MBA SOLVED ASSIGNMENTS: Projects and Operations Management

Projects and Operations Management - ICFAI solved Case study help

Dear students, get ICFAI latest Solved assignments and case study help by professionals.

Mail us at : help.mbaassignments@gmail.com

Call us at : 08263069601

As and when you get 5 to 10 minutes you can read one of these and absorb and comprehend. Spending more time is your choice.

You can use the time in travel, waiting for meetings, lunch time, small breaks or at home usefully.

Through these tools, the learning bytes are right sized for ease of learning for time challenged participants.

The content starts from practice and connect to precept making it easy to connect to industry and retain.

They can be connected to continuous assessment process of the academic program.

Practitioners can use their real life knowledge and skill to enhance learning skills.

Immediate visualization of the practical dimension of the concept will offer a rich learning experience.

AN INTRODUCTION TO DIFFERENTIATED LEARNING TOOLS

Participants in flexible learning programs have limitations on the nature of the time they can spend on learning. Typically they are employed fully or partially, pursuing higher studies or have other social and familial responsibilities. Availability of time is a great constraint to these students.

To aid the participants, we have developed four unique learning tools as below:

· Bullet Notes : Helps in introducing the important concepts in each unit

of curriculum, equip the student during preparation of examinations and

· Case Studies : Illustrate the concepts through real life experiences

· Workbook : Helps absorption of learning through questions based on real life nuggets

· PEP Notes : Sharing notes of practices and experiences in the Industry will help the student to rightly perceive and get inspired to learn concepts at the cutting edge _{application level.}placementinterviews

Why are these needed?	· Adults learn differently from B. School or college going
	· Adults learn differently from B. School or college going
	students who spend long hours at campus.
	· Enhancing analytical skills through application related learning
	kits trigger experiential learning
	· Availability of time is a challenge.
	· Career success increasingly depends on continuous learning
	and success

What_· makes it relevant?

How_· is it useful?

Where· does this lead to?

· Easier to move ahead in the learning process.

· Will facilitate the student to complete the program earlier than _otherwise.Helpsstay motivated and connected.

When_· is it useful?

Case Studies:

Project & Operations

Management

No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying or otherwise – without prior permission in writing from The ICFAI Foundation for Higher Education (IFHE), Hyderabad.

Ref. No. P&OM-CS-IFHE – 052015

For any clarification regarding this book, the students may please write to The ICFAI Foundation for Higher Education (IFHE), Hyderabad giving the above reference number of this book specifying chapter and page number.

While every possible care has been taken in type-setting and printing this book, The ICFAI Foundation for Higher Education (IFHE), Hyderabad welcomes suggestions from students for improvement in future editions.

Our E-mail id: cwfeedback@icfaiuniversity.in

CONTENTS

1.	Nokia India	6
2.	Generating Ideas through Fast Works at GE	7
3.	Starbucks Localizing Indian Coffee Chain Market	8
4.	Making Water Projects Financially Viable	10
5.	Dell‟s Project Selection Model	12
6.	Food Parks	14
7.	Reliance Retail through Reliance Fresh Direct.com	15
8.	Proper Sequencing Helps Timely Execution of Power Projects	17
9.	Dangers of Incomplete Project Reviews	18
10.	Project Control	19
11.	Cost Overruns in Infrastructure Projects	20
12.	Nissan‟s Supply Chain Risk Management	21
13.	Ban on Indian Mangoes	22
14.	Project Auditing	23
15.	Tata Steel Diverting Focus from Unsuccessful Projects to Successful Projects	24
16.	Localization helps Globalization	25
17.	Xiaomi‟s Consumer Segmentation to Tap the Untapped Indian Market	26
18.	Resource Allocation	27
19.	Uber Cab Services	28
20.	Shifting Locations of Global Operations	29
21.	Operations planning - Key to Healthcare Delivery	30
22.	Hi-tech Inventory Control Systems	31
23.	Innovative Supplier Management at British Telecom	32
24.	E-Waste	33
25.	Operations Scheduling	34
	iii

26.	Business Process Reengineering : Precor‟s Strategy	35
27.	Ambuja‟s Supply Chain Management	37
28.	JIT in Action	38
29.	Infosys Strategy for Measuring Employee Productivity	39
30.	Indian Railways- Need for Focus on Facilities and Maintenance	40
31.	Blue LED Invention Looked Disruptive	41
32.	Strategic Partnerships Facilitate Globalization	42
33.	Formulating Chemistry for a Sustainable Future	43

Introduction to the Case Studies

Participants in ICFAI University Programs are eager to apply theory into practice. They realize that application orientation can enhance their learning and subsequent usage of management precepts and practices. Picking out the principle behind real world events is critical to this learning.

To fulfil this objective the institution has introduced the Case Study methodology as a learning tool. A one page case is developed for learning a concept/topic from an illustration of a real world occurrence. The case illustrates a situation pertinent to an individual/a company/an industry or an economy in relation to a concept or issue covered in the curriculum. The illustration is specific to the point being discussed.

The case depicts the knowledge which can be applied as illustrated in the practice of the real world. These experiences can be distilled to look at a core principle at play by the participant. While there could be multiple principles at play, the illustration of each case helps in its better understanding of the concept at a very fundamental level.

The learning outcomes expected are:

1. Real world is illustrated and connected back to one concept/topic for better theoretical understanding.

2. Application based approach, which significantly enhances absorption and retention.

3. Exposure to specific business situations and developments improves perspective.

It may be used for Assessment

	1		Nokia India
	1

Nokia India Pvt. Ltd. was incorporated in 1995. Forecasting fast increasing domestic market for mobile handsets, the company started its manufacturing operations in Chennai in 2006.

· The facility had a record capacity (4 lakh cell phones per shift)

· Provide employment to 20,000people

· Recorded a turnover of Rs. 30,000 cr. per year during the period 2005-06 to 2011-12, resulting in a cumulative turnover of Rs. 1,51,000 cr.

Nokia was taken over by Microsoft in 2013. But due to tax related disputes with the Indian Government, Microsoft did not take over the Indian subsidiary. However, it was supporting it as a contract manufacturing unit. Nokia was not keen on continuing its manufacturing operations in India mainly due to tax issues.

The fully functional manufacturing plant was Nokia‟s largest and best plant in the world in terms of quality, productivity and cost competitiveness. By the time of taking decision to close down the Chennai plant in 2014, it had a residual manpower of about 1000 employees with hardly one or two lower end products. Nokia had planned to expand its manufacturing base in Vietnam, citing better incentives. It had also found that manufacturing in China and selling in India would ensure superior cost competitiveness. Following reasons were forwarded for the drastic decision to close down the plant:

· Unfavourable tax, policy and regulatory regime of the political system. Tax holiday was coming to an end. The promise of returning 4% VAT was not kept and IT Dept. served a notice for Rs.21000 cr. and the state demanded Rs.2400 cr. towards sales tax.

· Unsuitability of the facility for the product mix and production model of Microsoft. It was observed that the existing facility cannot manufacture smart phones without additional investment.

Sustainable manufacturing operations called for a manufacturing eco-system supported by a favorable policy and tax regime and periodic upgradation of infrastructure. This necessitated thorough reengineering at the policy making and implementation levels to ensure ease of doing business in India. Nokia found the investment climate not conducive for the continuation of its operations in India. Microsoft found the facility incompatible with its project management strategy, aiming for altogether a new range of high technology products. Thus all stakeholders need to be kept in mind.

Discussion questions:

1. What do you think about the operations strategy of Nokia/Microsoft in view of its decision to close Indian operations?

(Hint: Ease of doing business and globalization)

2. What were the compelling reasons for exiting operations in a low cost and highly productive facility like India?

(Hint: Operations and Project Management)

Course Reference: Concept- Project Stakeholders/Unit 1-Introduction to Project Management/ Subject-Project & Operations Management

Sources:

i. TE Narasimhan, “Why did Nokia suspend manufacturing in India?” Business Standard, 9th October, 2014

ii. “Nokia to shut down its Chennai factory from Nov.1,” The Hindu, 7^th October, 2014

	2		Generating Ideas through Fast Works at GE
	2

General Electric (GE), an American multinational conglomerate established in New York was founded by Thomas Edison in 1892. It had an annual turnover of around $146 billion in 2013 with employee strength of 307,000. GE wanted to overcome its monolithic culture which had affected its speed in manufacturing products with FastWorks Technique. FastWorks is a process of building an idea for production, measure it and learn from the feedback - minimizing total time of production. It is designed to reduce costs, speed up new product development and increase customer engagement.

GE identified following challenges in its existing business operating strategies:-

· Traditionally sales staff gave design requirements to manufacturing. This lacked product

_·customization.

_·New product development expenditure frequently overshot budgets.

Lost momentum due to organization structure and lengthy process in developing and delivering

_·services related to new products

· ^{Inability to develop innovative internal culture
due to complex and bureaucratic system.}Lackedmodernizationinrefiningproductfeaturesandfocusednewproductdevelopment.

GE adopted Fast Works strategy for generating project ideas as follows:

Figure 1: Fast Works Strategy at GE Fast Works strategy helped GE to reduce product development cycles while reducing costs and errors

Generating Project Ideas aligned to changing customer needs and preferences, new technologies, shortened product life cycles and increased competition force the project manager to be innovative. FastWorks technique has helped GE to achieve its objectives of customer engagement for product features, engaged finance personnel to reduce costs, developed internal culture and trained employee

Discussion Questions:

1. How did Fast Works technique help GE? (Hint: Innovative Project Ideas)

2. What made GE adopt the Fast Works technique?

(Hint: Agility and Operations Strategy)

Course Reference: Concept- Generating Project Ideas /Unit 2- Project Idea Generation and Screening/Subject-Project

& Operations Management Sources:

i. Richard Clough, General Electric wants to Act Like a Start-up, Bloomberg BusinessWeek, 7^th August, 2014

ii. Brad Power, “How GE Applies Lean Start up Practices,” Harvard Business Review, 23^rd April, 2014

	3		Starbucks Localizing Indian Coffee Chain Market
	3

Starbucks, a reputed multinational coffee chain was established at Seattle, USA in 1971. By 2014, it had more than 20,000 stores in 64 countries, employing 1, 60,000 people and registering a turnover of $15 billion by 2013. It was serving 70 million customers per week. Aiming for accelerated growth, the company decided to focus on India as one of the top five markets in the world. Starbucks partnered with Tata Global Beverages and established a 50-50 joint venture. Starbucks had established 59 stores in six states in India within two years, after entering the country in 2012. Starbucks planned to expand to 100 outlets by 2015.

Starbucks failed to make entry into India in 2007 as it could not meet specifications of FDI in retail. Also it

faced partnership issues with the Future Group. In 2011, chairman and CEO of Starbucks Howard Schultz, visited Tata Coffee‟s plant at Kushalnagar near Coorg, India. He then observed the Indian customer

requirements, their purchasing capacity and understood the strategies of the competitors. The result was the venture with Tata Global Beverages.

