Q1.

Identify the types of operations systems which could be used by

manufacturing organisations; choose each type with appropriate example.

1. Continuous Production System

 Definition: Used for producing standardized products in large volumes with minimal
variation. The production process runs continuously.

 Example: Oil Refining industries such as Indian Oil Corporation.

2. Batch Production System

 Definition: Used for producing goods in batches where each batch undergoes the same
process. Ideal for moderate volumes.

 Example: Bakery: Producing batches of specific types of cakes or cookies, such as chocolate
cakes for one batch and vanilla cakes for the next.

3. Job Shop Production System

 Definition: Produces customized products in small quantities. Focuses on flexibility and

meeting specific customer requirements.

 Example: Custom Furniture Manufacturer: Producing made-to-order, handcrafted wooden

furniture based on unique designs.

4. Mass Production System

 Definition: Produces a high volume of standardized products using assembly lines. Efficiency
and consistency are key.

 Example: Consumer Electronics Manufacturing, such as Samsung's TV or smartphone

assembly lines.

5. Flexible Manufacturing System (FMS)

 Definition: A system with flexibility to adapt to changes in product type and volume with
minimal downtime.
 Example: Car Manufacturing Plants, like Toyota, where machinery adapts to produce
multiple car models.

6. Lean Manufacturing System

 Definition: Focuses on minimizing waste while maximizing productivity and quality in the
production process.
 Example: Toyota Production System (TPS): Implementing "Just-in-Time" (JIT) to reduce
inventory costs.

7. Cellular Manufacturing System

 Definition: Groups similar products into families processed in "cells" to optimize workflow
and reduce movement.

 Example: Furniture Manufacturing, such as modular office furniture at Godrej Interio.

8. Project-Based Production System

 Definition: Unique, large-scale, and one-time projects with extensive customization and long
timelines.

 Example: Shipbuilding: Construction of cruise ships or naval vessels.

9. Just-In-Time (JIT) System

 Definition: Produces goods as they are needed, reducing inventory costs and enhancing
efficiency.

 Example: Automotive Industry, like Maruti Suzuki, implementing JIT for parts supply.

10. Hybrid Production System

 Definition: Combines features of two or more systems (e.g., continuous and batch
production) for enhanced adaptability.

 Example: Pharmaceutical Manufacturing, such as Cipla, where certain drugs are produced in
batches while others are in continuous processes.

Q2. Apply the concept of Operations Management along with its scope with respect to
service organisation.

Operations Management (OM) in service organizations focuses on efficiently delivering

intangible products, meeting customer expectations, and managing resources effectively.
Definition: Operations Management in services involves designing, managing, and improving
service delivery systems to create value for customers.
1. Customer-Centric Approach: Ensuring high customer satisfaction and loyalty.
2. Intangibility: Managing processes instead of physical goods.
3. Perishability: Services cannot be stored; they are consumed simultaneously as they
are produced.
4. Customization: Services often need to be tailored to individual customer needs.
5. Labor Intensity: Services rely heavily on human interaction and skilled labour

Scope of Operations Management in Service Organizations

1. Service Design and Delivery
 Concept: Designing service processes to ensure efficiency and quality.
 Example: A hotel creating seamless check-in/check-out processes through automated
kiosks.
2. Process Optimization
 Concept: Streamlining service workflows to reduce time and cost.
  Example: A hospital optimizing patient admission and discharge processes to
minimize waiting times.
3. Capacity and Demand Management
 Concept: Balancing service capacity with fluctuating demand.
 Example: An airline implementing dynamic pricing and managing seating capacities
during peak seasons.

4. Quality Management
 Concept: Ensuring consistent service quality through standards and customer
feedback.
 Example: A restaurant using customer feedback apps to maintain food and service
quality.
5. Technology Integration
 Concept: Leveraging technology to enhance service delivery and efficiency.
 Example: Banks implementing mobile apps for 24/7 customer banking services.

Q3. An organisation has decided to go for TQM. Construct the structure of total process.

Total Quality Management (TQM) Process Structure

Total Quality Management (TQM) involves a structured, systematic approach to improving
organizational processes, ensuring quality, and meeting customer expectations. Below is the
step-by-step structure of the TQM process:

1. Commitment from Leadership

 Action: Top management must demonstrate commitment to TQM principles by
setting clear goals, allocating resources, and leading by example.
 Example: CEO initiating TQM workshops and monitoring progress.

2. Develop a Quality Vision and Policy

 Action: Establish a mission statement and quality objectives that align with customer
expectations and organizational goals.
 Example: "Achieve zero defects in product delivery within one year."
3. Create a TQM Implementation Team
 Action: Form a cross-functional team with representatives from different
departments to drive and oversee the TQM process.
 Example: A TQM team comprising production, HR, and customer service managers.

4. Conduct Training and Awareness Programs

 Action: Train employees at all levels on TQM principles, tools, and techniques to
foster a culture of quality.
 Example: Workshops on Six Sigma, Kaizen, or ISO 9001 standards.

5. Identify and Understand Customer Needs

 Action: Gather customer feedback to understand their expectations and incorporate

them into the quality objectives.

 Example: Surveys, focus groups, and customer satisfaction indices.

6. Analyze Current Processes (Process Mapping)

 Action: Document and analyze existing processes to identify areas of inefficiency,
errors, or waste.
 Example: Using tools like flowcharts or value stream mapping (VSM).

7. Set Quality Improvement Objectives

 Action: Define measurable goals for quality improvement, such as reducing defects,
increasing customer satisfaction, or cutting process time.
 Example: "Reduce customer complaints by 20% in six months."

8. Implement Continuous Improvement (Kaizen)

 Action: Apply quality improvement methodologies like PDCA (Plan-Do-Check-Act) or

Six Sigma to drive process enhancements.

 Example: Use DMAIC (Define, Measure, Analyze, Improve, Control) to address a

production bottleneck.
9. Use Quality Control Tools and Techniques
 Action: Deploy statistical tools to monitor and improve processes.
 Examples:

o Pareto Chart for identifying major issues.

o Fishbone Diagram for root cause analysis.
o Control Charts to monitor process stability.

10. Foster a Culture of Quality and Teamwork

 Action: Encourage teamwork, ownership, and open communication across the

organization.

 Example: Cross-functional quality circles to solve specific operational issues.

Q4. A hospital chain is operating super speciality hospitals mostly in semi urban and rural
areas. It must take care of patients at a moderate price. Make use of FSN inventory model
that can be applied in this scenario.
Application of the FSN Inventory Model for a Hospital Chain in Semi-Urban and Rural Areas
The FSN inventory model classifies items into Fast-moving (F), Slow-moving (S), and Non-
moving (N) categories based on their consumption rate. This model helps in managing
hospital inventories efficiently, ensuring the availability of critical supplies while optimizing
costs in a moderate pricing environment.
Steps to Apply the FSN Inventory Model in the Hospital Chain
1. Identify Inventory Items
 Action: List all inventory items, including medicines, medical equipment, surgical
tools, consumables, and non-consumables.
 Examples: Antibiotics, syringes, X-ray films, oxygen cylinders, PPE kits.

2. Analyze Consumption Patterns

 Action: Analyze the consumption rate of each item over a specific period (e.g.,
weekly or monthly).
 Example:
o Antibiotics (e.g., Amoxicillin) have high usage = Fast-moving.
o Specialized equipment (e.g., heart stents) used less frequently = Slow-moving.
o Expired drugs or rarely used equipment = Non-moving.
3. Classify Items into FSN Categories

Category Description Examples in Hospitals

Fast- High consumption rate; must always Common medicines (paracetamol),

moving (F) be in stock. saline bottles, syringes, gloves,
masks.

Slow- Moderate consumption; stock Diagnostic kits, certain surgical tools,

moving (S) monitored closely to avoid overstock or non-emergency medications.
or stockouts.

Non- Rarely used or not consumed for a Rare medicines, outdated surgical
moving (N) long time; consider disposal or instruments, or equipment no longer
reallocation. in use.

4. Implement Inventory Control Measures

For Fast-moving Items:
 Maintain high stock levels and reorder frequently.
 Use automated reorder systems to prevent shortages.

 Example: Always keep a buffer stock of saline bottles and gloves.

For Slow-moving Items:
 Maintain moderate stock levels to avoid overstocking.
 Monitor demand trends and plan purchases accordingly.
 Example: Order specialized diagnostic kits only when usage patterns increase.

For Non-moving Items:

 Conduct regular audits to identify non-moving stock.
 Dispose of expired items or reallocate usable ones to other branches.
 Example: Donate rarely used medicines approaching expiry to government health
programs.
5. Leverage Technology for Inventory Management
 Use inventory management software to track consumption patterns and categorize
items dynamically.

 Example: Implement barcode scanning systems for real-time stock updates.

6. Monitor and Review Periodically
 Conduct periodic reviews of FSN categories to account for changing demand
patterns, especially in semi-urban and rural areas.
  Example: Increase stock of emergency drugs during seasonal outbreaks (e.g., dengue
fever).
Benefits of Using the FSN Model for the Hospital Chain
1. Cost Efficiency: Reduces wastage of non-moving items and avoids overstocking slow-
moving supplies.
2. Availability of Essentials: Ensures fast-moving critical items are always in stock,
preventing service disruptions.
3. Improved Patient Care: Timely availability of medicines and equipment enhances the
quality of healthcare delivery.
4. Resource Optimization: Allocates resources effectively between semi-urban and
rural hospitals.

Example: Implementation in a Semi-Urban Hospital

 Fast-Moving Items: Common antibiotics (e.g., amoxicillin), basic diagnostic supplies
(e.g., glucose test strips), and IV fluids are stocked in bulk and replenished weekly.
 Slow-Moving Items: CT scan contrast agents or rare blood group supplies are
ordered monthly based on predicted demand.
 Non-Moving Items: Expired surgical implants or rarely used medications are
identified and removed quarterly to avoid unnecessary holding costs.

By applying the FSN model, the hospital chain can balance cost efficiency and service quality,
ensuring moderate pricing and optimal patient care.

