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Pan-IIM Operations Magazine

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Opsworld 6 12 Opsworld 6 12 Document Transcript

  • Opsworld 4 CONTENT Productivity: The Mystery 1 Efficiency: The Future Concepts 5 Efficiency in Supply chain for milk and Academia milk products: An Indian perspective 9 Industry Specials 17 Lean: New product development Trends Toyota recall: Are the Lean Operations at blame 21 Operations and Supply Chain Management – The Akshaya Patra way Unified efficiency measurement of Thermal power plant using DEA Background 27 33 Brain and Heart of operations efficiency 39 Enhancing Operational Excellence by Improving Productivity 43
  • Opsworld 4 DIRECTOR’S MESSAGE I am happy to present the fourth issue of Pan IIM operations magazine. This magazine is a great medium for integrating and bringing together experiences and opinions of the students from IIMs, the best management institutions in the country. With the focus of business on driving Productivity and Prof. B. S. Sahay Efficiency, it is heartening to see the OPEP, Operations and Supply Chain club of IIM Raipur releasing the fourth issue of the Pan IIM Magazine with the theme on "Productivity and Efficiency". I wish OPEP a great success in their endeavour and hope that you enjoy reading this publication. Prof. B.S. Sahay Director, IIM Raipur .
  • 1 Opsworld 4 EDITORIAL According to Michael Porter, competitiveness and productivity can be used interchangeably. Companies have to be productive to be successful and to achieve those results daily efficiency levels should be maintained high. By improving its productivity and efficiency, company can improve its market share; maximize its profitability and lower its operational cost. Thus to gain a competitive edge, productivity and efficiency are the primary factors. children in India. The article, Akshaya Patra way, explains how they efficiently use supply chain and operations management to provide safe, nutritious and tasty food on time and every time. Keeping this in view, we have taken forward productivity and efficiency as the theme for the Pan IIM operations magazine. This issue takes its readers through various insights about productivity and efficiency from academia as well as from the industry perspective. We also would like to thank Prof. B.S. Sahay, Director, IIM Raipur for his strong support and motivation. We are thankful to Prof. Parakshit charan & Prof. Sumeet Gupta for their guidance. Our editorial would be incomplete without thanking the Pan IIM Operations group for giving IIM Raipur this opportunity of publishing this issue of Opsworld. We hope our readers would enjoy this issue of Opsworld! - Manoj H. & Ruchi Sao Editors We also thank Akshaya Patra, an Indian NGO providing food for About the cover page: The cover page of this edition of Opsworld was selected through the pan IIM cover page design competition ‘Impression’. Amongst the various entries for the competition, the design made by Bipin Chand Tumu of IIM Kashipur was chosen to be the cover page. We thank all our participants for their participation in the event. Editorial We thank Prof. Omprakash S Vaidya, IIM Lucknow, for contributing an article on ‘Efficiency in supply chain in milk and milk products: An Indian perspective’. This article explains the challenges, issues present in the supply chain of world’s largest milk producing country. On behalf of Operations and Supply chain club (OPEP) of IIM Raipur, we would like to thank all IIMs for their continued support. We also thank our authors for taking their time and contributing for this issue. View slide
  • 2 Opsworld 4 View slide
  • 3 OPSWORLD 4 PRODUCTIVITY: THE MYSTERY Abstract: The companies all over the world have implemented wide range of activities with an intent to improve their productivity but eventually have faced the phenomenon of productivity paradox such that there were little or negative return despite investing heavily to boost productivity. In this article, we have discussed the main reason for productivity paradox because the firms do not persist in improving efficiency with respect to the capabilities that originally made them successful. Therefore, by focusing more on cost effectiveness and less on effici ency, they are getting diverted from the path which was the main reason for their success. Anurag has completed his Bachelor's degree in Computer Science & Engineering. His interest in the areas of Management was piqued during the course. He decided to enhance his knowledge and make his career in the area of Management & subsequently cleared CAT & joined IIM Raipur. He also has a research paper published in an International Journal in the field of IT & Systems. Shubham is a second year Doctoral Student in Operations Management area at IIM Raipur. Shubham completed his Bachelor's degree in Engineering (Electronics and Communication) from RGTU Bhopal. During his under graduate studies he was associated with a research institute involved in the monitoring of Public Distribution System in different states which has been driver for his interest in this area