Highlights of India Operations (See Figure 1):

Store ambience based on consumer preferences

Store decor was designed according to city culture Example-Outlets in Mumbai were made with hand-carved

screens, teakwood tables,painted vintage trunks, old leather-bound books which represented Mumbai's old merchant culture

Thinking globally & acting locally

*They offered Indianized food along with coffee such as Chatpata Paratha, Wraps, Tandoori and Paneer Rolls *As a result every customer

had an exposure to international brand with local offerings

Growing business with stakeholders

Suggestions were taken by marketing, channel partners and employees, to strengthen brand image. Example- In Mumbai's Horniman Circle

had heritage structure maintained by Tata Starbucks; Employees regularly cleaned Gurgaon‟s Metro station, which was closer to store

Figure 1: Tata Starbucks operations in India

After conducting situational analysis and starting operations in India, Tata Starbucks achieved the following:_·

Tata Starbucks generated total revenue of Rs.95.42 cr. by the year ending March 2014

· Each shop sold coffee, snacks and merchandise worth over Rs.2.2 cr. in 2012-13 which was significantly higher than the per store sales of competitors

· To substitute the tea drinking habit among Indians, locally produced Tata‟s Espresso Roast was introduced

· Stuck to its premium pricing policy

Tata Starbucks focused on long-term, disciplined and thoughtful growth in the dynamic market. They positioned themselves as third place for leisure café experience after office andhome.

Situational Analysis is the process by which a project manager studies customer preferences, their purchasing capacity, strategies of the competing firms and intermediaries. In the process, the project manager interacts with the project stakeholders such as clients, channel members, employees and competitors of the firm to better understand market requirements. Starbucks undertook situational analysis and operated in India through a joint venture. Tata Starbucks studied customer preferences and localized its operations while maintaining the global flavor.

Discussion Questions:

1. What is situational analysis?

(Hint:Varied customer preferences)

2. What are the major outcomes of situational analysis made by Tata Starbucks?

(Hint: Partnerships and localization)

Course Reference: Concept- Situational Analysis /Unit 3-Market and Technical Analysis of Projects/Subject- Project & Operations Management

Sources:

i. Moinak Mitra, “How Starbucks is Localizing to Crack the Indian Coffee Chain Market,” The Economic Times,

25^th July, 2014

ii. Sagar Malviya, “Starbucks Outshines Coffee Chain Rivals in First Fill Year in India,” The Economic Times,

7^th November, 2014

	4		Making Water Projects Financially Viable
	4

Chennai faced severe water crisis during 2003-04, unprecedented in its 400 year history as:

· All the four reservoirs went dry as the monsoon failed for two consecutive years

· Ground water fell sharply

· Piped water supply was shut down for a year

The situation aggravated as water was transported from aquifers (150km away) by trains and trucks. Residents had to pay exorbitant prices for buying water from private sources and even extra tanks constructed by the local communities were also dependent on monsoons. The crisis alerted the government to look for a permanent solution like desalination of sea water. Long coastline offered a perennial source of water for desalination, but posed many challenges as financial analyses were not encouraging.

· Water was always underpriced as it was a politically sensitive commodity and people expected free supply

· Pricing kept the private sector away from water projects and the state run utilities always operated in losses. Desalination was expensive and without private participation, it could be financially unviable

· Build, Own, Operate and Transfer (BOOT) model followed on an experimental basis did not result in cost reduction, choice of technology for desalination and cost efficiency, proving it financially infeasible.

The Metro Water arrived at a hybrid model, synthesizing the advantages of BOOT and EPC (Engineering, Procurement and Construction) models which succeeded in

· Readily attracting private participation and

· Leveraging the government‟s strength in capital mobilization and financial risk management

The project became financially feasible through

· A grant from the Central Government

· Advanced Integrated Membrane Technology chosen for desalination was 5% cheaper in terms of capital costs, offered low running costs and consumed 20 per cent less energy (energy accounts for 65 per cent of total costs)

· Consumed fewer chemicals and occupied less land

· Non-proprietary equipment was used

· Enforced 7 year operation and maintenance on contractors to ensure operational and energy efficiency. As the financial analysis was favourable, two more desalination projects were planned to meet 70 per cent of Chennai‟s water needs and make it permanently drought-proof. The operations were also eco-friendly.

Financial analysis of projects was essential for ensuring feasibility and sustainability. Chennai Metro created a hybrid model that ensured techno-commercial feasibility and environmental-compliance. Financial analysis ensured a politically palatable and financially feasible solution that was replicable.

Discussion Questions:

1. What are the advantages of desalination as a permanent solution for water crisis? (Hint: Sources for water management)

2. Why the people are suffering when three-fourths of our planet is surrounded by water? (Hint: Technology and Water Management)

3. What are the factors driving the viability of drinking water projects? (Hint: desalination, panacea for water crisis)

Course reference: Concept- Means of Financing the project /Unit 4- Financial Analysis of projects /Subject-Project &

Operations Management

Sources:

i. N Madhavan, “Quenching Chennai‟s Thirst,” Business Today, 16th Mar,2014

ii. R. Srinivasan,”Stealing Farmers‟ water to Quench Chennai‟s big Thirst,” Infochange Agenda, News and features, October, 2005

iii. S. Jency, “Quenching Chennai‟s Insatiable Thirst: A Study of the City‟s Water Demands and Solutions,”

CRCnetBASE, Taylor & Francis,2009

	5		Dell’s Project Selection Model
			Dell’s Project Selection Model

Dell Inc., an American multinational healthcare information technology service provider was founded by Michael Dell in 1984. It had a 20-year legacy as a leader in healthcare IT, providing broad capabilities,

including electronic medical records (EMR), cloud and disaster recovery services, cloud clinical archiving, mobility solutions and tools to support personalized medicine. Globally, Dell‟s healthcare business had over

500 technology partners and 14,000 healthcare employees in 2014.

In 2014, Dell studied and found that Indian healthcare industry was cost competitive. Traditional hospitals were not upgraded with latest IT technology. Dell observed that the Indian healthcare sector was growing by 15% in 2014 and targeted the healthcare market with a cloud based solution. It developed the new cloud based solution with focus on cost-benefit analysis, adaptability to change and easy accessibility. Their target customers were mid-sized hospital chains.

Dell collaborated with Ubq Technologies and Ramco Systems and launched an integrated, end-to-end cloud-based healthcare solution with following features (See Figure 1):

Figure 1: Cloud based solution developed by Dell

· It prevented manual errors

· Software application reduced operational barriers in hospital management system

_·_{Hospital formalities were reduced}Centralizedapproachofcloudbasedsolution improved patient experience as:

Dell‟s cloud based solution was delivered under software-as-a-service model and user had to pay only usage charges. Dell‟s unique cloud based solution enhanced patient care. Experts at Dell believed cloud based

solution had minimized cost burden and increased flexibility to use.

Appropriate Criteria for Project Selection Models help project manager choose projects which

guarantee returns in future and which determine the allocation of resources efficiently. The model should be cost-effective, easy tomodifyand should be computerized for easy storage and retrieval. Dell‟s cloud

based end-to-end business services helped hospitals to provide affordable services.

Discussion Questions:

1. What are the major criteria for Project Selection? (Hint: Project performance parameters)

2. Which criterion of project selection is used by Dell?

(Hint: Cost effectiveness and healthcare solutions)

Course Reference: Concept- Criteria for Project Selection Models/Unit 5-Project Selection/ Subject-Project &

Operations Management

Sources:

i. TE TajaSimham , “Dell offers Cloud-Based Solution Targeting Mid-Sized Hospital Chains,” The Hindu

Business Line, 29^th October, 2014

ii. “Dell Launches Cloud-based Healthcare Solution,” CRN, 28^th March, 2014

iii. “Dell Set to Enter IT Healthcare Market in India,” The Pharma Times, 29^th March, 2014

	6		Food Parks
	6

Future Group, an Indian private conglomerate headquartered in Mumbai was founded by Kishore Biyani in 1981. It had employee strength of 35,000 in 2014. Its net income stood at Rs.960 cr. in financial year 2013-

14. Future group had a strong retail footprint in food business with over 720 stores across the country under the name Big Bazaar, KB‟s Fair Price, BigApple, FoodHall and Aadhar.

In 2014, Future group analyzed its operations across all categories and derived that it had strong distribution centers and best express fleets in India. They examined the retail scenario and arrived at the success criteria to increase profit margins through setting up manufacturing hub. They launched a subsidiary named as Integrated Food Park Holdings Ltd- a cluster of food processing units. The units were located in south, east and central India to supply food products. Later, Future group defined food parks as food processing units that manufactured and processed frozen foods (See Figure 1).

Future Group launched Food Parks as it could identify the following opportunities in food retailing:
·	Indian packaged food industry was worth of $39.7 billion in 2014 and was estimated to grow to
·	$ 65.41 billion by 2020
·	Low presence of E-commerce competitors
·	No focus on high margin food manufacturing

Subsequently it planned Food Parks Project Definition Statement (PDS) as follows:

Figure 1: Operations at Food Parks

Project Definition Statement (PDS) of Future group, with the objective to become one of the largest FMCG companies laid down a road map. The PDS focused on categories like ready-to-eat-frozen foods, chocolates, pasta and food business to become bigger than their own fashion segment in future. It has reengineered its project definition statement accordingly.

The Project Definition Statement (PDS) provides detailed information about the project. PDS is laid down on project/opportunity, goal, objectives, success criteria, assumptions, risks and obstacles. TheFuture group plans to have 70% packaged food in all owned retail outlets by 2018-19 and incorporated in its PDS accordingly.

Discussion Questions:

1. What is Project Definition Statement? (Hint: Project requirements)

2. How did Future Group use PDS?

(Hint: Goal and targets vis-a-vis customer requirements)

Course Reference: Concept- Project Definition Statement (PDS) /Unit 6- Management of Project Scope/ Subject-Project & Operations Management

Source:

i. Reghavendra Kamath, Viveat Susan Pinto, “With Food Parks, is Biyani Biting Off More than he can Chew?” Business Standard, 15^th October, 2014

ii. “Future Group to Foray into Food Manufacturing,” Hindustan Times, 24th September, 2014

iii. “Our Food Business will Soon Overtake our Fashion Segment,” The Hindu Business Line, 23rd September , 2014

	7		Reliance Retail through Reliance Fresh Direct.com
	7

Reliance Retail Ltd., a subsidiary of Reliance Industries was founded by Mukesh Ambani in 2006 and was based in Mumbai. In 2014, Reliance Retail operated in over 96 cities across the country with 700+ stores, serving more than 13 million customers. It faced the following challenges in retail market.

· Inclination of customers towards online grocery shopping

· Difficulty in personal shopping due to congested roads, traffic snarls, high cost of fuel and scarcity of time

· Forced to shut down retail stores as they were earning less profits

At the same time, Reliance Retail observed the following opportunities in online grocery:

· 69% of retail industry comprised of food and grocery

· Only 10% is organized which had attracted online players

· In India, number of internet users was 250 million and therefore huge potential exists

· Online grocery was a convenient option

· Reliance Retail had fast moving merchandise, better pricing and strong vendor relationships

Subsequently, it started to make an impact on the online retailing market by introducing Reliance Fresh Direct.com that sold fruits and vegetables, dairy products, groceries, packaged food, confectionary items and personal care products to online customers of South Mumbai, Navi Mumbai and parts of Thane. Reliance Fresh Direct.com was designed with the help of an Architecture tool providing a comprehensive picture of the project and representing how various activities were related to each other (See Figure 1).

Reliance Fresh Direct.com’s Architecture tool:

Figure 1: Architecture tool designed by Reliance Fresh Direct.com

Reliance Retail presented complete picture of interrelated activities to help customers shop with ease on RelianceFreshDirect.com. Strong vendor relationship helped the company balance inventories and manage discounts due. RelianceFreshDirect.com provided choice and convenience at great value to the customer.