Q5. Transportation is the backbone of any supply chain and has multiple choices. Identify
various means of Transportation in Supply Chain Management giving suitable examples.
Means of Transportation in Supply Chain Management

 Transportation plays a critical role in ensuring the smooth flow of goods from
suppliers to end customers. Each mode of transportation has unique characteristics
and is selected based on factors such as cost, speed, reliability, and the nature of the
goods being transported. Here are the primary means of transportation in supply
chain management, with examples:

1. Road Transportation
Description: Most versatile and widely used mode for short-to-medium distances. It allows
door-to-door delivery and flexibility in route and scheduling.
Examples:
  FMCG Industry: Distribution of packaged foods like biscuits or beverages to local
retailers via trucks.
 E-commerce: Last-mile delivery of online orders by courier vans or bikes.
2. Rail Transportation
Description: Suitable for moving bulk goods over long distances at a lower cost but with less
flexibility in scheduling and routes.
Examples:
 Coal and Minerals: Transport of coal or iron ore from mines to factories.

 Automobiles: Movement of cars and bikes between manufacturing plants and

regional warehouses.

3. Air Transportation
Description: Fastest mode of transportation, ideal for time-sensitive and high-value goods.
However, it is the most expensive option.
Examples:
 Pharmaceuticals: Shipping vaccines or perishable drugs requiring quick delivery.
 Electronics: Transporting high-value items like smartphones or laptops.
4. Sea Transportation
Description: Economical option for large-scale international shipping, especially for heavy
and non-perishable goods. It is slow but cost-effective for global trade.
Examples:
 Oil and Gas: Transportation of crude oil via oil tankers.

 Consumer Goods: Bulk import/export of clothing, furniture, or electronics using

container ships.

5. Pipeline Transportation
Description: Used for continuous movement of liquids, gases, or slurries over long distances.
It is highly cost-effective and efficient for specific industries.
Examples:
 Oil and Gas Industry: Transportation of crude oil, natural gas, or refined petroleum
products through pipelines.
 Chemical Industry: Moving chemicals like ammonia or ethanol between plants.
6. Multimodal Transportation
Description: Combines two or more modes of transportation to optimize cost and efficiency.
Examples:
 Retail Supply Chains: Using rail to transport goods to a regional warehouse and road
transport for last-mile delivery.
  International Trade: Sea freight for cross-border shipping and air freight for urgent
portions of the same shipment.
7. Inland Waterways
Description: Utilizes rivers, canals, and lakes to transport goods. It is cost-effective for heavy
or bulk cargo but slower than road or rail.
Examples:
 Agriculture: Transporting grains or fertilizers through river barges.
 Construction: Moving sand or cement to construction sites near waterways.

8. Drone Transportation
Description: Emerging technology for small, time-sensitive deliveries over short distances,
especially in urban or remote areas.
Examples:
 Healthcare: Delivering emergency medical supplies like blood or vaccines to rural
areas.
 E-commerce: Amazon using drones for rapid delivery of lightweight products.

Factors Influencing the Choice of Transportation Mode

1. Cost: Rail and sea are cost-effective for bulk goods; air is expensive but faster.

2. Speed: Air transport is the fastest; sea and rail are slower but suitable for non-urgent
shipments.

3. Nature of Goods: Perishables need refrigerated trucks or air transport; heavy

machinery uses rail or sea.
4. Distance: Short distances favor road; long international routes favor sea or air.
5. Reliability: Pipelines and rail are reliable for continuous flow; roads are more prone
to delays.

Q6. Select various quality parameters those would be applicable for a readymade garment
manufacturer targeting low-income group of customers.
For a readymade garment manufacturer targeting low-income customers, quality parameters must
focus on affordability, durability, and functionality, ensuring value for money without
compromising essential quality aspects. Below are the specific quality parameters:
1. Durability

 Description: Garments should withstand regular use and washing without significant
wear or tear
  Application:
o Use sturdy fabrics like cotton blends that resist fraying and tearing.
 Examples:
1. Stitch strength to prevent seams from opening.
2. Fabrics that resist pilling, fraying, or fading over time.
2. Fabric Quality
 Description: Use cost-effective but reliable materials that are comfortable and
long-lasting.
 Application:
o Use standardized sizing for predictable fits.
 Examples:

1. Cotton-polyester blends for durability and affordability.

2. Wrinkle-resistant and low-maintenance fabrics.
3. Stitching and Seam Quality
 Description: Ensuring strong and neat stitching to handle daily wear.

 Application:
o Avoid fabrics prone to shrinking or fading after washing.
 Examples:

1. Double-stitching at high-stress areas like pockets and armholes.

2. Consistent stitch length to enhance appearance and strength.

4. Fit and Comfort

 Description: Garments must fit well and be comfortable for daily wear.

 Examples:

1. Proper sizing for a wide range of body types.

2. Non-restrictive designs that allow ease of movement.

5. Color Fastness
 Description: Ensuring colors do not fade or bleed during washing or usage.

 Examples:

1. Testing for resistance to sunlight exposure and detergent washing.

2. Avoiding low-quality dyes prone to fading.

6. Affordable Pricing
 Description: Balancing quality with low production costs to keep garments
affordable.
 Examples:
 1. Bulk sourcing of fabric and trims.
2. Simple designs that reduce manufacturing complexity.
7. Basic Functional Features

 Description: Include essential features that enhance usability.

 Examples:

1. Durable buttons and zippers that do not break easily.

2. Pockets that are functional and securely stitched.
8. Safety Standards

 Description: Ensure garments meet basic safety norms, especially for

children's clothing.

 Examples:

1. Avoid small detachable parts that could pose choking hazards.

2. Flame-resistant materials where applicable.
9. Low Maintenance Requirements
 Description: Garments should be easy to wash and maintain without
requiring special care.

 Examples:

1. Machine-washable fabrics that dry quickly.

2. Stain-resistant materials for longer usability.
10. Ethical Manufacturing Practices
 Description: Maintain ethical standards even while targeting low-income
customers.
 Examples:

1. Avoiding harmful chemicals in fabric processing.

2. Fair labor practices to ensure sustainability and trustworthiness.
Q7. Identify various functions of Production Planning & Control using suitable examples.

 Production Planning and Control (PPC) ensures that production processes are
efficient, cost-effective, and meet quality and delivery requirements. Here are the key
functions of PPC with specific examples:
1. Forecasting
Description: Estimating future demand for products to plan production levels.
Example:
 A bakery forecasts higher demand for cakes during festive seasons and adjusts its
production accordingly.
2. Capacity Planning
Description: Determining the production capacity required to meet demand.
Example:
 An automobile manufacturer plans additional shifts to produce 10,000 vehicles per
month during peak demand periods.
3. Production Scheduling

Description: Preparing a detailed timeline for production activities to ensure timely

completion.
Example:

 A garment factory schedules fabric cutting in the morning, stitching in the afternoon,
and quality checks in the evening to meet delivery deadlines.

4. Material Planning
Description: Ensuring the right materials are available at the right time in the required
quantities.
Example:
 A furniture manufacturer calculates the quantity of wood, nails, and paint needed to
produce 500 chairs.
5. Routing
Description: Defining the optimal sequence of operations or processes for production.
Example:
 A car assembly plant routes raw materials through stamping, welding, painting, and
final assembly stations in a specific order.
6. Loading and Scheduling
Description: Allocating work to machines and workers based on capacity and skill.
Example:
  A metal fabrication shop assigns a high-precision job to a CNC machine and simpler
tasks to manual operators.
7. Dispatching
Description: Issuing orders to start production based on schedules and availability of
resources.
Example:
 A pharmaceutical company issues a production order for a batch of paracetamol
tablets after receiving raw materials and quality clearance.
8. Monitoring and Progress Control
Description: Tracking production activities to ensure they are on schedule and resolving
issues promptly.
Example:
 A toy manufacturer uses a dashboard to monitor production rates and identifies
delays caused by a machine breakdown.
9. Quality Control

Description: Ensuring that products meet predefined quality standards throughout the
production process.
Example:

 A food processing plant conducts periodic checks for weight, packaging integrity, and
expiry labelling accuracy.

10. Inventory Control

Description: Managing raw materials, work-in-progress, and finished goods to avoid
overstocking or shortages.
Example:
 An electronics company maintains an optimal stock of microchips to prevent
production delays while avoiding excess inventory costs.
11. Maintenance of Records
Description: Keeping detailed records of production schedules, resource utilization, and
performance metrics.
Example:
 A printing company maintains records of daily output, machine usage hours, and raw
material consumption for future planning.
12. Cost Control
Description: Managing production costs by optimizing resource utilization and minimizing
waste.
Example:
 A plastic bottle manufacturer reduces costs by implementing a lean production
system, cutting down material wastage.
13. Coordination Between Departments
Description: Facilitating communication between production, procurement, and sales teams
to align goals.
Example:
 A textile mill coordinates with the sales department to prioritize production of high-
demand fabrics.
14. Delivery Follow-Up

Description: Ensuring timely delivery of finished goods to customers.

Example:

 A packaging company tracks shipments to ensure customers receive their orders

within agreed timelines.
Q8. Apply different product and process characteristics combinations to build the Process
Product Matrix.

The Process-Product Matrix is a strategic tool that aligns product characteristics (volume
and variety) with process characteristics (flexibility and efficiency). It helps organizations
choose the right production processes to maximize operational effectiveness. Below is a
detailed explanation of the combinations and their placement on the matrix:
Process Product Matrix: (Mahadevan Page 230 diagram)
1. Project Process
 Characteristics:
o Product: Low volume, high variety (customized, unique).

o Process: High flexibility, low standardization.

 Examples:
o Construction projects (e.g., bridges, buildings).
o Specialized machinery for custom client needs.
2. Job Shop Process

 Characteristics:
o Product: Low-to-medium volume, medium-to-high variety.
o Process: Flexible, equipment and labor configured for a wide range of tasks.
 Examples:
o Custom furniture manufacturing.

o Small-scale machine parts fabrication.

3. Batch Process
 Characteristics:
o Product: Medium volume, medium variety (grouped production runs).
o Process: Moderate flexibility, some standardization.

