Cover Story X-Ops conducts NIRNAY-2016 Around the World with Operations Management ____
Role of Digitalisation in Market Transformation ____
Opsession
Milk Run Logistics in Automobile Industries
October Issue This is the third issue from Volume three of Opsession, the monthly newsletter of X-Ops. The newsletter was introduced two year ago by X-Ops with the intention of covering all the activities and events that took place during the span of a month.
Xavier Institute of Management, Bhubaneswar Volume#3
OPSESSION | Volume 3 | Issue 3
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X-Ops conducts Nirnay’16 X-Ops, the operations committee of Xavier Institute of Management has always assayed for better learning opportunities for students and encouraging them to tax their brains. For the Holistic development of a Budding Operations Manager, the Operations Society of XIMB, X-Ops recently developed an In-house Business Simulation Game, ‘NIRNAY2016’ challenging the business minds of the students throughout all Bschools in the country. The dynamic nature of the game required the contestant to not only be abreast with the basic concepts of Operations Management, but also be aware of changes happening in the real world. With increasing constraints and complexities in today’s business scenarios, developing business strategies to optimally run the business has become highly critical. NIRNAY had been developed taking these into consideration and force the contestants to think in similar lines to reach the goal. The event was conducted during Xpressions’16 in two phases. The event was focused to test the agility of participants to apply the concepts of operations and supply chain on real time problems. The first round of the event was conducted on 8th November,2016. It was an online quiz which saw a good number of participation. It was conducted as a basic elimination round for the simulation game planned in the next phase. The quiz comprised of 35 questions with a time constraint of 25 minutes with the objective of selecting the most capable candidates. The questions ranged from a plethora of topics, starting from operations management through supply chain to the current happenings and techniques being used to optimize businesses. These topics tested not only the knowledge on trending topics
but also about its history. The quiz received a good feedback from the participants. After the quiz a total of 12 teams were selected for the next round. The second or the finale round was held on 12th of November,2016 with the 12 finalists battling it out in the simulation game designed by the Nirnay team. The game was based on the setting up of a market place ecommerce firm. It was designed for a period of four years with various conditions applied for different years. In the first year, the participants were required to do the basic setup of the organization, as in choosing the correct business model to maximize the revenue and minimize the cost, setting up the web portal, choosing the courier service and supplier for order fulfilment and the marketing budget. In the second year, membership model was introduced to encash the opportunity of delivering products by priority service for the customers who are willing to pay a premium charge annually. During the third year, along with the above-
mentioned factors other options were added from which the participants had to choose the optimal one. The choices available were cash on delivery and mobile app. In the fourth year, the participants got options of choosing between expanding it to more cities or providing after sales service in those cities. Demands were specified for each available option based on which profits were calculated. The team which maximized profit was declared the winner. It was a very close fight amongst the finalists with fierce battle between the teams Seeking Alpha of XIMB and Hoplites of IIM Ranchi. In the end, Seeking Alpha edged Hoplites in a narrow margin and were declared the winners. Hoplites from IIM Ranchi finished runners-up followed by Master Blasters from XIMB. The sincere efforts put in by the organizing team made Nirnay’16 a success and was a good learning experience for the participants.
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Around the World with Operations Management Ford decides to reduce its water use in manufacturing way down to zero by 2020 Car production facilities typically consume high volume of water for different set of manufacturing different set of manufacturing processes like washing, paint spraying, surface treatments. Vehicle manufacturers always try to bring down the usage of water through process improvements and innovative practices. But Ford Motors’ announcement is quite a challenging task in itself.
The company has claimed to have saved 377 billion liters of water from 2000 to 2015. It was possible by reduction in water consumption using processes like 3-wet paint process and minimum quantity lubrication (MQL). In 3-wet paint process, primer, base and enamel are applied in quick succession when they are in wet condition. By use of MQL, the near dry machining has helped to reduce water consumption and improve air quality around the manufacturing plant. The campaign of reduction in water use was launched in 2000 as part of its
Global Water Management Initiative. Ford is also sharing its practices with vendors and suppliers around the world to make the largest impact. Autopilot: It’s a misleading Adterm, at least for now Autopilot: Should it mean a driver assistance system or the system to replace the need for a driver altogether. At least that’s open for debate now. The regulators in Germany have asked Tesla to stop the promotion of “autopilot” functions in Tesla models, as these autopilot functions can lead to false customer expectations. There has been heightened caution and questions are being raised after two fatal crashes involving Tesla models on autopilot, one in northern China and the other in Florida. Amidst all these, newly introduced Autopilot 2.0 hardware with the promise of “the highest levels of autonomy” is being viewed with a bit of skepticism.