Architecture Tool is defined as a tool which gives complete picture of the project and represents interrelated activities. Reliance Fresh Direct.com through „direct delivery‟ channel added convenience

and choice to valued customers.

Discussion Questions:

1. What were the features of Architecture tool designed for Reliance Fresh Direct.com On-line grocery store?

(Hint: Merchandise and interrelationships)

2. Which are the opportunities identified by Reliance Fresh Direct.com? (Hint: Price and product range)

Course Reference: Concept- Architecture Tool/Unit 7-Identifying Project Activities/ Subject-Project & Operations Management

Sources:	*Purvita*	*Chatterjee,*	*“Will Reliance Retail Change e-commerce Game?”*	*The Hindu Business Line,*
i.
	23^rdNovember, 2014
ii.	*Shambhavi Anand, “Reliance Fresh Direct.com to Deliver Fresh Groceries in Mumbai,” The Economic*
	Times, 17^thNovember, 2014
iii.	*Krishna*	*Chandran,*	*“Reliance retail Goes Online-Starts Fresh Direct,”*	*Dream Weaver Diaries,*
	19^thNovember, 2014
iv.	*Raghavendra Kamath, “Reliance Retail to go Online,” Business Standard, 31*stMay, 2014

₈ Proper Sequencing Helps Timely Execution of Power Projects

Tata Power was the country‟s largest integrated power utility. It had commissioned the 800MG, Rs.17,000 crore ultra-mega power plant at Mundra, Gujarat in 2013. Its wholly owned subsidiary, Coastal Gujarat Power Ltd. developed the entire project. The project was completed in a record time of one year after commissioning the first unit. It was rated as the most energy-efficient power plant in the country. Its successful commissioning was attributed to the project management and operational expertise employed in executing the project with predictable cost, quality and safety through meticulous sequencing of various activities.

Following	·	initiatives coupled with sequencing helped in execution of the project ahead of schedule:
	·	Using advanced technological initiatives based on super critical technology
	·	Sourcing coal supplies from Indonesia
	·	Employing best project management and operational expertise
	·	Using in-house ordering and co-ordination to ensure timely completion of tasks
	·	Inducting and training staff to operate the station in synchronization with the completion of units

The project helped in saving fuel, ensuring competitive generation of power and cutting down greenhouse gas emissions.

To ensure	·	eco-friendly operations,
	·	the plant installed electro-static precipitators to reduce emissions
	·	the coal ash was collected and transported for use in cement industry in an eco-friendly manner
	·	developed a green belt of 100 meters along the boundary
	·	Wind barriers were installed to control any coal-dust fugitive emissions.

But the project· faced a few challenges like:

Hiring the people skilled in engineering, procurement, construction and operation at the right

· time

· Sudden increase in coal price by Indonesian suppliers

Difficulty in getting higher tariff from Central Electricity Regulatory Commission to offset the

losses

In the power project sector where schedule and time overruns were common, Mundra Power Project was probably one of the few power projects, completed ahead of schedule. Meticulous planning and sequencing of diverse activities and processes facilitated efficient execution.

Activity sequencing is a critical phase in project management, as any misalignment can lead to time and cost overruns. Tata power using its project management experience very skilfully sequenced the innumerable activities and ensured commissioning of the project ahead of schedule. The project established new benchmarks for the entire power industry, which can lead to more efficient power management in India.

Discussion Questions:

1. Why do many infrastructure projects invariably end up in cost and time overruns? (Hint: Technology and Project Execution)

2. What factors ensure efficient execution of projects vis-a-vis the performance parameters? (Hint: Make/Buy decisions in Project Management)

3. How power projects by Public Sector Units also can replicate such efficiencies?

(Hint: Activity sequencing and timely project execution)

Course Reference: Concept- Activity Sequencing/Unit 8- Activities: Sequencing, Estimating Duration and Scheduling/Subject-Project & Operations Management

Sources:

i. “Tata Power‟s Mundra Plant goes Fully Operational,” The Hindu Business Line, New Delhi, 6thMarch, 2013

ii. SIdharthaSaikia, “What helped MundraUltra Mega Power Plant Start before Schedule,” 26th May, 2013

	9		Dangers of Incomplete Project Reviews
	9

The Supreme Court asked the Union environment ministry to review six hydroelectric projects in Uttarakhand in the light of the disaster that occurred in 2013, which killed thousands of people. The ministry informed the court that it had appointed an expert committee to review the projects in detail. The committee found that the projects had almost all the requisite and legitimate clearances. The experts had also warned that these dams could have a huge impact on the people, ecology and safety of the region and should not be permitted at all on the basis of old clearances.

The experts made the following observations on the six projects:

· The projects received their clearances long before the tragedy

· All the projects needed comprehensive assessment based on the revised understanding after the

· The proposed projects had potential of causing significant impacts on the biodiversity, riverine system, wildlife and other fragile ecosystems in the areas where these projects are located due to altered hydrological parameters.

· The projects should not go through in their current shape without a comprehensive review.^{Uttarakhanddisasterandthealteredphysicalandmaterialconditionofthesites.}

As such, the entire process of according clearances to these projects warranted a detailed review. The government submitted that all expert advice and government committees warned that

· The dams played a part in the disaster.

· The ecological footprints of these individual projects were significant and could not be ignored

in terms of their impacts and five out of these six proposed projects fell within the critical

· The project clearances needed to be viewed for any deficiencies as per the latest knowledge of environment and ecological protection and assessment methods^{wildlifehabitats}

Uttarakhand disaster of 2013 established that critical projects like dams, bridges, power plants etc. needed more comprehensive reviews as there are deficiencies in the existing system. The Ministry of Environment and Forests, Govt. of India laid down very detailed guidelines for comprehensive project reviews for according clearance. Dilution of project reviews and approval mechanisms had very serious consequences. Public interest, safety and environmental and biodiversity security of the area surrounding these projects as well as to protect the unique ecological character of the area should be the prime concern while reviewing such projects.

Reviews of critical projects help in anticipating the likely impacts and taking decisions with regard to continuation or otherwise of the projects. As in the case of the six Uttarakhand projects, project reviews need to be comprehensive.

Discussion Questions:

1. What were the consequences of non-comprehensive reviews of critical infrastructure projects? (Hint: Politics and Project Clearances)

2. What are the benefits of project clearances accorded after comprehensive reviews?

(Hint: Project reviews and consequences)

Course Reference: Concept- Importance of Project Review/Unit 9-Project Review/Subject-Project & Operations Management

Sources:

i. “Cloud over Uttarakhand Hydropower Projects Remains,” Business Standard, 29thAugust,2014

ii. “Hydropower Issue Strains Ties between Centre, Uttarakhand,” The Indian Express, 14^thDecember, 2014

iii. Uttarakhand Dam Projects Remain in Limbo, www.thethirdpole.net, 4^thSeptember, 2013

	10		Project Control
	10

Richard Branson, a British Entrepreneur with focus on Space Tourism dreamt of commercialising space travel. To realise the mission, he launched a project called Spaceship Two. Following were the salient features of the project:

· The vehicle was manufactured by Virgin Atlantic, the company floated exclusively for the purpose by Branson

· Formally opened to the public on 7^th December, 2009 and after three years of unpowered testing, successfully performed its first powered test flight on 29^th April, 2013

· Due to technical snags, the flight tests were postponed repeatedly and the engineering time had to spend two years for fixing the problems

· The company announced that the flight tests would be resumed for a second spacecraft in 2015

· The company planned to operate a fleet of five planes and started taking bookings with an initiative price tag of US$200,000 per person.

The fatal Virgin Galactic spaceship crash on October 31, 2014 brought to doubt the efficacy of the project control system adopted by the management. This drew support from the following:

· Unrealistic schedules and projections created tension with the engineering team struggling to fix the non-stop technical issues

· The National Transportation Safety Board reviewing the accident was investigating whether pressure was placed on the pilots, the technical experts and the flight test schedule by creating schedules and deadlines without input from the engineering team.

The design and deployment of the project control system failed to indicate the status of the project. As a result, underlying challenges facing the project team and the corrections needed posed formidable challenges. Projections and deadlines hindered the progress of the mission instead of accelerating it.

Project Control System helps in fixing problems in time and putting the project back on track. It is a

corrective evaluating tool to minimize the risk and cost of project deviations that may lead to project failures. Richard Branson‟s ambitious vision of commercial space travel has been blurred due to the

catastrophic failures and postponement of launch schedules. Analysis suggests that the project control system calls for a thorough review and reengineering.

Discussion Questions:

1. What according to you was the main reason for the delay in the eagerly awaited project? (Hint: Schedules and Project Management)

2. What should be the main parameters of a project control system for such a prestigious project?

(Hint: Control system and project management)

Course Reference: Concept- the Objectives of Control/ Unit 10-Project Control/Subject- Project & Operations Management

Sources:

i. Oscar Raymundo, Virgin Catastropic: “How Richard Brandon‟s Galactice Ambition Backfired,” ww.inc.com,November,2014

ii. Jacob Kastrenakes, “Virgin Galactic Pilot gives First Account of SpaceShipTwo's Destruction,” The Verge,

Science, 13^thNovember, 2014

11	Cost Overruns in Infrastructure Projects

The Planning Commission of India, proposed 738 central projects during XI^th Five Year Plan in various infrastructure sectors like Railways, Roads, Power, Petroleum, Coal, Shipping & ports, Telecom, and Civil Aviation. Approximately Rs.5.6 lakh cr. had already been spent on these projects. Additional funds of Rs.5.7 lakh cr. were required for completion. Planning Commission recognized that 83% of infrastructure projects were delayed. The project cost were expected to overrun by Rs.1,90,000 cr.

Planning Commission made presentation for 2014-15 fiscal year to Prime Minister Narendra Modi.

Following	·	reasons were forwarded for the delays in execution of Infrastructure projects:-
	·	274 Railway projects delayed due to cost escalation
	·	Main reasons for the delay were land acquisition, law and order issues, improper resource
	·	planning, etc
	·	Projects in Petroleum, Shipping & Ports and Telecom were delayed due to unfavorable
	·	excahnge rate on import of machinery and equipment
	·	Scope of Civil Aviation projects faced obsructions due to design modifications

Planning Commission proposed following framework to overcome the delays and cost overruns (See Fig 1):

Figure 1:-Proposed framework by Planning Commission

Infrastructure projects recorded mixed picture of performance. Coal production has achieved 50% of its annual target of 630.25 mt, power sector managed to add 54% of its annual capacity (17,830MW) and 61 % of its generation targets (1,023 billion units).

The extra costs incurred over the estimated costs are called cost overruns/escalations. The cost of the project usually increases to the time gap between the planning and implementation of the project. Planning Commission is trying to control cost overruns by developing efficiency parameters, refining land acquisitions act and managing the scope of infrastructure projects.