  • 4 Opsworld 4 PRODUCTIVITY: THE MYSTERY Skinner around 1980’s talked a lot about Skinner talked about how American firms operational especially implemented productivity improvement plans manufacturing strategy and connected operations with the main objective of reducing overall cost. management to business strategy. In his article They did everything on Productivity Paradox, Skinner made a point productivity manager that despite best intentions and improvement departmental productivity committees, raising programmes, productivity seemed to be hardly the improving. professionals by 50%, carrying out operation-by- strategy and Companies around the world got inspired by the industrial success of Japanese around 1960’s and have started implementing huge range of initiatives ; such as TQM, six sigma, JIT, Business Process Reengineering (BPR), lean management, bench marking etc. Most of these initiatives have not achieved the desired success being sought. Researchers have often argued that these initiatives were conceptually sound but were poorly implemented. In-fact these and other productivity improving initiatives have not addressed the core parameters that are needed to achieve permanent productivity gains. number of from to employing establishing industrial engineering operation analyses to improve efficiency levels, avoid wastages, simplify jobs, retraining employees to work "smarter not harder", streamlining work and material flow movement, replacing out-of-date equipment, retooling operations to reduce operator time, tightening of standards, installing a computerized production control system, training foremen in work simplification, emphasizing good housekeeping and cleanliness and installing a computer- based measured-day work plan, which allows for daily performance reports on every operation, worker and department. But, the result was a minimal improvement in productivity of 7% over three Productivity Paradox in form of “Productivity Dilemma” was also discussed by Abernathy’s continuous fall in market share. when he made observation of decline of US This is the paradox that why there is so little or automobile sector in 1978, he argued that it was negative return despite investing heavily to boost the obsession of the automobile firms with productivity. productivity which inhibited its flexibility and The most important thing to observe in all these innovation and ultimately led to their loss of productivity improvement drive was, their market share and profitability. 2 years and the profit remained static with objective, which was gaining cost
  • 5 Opsworld 4 competitiveness, which was in contradiction to from investing in process or systems because this the popular “40, 40, 20” rule. According to this will drive the cost up. So innovation which will rule based improve product design, lead time and customer competitiveness is derived from long-term services suffers, which in turn leads to fall in changes in manufacturing structure another 40% market share and profits. Also, when cost comes from change focused on equipment and effectiveness is the primary focus, it generally process technological changes and the rest 20% hampers quality, while when quality is the main can about be 40% gained of manufacturing from the productivity focus then low cost usually follows it. approach. So productivity Hence, there is an inconsistency between the improvement focused on cost competitiveness activities, focused on innovation and flexibility should be the last and those focused on productivity improvement improvement resort of developing and cost reduction (Abernathy; 1978). So, from Skinner found that actually it’s not the the time, firms start to focus on productivity; productivity focus but the cost reduction priority innovation and exploration takes the back seat, which harm the firm’s heath. The productivity which prevents the firms from taking risks. drive focuses on reduction of direct labour cost Thus, there is a need for firms to balance and labour efficiency while distracts their between productivity and innovation. The main attention from the manufacturing structure. reason why productivity paradox occurs is Also, when productivity becomes the driving because firms persist in improving efficiency strategy for a firm, cost reduction becomes the with respect to the capabilities that originally focus and other strategies to gain competitive made them successful and by focusing more on edge becomes immaterial. cost effectiveness and less on efficiency they are Productivity improvement and cost reduction putting getting diverted from the path which was diverts the attention of a firm from developing the main reason for their success. long term manufacturing competitiveness to gain References:- short term cost competitiveness which inhibits innovation and structural changes.  The productivity focus of firms prevents them from paradox. Harvard Business Review  Skinner, W. (1966). “Production Under Pressure,” Harvard Business Review gaining manufacturing flexibility which in turn prevents product changes and pace of new Skinner, W. (1986). The productivity Productivity: The Mystery manufacturing competitive advantage.  Abernathy, W.J., 1978. The Productivity product development. The biggest impact of Dilemma Roadblock to Innovation in the these Automobile Industry. Johns Hopkins cost reduction programmes is on innovation because firms restrain themselves University Press 3
