase
its visibility and monitor its stocks in the different outlets in real-time, thus avoiding
instances where there is a stockout, or on the other extreme, where the company may order
more stocks than it can sell. With these systems, as well as more sophisticated forecasting
models, ISTOBAL could gain better ease in identifying these changes and make necessary
changes in an effort always to maintain a healthy inventory. Also, it is possible to lean
manufacturing for the most minor parts that the company may produce as well. ISTOBAL
would be able to slash its inventory costs by clearing much of the unnecessary inventories
held by the company while at the same time lowering the costs of production.
Conclusion
Hence, the continuous focus on innovation, quality, and environmental and social
sustainability of the organization has put ISTOBAL in an advantageous competitive
advantage within the car wash industry. Nonetheless, there are regions in which the company
can increase efficiency and productivity for better outcomes. As for the ideas of quality
control improvement, it is possible to continue working at the same level and even increase
the number of such controls, using stricter inspections and automations, for ISTOBAL to gain
even better product reliability and customer satisfaction. Moreover, by expanding the number
of suppliers and applying enhanced supply chain management tools, the company can
minimize the problems connected with supply chain disruption and guarantee the timely
delivery of the materials at the lowest price. Regarding inventory control, ISTOBAL can take
advantage of the automation of its inventory tracking and use forecasting tools that would
help ISTOBAL overcome the issue of holding more stock than is necessary. Thus,
ISTOBAL, which is closely pursuing the path of further innovation and improvement of its
business processes, will remain a leader in the sphere and ensure further improvement in the
company's performance in the future years.
References
Appendix

1. Process Flowchart for M’WASH PRO

2. Inventory Management Models