Discussion Questions:

1. What do you mean by cost escalation? (Hint: Production control and costs)

2. How is Planning Commission proposing to complete the stalled projects ?

(Hint: Cost overruns and project reviews)

Course Reference: Concept- Cost overruns and their implications/Unit 11- Project Cost Management/Subject-Project & Operations Management

Sources:

i. Shishir Sinha, “Stalled Infrastructure Projects will Need 5.7 lakh cr. More,” The Hindu Business Line,

17^thNovember, 2014

ii. Priyadarshini Siddhanta, “Cost Overruns, Delay in 83% Infra Projects, Plan Panel tells PM Modi,” The

Indian Express, November 12 2014

	12		Nissan’s Supply Chain Risk Management
	12

Nissan Motor Company was established in 1933. The company manufactured vehicles in 20 countries and provided products and services in 160 countries. It had a HR base of about 150,000 employees and registered net sales of 10,483 billion yen during 2013. Nissan was one of the Japanese automobile manufacturers most severely affected by the earthquake and Tsunami that stuck Japan in March 2011. Six manufacturing facilities and 50 critical suppliers suffered severe damage. Nissan addressed the unprecedented adversity by having dynamic supply chain risk management practices in place:

· Prepared a continuous readiness plan covering its suppliers including an earthquake emergency response plan, business continuity plan and disaster simulation training

· The management was empowered to take decisions locally

· The supply chain structure was made more flexible and visible to the suppliers also

Consequently, the company achieved such a remarkable recovery due to its innovative risk management strategy in its supply chain management.

· Within six months, its production in Japan decreased by only 3.8% compared to an industry average of 24.8%

· Nissan ended 2011 with an increase in production of 9.3% compared to an industry wide reduction of 9.3%

Companies with more mature capabilities in supply chain risk management are able to effectively address risks, outperform the market and gain competitive advantage. The case of Nissan illustrates that linking the customer-value proposition, sound supply-chain operations involving suppliers as partners and robust risk management is the key to success in a highly volatile business environment.

Discussion Questions:

1. Why every company must have a risk management strategy for its supply chain management? (Hint: Risks in Supply Chain)

2. What were the main reasons for the effective deployment of the risk management strategy by Nissan?

(Hint: Risk Management strategy )

Course Reference: Concept- Risk Management/Unit 12- Project Risk Management/ Subject-Project& Operations Management

Sources:

i. “Making the Right Risk Decisions to Strengthen Operations Performance,” PWC and MIT Forum for Supply

Chain Innovation, 2013

ii. “Supply Chain Risk Management: A Compilation of Best Practices,” Supply Chain Risk Leadership Council,

August, 2011

	13		Ban on Indian Mangoes
	13

The European Union accounted for more than 50% of total exports of fruits and vegetables from India. The

UK was the main destination, followed by the Netherlands, Germany and Belgium. During 2014, the European Union clamped a temporary ban on import of mangoes from India after EU‟s Standing Committee

on Plant Health located in Brussels found pests such as fruit flies in a number of consignments and significant shortcomings in the phytosanitary certification system. The ban proved devastating for the farmer community in India and business community and the consumers in the UK.

· The ban came into force on May 1, 2014 and was to remain effective until December 2015.

· The imposition of ban on mangoes affected India's exports of fresh fruits which declined from $307.38 million in April-Nov 2013 to $291.43 million in April-Nov 2014

However, during January 2015, the European Union (EU) lifted the ban on the import of mangoes from India, after the country made significant improvements in plant health controls and certification system. Similar ban continued on some vegetables like bitter gourd, taro, eggplant and snake gourd. According to many exporters from India they faced the following challenges:

· Lack of thorough knowledge about the regulatory mechanism and certification requirements

· Lack of requisite guidance from the Federation of Indian Exporters Organization(FIEO)

The European Union decided to lift the ban on mango imports from India just seven months after it was enforced, well ahead of the deadline of December 2015. The Audit by the concerned authorities found significant improvements in phytosanitary export certification system. This meant recognition of the effectiveness of the quality inspection process and new packaging practice adopted by exporters and certified by competent authorities. To facilitate this, a new procedure was jointly worked out by the European and Indian agencies as per which export of mangoes was permitted only through pack houses

certified by the Agricultural Products Export Development Agency (APEDA) under the guidance of the plant quarantine authorities. At a time when the government vigorously campaigned for „Make in India‟,

there is a need to ensure quality related certification.

Quality Certification for products and packaging had been a mandatory requirement of the European Union, specifically for food products. When certification requirements were violated, EU clamped the ban. The efforts of the Federation of Indian Exports Organization (FIEO) and the British authorities helped in meeting certification norms. Mere certification would be inadequate to export Indian products but served as a platform for launching continuous improvement initiatives. Certification is a regulation driven externally and complied internally whereas business excellence is driven by the entire organization.

Discussion Questions:

1. What measures do you suggest to prevent such situations like banning of Indian products? (Hint: Compliance and Prevention)

2. What is your opinion about the argument that certification is not a fool-proof way of promoting made in India brand abroad?

(Hint: Export Regulations and Certification)

Course Reference: Concept- ISO 9000 standards and TQM /Unit 13- Total Quality Management- Concept, Process and Implementation/ Subject- Operations Strategy

Sources:

i. “EU Lifts Ban on Import of Mangoes from India,” Business Standard, 21^st January, 2015

ii. “Mango Delight: A year after Ban, King of Fruits to Re-Enter Europe,” Business Standard, 21st January, 2015

	14		Project Auditing
	14

The Comptroller and Auditor General (CAG) of India audited the implementation of Public Private Partnership (PPP) project at Chhatrapathi Shivaji International Airport, Mumbai. The PPP mode of project management was approved by the government in 2003 and the Mumbai International Airport Limited (MIAL) took over the airport in 2006. CAG audit examined the PPP arrangement to assure that the interests of the government were protected and that the risks and returns of the operator were as envisaged in the agreement. MIAL was a joint venture between GVK and Airports Authority of India.

Significant audit findings pertaining to project management were as follows:

· The implementation of the project was progressively delayed due to the revision of the project scope for the terminal building. Appropriate penalties were not levied on the contractors.

· The project cost more than doubled on account of the revised scope of work and delay in project completion. The financing risk was not effectively transferred to the private partner.

The CAG also audited Delhi Metro Rail project, considered as one of the efficiently executed projects in India. The key findings of the draft audit of Delhi Metro Rail Corp. Ltd (DMRC) by the Comptroller and Auditor General of India (CAG) include:

· Shortcomings and lapses in the systems and procedures and issues relating to quality control and land acquisition in excess of project requirements in some areas.

· “Unique administrative model” creates ambiguity in “co-ordination and control” by the government, as well in deciding the right forum for legislative accountability.

· Audit analysis of quality control indicated scaling down of testing requirements, non-witnessing of tests by the company‟s representatives, testing of materials in non-accredited laboratories and non-preservation of test reports

Project audits help in enhancing the efficiency of critical infrastructure projects like the two exemplified above. In India, most of the major projects are financed by the Government in view of their size, complexity and the investment needed. The government invests public money and is therefore accountable to public for its prudent utilization. Project audits help in identifying the root causes for time and cost overruns and finding corrective and preventive measures.

Project auditing is the process of detailed inspection of the management of a project. The scope of project auditing comprises - its methodology, techniques, procedures, documents, properties, budgets, expenses and level of completion. A project audit is a key step in the process of closing a project. The two audits exemplified above bring out the type of observations and lessons for corrective and preventive actions.

Discussion Questions:

1. Why some people consider project auditing as a harassment process? (Hint: Auditing and Fault Finding)

2. What benefits project management gets as a result of project auditing? (Hint: Benefits of Project Auditing)

Course Reference: Concept-Performance Measurement/ Unit 14- Project auditing/Subject-Project & Operations Management

Sources:

i. “CAG Audit report on Implementation of PPP project,” , CAG of India, July, 2014

ii. “CAG Questions Delhi Metro‟s Quality Control, Bidding Process,” Livemint, 18^thFebruary, 2009

Tata Steel Diverting Focus from Unsuccessful Projects to

15	Successful Projects

Tata Steel is one of the world‟s most geographically diversified steel producers, with operations in 26 countries and commercial offices in over 35 countries. Tata Steel acquired Anglo-Dutch steel maker Corus Group Plc for $12.9 billion in 2007 to become one of the largest steel producers with significant operations in Europe. Its profit (before EBITDA) was Rs.4325 cr. at the end of first quarter of 2014 with an employee strength of 30,500.

Tata‟s „Long Products‟ division produced wire rods, plates and semi-finished steel. It provides steel to construction, shipbuilding, rail and engineering industry. Tata Steel decided to sell loss-making Long Products project to Switzerland based Klesch group in 2014. Tata Steel signed a memorandum of understanding (MOU) with Klesch. Klesch was involved in businesses like chemicals, metals and oil production and trading.

Tata Steel identified following factors for termination of Long Products division:-

· Decline in demand for products of construction and engineering in Europe due to economic crisis

· Low margin returns

· High costs of labor and logistics

· Stiff competition from Asian and US companies

Tata Steel anticipated the following benefits post sale of the Long Products project to Klesch (See Fig 1):

Figure 1:- Tata Steel benefits of closing Long Products project

Tata Steel decided to engage employees and other stakeholders throughout the process. They planned to consult trade union representatives and working councils in a process of closing Long Products division.

A project can be called unsuccessful when it fails to meet its established objectives on time, budget and performance. Tata Steel focused on cross-European steel production through termination of Long Products division in Europe.

Discussion Questions:

1. What are the factors that lead to Project Closing? (Hint: Long Products division)

2. What led Tata Steel to close Long products project?

(Hint: High margin products)

Course Reference: Concept- Reasons for Termination an Unsuccessful Project /Unit 15- Project Closing/Project & Operations Management

Sources:

i. “Tata Steel in talks with Klesch to sell Europe long Products Unit,” Livemint, 16th October, 2014

ii. Aman Shah, MaytaalAngel, “Tata in Talks to sell UK Steel Plants to Swiss Group Klesch,” Reuters,

15^thOctober, 2014

	16		Localization helps Globalization
	16

Hyundai , the South-Korean automobile manufacturer made frantic efforts to enter the US market but did not succeed as its cars were rated very low in quality as compared to the Japanese and local models. But a detailed review of the operations strategy made the company decide to venture into other global markets. Accordingly a slew of measures brought about a turnaround in the endeavours of the company to tap the global markets. But by 2014, Hyundai was rated as the fastest growing car manufacturing company in the world with an annual turnover of $70 billion.

· Sensing that its domestic market (South Korea) was saturating, the company cast its eyes on India as the potential market as well as a route to global markets

· As early as 1997 the company established manufacturing operations in India and in 2014 became the largest exporter from India with 50% export market share

· It had two assembly plants, one engine manufacturing plant and an R&D center, with an investment of $2.7 billion.

The success of Hyundai was due to its localization strategy, aimed at capturing substantial share of the Indian car market and focusing on exports. Its vendor strategy resulted in a judicious mix of South Korean (42) and Indian (77) vendors. Hyundai helped many Indian companies to become global vendors.

Speed was the main performance objective on which Hyundai focused. It had established Indian operations within six months, added a second shift in the very first year of operations and achieved break-even within a year. This was due to the cost-effectiveness achieved from the localization strategy. It was supported by efficient inventory management and effective quality management, supporting a flexible manufacturing system. Its operations strategy was a synthesis of US assembly line systems, European finesse and Japanese JIT and quality practices.

Hyundai viewed threat as an opportunity. Its depleting domestic market forced it to globalize. It took the time tested route of quality, cost, speed and flexibility in its operations strategy and became today the fastest growing car manufacturer in the world. Its localization focus proved to be a win-win strategy for Hyundai to become the largest exporter of cars from India and helping Indian vendors to become globally competitive.