 Examples:
o Bakery producing batches of cakes, cookies, and bread.
o Pharmaceutical companies manufacturing batches of medicines.
4. Assembly Line Process
 Characteristics:

o Product: High volume, low variety (standardized products).

o Process: Sequential and repetitive, low flexibility.
 Examples:
o Automobile manufacturing.
o Electronics assembly (e.g., smartphones, TVs).
5. Continuous Process
 Characteristics:
 o Product: Very high volume, no variety (homogeneous products).
o Process: Highly standardized and automated, minimal flexibility.
 Examples:

o Oil refining.
o Cement production
Matrix Structure

Process Type Product Product Process Examples

Volume Variety Flexibility

Project Process Low High High Construction, R&D

prototypes

Job Shop Process Low to Medium to High Custom furniture,

Medium High machine tools

Batch Process Medium Medium Moderate Bakeries, apparel,

pharma

Assembly Line High Low Low Automobiles,

Process appliances

Continuous Very High None Minimal Oil, cement, steel

Process

Q9 "Location decision is of Strategic importance for organisations". Analyse this statement

using suitable examples,

The decision regarding the location of a business is strategically critical as it impacts

operational efficiency, cost management, customer satisfaction, and overall competitiveness.
Below is an analysis of why location decisions are of strategic importance, supported by
specific examples.
1. Proximity to Target Market

 Impact: Reduces delivery time, ensures customer accessibility, and improves service
quality.
 Example:
o Retail Chains: McDonald’s strategically selects high-footfall areas such as
malls or highways to maximize customer access.
o Hospitals: Super-specialty hospitals like Apollo locate near urban centers to
serve a large patient base efficiently.
2. Cost Optimization
 Impact: Influences operational costs, including rent, transportation, utilities, and
labour.
 Example:
o Manufacturing Plants: Tesla’s Gigafactory in Nevada leverages low land costs
and proximity to lithium mines, reducing raw material transportation costs.

o BPO Companies: Call centres are often located in countries like India or the
Philippines due to lower labour costs and infrastructure availability.

3. Access to Skilled Workforce

 Impact: Determines the availability of a skilled labor pool, crucial for industries
requiring specialized expertise.
 Example:
o Tech Companies: Google and Microsoft set up R&D centres in Bengaluru,
India, due to its reputation as a technology talent hub.
o Pharmaceutical Firms: Pfizer establishes plants near biotech research hubs
like Boston, USA, to recruit top talent.
4. Proximity to Suppliers and Raw Materials

 Impact: Reduces logistics costs and ensures timely availability of inputs.

 Example:
o Steel Plants: Tata Steel’s location in Jamshedpur, India, is strategically close to
iron ore mines, ensuring cost-effective raw material procurement.
o Food Processing Units: Nestlé sets up factories near agricultural zones to
source fresh produce, such as milk and coffee beans.
5. Transportation and Distribution Network
 Impact: Enhances supply chain efficiency and minimizes distribution delays.

 Example:
o E-commerce Warehouses: Amazon places fulfilment centres near major
urban areas and transport hubs for faster deliveries.
o Port-Based Industries: Oil refineries are often located near ports (e.g.,
Jamnagar, India) for efficient import/export logistics.
6. Regulatory and Tax Advantages
 Impact: Certain locations offer tax breaks, subsidies, or business-friendly policies.
 Example:

o IT Firms: Companies set up operations in Special Economic Zones (SEZs) in

India to benefit from tax exemptions.

o Automobile Plants: Hyundai’s plant in Tamil Nadu leverages state-level

incentives for the automotive industry.
7. Clustering and Competitive Advantage
 Impact: Operating in industrial clusters enhances access to shared infrastructure,
knowledge spillovers, and economies of scale.
 Example:
o Silicon Valley: A cluster of technology companies promotes collaboration and
innovation in California.
o Textile Hubs: Tirupur, India, is a cluster for knitwear production, benefiting
from shared supply chains.

8. Adaptability to Changing Market Trends

 Impact: Strategic location allows businesses to quickly adapt to market shifts or
expand into new regions.
 Example:
o Automotive Companies: Toyota invests in hybrid and electric vehicle
manufacturing facilities in regions with rising demand for green technologies.
o Retail Giants: Walmart establishes stores in semi-urban areas to cater to
growing demand in emerging markets.
Q10 Assembly lines are the most commonly used method in the mass production of car
manufacturing". Examine this statement to highlight the importance & advantages of
Assembly lines

Assembly Lines in Mass Production of Cars: Importance and Advantages

Assembly lines are the backbone of mass production in the automobile industry. They
enable manufacturers to produce cars efficiently, cost-effectively, and with consistent
quality. Here’s an examination of their importance and advantages:
Importance of Assembly Lines in Car Manufacturing
1. Efficiency: Assembly lines speed up production by reducing downtime. For example,
Henry Ford’s assembly line produced a car every 93 minutes, much faster than
previous methods.
2. Cost Reduction: The division of tasks reduces labor costs and material waste, making
cars cheaper to produce and sell.
3. Consistency: Standardized processes ensure the same quality for every car, with less
chance of mistakes.
4. Scalability: Assembly lines can be expanded to meet increased demand by adding
shifts or workers.

Advantages of Assembly Lines

o Faster Production: The assembly line allows manufacturers to produce cars
quickly, helping them meet high demand. For example, Toyota produced over
10 million vehicles in 2022 due to efficient assembly lines.

o Specialized Labor: Workers focus on specific tasks, becoming experts, which

improves speed and efficiency.
o Reduced Errors: The structured process and repetition reduce mistakes.
Automated machines also handle precise tasks like welding.
o Better Supply Chain: Parts arrive on time for production, reducing the need
for large inventories and cutting storage costs.
o Example:
1. Tesla's Gigafactories use advanced assembly lines with automation to
efficiently produce electric vehicles while maintaining high quality.
2. In summary, assembly lines are essential in car manufacturing because
they increase production speed, reduce costs, ensure consistent quality,
and allow for easy scaling.

Q11 A product is assembled in four stages i.e stage 1(10 minutes), stage 2(8 minutes),
stage 3(15 minutes) and stage 4(10 minutes) with operation timing given in the
bracket. The target is to produce 200 units in an eight-hour shift. Analyse the data to
list out the cycle time, no of workstations and bottleneck point.
Q12 List out the opportunities for a manufacturing organization to adopt six sigma practices.
Opportunities for a Manufacturing Organization to Adopt Six Sigma Practices
Six Sigma offers manufacturing organizations a framework to enhance quality, reduce waste,
and improve operational efficiency. Here are specific opportunities where Six Sigma can be
effectively applied:

1. Reducing Defect Rates

 Opportunity: Identify and eliminate defects in products to meet customer

expectations.

 Example: A car manufacturer uses Six Sigma tools to reduce the defect rate in engine
assembly, improving reliability.

2. Improving Process Efficiency

 Opportunity: Streamline production processes to reduce cycle time and operational
costs.
 Example: A textile company implements Six Sigma to shorten dyeing process times,
enhancing productivity.

3. Minimizing Waste

 Opportunity: Apply Lean Six Sigma principles to reduce material waste in

manufacturing.
 Example: A packaging company reduces plastic film wastage during roll cutting
operations.

4. Enhancing Supplier Quality Management

 Opportunity: Collaborate with suppliers to improve the quality of raw materials.
 Example: A smartphone manufacturer works with its chip supplier to reduce defects
in semiconductors.

5. Optimizing Equipment Performance

 Opportunity: Reduce equipment downtime and increase Overall Equipment
Effectiveness (OEE).
 Example: A steel manufacturer applies Six Sigma to analyze frequent machine
breakdowns and implement predictive maintenance.
6. Reducing Inventory Levels
 Opportunity: Balance inventory levels to minimize carrying costs and stockouts.
 Example: An electronics company uses Six Sigma to improve demand forecasting and
reduce excess inventory of components.

7. Enhancing Product Quality

 Opportunity: Develop robust quality control processes to meet customer
specifications consistently.
 Example: A pharmaceutical manufacturer adopts Six Sigma to reduce variability in
tablet weight during production.

8. Shortening Lead Times

 Opportunity: Identify bottlenecks and streamline workflows to improve delivery
times.
 Example: An automobile company reduces lead time for car manufacturing by
improving the assembly line layout.

9. Reducing Cost of Poor Quality (COPQ)

 Opportunity: Lower costs associated with rework, scrap, and warranty claims.
 Example: A home appliance manufacturer reduces warranty claim rates by improving
production accuracy.

10. Improving Customer Satisfaction

 Opportunity: Use Voice of the Customer (VOC) tools to align production quality with
customer expectations.

 Example: A beverage manufacturer applies Six Sigma to ensure uniform carbonation

levels in bottled drinks.
Q13 Dissect the supply chain system of a firm managing a chain of supermarkets. Make
your own assumptions.
Dissection of the Supply Chain System for a Supermarket Chain

Assumption:
A supermarket chain operates in urban and suburban areas, offering groceries, fresh
produce, dairy, packaged foods, and household essentials. The chain uses regional
distribution centers (RDCs) to streamline operations.
1. Supply Chain Components

1. Inbound Supply Chain:

o Focuses on sourcing raw materials and products from suppliers, including
fresh produce, packaged goods, and non-food items.
o Involves relationships with vendors, contracts, and procurement processes to
ensure steady supply.
2. In-House Supply Chain:
o Includes activities such as inventory management, stock allocation across
stores, and warehouse operations.
o Key metrics include stock turnover, storage costs, and replenishment rates.
3. Outbound Supply Chain:
o Refers to the delivery of goods to retail stores and ultimately to end
consumers.
o Includes transportation, delivery scheduling, and store-level distribution
strategies.

2. Major Flows in the Supply Chain

1. Product Flow:
o Forward movement: Goods from suppliers to warehouses, then to retail stores.
o Reverse flow: Handling customer returns and unsold stock.
2. Financial Flow:
o Includes payments to suppliers and funds from customers via sales.
o Managed through accounts receivable/payable and pricing strategies.
3. Information Flow:
o Data sharing about inventory levels, sales forecasts, and delivery schedules.
o Includes feedback loops between stores and central distribution hubs for real-
time adjustments.

3. Supply Chain Enablers

1. Facilities/Production:
o Centralized warehouses ensure economies of scale; smaller, regional
warehouses improve responsiveness to local store needs.
2. Inventory:
o Seasonal goods are managed using safety stock during peak demand periods.
o ABC classification ensures that high-value products receive tighter control.
3. Transportation:
o Efficiency is achieved by batch deliveries from centralized locations.
o Responsiveness can involve direct deliveries for urgent replenishment.
4. Information Technology:
o Real-time inventory tracking through ERP systems enhances decision-making.
o Integration of demand forecasting tools for optimal stock levels.
5. Sourcing:
o Strong supplier partnerships ensure reliable, cost-effective procurement.
o Emergency plans for alternate suppliers improve resilience.
 6. Pricing:
o Dynamic pricing based on demand trends (e.g., discounts for near-expiry
goods).
o Aligns with promotional campaigns and demand management.

