Cover Story: Performance Analysis Manufacturing Systems
Crack It 2 Meet the winners
____ X-Ops Conducts OPSIE V
Opsession January Issue This is the eighth issue from Volume two of Opsession, the monthly newsletter of X-Ops. The newsletter was introduced last year by X-Ops with the intention of covering all the activities and events that took place during the span of a month.
Around the World with Operations Management
Xavier Institute of Management, Bhubaneswar Volume#2
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Around the World with Operations Management For A Bigger Share of the Pie The online food and hyperlocal grocery business in India are in troubled water. The only exciting thing is fashion, food and grocery are the next big thing in the e-commerce space. The place is already crowded by full-stack players like Fasoos, Eatfresh.com, aggregators (Zomato, foodpanda) and home cooked or chef-curated meal providers (the likes of Holachef). Online grocery space like Grofers, is grappling with some serious "operation issues", and Localbanya and Dazo that have all but closed down. Many are struggling to get the right mix of people, processes and product in place to ensure sustainable growth. The biggest issue most players are grappling with is “last-mile delivery”. Managing logistics is tedious and complicated. Most players in the industry are hesitant to control this area and end up getting a third party on board, which has its own set of complications. The two most important things for an average consumer is the quality of food and timely delivery. Majority of online food aggregators have failed as they don’t exercise control over the quality of food. But Grofers, had to suspend delivery in certain locations, which believes in good product backed by unmatchable customer
service are key to building a successful business. The challenge is to set up robust operations and get TAT under an hour. Also, most merchants are not techsavvy. Grofers has integrated merchants with technology-enabled point of sales. It Sampat Padhi and Anuja Verma gives the company live feed of the supply and helps plug gaps on a real-time basis. Tie breaker is delivery cost that is where one makes or breaks the unit economics of the delivery model. All of this requires innovation and oodles of creativity and innovation, but there is no shortage of that in start-up land.
ISM says U.S. Manufacturing in slump In its Manufacturing Report on Business, ISM said that the PMI, its index to measure growth, was 48.2 in January (a reading of 50 or higher indicates growth), which was 0.2 percent ahead of December. ISM noted the overall economy has seen growth for 80 months in a row. While assessing the inventory data, both the manufacturing/industrial and consumer sides, ISM chair manager said that happenings are more strategybased than seasonal-based.
With lukewarm business due to low oil prices, ISM wanted to hold down inventories to a very lean, if not artificially lean, level. Business are waiting for new customer orders. ISM said that of the 18 manufacturing sectors contributing to the report, only eight reported growth in January, including Textile Mills; Wood Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Furniture & Related Products; Computer & Electronic Products; Machinery; and Electrical Equipment, Appliances & Components. All the above scenarios are after effects of China economy’s impact on global economy.
Takata gives headaches to Mazda On automobiles recalling spree, Mazda joins in as it will recall 19,000 examples of the 2004–2006 B-Series pickup. The pickups contain Takata-sourced driver's side airbag inflators that could rupture in a crash. The spray of metal shrapnel could injure or even kill occupants. None reported in the Mazda pickups. However, a rupturing airbag inflator killed the driver in a Ford Ranger, which is identical to the B-Series. With Takata lacking the processes to tackle the Air-bag defects, Mazda will replace the driver's side inflator. Mazda already recalled 442,266 driver's side Takata inflators and 416,475 of them on the passenger's side. The affected models included the 2003-2008Mazda6, 20042006 B-Series, 2006-2007 Mazdaspeed6, 2004-2008 RX-8, and some examples of the 2004 MPV. Ford also issued an expanded safety campaign for 391,394 examples of the 2004-2006 Ranger.
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Performance Analysis of Manufacturing Systems Make-to-Order (MTO) strategy is to build every product according to the likes and requirements of each and every customer individually. With the strategy of Make-to-Order (MTO) the products are not produced until the actual order comes in. MTO enterprise accepts only backorders and doesn’t keep any inventory for finished goods. Product and process designs are made to customer specifications, after the order is placed. This reduces the costs of stock and requires short lead times in production. Forecasts are always wrong! To buffer mistakes in forecasting, organizations store a lot of inventory in their warehouses and in their production pipelines. If it would be possible to be independent from forecasts just by reacting fast on actual demand, inventory would become obsolete. Days of Inventory represents a good indicator for inventory level change, since it accounts for cost and sales fluctuations. Depending on availability within each case, inventory data is segmented in: Total Inventory, Raw Materials Inventory, Work in Progress Inventory and Finished Goods Inventory. All four of those variables are utilized to calculate the days of inventory for each type to detect changes in inventory levels across any part of the production process. For products that are exactly what the customer wants, companies can charge more than for products that were designed to attract a large mass of people, but do not match the preferences of particular individuals. This kind of logic creates a problem especially in computer and automobile companies. New cars are often discounted a lot many times before they leave
the lot of retailers, just because they were not exactly what the customer wanted. With customized products, the car industry hopes to decrease the practice of discounting and sustain prices at higher levels. After restructuring their supply chains for MTO processes, manufacturers expect to reduce costs for order processing and communication among supply chain members. An overall increase of operating efficiency and accuracy is supposed to come along with the adoption of MTO principles. Without any doubt, there are more goals involved with the MTO transformation, but the goals mentioned above were consistently stated among companies applying MTO. Reductions in manufacturing throughput time has several advantages and can produce huge amount of benefits, including lower work-in-process and finished goods inventory levels, improved quality, lower costs, and less forecasting error (as forecasts are for shorter time horizons). More importantly, reductions in manufacturing throughput time makes the process more flexible and reduce the time required to respond to customer orders. This can be vital to the survival and profitability of numerous firms, especially those experiencing increased market pressures for shorter delivery lead times of customized product. As we can observe, the literature analysis does not allow us to exhaustively
describe managerial practices actually employed by firms for capacity and delivery lead-time management and the main criticalities in field. Whereas much of the literature on lead time reduction had been largely anecdotal and exploratory. The lack of clarity in a large portion of the lead time reduction literature, concerning such fundamental aspects of lead time reduction. Customer delivery time is the time between when the customer places an order and the customer receives the order. Production lead time is the total processing time of converting raw materials to finished goods and the delivery time from the manufacturer to the customer. Intuitively, production lead time can be viewed as an internal performance measure that monitors the efficiency of the production control system. On the other hand, customer delivery time can be viewed as an external performance measure because it represents the manufacturer‘s commitment on customer satisfaction and it is the performance that the customer really cares about. Of course, shorter production lead time increases the service level to the customer, which leads to capturing a greater market share. But this may lead to a higher supply chain cost. In some cases, the order handling on the front end and/or shipment and transportation at the other end may exceed actual production time significantly. In every situation, it is important to identify the opportunities and focus on improvement efforts which are most likely to deliver practical results.