Discussion Questions:

1. What are the main aspects of Hyundai‟s globalization strategy?

(Hint: Customer focus and Globalization)

2. How do you justify that even to survive locally, a company should become global?

(Hint: Globalization, Innovation in Operations)

Course Reference: Concept- Operations Strategy as a Competitive Weapon/Unit16 - operations Management and Operations strategy/Subject-Project & Operations Management

Sources:

i. AmritRaj, “Speed it up the Hyundai Way, India Story,” Livemint, 9^th October 2014

ii. Roudra Bhattacharya, RachitVatts, “How Hyundai Bucked Car Sales Slowdown in India,” The Financial Express, 13^th October 2014

Xiaomi’s Consumer Segmentation to Tap the Untapped

17	Indian Market

Xiaomi Inc. designs, develops and sells smart phones, mobile apps and consumer electronics. It was

founded in 2010 in Beijing, China. Its annual revenue was US$5.5 billion at the end of half year (June) 2014, it had 3000 employees. As of 2014, Xiaomi was the World‟s 3rd largest smartphone maker.

In 2014, Xiaomi entered India tying up with online retailer, Flipkart. Xiaomi sold 95,000 Mi3 smartphones through Flipkart only. In 2014, it faced production issues such as hardware and antenna calibration and legal issues on security concerns. These issues forced the company to suspend sales until further notice by the Delhi High Court. Later, it was allowed to sell smartphones built only on Qualcomm chipsets. To offset the setback from these obstacles and push up their sales further, Xiaomi explored the factors influencing demand:

· Government‟s vision to make India digitally connected where all citizens could be connected for e-services like health, education and financial services

· Requirement of features like 2G, GPRS, 3G,FDD-LTE and TDD-LTE in smartphones

· RBI‟s plans to launch norms like digital wallets and virtual currencies

· Lead time for launching the smart phone between India and China

· Potential to expand product portfolio

After analyzing the above factors, Xiaomi planned to go for product diversification and R&D development to suit the Indian smartphone users. They planned to improve sales for 2015 by:

· Dominating the smartphone market by a new family of smartphones called featured smartphones by 2019

· Building eco system of innovation by adding new services and features to its products

· Reducing the lead time of product launches between China and India

· Investing in local start up eco system to develop products for India and global markets

· Setting up own e-commerce portal

· Launching „Mi Credit cards‟ for paid internet services

· Introducing integrated dual-mode LTE( Long term Evolution) Mi4 smart phone

Based on demand influential factors, they set up R&D centre at Banguluru with engineering team, product

designers, product managers and software engineers. They focused and built India-specific localized features for smart phones.to achieve the target sales for 2015, Xiaomi‟s global vice-president agreed to investigate

and assess the legal issues faced by them.

Identifying the factors influencing sales such as seasonal components, trends, etc play an important role. Xiaomi forecasted its sales improvement for 2015 by identifying influencing factors such as market trends, government policies and future product requirements and focused on product diversification and development of R&D services.

Discussion Questions:

1. What is demand forecasting process? (Hint: Trends in customer preferences)

2. Which stage of demand forecasting process is addressed in this caselet?

(Hint: Sale of mobile phones)

Course Reference: Concept- Identifying the influencing factors /Unit 17- Forecasting Demand/Subject - Project & Operations Management

Sources:

i. Gulveen Aulakh, “Xiaomi Plans R&D Centre in India, Bangalore may Host Local Centre for „Apple of China‟,” The Economic Times, August 27th, 2014

ii. Sounak Mitra, “ Xiaomi Bets Big on India Despite Problems, ” Business Stndard, 22^ndDecember, 2014

iii. Gopal Sathe, “After Sales and Some Scares in Debut Year, Manu Jain on Xiaomi India‟s 2015 Plans,”

NDTV Gadgets, 22^ndDecember, 2014

	18		Resource Allocation
	18

Ceat Tyres, the flagship company of RPG group was founded in 1958. By 2014, it was the second largest two-wheeler tyre manufacturer in India. They manufactured tyres for other segments also. The company went into losses from 2011 to 2013 in terms of revenues and profits. Its performance was declining, stock price was reducing and investors were reluctant to make further investments. The company undertook detailed evaluation of its performance and found that the resources were not being efficiently deployed. Ceat decided to reengineer its product portfolio with a view to utilize its resources judiciously.

Its strategy was to focus on a few product lines and growth potential areas and allocate resources accordingly. So the areas chosen were:

· Focus on high margin two wheeler and SUV category

· Decrease investments in truck and bus categories

· Invest in new two wheeler tyre plants

· Increase allocations for promotion

· Explore export markets like Bangladesh

· Establish CeatShoppee, the retail tyre outlet with comprehensive expertise in tyre services The action plan focused on resources management, resulted in:

· Improvement in sales by 9.9%, topping the industry

· Launching 100 new products in chosen categories

· Increase the number of CeatShoppee outlets by 135 in 2014

· Boosting export sales to Indonesia and Bangladesh

· Sharp increase in share price by 392% in 2014

· Winning Indian Design Mark Award for Motorcycle Grip pattern during 2013-14

Many companies aggressively plan for more activities beyond their capacities and capabilities and land up in operational bottlenecks and poor performance. In the increasing world of resource constraints and global competition, allocation of available resources is a challenging operational strategy. Resource optimization is influenced by the core competencies of the organization and taking advantage of the business opportunities provided.

In an era of resource constraints and rising input costs, efficient allocation of resources is imperative to

^. remain globally competitive. Ceat learnt this the hard way after encountering business failures. But the company staged a remarkable recovery after reengineering its resource allocation.

Discussion Questions:

1. Why priority should be accorded to resource management in the context of globalization? (Hint: Resource focus and Globalization)

2. What initiatives enabled Ceat to bounce back in performance?

(Hint: Resource Management and Operational Excellence)

Course Reference: Concept- Allocation Decisions in Operations Strategy/Unit 18- Allocating resources to Strategic Alternatives/Subject- Project& Operations management

Sources:

i. Sriram Ramakrishna, “Ceat Sharpens Focus to Get Back in Game,” The Economic Times, 9th January, 2015

ii. Jwalit Vyas, “Ceat Shifts Focus to High-Margin Business Closes in on Peers,” The Economic Times, 21st January, 2014

iii. “Ceat Tyres to Invest Rs.400 cr. in Nagpur plant,” Business Standard, 11^thDecember, 2014

	19		Uber Cab Services
	19

Uber, an internet-based cab service application provider launched its operations in 2010. Uber offered three types of services- UberGo (low cost), UberBLACK (premium) and UberX (priced in between the other two). It did not own any of the capital assets like cabs nor were the drivers on its payroll. With minimum infrastructure they were able to offer on-line services to customers by pooling resources of operators and drivers, which ensured low cost. By 2014, Uber started operations in 53 countries and 200 cities globally and the user base in India was growing at a rate of 25-30% per year. The innovative cab services like Uber, attracted millions of riders, checked competitors and proved disruptive in the market place. Attracted millions of riders, rattled competitors and disrupted markets with the forces of creative destruction. Removal of middlemen facilitated cost-cutting for the benefit of the rider and the driver but its success sparked heated debates. Based on an advisory from the central government, Delhi administration banned Uber services after a woman complained that she was raped by a driver of Uber. This was followed by ban from few more states sending 10,000 cars off the roads affecting about I million customers in Delhi alone and depriving drivers of their livelihood.

Earlier, many countries invoked local transportation laws to either restrict or ban Uber‟s operations. Taxi

drivers, companies and governments alleged that it was an illegal taxicab operation engaged in unfair business practices and compromised on passenger safety. Uber was banned in Germany, Spain and continued to be involved in disputes with several governmental bodies of the US and Australia. But Uber

services· continued to be popular with customers. Uber faced many challenges like

· Reengineering process design to ensure compliance to multiplicity of government regulations

· Building confidence among stakeholders about safety by explicitly addressing it in process design

Combating political lobbyists supporting entrenched taxi operators and compete with low cost

operators

Uber claimed that it partnered only with registered for-hire drivers who have undergone the commercial licensing process with authentic ID Cards. They work with the community, government and technology industry with focus on safety. Such cab solutions were in increasing demand and therefore ban will not serve the purpose and instead tighten regulatory mechanism. However, being a major safety concern, Uber must review its process design and recast its policies to address all relevant requirements.

Designing processes for a product or a service involves consideration to many explicit and implicit requirements. In the absence of universal regulations, Uber had to comply with varied local regulations. Accordingly it had to design its processes separately for different regions and cities and ensure strict compliance to the regulatory requirements for the vehicles, drivers and ensure passenger safety. Competitiveness in transportation services depends on how effectively associated processes are designed by leveraging infrastructure available in the market and ensuring strict compliance to applicable regulations.

Discussion Questions:

1. What are the regulatory and safety concerns Uber needs to address in its process design? (Hint: Customer safety and Service Operations)

2. How Uber has to fine-tune its process design separately for each target group to stage a comeback?

(Hint: Process Design and Service Operations)

Course reference: Concept- Major factors affecting Process Design Decisions/Unit 19- Design of Production Processes/ Subject- Project & Operations Management

Sources:

i. Hika Sharma Punit, Digbijay Mishra, SounakMitra, “Blanket Ban on taxi applications to affect about a million consumers,” Business Standard, 12^th December, 2014

ii. Ryan Xue, Evan Engstrom, Zach Graves, “Hired driver rules in US cities,” R Street Institute, Redscore 2014:

12^th November, 2014

iii. SarithaRai, “Uber‟s Pressing for India Comeback Via Social Media Campaign,” Forbes, 29th December, 2014

iv. “Delhi government modifies rule; Uber may make a comeback,” The Times of India, 29^th December,2014

	20		Shifting Locations of Global Operations
	20

According to a study conducted by McKinsey Global Institute, by 2025, about 50% of large companies in the world would be located in the emerging countries in hundreds of new locations as against 20 big cities in 2013. Emerging world would be home to 45% of Fortune 500 companies contributing towards 46% of global revenue. Instead of being low cost production centers, emerging countries would be hubs for operations as well as consumption.

Facility locations in emerging nations started creating seismic shifts by providing stimuli for higher productivity, innovation and dissemination of skills and technology. A study by the World Economic Forum held similar views.

Future	facility locations would be cities and countries with:
	·	Favorable business environments like research institutions and access to youth with skills and
	·	knowledge
	·	Global industry networks and supply chains with efficient material and manpower resources
	·	Focus on creating a competitive business environment like ease of doing business, streamlined
	·	and efficient regulatory and enforcement practices and approval processes
	·	Infrastructure like airports, lower corporate taxes, competitive wages and the presence of
		upstream and downstream companies
Key	imperatives for business leaders to reengineer their location strategies:
	·	Business leaders to understand how the ecosystem for customers and competitors evolves and
	·	watch for new sources of innovation and potentially disruptive changes
	·	Companies in the emerging world to compete for global customers, talent, capital and resources
	·	Companies to think about the structure and location of senior management and even location of

headquarters

In view of the fast changing manufacturing ecosystem, facility location became a major strategic issue. With inclusive growth and sustainability as priority objectives and „Make in India‟ as the growth engine, facility

location strategies needed to be reengineered in Indian industry. Multinational companies should pay special attention to the attractive markets of emerging nations and formulate operations strategies to localize their facilities.

Post-globalization, organizations resorted to locating their manufacturing facilities as per their convenience.. Competitive pressures, availability of skilled workforce and managerial talent, resources and an industrial climate were the main criteria for facility location choices. Accordingly, automobile companies such as GM, Volkswagan, Ford, Toyota Suzuki and Hyundai started locating their manufacturing and servicing facilities closer to the places of potential markets in emerging countries.