4. Process Flow Types

1. Batch Process:
o Suitable for products like bakery items that need replenishment in batches.
o High seasonal demand, requiring quick restocking cycles.
2. Continuous Process:
o Used for staples like milk and bread, ensuring uninterrupted availability.
3. Assembly Line Processes:
o Relevant for in-house processing of fresh produce (e.g., cutting, packaging
fruits).

5. Challenges and Strategic Fit

1. Operational Challenges:
o Stockouts or overstocking due to incorrect demand forecasts.
o High inventory carrying costs for non-moving items.
2. Strategic Fit:
o Balancing responsiveness (e.g., fast delivery of perishables) and efficiency
(bulk sourcing for cost reduction).

Q14 Analyse critically the obstacles in implementing TQM?

Obstacles in Implementing TQM (Total Quality Management)

Implementing Total Quality Management (TQM) can face several obstacles that hinder its
effectiveness. Below is a critical analysis of these obstacles:

1. Lack of Management Commitment

 Description: Without full support and involvement from top management, TQM
initiatives fail to gain traction.
 Impact: Employees may perceive TQM as a passing trend rather than a long-term
strategy.
 Example: A manufacturing firm struggles to sustain TQM because leadership does
not allocate sufficient resources or actively promote it.
2. Resistance to Change
 Description: Employees may resist TQM due to fear of increased workload, loss of
autonomy, or uncertainty about new processes.
 Impact: Resistance slows down implementation and leads to non-compliance.
 Example: Workers in a textile company resist using quality checklists introduced
under TQM.

3. Inadequate Training and Awareness

 Description: Insufficient training on TQM principles and tools leaves employees ill-
equipped to adopt new practices.
 Impact: Poor understanding results in inconsistent application and suboptimal
results.
 Example: Staff in a logistics firm fail to use Six Sigma tools effectively due to
inadequate training.

4. Poor Communication

 Description: Lack of clear and consistent communication about TQM goals and
benefits leads to confusion and misalignment.

 Impact: Teams work in silos, undermining the collaborative spirit essential for TQM.
 Example: A healthcare organization fails to communicate the importance of patient
feedback in improving service quality.

5. Inadequate Resource Allocation

 Description: Insufficient financial, technological, or human resources delay or derail
TQM implementation.
 Impact: Quality initiatives remain incomplete or lack scale.

 Example: A small-scale enterprise cannot afford advanced quality monitoring tools,

limiting TQM impact.

6. Short-Term Focus
 Description: Organizations seeking immediate results may abandon TQM initiatives
prematurely due to their long-term nature.
 Impact: Failure to achieve sustained improvements or cultural change.
  Example: A retail chain discontinues TQM efforts after not seeing immediate cost
reductions.

7. Inconsistent Leadership Support Across Levels

 Description: Middle managers may not align with top management’s TQM vision,
leading to gaps in implementation.

 Impact: Employees receive mixed signals, reducing buy-in.

 Example: A manager in a food production unit prioritizes output over quality
standards mandated by TQM.

8. Ineffective Measurement Systems

 Description: Poorly designed metrics or lack of data analysis capabilities make it
difficult to track TQM progress.
 Impact: Organizations fail to identify areas for improvement or celebrate successes.
 Example: A factory does not monitor defect rates effectively, missing opportunities to
reduce waste.

9. Cultural Barriers
 Description: Organizational cultures resistant to accountability, transparency, or
teamwork hinder TQM adoption.
 Impact: Employees focus on individual tasks rather than collective quality
improvement.
 Example: In a traditional construction firm, workers resist cross-departmental
collaboration.

10. Overemphasis on Tools Over Philosophy

 Description: Organizations may focus excessively on TQM tools (e.g., Pareto charts,
fishbone diagrams) without embedding the underlying philosophy.

 Impact: Implementation becomes mechanical, losing its strategic essence.

 Example: A company conducts regular quality audits but fails to empower employees
to address root causes.
Q15 An electrical water heater manufacturer has appointed you to do an inventory control
exercise. Analyse the application of ABC model in this factory.
Application of ABC Model in an Electrical Water Heater Manufacturing Factory

1. A Category: High-Value, Critical Items (20% of Items, 70-80% of Value)

These are the most important items that have a significant impact on production and require
close attention and strict inventory control.
 Example Items:
o Key components like heating elements, thermostats, and high-quality metal
parts for water heater bodies.
o These are expensive and crucial for the final product, so even a small
disruption in their supply could delay production.
 Management Approach:
o Frequent monitoring: Constantly track inventory levels and use just-in-time
(JIT) ordering to avoid stockouts.
o Supplier Relationships: Work closely with suppliers to ensure timely
deliveries and negotiate bulk discounts or better terms.
o Low stock levels: Keep minimum inventory levels to reduce carrying costs,
but ensure quick reordering when necessary.
2. B Category: Moderate-Value, Moderately Important Items (30% of Items, 15-25% of
Value)

These items are important but less critical than A category items. They don't directly affect
production speed or quality as much but still need proper management.

 Example Items:
o Plastic covers, screws, and insulating materials that may not be as expensive
as the A category but are still essential for assembly.
o These are used in large quantities but do not have a large impact on the final
product's cost.
 Management Approach:
o Periodic Reviews: Inventory should be reviewed periodically (e.g., monthly)
to ensure sufficient stock.
o Order Regularly: Use an economic order quantity (EOQ) model to balance
ordering costs and inventory holding costs.
o Supplier Coordination: Ensure suppliers provide consistent delivery
schedules.
3. C Category: Low-Value, Non-Critical Items (50% of Items, 5-10% of Value)
These items are less critical and generally cheap. They can be high in volume but have a low
impact on production or product quality.
 Example Items:
o Packaging materials, labels, and minor fasteners. These are low-cost items
that are needed in large quantities but are not vital to the product's
functionality.
 Management Approach:
o Bulk Purchasing: Purchase in bulk to take advantage of economies of scale.

o Simple Inventory Control: Maintain less strict monitoring and order in larger
quantities to reduce transaction costs.

o Reorder at Set Intervals: These items can be reordered at fixed intervals

without the need for constant monitoring.
Summary of ABC Model Application:

Category Examples Inventory Control Focus Order Management

Heating elements, Frequent monitoring, tight Minimize stockouts,

A
thermostats, metal parts control, JIT inventory supplier relationships

Plastic covers, screws, Periodic reviews, economic Regular ordering,

B
insulating materials order quantity (EOQ) balanced stock levels

Simple control, bulk

Packaging materials, Bulk purchase, fixed
C purchasing, less frequent
labels, minor fasteners reorder intervals
ordering

Benefits of the ABC Model:

1. Focus on Critical Items: Ensures the most important components are available when
needed, minimizing production delays.
2. Cost Efficiency: Helps reduce unnecessary stockholding costs for low-value items.
3. Better Resource Allocation: Enables better management of resources by focusing
efforts on high-value, high-impact items.
Q16 A MNC is looking for setting of hospital for its employees and the surrounding
population of its factory location as a CSR activity. List the parameters it needs to consider
setting up the hospital?
When setting up a hospital as a CSR activity for employees and the surrounding community,
an MNC should consider the following key factors:
1. Location and Accessibility
 Ensure the hospital is close to the factory and easily accessible by road, with good
public transport options and parking.
2. Hospital Size and Capacity
 Estimate the number of people to be served and plan for future growth. The hospital
should be able to handle the current and future patient load.

3. Range of Medical Services

 Offer basic healthcare, preventive care, and emergency services. Include specialist
services like maternity, pediatrics, dental, and orthopedics if possible.
4. Quality of Healthcare
 Equip the hospital with modern medical equipment and hire skilled doctors, nurses,
and staff to ensure high-quality care.
5. Budget and Funding
 Plan for the initial investment in construction, equipment, and staff. Ensure the
hospital is financially sustainable in the long term.
6. Partnerships and Collaboration

 Work with local government and healthcare providers to meet regulations and
improve service delivery.

7. Healthcare Programs and Outreach

 Conduct health awareness programs for employees and the community, including
wellness initiatives and health camps.
8. Regulatory Compliance and Accreditation
 Ensure the hospital complies with local healthcare laws and obtains necessary
certifications to maintain quality standards.
9. Technology and Record Keeping
 Use electronic health records (EHR) for efficient data management and offer
telemedicine services for remote consultations.
10. Community Engagement and Impact
 Understand the health needs of the local population and ensure the hospital offers
affordable services to the community, especially vulnerable groups.
11. Environmental Impact and Sustainability
 Implement eco-friendly building practices and sustainable hospital operations,
including energy and waste management.

12. Emergency Preparedness

 Have plans in place for handling emergencies like natural disasters, accidents, or
health crises.
Q17 Where do you perceive that continuous flow system is better as compared to
intermittent flow systems? Justify with an example.
A Continuous Flow System is ideal for high-volume production of standardized products,
where the manufacturing process is highly streamlined and uninterrupted. In contrast, an
Intermittent Flow System is suitable for mid-volume, mid-variety production where
flexibility is required to cater to varying product designs.

Advantages of Continuous Flow Systems

1. Efficiency:
o Continuous flow systems minimize downtime and ensure steady output,
leading to higher efficiency.
o Example: Manufacturing of petrochemicals or steel, where processes like
smelting or refining must run continuously to optimize resource use(OSCM
PPT Student Copy 0…).
2. Cost-Effectiveness:
o Bulk production lowers per-unit costs due to economies of scale.
o Reduced changeovers and setups compared to intermittent systems.
3. Consistency:
o Ensures uniform quality and predictable output, essential for industries
producing standardized products like cement or pharmaceuticals.
4. Minimal Wastage:
o Since the process operates without interruptions, material wastage is
minimized, particularly in cases where stopping the process can result in
unusable material.
Advantages of Intermittent Flow Systems
1. Flexibility:
o Intermittent systems cater to a wider variety of products and customization.

o Example: Furniture manufacturing, where product designs and customer

demands frequently vary(OSCM PPT Student Copy 0…).

2. Adaptability to Demand Changes:

o Suited for seasonal or variable demand scenarios.
3. Lower Initial Investment:
o Requires less specialized machinery and infrastructure compared to
continuous systems.

Where Continuous Flow is Better

Continuous flow systems are preferable when:
1. High Volume and Standardization:
o Products are produced in large quantities without significant variations.
o Example: Cement Production: The kiln operates continuously to ensure
consistent clinker production. Stopping the process mid-way would disrupt
output and waste material(OSCM PPT Student Copy 0…).
2. Technology-Driven Processes:
o Processes that cannot be stopped without loss of material or damage to
equipment.

o Example: Petrochemical Refining: Once crude oil enters the refining process,
the system runs continuously to optimize yield.