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Crack it Crack It is one of the most awaited events by X-Ops as it gives the opportunity to students to develop their competencies in order to not just compete well in various case study competitions but also win them. This was the second session of Crack It which was conducted in a befitting manner in both XIMB and XUB campuses. Crack It aims at providing an edge to the students over their competitors from other colleges and in order to provide them a good exposure we had invited the present campus winners of Deloitte Maverick and Mahindra War Room to talk about what it takes to win such competitions. Though the crux remains the same, but different competitions differ in their span, the areas on which the judges focus more and regarding the expectations from the teams participated. The speakers for the event provided the audience a good walkthrough for both these competitions and provided ample guidelines to improve their work and push it more towards excellence.
If we talk about the two competitions in particular, Deloitte Maverick looks more into the analysis presented, provides more cases on Mergers & Acquisitions, and checks the team on the information presented and their recommendations. On the other hand, MWR with a time span of two months is more focused to know about the team’s primary research, provides a large number of cases to choose from and is more oriented to look into immediate solutions. The speakers guided the students through all the phases, right from forming the right team and selecting the right case to the final presentation, what information to include, how lengthy it should be, what tools should be used and what kind of recommendations to be made. They also provided enough information on the market analysis, strategic analysis, financial analysis, valuation and operational assessment. In a nutshell, we can say that in order to win a competition forming a team
The Teams that had won ‌ Deloitte Maverick - Swagat Acharya, Kundan Mahapatra and Ashish Dwivedi
Mahindra War Room - Sourav Panda, Nihar Gosalia, Vaibhav Jain and Shruti Ray
Steelathon- Ipsita Joshi, Mahamedha Sahoo, Shreya Subrata, Subhashree Pattanaik
with a good mix of people is the most important thing. Also, we need to strategically choose a case and should be able to apply the concepts learned and the knowledge acquired so far in order to provide a complete analysis and do a good presentation. Crack It proved to be a success with the number of people turned out to attend the event in both the campuses, also as per the feedback, students appreciated X-Ops for this initiative and look forward to X-Ops for further such sessions.
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Opsie-V One of the most innovative way of quizzing is the visual quiz. X-ops has always endeavored to do unique and extraordinary events that attract the students to pursue challenges and test their knowledge on operations and supply chain management. Opsie V is one such quizzing event that incorporates the concept of visual quiz and tests the participants on the concepts of operations and supply chain management. It is a pan India online quiz and attracts competitors from all over the country and top b-schools. Every year Opsie V witnesses a vast number of participants and this year was no different. 90 teams from all over the country registered for the quiz and 42 teams went head to head in a
grueling 30 minutes which tested the ability of the competitors to connect the images and recognize the concept behind them. The participation from XIMB and XUB campuses was also very encouraging and it showed that the vision of increasing operations learning individuals is increasing day after day. Team X-ops did outstanding work to promote Opsie V by preliminary teasers sent out to the registered teams and then leading up to the D-day. Opsie V, for the first time worked on developing questions that test the imagination of an individual and the effort put by the quiz masters was definitely commendable. The questions though seemed easy were subtly tricky and this
The Teams that won ‌
1st NITIE LEOPHARDS (NITIE Mumbai) Rahul Markad P.Harikumar
2nd SWAT KATS (IIM LUCKNOW) Minal Patel Subham Tonk
was the intriguing factor that led to a successful culmination of an exciting event. In a nutshell, Opsie V was a huge success not only in XIMB/XUB this year but all over the country.
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Editorial Board: EDITOR:
ABINASH MALLICK
CO-EDITOR:
SAMPAT PADHI
DESIGN:
RAKSHA ARYA
COORDINATOR: P H PRUDHVI
TEAM:
Opsession Monthly
XIM, Bhubaneswar
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