Discussion Questions:

1. Why do you think that globalization caused major shifts in facility location strategy (Hint: Cost competitiveness and globalization)

2. Identify five major reasons for companies to migrate from developed to developing countries (Hint: Labour Costs and Outsourcing)

3. What made some American companies to stop outsourcing and restart manufacturing in the US? (Hint: Globalization and shifts in facility locations)

Course Reference: Concept- Factors affecting Location decisions/Unit 20- Facility Location and Layout/Subject-Project &Operations Management

Sources:

i. “Urban world: the Shifting global business landscape,” McKinsey Global Institute, October,2013

ii. “The Future of Manufacturing Opportunities to Drive Economic Growth,” World Economic Forum Report in

Collaboration with Deloitte Touché Tohmatsu Limited., April 2012

	21		Operations Planning - Key to Healthcare Delivery
	21

Tamil Nadu Medical Services Corporation (TNMSC) was set up in 1994 in the wake of a spurious drugs scam. At that time drug procurement in the state was scattered, with each public hospital sourcing drugs on its own with no standard procedures. The corporation streamlined drug delivery significantly through a slew of innovative practices in operations planning which made aggregate planning and capacity planning more effective. Major initiatives are:

· Drug procurement through tendering that broke down suppliers‟ stranglehold on the public health system

· Quality Management throughout the supply chain by accrediting testing laboratories

· Drug delivery through a passbook system that guided capacity building, warehousing and inventory control

· Use of IT for efficient information system on the supply chain performance

The system yielded a number of tangible benefits:

· Procurement costs of drugs reduced by 30% -the average cost of drugs in Tamil Nadu is Rs. 102 against Rs. 3268 in Haryana, 2166 in Himachal Pradesh and 3,187 in Rajasthan.

· The total cost of a patient‟s hospital stay in Tamil Nadu is the lowest in the country at Rs. 255.

The initiatives were fully supported by state government allotting a higher health budget of 9% when compared to other states and spending more on drugs. Tamil Nadu‟s per capita allocation for drugs is Rs.27

as against Rs.2 in Rajasthan, Rs. 3 in UP.

TNMSC convincingly demonstrated that public healthcare could be made efficient and citizen-friendly

through innovative operations and planning. The success made it a role model for the central government while formulating country‟s Drug Policy.

Operations strategy based on clear performance objectives and meticulous planning paves the way for efficient healthcare delivery. The feeling that public healthcare delivery in India is inefficient and unaffordable has been convincingly shattered by the Tamil Nadu Medical Services Corpora tion through its innovative operations planning.

Discussion Questions:

1. What were the major reasons for the reduction in the procurement costs of drugs? (Hint: Procurement Strategy and Drug Delivery)

2. What role IT played in operations planning and supply chain management? (Hint: Efficient MIS and Patient Care)

3. What do you suggest for ensuring speedy and low cost drug delivery to the patients? (Hint: IT and efficient drug delivery systems)

Course Reference: Concept- operations planning/ Unit 21 -Aggregate Planning and Capacity Planning/Subject-Project & Operations Management

Sources:

i. Dinesh Narayanan, “Tamil Nadu Medical Services Corporation: A Success Story,” Forbes India, 30th September, 2014.

ii. Y Balarajan, S Selvarajan, Dr. S V Subramanyan., “Health Care and Equity in India,” The Lancet Medical Journal, 11^th January, 2011

	22		Hi-tech Inventory Control Systems
	22

Walmart, a global leader in retailing with revenues of $443.9 billion in 2012 operated from 11,137 locations (2013) and employed 2.2 million people. The changing global supply chain patterns necessitated state of art inventory control systems. Deployment of sophisticated technologies and Radio Frequency Identification

(RFID) helped Walmart to ensure efficient inventory control systems and maintain competitive advantage. The supply chain process that aligned the demand management with the RFID system helped to: ·

· Instantly know the brands, models, and sizes that consumers are buying thereby making the supply chain become more efficient.

· Alert employees to immediately replenish the racks instead of waiting to restock

_·_{Notify
purchase department for spot purchase decisions.}stores,accesssalesrecords,andtroubleshootandmanage problems

RFID implementation could

· Drastically reduce costs associated with the downstream flow of physical goods and the upstream flow of demand information, making the inventory control system efficient

· Help users see supply in real time, enabling them to improve the timing of reorder, accurately forecast the demand and reduce the cost of labor

· Help in identification of slow-moving and obsolete items and know the health of inventory in any other location in the network.

· Provide total supply chain visibility from the point of production to the point of consumption and the ability to know the demand pattern.

Inventory control became a major determinant of the efficiency of supply chain management, an imperative for competitive advantage. Traditional and manual systems of inventory control were not compatible with the dynamism expected from supply chains operating in large retail stores. Use of high technology solutions like RFID was unavoidable for ensuring operational efficiency.

The Inventory system is a series of activities involved in maintaining adequate levels of inventory such as ordering of inventory and receiving, storing and using them in the production process. Inventory control is important as the material consumes precious working capital. Walmart used RFID system to streamline inventory control, thereby ensuring a smooth supply chain management.

Discussion Questions:

1. Why sophisticated technology is necessary in a retail supermarket? (Hint: Customer focus and Inventory Control)

2. What advantages accrue as a result of RFID system over traditional inventory control system?

(Hint: RFID and Inventory Control)

Course Reference: Concept- Inventory Control/ Unit 22- Fundamentals of Inventory Control/Subject- Project& Operations Management

Sources:

i. Daniel Millsap, “Walmart‟s use of RFID in Global Supply Chain Management,” www.danielmillsap.com

23	Innovative Supplier Management at British Telecom

British Telecom (BT) is a multinational telecommunications company with headquarters in London. It had operations in 170 countries with revenue of 18,017 billion pounds and an employee count of 87,800 as of 2013. BT‟s Global Services division supplied telecom services to corporate customers and governments worldwide and its consumer services division supplied telephony, broadband and subscription television services in Great Britain to around 18 million customers. BT initiated an innovative approach to supplier management, called Better Future Supplier Forum (BFSF). It was primarily aimed at reducing its carbon impact through its 17,400 suppliers representing 64% of its carbon footprint. Through BFSF, suppliers were

· Trained on use of tools and techniques for improvement in products and services

· Taught how to make changes, capture savings and quantify benefits

· Made aware of the philosophy of circular economy through designing for disassembly or maintenance, zero waste, measuring and reporting carbon foot prints, energy, water and resource efficiency, sustainable transport and stakeholder engagement

· Incentivized to innovate in products and services

The BFSF approach resulted in

· Enhancing the sustainability credentials of suppliers

· Reducing carbon impact of the supply chain by 2,50,000 tonnes from 2011 to 2013

· Improvement in the health of the employees of suppliers, thereby reducing employee turnover, accidents and illness rates while increasing productivity by nearly 30%

· Quest, the global telecom industry body using BSFS framework as a best practice model for operator and supplier collaboration at a global level

· Helping product innovation and engagement with suppliers

Climate Change, a major threat to humanity is due to the GreenHouse Gases emitted by global industry and calls for reengineering supply chains with focus on purchase management to drastically reduce their carbon footprints.

Supplier management is the core of purchase management and its effectiveness decides supply chain efficiency. By using BFSF, BT revolutionized supplier relationship management that not merely smoothened purchase management but yielded enormous benefits to all the partners. Introduced in 2012, BFSF involves two main things-assessing suppliers against global best practices and rewarding pioneering ideas. BT helps all its suppliers in enhancing their capabilities and helping them in identifying opportunities for improvement in purchase management through BFSF.

Discussion Questions:

1. What are the salient features of BFSF to adopt it as a global framework to set benchmarks? (Hint: Purchase Management and Carbon Footprint)

2. How BFSF can help the suppliers to raise their levels through more effective purchase management?

(Hint: Supplier relationships and sustainability)

Course Reference: Concept-Responsibilities of a purchase manager/Unit23-Purchase Management/Subject- Project and Operations Management

Sources:

i. “BT: Inspiring its suppliers to innovate,” Sustainable Business Case studies, the Guardian, 2014

ii. Barbara Morton, Malcolm McInnes, Chris Foster, “Environmental Purchasing in Practice-guidance for organizations,” The Institute of Environment and Assessment, September 2002

iii. Nidhi Shah, “Green Purchasing- The Issue of Responsible Supply Chain Management for Improving the

Environmental Performance,” Green Purchasing Network of India, 2010

	24		E-Waste
	24

Guiyu in China was a huge electronic waste processing area, referred to as the “e-waste capital of the world.” The area employed over 150,000 e-waste workers, working 16-hours per day, extracting metals and

parts from electronic hardware for reuse or sale. The workshops employed labour to disassemble cables and strip wires, remove chips from circuit boards, grind plastic computer cases into particles and dip circuit boards in acid baths to dissolve the lead, cadmium, and other toxic metals. Uncontrolled burning, disassembly and disposal caused a variety of environmental problems such as groundwater contamination, atmospheric pollution and water pollution either by immediate discharge or due to surface runoff as well as health problems including occupational safety and health effects among those directly and indirectly involved. With the environment around Guiyu totally poisoned, medical tests revealed that 82% of the 165 children tested had higher concentrations of lead in their blood (149 as against an acceptable limit of 100).

High levels of lead in young children's blood could impact IQ and the development of the central nervous system. The highest concentrations of lead were found in the children of parents who worked in workshops dealing with circuit boards and the lowest was among those who worked in recycled plastic units. The environmental group Greenpeace sampled dust, soil, river sediment and groundwater in Guiyu where e-waste recycling was done and found soaring levels of toxic heavy metals and organic contaminants in the workshops as well as at the recycling facility. Guiyu was only one example of digital dumps but similar places could be found across the world such as Asia and Africa. With amounts of e-waste growing rapidly each year urgent solutions were necessary for its safe disposal. While the waste continued to flow into digital dumps like Guiyu, there were measures to reduce the flow of e-waste but were not effectively implemented. E-waste management thus became a new challenge to materials managers. The challenges faced by materials managers in the context of e-waste were many:

· Bringing awareness among the staff about the implications of e-waste in their activities such as occupational health and safety hazard to the employees, their families and the surrounding community

· Developing and operating waste catalogues to provide guidance on planning, procurement, management and disposal of e-waste.

· Ensuring that no unauthorized vendors are included in their procurement or disposal activities.

To effectively address this priority concern, the materials managers must redefine their responsibilities by ensuring requisite knowledge about the applicable legal and regulatory framework and their implications to health, safety and environment on the society at large.

Materials Management needs to enlarge its scope to address e-waste and its implications. Guiyu does not seem to address the global concerns about e-waste by adopting industry‟s best practices. Such

negligence by the industry made China surpass the US as the biggest polluter in the world. Being a serious issue with multidimensional implications, every organization has to take e-waste as a priority consideration in materials management strategy.