3. Cost and Time Sensitivity:

o Industries where stopping and restarting processes is time-consuming and
expensive.
o Example: Glass Manufacturing: The molten glass must be processed
continuously to prevent solidification, ensuring smooth operation.

Justification with Example

In cement production, a continuous flow system is critical. The clinker-making process
requires a continuous supply of raw materials into the rotary kiln to maintain high
temperatures for efficient chemical reactions. Interruptions can cause temperature drops,
affecting the clinker quality and increasing energy costs for reheating. This makes continuous
systems significantly better than intermittent systems in such scenarios

Q18 Explain the reasons for organisations to carry inventory. Compare various types of
Inventories at different stages of operation.
Reasons for Organizations to Carry Inventory
Organizations maintain inventory to ensure smooth operations and meet customer demands
efficiently. The key reasons include:

1. Meet Customer Demand

 Purpose: Maintain stock to fulfill orders promptly, avoiding delays.

 Example: A supermarket keeps shelves stocked to meet daily consumer needs.

2. Buffer Against Uncertainty

 Purpose: Protect against variability in supply, demand, or production.

 Example: A clothing manufacturer stores extra raw fabric to handle unexpected

surges in demand.

3. Enable Economies of Scale

 Purpose: Purchase in bulk or produce in large quantities to reduce costs.
 Example: A factory orders steel in bulk to save on transportation and procurement
costs.

4. Support Production Flow

 Purpose: Ensure availability of raw materials or semi-finished goods to avoid
production halts.
 Example: An automobile plant maintains inventory of tires to ensure uninterrupted
assembly line operation.

5. Hedge Against Price Fluctuations

 Purpose: Protect against potential price increases of materials or components.
 Example: A bakery stocks wheat flour in anticipation of price hikes due to seasonal
shortages.
6. Enable Efficient Operations
 Purpose: Store work-in-progress (WIP) inventory to manage workflow between
production stages.
 Example: A toy manufacturer holds semi-finished plastic parts to ensure the
assembly stage operates smoothly.

Comparison of Various Types of Inventories

Type of Inventory Stage of Purpose Example

Operation

Raw Materials Input Stage Ensure uninterrupted Steel for

production by holding manufacturing cars.
essential inputs.

Work-in-Progress During Manage flow between Semi-assembled circuit

(WIP) Production production stages. boards in an
electronics factory.

Finished Goods Post-Production Meet customer demand Packaged smartphones

and prepare for ready for shipment.
distribution.

Maintenance, Supporting Facilitate smooth Spare machine parts in

Repair, and Operations factory maintenance a production plant.
Operations (MRO) and repairs.

Safety Stock Across Stages Buffer against Extra syringes stored in

uncertainties in a hospital.
demand or supply.

Transit Inventory Between Cover delays during Imported electronics in

Suppliers and transportation of transit to warehouses.
Operations materials or products.

Cycle Stock Across Stages Match regular Monthly batch of raw

production cycles with milk for a dairy plant.
demand cycles.

Seasonal Inventory Across Stages Prepare for seasonal Air conditioners

demand fluctuations. stocked before
summer season.
Q19 How do you determine the mode of Sourcing in Supply Chain Management? Interpret
this in case of a LED producer.
Determining the Mode of Sourcing in Supply Chain Management
The mode of sourcing depends on various factors such as cost, quality, lead time, supplier
reliability, and strategic priorities. Organizations typically evaluate these factors to choose
the most appropriate sourcing strategy:

Key Considerations for Sourcing Decisions

1. Product Complexity: Higher complexity may require specialized suppliers or in-house

production.

2. Cost Efficiency: Balancing between low-cost sourcing and high-quality output.

3. Supply Chain Risk: Mitigating risks of disruptions by diversifying suppliers.
4. Lead Time: Ensuring timely delivery to meet production schedules.
5. Volume Requirements: Bulk requirements favor economies of scale.
6. Strategic Importance: Critical components may require closer partnerships or in-
house sourcing.

Sourcing Modes and Their Application to a LED Producer

1. In-House Sourcing (Make)
o When Used:
 For critical components requiring high precision or proprietary
technology.
 When the organization wants complete control over quality and IP
protection.
o Example: Producing LED chips internally, as they are core to product
performance and differentiation.

o Benefit: Ensures superior quality and control.

2. Single Sourcing (Buy from One Supplier)

o When Used:
 For components that need a specific expertise or custom design.
 To build strong supplier relationships for long-term collaboration.
 o Example: Sourcing custom-built drivers for LED panels from a single, reliable
supplier.
o Benefit: Simplifies communication and ensures consistent quality.

3. Multiple Sourcing (Buy from Multiple Suppliers)

o When Used:
 To diversify risk and ensure supply continuity.
 When there is a high demand for standardized components.
o Example: Procuring standard casings or lenses from multiple suppliers to
ensure flexibility.
o Benefit: Mitigates supply chain risks and reduces dependency.

4. Global Sourcing (International Suppliers)

o When Used:
 To reduce costs by leveraging cheaper inputs from international
markets.
 To access advanced technologies or materials not available locally.
o Example: Importing rare earth materials for phosphors in LEDs from China.

o Benefit: Cost savings and access to global expertise.

5. Local Sourcing (Domestic Suppliers)

o When Used:
 To reduce lead times and transportation costs.

 To comply with local regulations or government incentives.

o Example: Procuring aluminum frames for LEDs from nearby manufacturers.
o Benefit: Supports local economy and minimizes delays.

Interpretation for a LED Producer

For a LED producer, the sourcing strategy will involve a mix of modes:
1. Critical Components (LED Chips): In-house or single sourcing to maintain quality and
technological edge.
 2. Standard Components (Frames, Casings): Multiple sourcing for cost efficiency and
risk diversification.
3. Specialized Components (Phosphors, Drivers): Global or single sourcing based on
supplier expertise.
4. Local Components (Packaging Materials): Local sourcing to reduce costs and lead
time.

Conclusion

The mode of sourcing for a LED producer depends on the strategic importance of
components, cost considerations, and supply chain risks. A balanced approach leveraging in-
house, local, and global sourcing ensures cost efficiency, quality, and reliability.

Q20 "Lean management is based on the premise that by identifying waste in any system
and removing it". Interpret (Support/Disapprove) this statement using suitable examples.
Interpretation of the Statement

Lean management indeed focuses on identifying and eliminating waste to improve

efficiency, reduce costs, and enhance value to customers. This statement is supported, as
waste reduction forms the core of lean principles.

1. Definition of Waste (Muda)

1. Waste Reduction: Lean management identifies seven types of waste, also known as
"muda." These are overproduction, waiting, transportation, over-processing,
inventory, motion, and defects. By eliminating these wastes, organizations can
improve efficiency, reduce costs, and increase value to customers.
Example: In a manufacturing plant, if there are long waiting times for materials or parts due
to poor scheduling, this waiting time is considered waste. By improving scheduling, the
company can reduce waiting times, increase productivity, and lower costs.
2. Increased Efficiency: Lean management improves the flow of processes by focusing
on value-added activities and eliminating unnecessary steps. This reduces delays,
minimizes resource usage, and improves the overall efficiency of operations.

Example: In a restaurant, lean management might involve analyzing the kitchen workflow. If
kitchen staff are moving back and forth unnecessarily to get ingredients, this is waste. By
reorganizing the kitchen layout, staff can reduce unnecessary movement, making the
process more efficient and faster.
3. Continuous Improvement (Kaizen): Lean management encourages continuous
improvement (Kaizen), where employees regularly look for ways to eliminate waste
 and improve processes. This creates a culture of efficiency and problem-solving
across all levels of the organization.
Example: In a software development company, lean principles could help identify
inefficiencies such as redundant coding steps or unclear communication, which waste
time and resources. By removing these wasteful practices, the team can deliver software
faster and with fewer defects.

Conclusion
Lean management, centered on identifying and removing waste, is a proven strategy for
enhancing operational efficiency and delivering customer value. Successful applications in
industries like automotive, healthcare, and retail validate the statement. However, its
effectiveness requires proper demand planning and commitment from all organizational
levels.
Q21 Rajesh is a supply chain consultant advising dairy plant. The plant is operational on
cooperative basis i.e. procuring milk from cattle owners, storing and processing the milk;
then distributing the end product to different markets. Determine various types of
information captured during the whole supply chain process for his discussion with top
management of the dairy plant.
Types of Information Captured in the Dairy Plant Supply Chain

Rajesh, as a supply chain consultant, should focus on the key types of information captured
at each stage of the dairy plant's supply chain for effective management and optimization:
1. Procurement (From Cattle Owners)
 Milk Quantity: Amount of milk collected from each supplier.
 Milk Quality: Quality checks like fat content and freshness to ensure only high-
quality milk is used.

 Supplier Details: Information on cattle owners, including location and reliability.

 Cost and Delivery Information: Costs and delivery schedules to manage expenses
and logistics.
2. Storage and Inventory Management
 Inventory Levels: Current stock of raw milk and finished products.
 Storage Conditions: Temperature and shelf life tracking to maintain freshness.
 Waste and Spoilage: Data on any wastage or spoilage during storage.

3. Processing
 Processing Time and Yield: Time taken and output of processed products (like butter,
cheese).
 Quality Control: Monitoring product quality during processing.
  Batch Information: Details of each production batch for quality and traceability.
 Efficiency: Machine performance, downtime, and production speed.
4. Distribution

 Delivery Schedules: Timing and frequency of deliveries to markets.

 Market Demand: Sales data and customer preferences for better planning.
 Logistics: Transport routes and vehicle usage for efficient delivery.
 Customer Feedback: Satisfaction, complaints, or returns to improve service.
5. Sales and Financial Data

 Sales Volumes: Sales data for various products across markets.

 Pricing and Profitability: Pricing strategies and cost analysis to ensure profitability.
 Financial Information: Revenue, production, and transportation costs for
profitability.
6. Supply Chain Coordination
 Supplier and Distributor Communication: Coordination with cattle owners and
distributors for smooth operations.
 Regulatory Compliance: Ensuring all legal and health regulations are met.

By tracking these data points, Rajesh can help the dairy plant improve its operations, reduce
waste, and ensure high-quality products, all while keeping costs in check.