Perils of ever increasing Battery capacity Building a better and longer lasting battery is one of the significant challenges that a manufacturer faces
while coming up with newer and improved model of smartphones. Smartphones are continually improving with sharper displays, improved cameras, additional sensors and newer features. All of these require increasing amount of power and are driven by the battery cell fitted inside the smartphone unit. But the advance in battery technology hasn’t been able to keep pace with the innovation in other areas smartphone technologies. Along with that the manufacturers are in a race to win the consumers with the thinnest device possible. It’s causing strain in the manufacturing process and increasing the risk of defects which is evident from the Samsung Note 7 exploding fiascos. Samsung launched the Note 7 a month earlier than the unveiling of new iPhone, to get an edge over its biggest rival. But the incident of Note 7 catching fire and exploding clearly shows that the decision backfired. The company has announced to replace 2.5 million Note 7 phones, which can cost as much as $2 billion.
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Digitization’s Role in the transformation of Manufacturing The global manufacturing industry is going to be driven by transform how it creates and services products by seven external forces these are digitization, regulation, personalization, smart products, connectivity, globalisation and services. Here, we will look as to how digitization and model based design supports manufacturing transformation. How has digitization become one of the major transformative forces? It has enabled manufacturers to move from basic drawings to highly sophisticated 3D models that are suitable for digital simulation activities. In other words, digitization is the concept of collecting analogy information and converting it into digital information through the use of computers so it can be easily shared and used across a global value chain. Considering the area of manufacturing, digitization has its roots in engineering CAD (computer aided design) software enabled manufacturers to create a digital representation of its products for purposes of early stage design, testing, simulation, and manufacturing automation. Digital technologies such as CAD enable people to design a prototype for testing before it moves to the manufacturing floor. This can result in large cost savings and decrease the time it
takes to deliver a product in market. While digitization started out in product development, it is migrating out of the factory floor and into the service environment. For example, using 3D animations during a service visit to demonstrate how a particular part can be restored and repaired can dramatically improve the efficiency of the service experience. In this prospective, manufacturers could provide a reality experience for the service technician, creating a digital image of a product on top of the physical to show the component parts and simplify the repair process.
Over the next 5 to 10 years, digitization is expected to completely change manufacturing. In a survey carried out by Manufacturing Executive, almost 94% of respondents said they expect some level of end-toend digitization of their business processes in the next 10 years, with around 63% saying they might be largely digitized by that time. In future Digitalization is going the change the way in which manufacturing is done in industries making the processes more efficient and cost effective.
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Milk Run Logistics in the Automobile Industry The Automobile industry is a rapidly growing sector. India’s car market contributes about 7.1% to the country’s GDP and has the potential to grow to six million plus units annually by 2020. There is immense competition and an optimisation throughout its supply chain is essential to sustain in the market. The supply chain management of every organisation is on the lookout to reduce the logistics cost at each level. The Milk Run method is a highly efficient way to do that. The Milk Run is a logistics concept where there is a delivery of a conglomeration of goods from a variety of suppliers. A vehicle collects the requisites from all the suppliers on a daily basis and delivers to the customers. This way each vehicle load delivers the full day requirement for the customer. This method derives its name from the dairy industry where a single tanker collects milk every single day from different daily farmers and delivers to a milk processing industry. Milk Run method is quite successful as transportation costs are reduced to a great extent owing to the fact that the deliveries from different suppliers are consolidated. There is also improvement in the manufacturers’ production line and a greater coordination between the manufacturers and the suppliers. Further, if there are any discrepancies in the product quality, the manufacturers have the flexibility to immediately inform the
suppliers and get it rectified. OEMs like Toyota use the Milk Run method to support its operations in both Japan and United States. In Japan, they have the assembly plants located close to each other
and implements milk runs from a single supplier to many plants. In United States, however there are milk runs from several suppliers to
an assembly plant. This method has also been used to procure parts from foreign countries like Thailand where they have managed to gain total control of the procurement process. It was analysed that after implementation of this method there was a significant reduction in inventory costs as well as reduction in the costs of packages because the loading and unloading was only one time. The formation of an optimised supply chain is a competitive advantage and automobile industries now are on the path to achieve the same through the Milk run method.
OPSESSION | Volume 3 | Issue 3
Opsession Monthly XIM, Bhubaneswar
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