Discussion Questions:

1. What major initiatives are urgently required to control e-waste? (Hint: E-waste and occupational health)

2. Why e-waste management is a priority responsibility of materials managers?

(Hint: Vendors and E-Waste)

Course Reference: Concept- Functions of Materials Management/Unit 24- Materials Management/Subject- Project & Operations Management

Sources:

i. “Scrapping the Hi-tech Myth: Computer Waste in India,” Toxics Link, February 2003

ii. Environmental Protection Agency (EPA) of the US

iii. World Reuse, Repair and Recycling Association (wr3a.org)

iv. Ministry of Environment and Forests, Government of India

	25		Operations Scheduling
	25

US-based multinational corporation, General Electric (GE) developed world class expertise in medical imaging and information technologies, medical diagnostics, patient monitoring systems, performance improvement and drug discovery. Its biopharmaceutical manufacturing technologies helped clinicians around the world re-imagine new ways to predict, diagnose, inform and treat disease, so their patients can live their lives to the fullest. Its operations scheduling was exemplary. The company made parts for its diagnostic equipment in China, Hungary and Mexico and developed the software for them in India.

· This model was adopted by the company when it realized that the market for the equipment is limited in low income countries.

· It decided to use the Indian facility as a global sourcing base as the Indian facility proved superior to the Mexican facility in meeting global quality standards at a low cost

This strategy of operations scheduling enabled the company to be globally competitive. Globalization of supply chain operations brought new dimensions to operations scheduling in the company.

Similarly, what gave Apple its massive competitive advantage was its operations strategy and operations scheduling? It built a closed ecosystem where its exerts control over nearly every piece of the supply chain, from design to retail store. Apple got big discounts on parts, manufacturing capacity, and air freight. For Apple, operations expertise was as big an asset as product innovation or marketing. This operational edge enabled Apple to handle massive product launches without having to maintain large, profit-sapping inventories.

Operations scheduling is an important tool for manufacturing and engineering, where it can have a major impact on the productivity of a process. In manufacturing, the purpose of scheduling is to minimize the production time and costs, by telling a production facility when to make, with which staff and on which equipment.

Operations scheduling is the process of organizing, choosing and timing resource usage to carry out all the activities necessary to produce the desired outputs at the desired times, while satisfying a large number of time and relationship constraints among the activities and the resources. A Schedule specifies the time each job starts and completes on each machine, as well as any additional resources needed. GE, with global outsourcing as its operations strategy was performing operations scheduling in an effective way.

Discussion Questions:

1. What are the essential aspects of operational scheduling in an era of outsourcing? (Hint: Scheduling and eco-system)

2. Draw an operational schedule for the introduction of a new model of a mobile phone

(Hint: Operations scheduling and outsourcing)

Course Reference: Concept- scheduling by type of operation/Unit 25- Operations scheduling/Subject-Project & Operations Management

Sources:

i. G. Senthil,“Operations Scheduling”, www.slideshare.net

ii. www.gehealthcare.com

	26		Business Process Reengineering : Precor’s Strategy
	26

Amer Sports Corporation headquartered at Helsinki, Finland was founded in 1950. It manufactured and sold sports equipment. It had an annual turnover of $2.1 bn at the end of year 2013 with employee strength of 7330. Precor, a subsidiary of Amer Sports Corp had its headquarter at Seattle in Woodinville, Washington. It

was awarded Vendor of the Year at the 2014 World Gym Awards by World Gym held in Las Vegas, in September 2014. It sold equipment‟s to hospitals, corporate wellness, medical and rehabilitation and multi-

family housing industries.

Precor _·faced the following challenges to its holistic system:

There was no collaboration between the two teams, one focusing on commercial marketing operations and another focusing on customer operations.

· Lack of systematic approach to identify potential customer profiles and converting them into clients.

· Sales executive lacked specific data like email ids, phone numbers, etc from inbound marketing department.

· Failure to segment customers based on their unique requirements.

· Potential customers were getting repetitive emails irrespective of their need and interest.

Precor attempted to leverage holistic system through Business Process Reengineering (BPR) to reduce the lead lifecycle as follows (See Figure 1):

Collaboration

• Marketing team trained sales team on usage of automation for effective sales & services

• Integrated the sales team database

• Marketing and sales team discussed on ideas for building strong CRM system

Systematic approach for converting potential customer into clients

• Systematic	approach		for
converting	potential	customer	into
clients
• Leads	werecollected		from
tradeshows	and	personal

invitations,etc

• MQL(marketing qualified lead)-Potential customer with interest in product was consulted

• SQL(sales qualifiedlead)-Sales

person convince & convert prospective customer into client

Plan and execute email

automation

• Dynamic Interface Layer was created to send messages to specific user

• A lead, browsing Treadmill

frequently contacted by marketing team

• Stay Alive Method-Emails are sent to existing customer to promote new products based on their browsing pattern

Example of Lead Nurture

• Visitors		served	with
guides, infographics,etc
• Prospects		(interestd
customer) informed about
buying tools like selection
of	tread	mill,Stretch

Trainers,Bikes,etc.

• Prospects enter into SQL with sales, after sales service, maintenance,etc.

Figure 1: Precor‟s BPR

Business_· Process Reengineering implemented at Precor :

90-day lifecycle from MQL(Marketing Qualified Leads) to SQL(Sales Qualified Leads) was shortened to 25 days

· MQL increased by 45%

· Raw leads increased by 74%

· SQL velocity increased by 67%

· Relative frequency of record-breaking days for lead conversion increased by 35% · Precor achieved 74% increase in lead generation.

Business Process Reengineering is defined as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance

such as cost, quality, service and speed. Business Process Reengineering helped Precor to personalize potential customer‟s experience to develop smart techniques of marketing.

Discussion Questions:

1. What are the benefits of implementation of BPR? (Hint: Lead lifecycle)

2. Which aspect of performance is addressed in this BPR?

(Hint: Holistic system)

Course Reference: Concept- Business Process Reengineering /Unit 26- Enterprise Resource Planning/Project & Operations Management

Sources:

i. “Marketing Automation: Precor Achieves 74% lift in New Leads via Segmentation,” MarketingSherpa,

12^thNovember, 2014

ii. ”Precor Sets Revenue Record for Sixth Consecutive Year,” Reuters, Februry 2008

	27		Ambuja’s Supply Chain Management
	27

Ambuja Cements Ltd, a part of a global conglomerate Holcim, is one of India‟s leading cement manufacturers. The company initially called as Gujarat Ambuja Cements Ltd was founded by Narotam Sekhsaria and Suresh Neotia in 1983. Holcim, a global cement maker acquired management control of

Ambuja in 2006. Ambuja„s net sales are Rs.10,000crore for the year ended 2013. Ambuja have five integrated cement manufacturing plants and eight cement grinding units. It is the first Indian cement manufacturer to build captive port with three terminals.

Ambuja identified the following problems with its logistics system:-

· Grinding units are not close to fly ash markets

· Rise in fuel price made supply chain expensive

· Additional cost of Rs.1.5 per tonne/per kilometer was incurred on each bag of 50 Kg cement bag Proactive measures taken by Ambuja to make supply chain more efficient (See Figure 1):

Customized the logistics Network

* Established new grinding plants in Gujarat and Rajasthan which are close to fly ash market

* It reduced transportation costs by 25%

Complied with customer requirements

through Non-conventional Methods

* Chose shipments that reduced the costs about 50 paisa per tonne per kilometer

* Setting up new bulk cement terminal at Mangalore and integrating the terminals for distribution

Integration of Technologies

* Radio Frequency identification (RFID)

reduced turnaround time for trucks

* Improved truck utilization by eliminating congestion

* GPS/mobile applications helped to track trucks movement & delivery

Figure:-Ambuja‟s measures for supply chain management

Ambuja has taken 13 new projects at different locations worth Rs. 272 crore to optimize and enhance efficiency of supply chain management.

The principles of Supply Chain Management allow organizations to maintain a balance between customer‟s expectations and their own objectives. Customized logistics network, enhanced customer

requirements through non-conventional method and integrated technology has improved efficiency in supply chain and lowered cost at Ambuja.

Discussion Questions:

1. What are the principles of Supply Chain Management? (Hint: Customers expectations)

2. Which principles of supply chain management are used by Ambuja?

(Hint: Logistics)

Course Reference: Concept- Principles of Supply Chain Management/Unit 27-Supply Chain Management/ Subject-Project & Operations Management

Sources

i. Chandankishore Kant “Ambuja to Aggressively Cut Logistics Costs,” Business Standard, 5th August, 2013 “Supply Chain Excellence in India,”www.worldcement.com, 6thJune, 2014

	28		JIT in Action
	28

Toyota, the Japanese automobile giant pioneered the concept of JIT. This enabled it to keep a minimum amount of inventory which resulted in minimizing associated costs and improving competitiveness. Toyota could adapt quickly to changes in demand without focusing on expensive inventory. Small amounts of raw material inventory were kept at each node in production to support production schedules and then replenished when they were used. The Toyota production strategy highlighted the fact that raw materials were not brought to the production floor until an order was received and the product was ready to be built. No parts were allowed at a node unless they were required for the next node.

In spite of its roaring success that made Toyota a role model for JIT implementation, the company had to pay heavily after Tsunami devastated its plants. Reliable supplier base is an essential requirement for JIT to function efficiently and without disruption in the supply chain. For certain critical components, Toyota qualified only a single supplier. When Tsunami destroyed their plants, entire supply chain of Toyota collapsed and stalled its operations for about six months. After recovery and restart, Toyota changed its single vendor policy in view of its high risks and enlarged its supplier base.

Some companies like Johnson Controls took the guidance of Toyota for implementing JIT in its automotive product operations and ended up becoming an approved supplier to Toyota.

The challenges faced by Toyota were:

· The risk associated with its single vendor policy and the effects of revising this policy to enlist multiple vendors

· Managing vendors for effective quality and safety management.

Just-in-Time withstood the test of times until the Tsunami exposed the vulnerability of single vendor policy. Toyota had to remodel its JIT methodology by embedding some flexibility in its operations strategy. This called for certain trade-offs in the realm of inventory management and vendor policy without diluting quality and safety.

Just in Time Manufacturing (JIT) refers to a system of manufacturing in which products are not built until the product is ordered and paid for. JIT manufacturing is a powerful and proven system of producing products efficiently while keeping costs low. Toyota used this philosophy to streamline its supply chains, continuously improve manufacturing processes and ensure customer satisfaction. Many Indian companies aspiring to become global players also started implementing JIT.

Discussion Questions:

1. Why JIT implementation in Indian industry is in its infancy? Is it a requirement for globalization? (Hint: JIT and Operations Strategy)

2. What are the major reasons for the failure of JIT implementation?

(Hint: JIT and Global Competitiveness)

Course Reference: Concept- Characteristics of JIT systems/Unit 28-Just-in-Time Manufacturing system/Subject-Project & Operations Management

Sources:	*Jack Wilson, “Real-Life Examples of Successful JIT Systems,” British Hub PM, 29*th June, 2013
i.

ii. Vikas Kumar, Dixit Garg and NP Mehta,” JIT Practices in Indian Context: A Survey,” Journal of Scientific and Industrial Research, August 2014

iii. “Implementing Just in Time and Difficulties in Indian Business,” www.ukessays.com

29	Infosys Strategy for Measuring Employee Productivity

Infosys Ltd. is an Indian multinational corporation that provided business consulting, information technology and software engineering and outsourcing services. It was founded by a team of technocrats lead by Narayana Murthy in 1981. As of 2014, it was the third-largest India based IT Services Company. It had an annual revenue of $8 bn at the end of September 2014 with employee strength of 1, 65,411.