Q22 How do you evaluate with differentiation the reorder point in a inventory control
system if it is having no safety stock to maintaining a level of safety stock? Your
recommendation should be substantiated with an example depicted in saw tooth curve.
Evaluating the Reorder Point in Inventory Control
The Reorder Point (ROP) is the inventory level at which a new order should be placed to
replenish stock before it runs out. This evaluation considers two scenarios:
1. Without Safety Stock
2. With Safety Stock
The ROP formula differs in each case:

o Without Safety Stock:

ROP=Demand during lead time
o With Safety Stock:
ROP=Demand during lead time + Safety Stock
Key Differences in Evaluation
1. Uncertainty Management:
o Without Safety Stock: Assumes lead time and demand are consistent, risking
stockouts during variability.
o With Safety Stock: Provides a buffer to handle unexpected delays or demand
spikes.

2. Stockout Risk:
o Without Safety Stock: Higher risk of stockouts, potentially disrupting
operations.
o With Safety Stock: Minimizes stockout risk, ensuring smoother operations.
3. Inventory Holding Cost:
o Without Safety Stock: Lower holding costs as extra stock is not maintained.
o With Safety Stock: Higher holding costs due to maintaining additional
inventory.

Example with Sawtooth Curve

Scenario Assumptions:
 Daily Demand: 10 units.
 Lead Time: 5 days.
 Safety Stock: 20 units (to cover demand variability).

1. Without Safety Stock

 ROP=Demand during lead time=10units/day×5days=50units.
 New order is placed when inventory level reaches 50 units.
 Risk: Any delay in lead time or unexpected demand increase will cause stockouts.

2. With Safety Stock

 ROP=Demand during lead time + Safety Stock=50units+20units=70units.
 New order is placed when inventory level reaches 70 units.
 Benefit: Safety stock ensures availability even if lead time extends or demand spikes.
Sawtooth Curve Representation
In a sawtooth inventory curve:
1. Without Safety Stock:

o The inventory level depletes linearly until it hits the ROP of 50 units, at which
point replenishment occurs.

o Any unexpected demand or delay causes the curve to drop below zero
(stockout).
2. With Safety Stock:
o The curve dips to 70 units (ROP) before replenishment.
o Safety stock (20 units) creates a buffer zone, preventing the curve from
reaching zero, even during variability.

Recommendations

For businesses with fluctuating demand or lead times, maintaining a level of safety stock is
advisable to avoid stockouts, enhance customer satisfaction, and maintain operational
continuity. However, safety stock levels should be optimized to balance service level
requirements with inventory holding costs.

Q23 A Supply Chain is made up of different flows. Determine these flows in Supply Chain
Management giving appropriate examples.
Flows in Supply Chain Management

A Supply Chain involves the movement of materials, information, and funds across various
stages, from raw material suppliers to end consumers. The primary flows in a supply chain
are:

1. Product Flow
Definition: The movement of goods and services from suppliers to manufacturers, through
distribution centers, and ultimately to customers.
Example:
 Automotive Industry: The flow of raw materials like steel to a car manufacturer,
followed by the finished vehicles moving through distribution centers to retail
dealers for customer sales.

2. Information Flow
Definition: The exchange of data and communication across the supply chain to enable
decision-making, inventory management, and coordination between supply chain partners.
Example:
 Retail Supply Chain: A retailer sends an order request to its suppliers based on real-
time sales data from POS (Point of Sale) systems. Suppliers use this data to replenish
stock in the stores.
 Supply Chain Visibility: Companies use systems like Enterprise Resource Planning
(ERP) and Advanced Planning and Scheduling (APS) systems to share forecasts, order
statuses, and inventory levels across suppliers and customers.

3. Financial Flow /Money Flow

Definition: The movement of money through the supply chain, including payments for goods
and services, supplier financing, and customer payments.
Example:
 Electronics Manufacturer: A customer orders a product, and after delivery, the
payment is made to the manufacturer. The manufacturer in turn pays for the raw
materials to suppliers.
 Payment Terms: Supplier and buyer agreements (such as Net 30 or Net 60) define the
financial flow and how long payments can be delayed.

 Summary of the Key Flows:

Flow Description Example

Product Flow Movement of materials from suppliers to Raw materials to
consumers, including returns. manufacturers, then to
retailers.
Money Flow Financial transactions across the supply Payments from retailers to
chain, including payments and credit manufacturers.
terms.
Information Sharing of data related to orders, Order processing and
Flow inventory, production schedules, and inventory management.
delivery status.

Q24 The Top management of a business organisation dealing in diversified business is

discussing the Layout plans for their upcoming manufacturing units dealing with ship
building. Recommend a suitable layouts for the same with proper justification.
Recommended Layout for Shipbuilding Manufacturing Unit
In the context of shipbuilding, where large-scale, complex, and customized products are
produced, the layout design plays a critical role in ensuring smooth production flow,
minimizing delays, and optimizing resource utilization. Given the unique nature of
shipbuilding, the following layout options are recommended:
For a manufacturing unit focused on shipbuilding, the most suitable layout is a Fixed Position
Layout. This recommendation is based on the specific nature of shipbuilding, which involves
assembling large, complex products that cannot be easily moved during the production
process.

Fixed Position Layout

Description:
 In a Fixed Position Layout, the product remains stationary at a fixed location, and
workers, equipment, and materials are brought to the product as needed.

 This layout is typically used for the construction of large, immobile products such as
ships, aircraft, and buildings.

Key Features:
1. Product-Specific:
o The ship being built remains in one location throughout the manufacturing
process.
o The large size and complexity of the ship make it impractical to move it
between workstations.
2. Worker and Equipment Movement:
o Skilled workers, specialized tools, and machinery are moved to the ship's
location as required.
3. Custom-Built Nature:

o Shipbuilding often involves highly customized designs and specifications,

making it impractical to follow a continuous or assembly-line process.

Justification for Fixed Position Layout

1. Large Product Size:
o Ships are massive structures that cannot be moved through production lines
or conventional layouts.
o The fixed position layout eliminates the need for costly and complex product
transportation systems(OSCM PPT Student Copy 0…).
2. Flexibility:
 o Allows flexibility in manufacturing to accommodate customized designs and
specifications for each ship.
o Workers and materials can be adjusted to meet specific requirements without
disrupting the overall workflow.
3. Resource Efficiency:
o Centralized production eliminates the need for moving partially completed
products, saving time and reducing wear on equipment.
4. Effective Use of Space:

o The layout is ideal for facilities where large open spaces can be allocated for
ship construction, ensuring efficient use of available area.

5. Coordination Across Teams:

o Encourages collaboration between multiple teams (e.g., welding, electrical,
and mechanical teams) as they work on the ship concurrently in its fixed
position.

Challenges and Mitigation

1. Challenge: High levels of coordination are required to avoid delays or bottlenecks.
o Mitigation: Use advanced project management tools to schedule and track
activities.
2. Challenge: Movement of heavy equipment and materials can be complex.

o Mitigation: Employ cranes, forklifts, and automated guided vehicles (AGVs) for
efficient material handling.
3. Challenge: Dependency on skilled labor.
o Mitigation: Invest in training and skill development programs to build a
capable workforce.

Comparison with Other Layouts

1. Process Layout:

o Suitable for small-scale production or when producing a variety of small

products.

o Not feasible for shipbuilding due to the scale and immobility of the product.
2. Product Layout:
o Best for mass production of standardized products.
 o Shipbuilding requires customization and is not conducive to an assembly-line
setup.
3. Cellular Layout:
o Effective for batch production but lacks the scalability and flexibility needed
for large products like ships.

Q25 Narendra is the supply chain manager discussing the supply chain of their sweets with
seasonal variations with his team. Elaborate what are the various flows and the different
stakeholders in the whole supply chain of a sweet manufacturing firm.
Supply Chain of a Sweet Manufacturing Firm with Seasonal Variations

Narendra, as the supply chain manager, needs to focus on the various flows and
stakeholders involved in the sweet manufacturing process, especially considering the impact
of seasonal variations. Below is an elaboration of the key flows and stakeholders in the
supply chain.

1. Flows in the Supply Chain

1.1 Product Flow
Definition: The movement of raw materials, semi-finished goods, and final products through
the supply chain.
 Example:
o Raw Materials: Sweets like chocolates, candies, or traditional sweets require
ingredients like sugar, milk, ghee, nuts, flavoring agents, etc. These are
sourced from suppliers.
1.2 Information Flow
Definition: The exchange of data and communication across various stages of the supply
chain.

 Example:
o : Retailers send sales data and stock levels to the manufacturer to help adjust
production plans based on seasonal demand (e.g., more sweets during
festivals).

1.3 Financial Flow

Definition: The movement of funds within the supply chain, including payments for raw
materials, labor costs, and customer payments.
 Example: Retailer Payments: After the sweets are sold, the payments from retailers
or direct consumers are processed.
1.4 Cash Flow
Definition: The flow of money within the organization, ensuring the timely availability of
funds for procurement, production, and distribution.
 Example:
 Retailers pay manufacturers for sweets delivered, and manufacturers pay suppliers
for raw materials.

2. Stakeholders in the Sweet Manufacturing Supply Chain

2.1 Suppliers
 Raw Material Suppliers: Provide key ingredients such as sugar, milk, nuts, flavorings,
and packaging materials.
o Example: Suppliers of sugar and ghee during the festival season, when
demand spikes.
o Impact of Seasonal Variation: Suppliers must be capable of increasing their
supply during peak seasons and maintaining quality to meet the higher
demand.
2.2 Manufacturers
 Production Plant: This includes the factory where raw materials are processed into
final products. It is responsible for quality control, packaging, and maintaining
production schedules.
o Example: The plant produces a variety of sweets like halwas, pedas, or barfis
and packages them in festive-themed packaging for increased sales during
festivals.
o Impact of Seasonal Variation: The plant may need to ramp up production
during festivals (e.g., Diwali or Christmas) and scale down during off-seasons.
Effective scheduling is crucial to manage both peak demand and regular
operations.
2.3 Distributors
 Wholesale Distributors: These entities buy in bulk from manufacturers and sell to
retailers. They play an important role in ensuring the sweets reach various markets,
especially during high demand periods.
o Example: A distributor delivering sweets to multiple cities or regions during
festivals.
o Impact of Seasonal Variation: Distributors may need to increase their delivery
frequency during peak seasons and have stock ready for the increased orders.
2.4 Retailers
  Retail Stores and Supermarkets: They stock and sell sweets to customers. They are
often the first point of contact for consumers.
o Example: A retail store selling sweets like chocolates, candies, and regional
delicacies.
o Impact of Seasonal Variation: Retailers will see a surge in demand during
specific times of the year (e.g., Diwali, Christmas), so they need to ensure
stock availability and plan promotions accordingly.
2.5 Consumers
 End Customers: The final buyers of sweets, who purchase directly from stores, online
platforms, or local sweet shops.
o Example: A family purchasing traditional sweets for a wedding or festive
occasion.
o Impact of Seasonal Variation: Customer preferences change seasonally, with
specific sweets being more popular during festivals or holidays.
2.6 Logistics and Transport Providers

 Transporters: They are responsible for moving raw materials, finished goods, and
inventory between suppliers, manufacturers, distributors, and retailers.
o Example: A transport company handling the movement of raw ingredients like
milk, sugar, and ghee to the manufacturing plant, and then delivering the
finished products to retailers.

o Impact of Seasonal Variation: Increased demand during peak seasons requires

enhanced logistics to ensure timely delivery and avoid stockouts.
2.7 Regulatory Authorities and Quality Control
 Government and Food Safety Regulators: Ensure that the sweets meet health and
safety standards, especially in food manufacturing.
o Example: Regulatory bodies ensuring that sweets are produced in compliance
with health regulations.
o Impact of Seasonal Variation: During high-demand seasons, there may be
increased scrutiny to maintain quality control and safety standards,
particularly when demand and production volumes spike.

Conclusion
For Narendra, the supply chain of a sweet manufacturing firm with seasonal variations is
characterized by various interdependent flows (product, information, financial, and cash)
and stakeholders (suppliers, manufacturers, distributors, retailers, consumers, transporters,
and regulatory authorities). The key challenge is to manage these flows effectively, especially
during peak seasons when demand surges, ensuring that each stakeholder in the supply
chain can meet the increased demand without compromising on quality or delivery
timelines.
Q26 A quality management is critical in a service sector. Discuss the appropriate quality
approach for a hospital chain making suitable assumptions.
Quality Management Approach for a Hospital Chain
In the service sector, particularly in the healthcare industry, quality management is crucial as
it directly impacts patient safety, satisfaction, and the overall success of the organization. For
a hospital chain, managing quality involves not only delivering medical services efficiently
but also ensuring an excellent patient experience, regulatory compliance, and continuous
improvement. Below is a detailed discussion of the appropriate quality management
approach for a hospital chain:

1. Key Quality Management Approaches for a Hospital Chain

1. . Total Quality Management (TQM)
Description:
TQM emphasizes an organization-wide effort to improve processes, foster employee
involvement, and achieve customer satisfaction.
Key Elements for a Hospital Chain:
 Patient-Centered Care: Understanding patient needs and designing services around
them.

 Employee Involvement: Empowering healthcare staff through training, teamwork,

and feedback systems.
 Continuous Improvement: Regularly evaluating and improving processes such as
patient registration, diagnostics, and discharge.

Example: Implementing patient feedback systems to identify service gaps and improve
processes such as wait times or billing accuracy(OSCM PPT Student Copy 0…).

2. Six Sigma
Description:
Six Sigma focuses on reducing defects and variability in processes through a data-driven
approach.
Implementation for a Hospital Chain:
 Define: Identify key problem areas, such as long patient wait times or errors in
diagnostic reports.
 Measure: Collect data on wait times, service delays, and error rates.
  Analyze: Use root cause analysis and statistical tools to pinpoint causes.
 Improve: Develop and implement solutions, such as better scheduling or automation
of routine tasks.
 Control: Monitor processes to ensure sustained improvements.
Example: A Six Sigma project to reduce surgery scheduling delays by streamlining operating
room availability and coordination.

3. Lean Management
Description:
Lean management identifies and eliminates waste (non-value-added activities) to improve
efficiency and enhance service delivery.
Application in Hospitals:
 Value-Added Activities: Patient diagnosis, treatment, and counseling.
 Non-Value-Added Activities: Duplicate paperwork, unnecessary administrative steps,
and excessive inventory of medical supplies.
 Implementation:

o Streamlining patient flow from admission to discharge.

o Reducing waiting times through better staff and resource allocation.
Example: Using Lean principles to redesign emergency department workflows, reducing
patient wait times and improving triage efficiency(OSCM PPT Student Copy 0…).

Quality Standards and Compliance

 ISO 9001 Certification: Ensures the hospital adheres to internationally recognized
quality management practices.
 Healthcare-Specific Standards: Compliance with guidelines like NABH (National
Accreditation Board for Hospitals) or JCI (Joint Commission International).

Benefits of the Approach

1. Enhanced Patient Satisfaction: Patient feedback and continuous improvement
ensure better service quality.
2. Improved Safety and Compliance: Six Sigma reduces errors, ensuring adherence to
safety protocols.
3. Operational Efficiency: Lean principles streamline processes, reducing delays and
costs.
 4. Employee Engagement: Involving staff in quality initiatives boosts morale and
accountability.

Challenges and Mitigation

1. Resistance to Change:

o Mitigation: Conduct training and involve employees in decision-making.

2. Cost of Implementation:
o Mitigation: Start with pilot projects to demonstrate ROI before scaling.
3. Maintaining Consistency Across Locations:
o Mitigation: Standardize processes and conduct regular audits.

Conclusion
A combination of TQM, Six Sigma, and Lean Management provides a robust quality
management framework for a hospital chain. By focusing on patient-centered care, reducing
variability, and eliminating waste, the hospital can achieve higher service quality, operational
efficiency, and patient satisfaction(OSCM PPT Student Copy 0…).

Q27 There is an existing automobile manufacturing company. It has found that e vehicle
market is growing, and a lot of government incentive is available for the same. It decides
to venture into this segment of business. Construct a suitable layout for this new
manufacturing plant. Make suitable assumptions to support your decision.
EV Manufacturing Plant Layout Design
As the company enters the electric vehicle (EV) market, it’s crucial to design a manufacturing
plant layout that supports the new technology, battery assembly, and vehicle production
while optimizing efficiency.

Assumptions:
1. Product Range: The plant will produce entry-level and mid-range EVs.

2. Production Capacity: Initial capacity of 10,000 vehicles per year.

3. Technology: The plant will integrate advanced machinery for battery production and
EV assembly.
4. Size: The plant is about 150,000 square feet.
5. Government Incentives: The plant will benefit from incentives for clean energy
manufacturing.
Product Layout:
 Description: A product layout arranges equipment and workstations in the sequence
of the production process, with materials moving in a continuous flow along the line.
 Justification: Since the company is producing electric vehicles in a high-volume
setting, a product layout is ideal for efficient assembly of vehicles, particularly for the
standardization of components like batteries and motors.
 Key Stages:
o Assembly Line for EV Frame: Initial stages would involve assembly of the
vehicle's chassis, body, and frame.
o Battery Assembly Line: A separate line for assembling and testing battery
packs for EVs.

o Motor and Powertrain Installation: Dedicated stations for installing electric

motors and related systems.

o Final Assembly: A line for final vehicle assembly, including installation of

electronics, interior, and exterior parts.

 Example: The EV model assembly lines (e.g., for sedans, SUVs) can follow the same
sequence but may diverge for specific parts like body design or interior.
2. Cellular Layout:
 Description: In a cellular layout, the production area is divided into "cells" based on
product families. Each cell focuses on producing a set of similar products or
components.
 Justification: Since EVs have specific components like battery packs and electric
motors that may vary based on model, grouping related parts into cells helps
improve flexibility and reduces setup time for different models.
 Key Features:
o Battery Manufacturing Cell: A dedicated area for producing and assembling
battery packs for various EV models.
o Motor Assembly Cell: An area for manufacturing and assembling electric
motors and powertrains.
o Body Assembly Cell: A cell for assembling and finishing the vehicle body,
customized to different models.
o Final Assembly Cell: A flexible assembly area where the vehicle’s final
components (such as seats, doors, and electronics) are installed.
 Example: Different cells can handle parts and sub-assemblies for multiple EV models
to improve efficiency and reduce changeover times.

Conclusion:
A Product Layout would work well for high-volume production of electric vehicles, ensuring
smooth flow and efficiency in manufacturing, particularly for shared components like
batteries and motors. Alternatively, a Cellular Layout would be beneficial for providing
flexibility and optimizing production of different EV models, particularly when customization
is needed. A hybrid approach can also be considered, with specific assembly lines for core
components and flexible cells for varying models. This layout will help meet the growing
demand for electric vehicles while ensuring cost-effective and efficient operations.

Q28 A conglomerate is planning to enter FMCG sector. Propose a suitable Inventory

Control method for this organisation dealing in a variety of FMCG products.

Proposed Inventory Control Method for an FMCG Organization

An FMCG company manages a diverse range of products with varying demand patterns,
shelf lives, and profit margins. A hybrid inventory control approach combining the ABC
Analysis and FSN Analysis methods is recommended for effective management.

1. ABC Analysis (Always Better Control)

Objective: Manage inventory based on product value and profitability.
 Category A: High-value items with lower volumes (e.g., premium or niche products).

o Control Measures:
 Strict monitoring and stock optimization.
 Frequent reviews and Just-in-Time (JIT) replenishment.
o Example: High-cost baby care products or cosmetics.
 Category B: Moderate-value items with average demand (e.g., mid-tier personal care
products).
o Control Measures:
 Periodic monitoring with safety stock.
o Example: Mid-range shampoos or soaps.
 Category C: Low-value items with high volumes (e.g., basic grocery products).
o Control Measures:
 Bulk stocking to reduce ordering costs.

o Example: Salt, sugar, or biscuits.

2. FSN Analysis (Fast, Slow, and Non-moving Items)

Objective: Manage inventory based on movement speed.
 Fast-moving items: Products with high turnover (e.g., daily essentials).
o Control Measures:

 Stock adequate quantities at multiple locations.

 Use demand forecasting to ensure availability.
o Example: Milk, bread, and snacks.
 Slow-moving items: Items with moderate sales velocity (e.g., seasonal products).
o Control Measures:

 Maintain low stock levels to reduce holding costs.

 Implement discounts to boost sales if inventory stagnates.
o Example: Seasonal beverages or festive items.
 Non-moving items: Obsolete or rarely sold items (e.g., discontinued products).
o Control Measures:

 Liquidate or remove from inventory promptly.

o Example: Outdated product variants.