Infosys faced the following challenges in 2014:

_· To create differentiation strategy in an increasing commoditized market

· Managing employee scale and growth with quality and productivity

Individual productivity vis-a-vis competitors

Infosys took following measures for increasing individual productivity (See figure 1):

*Projects are taken

on time-and-

material basis

*Client benefitted

through productivity

gains

*Projects are rated

as per premium

pricing

Employee

productivity

measurement

focused on fixed-

price projects and

enhanced margins

Software engineers are appraised on objective basis

rather than

subjective basis

Focused on

timely salary

hike, internal

promotions

for senior

positions

Figure 1: Measures taken by Infosys

Infosys trained 10,000 software engineers for increasing employee productivity.

Measuring knowledge worker productivityis challenging as intangible and qualitative factors like knowledge of the workers, leadership skills etc, are involved. All the measures taken by Infosys were conceived, implemented and pushed forward for employee productivity enhancement.

Discussion Questions:

1. What is Productivity? (Hint: Quality)

2. Which factor of productivity is addressed in this caselet?

(Hint: Software development)

Course Reference: Concept- Measuring Knowledge workers productivity /Unit 29- Productivity and Quality Management/Subject-Project & Operations Management

Sources:

i. ”It is Difficult to talk of Value when you cannot Measure the Value you are Delivering: Rohan Murty,”

Business Standard, 15^thDecember, 2014

ii. “Infosys diluted focus on meritocracy in past decade: NarayanaMurthy,” The Times of India, 15^thJune, 2014

	30		Indian Railways- Need for Focus on Facilities and
			Indian Railways- Need for Focus on Facilities and
			Maintenance

Indian Railways, a Government of India undertaking was one of the world‟s largest railway networks in terms of capacity (116,000 km track length, 65,436 km Route and 7,172 stations). During 2014-15, it carried 8,397 million passengers (daily 23 million passengers) and 1050 million tons of freight. With a staff of 1.307 million employees, it earned revenues of Rs. 61,324 cr. (2013). Its infrastructure included 239,281 freight wagons, 62,924 passenger coaches and 9,013 locomotives.

There was a growing concern about the operational efficiency and service quality of the Indian Railways. The facilities management and maintenance was a serious concern calling for urgent attention. Continued neglect of maintenance of facilities in the railway stations, trains and other infrastructure like the signalling systems was causing serious occupational health and safety concerns, some of them culminating in fatal

accidents	·	and huge losses.
	·	Passenger casualties had risen fourfold (from 0.03 in 2003-04 to 0.126 per million	passengers
	·	in 2011-12)
	·	During 1965-96, the number of deaths in accidents remained mostly under 100 per year. Since
	·	2003-04, the safety record was discouraging with deaths crossing 300 in one of the accidents
	·	In the last few years (2010-2014), there were many devastating fires on trains
Enquiries	·	into the accidents revealed that most of them were caused by procedural failures:
	·	Technical systems like signalling and route relay interlocking were malfunctioning as they were
	·	outdated
	·	Many accidents involved derailments, collisions and mishaps at level crossings and were
	·	attributed to aging railway tracks and malfunctioning rolling stock
	·	Cost cutting strategies and trying to avoid delays prompted blatant violation	of safety
	·	procedures
	·	Large number of safety related positions were left unfilled, leaving a significant skill gap

Periodically, Ministry of Railways appointed expert committees to suggest ways to improve the operations of Indian Railways. The Bibek Debroy Committee suggested selective privatization in addition to replacement of ageing hardware, adhering to maintenance schedules and procedural drills to ensure safety and improve staff commitment and morale. Another High Level Safety Review Committee headed by Dr.

Anil Kakodkar also reported on the poor infrastructure and „implementation bug‟ troubling Indian Railways.

Immediate focus on augmentation of facilities and efficient maintenance thus assumed primary importance to make it a dependable mass transport system.

Facilities Management integrates people, process and technology with the work environment to enable the organization to carry out its core business operations in the most efficient manner. This necessitates efficient maintenance management as well to ensure sustainable operations. Indian Railways, with vast infrastructure needs to focus on facilities and maintenance management to ensure passenger safety while utilizing its infrastructure.

Discussion Questions:

1. What should be the main focus of Indian Railways to ensure passenger safety? (Hint: Safety and Maintenance)

2. What are the areas of operations in Indian Railways to be outsourced for improving the efficiency and quality of services?

(Hint: Outsourcing and improvement of railway services)

Course Reference: Concept- Necessity of Maintenance Management/ Unit- Facilities and Maintenance Management/ Subject- Project & Operations Management

Sources:

i. “ Will Privatization help the Railways,” Business Standard, 17th April, 2015

ii. Subir Roy, “ Railways has a Wagonload of Woes,” Business Columns, 15^th December,2014

iii. “Report of the High Level Safety Review Committee,” Ministry of Railways, Government of India,

February, 2012

	31		Blue LED Invention Looked Disruptive
	31

Three Japanese scientists, Isamu Akasaki, Hiroshi Amano and Shuji Nakamura won the 2014 Nobel Prize for Physics for inventing Blue LED. The success came after repeated failures by a number of scientists who researched for five decades for the invention after the Red LED (1962). The long awaited breakthrough was achieved by mastering the intricate layering of semiconductor materials.

Blue LED invention heralded a new era in lighting. In addition to creating platform for a multi-billion dollar industry ($75 billion) it triggered a fundamental transformation of lighting technology and promised to be disruptive with multiple applications and benefits.

· LEDs could provide lighting to people located far away from the electricity grid. LED lights worked on solar and other alternatives

· Life expectancy of LED bulbs was 20 years, reducing electronic waste generation. It was eco-friendly as it did not possess mercury

· LED provided displays for smart phones, laptops etc. and found applications in high-speed networking, data storage, water purification and efficient home illumination

· LED converted electricity directly to light as compared to other sources where substantial heat was generated along with light, leading to an enormous increase in power efficiency (more light with less electricity)

· Traditional lighting was expected to decline 10% per annum and LEDs expected to grow 20-25%. New players were likely to displace traditional MNCs like Philips and Osram

Sustainable operations call for innovative technologies which are more efficient and resource-friendly. Invention of „Blue LED‟ was disruptive with multiple applications. It is expected to create a new

business platform and provide clean and efficient substitutes for many traditional technologies and processes.

Discussion Questions:

1. What are the reasons to call the discovery of Blue LED as disruptive? (Hint: Disruptive Technologies and Sustainability)

2. What application you can conceive for LED technology for energy efficiency? (Hint: Innovation and Energy Efficiency)

Course Reference: Concept-Disruptive Technologies/Unit 31- Trends in Operations Technologies/ Subject-Project & Operations Management

Sources:

i. Elco van Groningen, Yuki Hagiwara, Aya Ta kada, Alex Webb, Boris Groendahl., “Nobel Prize for Physics goes to Developers of blue LED lights,” Livemint, 8^th October, 2014

Stav Ziv, “How the Blue LED changed the world and Won a Nobel Prize,” Newsweek, 7thOctober, 2014

	32		Strategic Partnerships Facilitate Globalization
	32

Starbucks, a reputed multinational coffee chain, was established at Seattle, USA in 1971. By 2014, it had more than 20,000 stores in 64 countries, employing 1,60,000 people and registering a turnover of $15 billion by 2013. It was serving 70 million customers per week. Aiming for accelerated growth, the company decided to focus on India as one of the top five markets in the world. Starbucks partnered with Tata Global Beverages and established a 50-50 joint venture. Starbucks had established 59 stores in six states in India within two years, after entering the country in 2012. Starbucks planned to expand to 100 outlets by 2015.

The Tata Group helped Starbucks in this globalization drive by

· Finding great locations for new stores

· Designing the stores keeping the local culture in mind

· Getting the food menu right

· Overcoming logistical and infrastructure barriers

· Recruiting best talent to ensure human connection in its services

Sourcing and roasting coffee beans locally to develop a recipe exclusively for India develop an

India only espresso roast

Starbucks, in turn shared closely guarded secrets of roasting (held confidential for four decades), critical to the product, heralding an innovative strategy based on the foundations of trust. This paved the way for its globalization plans for India.

One strategy adopted by many MNCs for globalization is partnership with established firms in the host

country. Market entry is facilitated through effective logistics management, catalysed by the brand image. Starbuck‟s partnership with the country‟s most trusted Tata Group, proved to be a win-win

strategy. The results are very encouraging with its network spreading very fast. The parent company is aiming to place Indian venture within top 5 in the world in the near future and within top 2 outside North America.

Discussion Questions:

1. What conclusions you can draw from the globalization strategy of Starbucks? (Hint: Partnerships and globalization)

2. Why do you feel that partnering with established local player is the best way for globalization in the targeted country?

(Hint: Globalization strategies and band focus)

Course Reference: Concept- Globalization/Unit 32-Globalization and Operations Management/Subject- Project & Operations Management

Sources:

i. “Starbucks India Grows Faster,” Business Standard, 5^thNovember, 2014

ii. “Reimagining India: Creating Partnerships for the Future,” McKinsey & Company, 2014

	33		Formulating Chemistry for a Sustainable Future
	33

BASF was a 150 years old globally renowned chemical company employing 122, 000 people with a turnover of 56 billion Euros (2014). The company realized the importance of sustainability in view of its high risk involved as in its area of operations i.e. chemicals. Accordingly, the company addressed sustainability as a

holistic strategy, integrating it with its long term business strategy. Its intrinsic safety culture helped in broader acceptance of sustainability by launching „sustainable solutions steering initiative‟. The initiative

· Encompassed a „top-down‟ perspective driven by a sustainability board

· „Middle out‟ perspective with every business unit investigating its own products and matching them against strict sustainability criteria.

· Product portfolio sustainability review helped in initiating necessary changes and

· Sustainable solutions approach encouraged analysis of every product line

BASF placed each product into one of the four categories after assessing for sustainability:

· Accelerators- those products which exceeded standards and stayed ahead of regulations

· Performers- those which met market standards

· Transitions’- which addressed sustainability issues and

· Challengers-products with significant sustainability concerns for which action plans were being created. For example, the company took a „Challenger‟ product- Polyfluorinated Compounds

(PFCs) and transformed it as an „Accelerator‟ through a set of initiatives. (PFCs are grease and stain repellents used in food packaging and they bio-accumulate in humans over time as dioxins with adverse effects on health).

Focus on sustainability all along the life cycle ensures long term performance. The significant steps taken by BASF enabled it to move sustainability from mere „Environment, Health & Safety‟ to the

strategic planning level. This helped it in integrating sustainability across all business units in the company and making sustainability a core competence driving sustainable solutions in a scalable environment.

Discussion Questions:

1. How can an organization ensure that all its products reach „Accelerator‟ status over a period of time?

(Hint: Product Status and Sustainability)

2. What types of strategic initiatives are required to ensure sustainable operations? (Hint: Product Life Cycle and Sustainability)

3. In these days of intense global competition, is sustainability a possibility? If yes/no, give reasons

(Hint: Organizational Culture and Sustainability)

Course Reference: Concept- Sustainability and Operations Planning/Unit 33-Sustainability and Operations Management/Subject-Project & Operations Management

Sources:

i. “For BASF, Sustainability is a Catalyst,” MIT Sloan Management Review, 15thOctober, 2014

ii. BASF in India, Annual Report, 2012

Dear students, get ICFAI latest Solved assignments and case study help by professionals.

Mail us at : help.mbaassignments@gmail.com

Call us at : 08263069601

MBA SOLVED ASSIGNMENTS

Fields

Pages

Projects and Operations Management - ICFAI solved Case study help

No comments:

Post a Comment

Labels