3. Combined Approach: ABC-FSN Matrix

Purpose: Prioritize inventory control based on both value and movement speed.

 High-value, fast-moving (A-F): Strict monitoring and frequent restocking.

 Low-value, slow-moving (C-S): Minimize stock levels and clear out excess inventory.
 Moderate-value, non-moving (B-N): Evaluate the need for continued stocking.

4. Additional Inventory Control Measures:

1. Demand Forecasting: Use predictive analytics to anticipate demand patterns.

2. Automation: Leverage inventory management software for real-time tracking.
3. Safety Stock: Maintain buffer stock for critical fast-moving items.
4. FIFO Method: Adopt "First In, First Out" to reduce the risk of spoilage for perishable
goods.

Conclusion:
The ABC-FSN hybrid approach ensures optimal inventory management by balancing value,
demand, and movement patterns. This strategy minimizes costs, prevents overstocking or
shortages, and enhances overall efficiency in managing diverse FMCG products.

Q29 You are a consultant helping various organisations in mapping their Supply Chains.
Design a supply chain of a product for one of your clients. Choose any product for this
mapping and elaborate the various flows.
Supply Chain Design for Bottled Water
Assumptions:
 The product is a 500 ml bottled water.

 The company aims for mass production and distribution across urban and rural areas.

Supply Chain Mapping

1. Supplier Flow:

o Raw Materials: Plastic for bottles, caps, and labels, sourced from suppliers.
o Water Source: Groundwater or purified water sourced locally.
o Flow: Suppliers deliver materials to the manufacturing plant.

2. Manufacturing Flow:
o Processes:
 Water purification (filtration, UV treatment).
 Bottle manufacturing and filling.
 Labeling and packaging.

o Flow: Finished goods are stored at the factory’s distribution warehouse.

3. Smartphone Assembly
 Manufacturers:
o Assembly Plants: The components (chips, screens, batteries) arrive at the
smartphone assembly plant, where final assembly takes place.
o Justification: Assembly is a key stage where components are integrated into
the finished product. Companies like Foxconn or Samsung handle large-scale
smartphone assembly.
 Flow:
o Components (chips, screens, batteries) are transported to the assembly line.
 o Assembly involves the installation of components, software loading, and
testing of the smartphone.
o Finished smartphones are packaged and prepared for distribution.
4. Distribution and Warehousing
 Distributors:

o Logistics Providers: The finished smartphones are stored in warehouses,

often close to key markets (e.g., regional distribution centers).
o Retailers: Smartphones are distributed to various retailers (online or physical
stores) such as Amazon, Best Buy, or telecom service providers.
 Flow:
o Packaged smartphones are shipped to regional warehouses.
o From warehouses, products are distributed to retailers or customers based on
demand forecasts and orders.
o Retailers or e-commerce platforms list the smartphones for sale to end
customers.
5. Retail and Customer Delivery

 Retailers:
o Online Retailers: E-commerce platforms like Amazon, Flipkart, or the brand’s
own website sell the smartphones.
o Physical Retail Stores: Mobile carriers or electronics stores stock the
smartphones for sale.
 Flow:
o Customers place orders through physical stores or online.
o Smartphones are delivered directly to customers through last-mile logistics
(e.g., couriers, delivery trucks).
o End customers receive the smartphone and use it for personal or business
purposes.
6. After-Sales Service and Returns

 Service Centers:
o Repair Centers: These provide repairs or servicing for damaged or
malfunctioning smartphones.
o Refurbishing: Old or returned smartphones can be refurbished and sold as
second-hand products.
 o Justification: After-sales service is crucial for customer satisfaction and brand
loyalty.
 Flow:
o Defective or used phones are sent back to the service center for repairs or
recycling.
o Repaired or refurbished smartphones can be resold in secondary markets.

Key Flows in the Supply Chain:

1. Material Flow:
o Movement of raw materials (bottle, caps, water) and finished goods through
the chain.
2. Information Flow:
o Demand forecasts, orders, and feedback flow between retailers, distributors,
and manufacturers.
3. Financial Flow:

o Payments from customers flow upstream; manufacturers pay suppliers for

raw materials.
4. Reverse Flow:
o Defective or damaged goods are returned to the manufacturer or recycler.

Conclusion:

This supply chain ensures the timely availability of bottled water while managing raw
material flow, distribution, and customer satisfaction effectively. Each flow is crucial for cost
efficiency and meeting demand.
Q30 Any typical business is having lot of problems to tackle. Solve any business-related
problem using the DMAIC approach giving suitable examples.

Solving a Business Problem Using the DMAIC Approach

Problem: A restaurant is facing frequent delays in order delivery, leading to customer
complaints.

DMAIC Steps
1. Define:
o Objective: Reduce order delivery time by 20%.
 o Problem: Orders take 45 minutes on average, exceeding the expected 30-
minute standard.
2. Measure:
o Data collected on order processing times:
 Order placement to kitchen: 10 minutes.

 Preparation time: 25 minutes.

 Delivery to table: 10 minutes.
3. Analyze:
o Findings:
 Delay in sending orders to the kitchen.

 Bottleneck during peak hours in food preparation.

o Root Causes: Inefficient communication system and lack of staff during busy
hours.
4. Improve:
o Actions:
 Install an automated order management system to send orders to the
kitchen instantly.
 Hire additional staff for peak hours.

 Pre-prepare popular items to save time.

5. Control:
o Steps Taken:
 Regularly monitor order processing times.
 Conduct weekly reviews to identify new delays.

 Train staff to handle peak-hour workflows efficiently.

Result:
Order delivery time reduced to 28 minutes, improving customer satisfaction and increasing
repeat visits by 15%.
Conclusion: The DMAIC approach helped identify and eliminate bottlenecks, ensuring
consistent improvements in service efficiency.
Q31 The final pricing of any product is an outcome of different SCM components.
Elaborate the pricing calculations of a ceiling fan. Make your own assumptions.
Pricing Calculation of a Ceiling Fan
Assumptions:
 The ceiling fan is manufactured and sold at a mass scale.

 Annual production capacity: 100,000 units.

Supply Chain Components in Pricing

1. Raw Material Costs (40%):
o Steel, aluminum, plastic, copper wires, and packaging materials.

o Example: Each fan requires ₹500 worth of raw materials.

Cost: ₹500 per unit.
2. Manufacturing Costs (20%):
o Labor, machinery, electricity, and factory overheads.
o Example: Factory overhead and assembly costs ₹250 per fan.
Cost: ₹250 per unit.
3. Logistics Costs (10%):
o Transportation, warehousing, and distribution to retailers.

o Example: Transportation and storage costs ₹100 per fan.

Cost: ₹100 per unit.

4. Marketing and Sales Costs (10%):

o Advertising, promotions, and retailer margins.
o Example: Marketing campaign costs ₹50 per fan.
Cost: ₹50 per unit.
5. Taxes and Compliance (5%):
o GST and other government levies.

o Example: Taxes add ₹50 per fan.

Cost: ₹50 per unit.

6. Profit Margin (15%):

o Desired profit added to cover risks and business growth.
o Example: Profit margin is ₹150 per fan.
Cost: ₹150 per unit.
Final Price Calculation:
 Total Cost: ₹500 + ₹250 + ₹100 + ₹50 + ₹50 = ₹950

 Profit Margin: ₹150

 Selling Price: ₹950 + ₹150 = ₹1,100 per fan

Conclusion:
The ceiling fan price reflects material costs, manufacturing, logistics, taxes, marketing, and
profit margin, ensuring the company covers expenses and earns profit while remaining
competitive.
Q32 An air conditioning manufacturing unit wants to outsource its service operation as it
decides to focus on quality manufacturing. You as a consultant need to develop a system
to decide potential partners for the same. Propose a system appropriate to the business.
To help an air conditioning manufacturing unit outsource its service operations, here’s a
streamlined approach to selecting the right partner:
1. Define Key Requirements:

First, the company must define what it needs from the outsourcing partner:
 Service Quality: High standards in installation, maintenance, and repair.
 Timeliness: Quick service response times.
 Cost-effectiveness: Competitive pricing.
 Customer Support: Efficient handling of customer issues.

 Technical Expertise: Knowledge of air conditioning systems.

 Geographic Reach: Ability to service all areas where the products are sold.
2. Selection Criteria:
Evaluate potential partners based on the following:
 Experience: Partner must have experience in servicing HVAC products. Example: A
partner with 5+ years in the industry is more reliable.
 Certifications: Ensure the partner has relevant certifications, such as ISO or HVAC-
specific qualifications.
 Reputation: Look for positive reviews, testimonials, and references from other
clients.
 Technical Capabilities: The partner should have trained staff and appropriate service
tools (e.g., advanced diagnostic equipment).
  Service Level Agreements (SLAs): Set clear performance expectations for response
and resolution times.
3. Scoring Model:
Develop a scoring system to rank potential partners based on criteria like experience,
certifications, technical capabilities, and SLAs. For example:

Criteria Weight (%) Partner 1 Partner 2 Partner 3

Experience 20% 18 16 20

Certifications 15% 12 13 14

Reputation 20% 18 17 16

Technical Capabilities 25% 22 23 20

SLAs 20% 20 18 19

Total Score 100% 90 87 89

The highest-scoring partner should be selected.

4. Site Visits and Interviews:

 Site Visits: Visit potential partners’ facilities to check infrastructure and operational
standards.
 Interviews: Meet with key staff to assess their skills and alignment with the
company's values.
5. Pilot Phase:
Before committing, run a trial period with the selected partner:
 Start with a limited scope, such as installations in a specific region.

 Evaluate: Monitor service quality, customer feedback, and operational efficiency

during the trial.

6. Contract and Agreement:

 Define clear terms in the contract:
o Scope of Services: Specify what services will be outsourced (installation,
maintenance, repairs).
o Pricing: Agree on service fees and payment terms.
o KPIs: Set performance targets like service response time and first-time fix
rates.
7. Monitor and Review:
 Continuously track the partner’s performance through customer feedback and
service reports.
 Regularly review the partnership and make adjustments as necessary based on
performance.
Conclusion:

By following this structured approach—defining requirements, setting clear criteria,

evaluating partners, running a pilot phase, and monitoring performance—the air
conditioning manufacturing unit can select a reliable service partner that will ensure high-
quality service while allowing the company to focus on its core manufacturing processes.