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  • 7 OPSWORLD 4 EFFICIENCY: THE FUTURE Abstract: With competition sprouting in every direction, businesses can no longer concentrate only at increasing their productivity. More focus is required at improving efficiencies. This is vital to survive in the highly demanding market. This article looks at how productivity can be differentiated from efficiency and why improving it is crucial for a business. Issac Solomon has completed his graduation in Electronics and communications engineering from Rajalakshmi Engineering College, Chennai. He is having a work experience of 31 months with Nokia Siemens Networks. Presently he is pursuing his first year of post-graduation course from IIM Raipur. He can be reached at pgp13020.issac@iimraipur.ac.in
  • 8 Opsworld 4 EFFICIENCY: THE FUTURE “There can be economy only where there is efficiency” – Benjamin Disraeli Not everyone is very clear on what differentiates converted to profits in a more efficient system efficiency from productivity. It is not uncommon for a given productivity. for someone to use both the terms carelessly and in the same context without actually understanding what they mean. To understand in simple terms, we can compare them with quality and quantity. Productivities are usually measured in output over some fixed time periods. While efficiency for manufacturing a product can be calculated on basis of wastes, labour time spent, money saved, resources used, etc. For example, if you produce 500 units on the first month and 600 the next, then you are more productive in the second month. Now, out of those 500 units you Productivity expensive. without A efficiency company can is achieve very its productivity target just by throwing around its available resources in a very inefficient process; but at what cost? When it comes to managing businesses, profit is what that matters. The example shows that efficiency is the name of the game. When the profit of a company improves, it can become more competitive. This can be due to increased productivity resulting from an improvement in efficiency. produced on the first month, let’s assume 50 Lack were defective and of the 600 you produced the businesses. In large businesses, inefficiencies next month, 65 were defective. Here you have can go unnoticed due to the availability of large become lesser efficient, though your productivity resources and the difficulty in identifying them. is higher. When it comes to growth and sustenance of Exploring a little further, let’s assume it took you Rs 10 worth of input (raw materials, labour, etc) to produce one unit and you sell it for Rs 12. If you manage to produce 600 products with the same efficiency of the first case, then you will of efficiency affects all forms of small businesses, being inefficient can be a calamitous mistake. In the current business scenario where most businesses thrive in small environments, being inefficient is a game that businesses cannot afford to play. make a profit of Rs 1100 and in the second case In the twenty first century business world, with a profit of Rs 1070 for a cost of Rs 6000. It is its quite evident that a larger proportion of input is companies striding technological have improvements, drastically improved productivities. With productivity on the roll, the 6
  • 9 Opsworld 4 companies have to focus more on efficiency to example, compete against their competitors who also have operation which needs it more should not reduce access to these technologies. Companies should efficiency of another operation which might need constantly work on reducing leakages within the same resource lesser. their operations. But this improvement should come in a holistic manner. Just by unclogging an inefficient operation to improve productivity is not enough. A potential improvement in efficiency should not happen at the expense of the productivity of another operation. For shifting resources closer to an Improving efficiency is a continuous process which must happen in accord with improving productivities. Identifying and improving the existing intrinsic inefficiencies can be tough, but it is worth the time and money spent as the returns are much higher. Efficiency: The future 7
  • 10 Opsworld 4 ACROSS 6: This logistics company is the official partner of F1 for 8 impeccable years. 1: Four car companies, called the "quattro" or "Auto Union" makeup this famous car company 7: Adolf Hitler gave a contract to this famous company to make a cheap and simple car 2: This company made the first ever dieselengine passenger car 8: Supply chain helped in getting success for this company’s expansion. It is referred to as journey from beans to cup. (Related to barista & year 2007-2008) 3: This Company is credited for developing the Critical Path Method (CPM) and also the synthetic polymers such as Nylon, Teflon, Kevlar & Neoprene. Id the company 9: Volkswagen manufactures and sells the fastest car on the earth under this name 4: Which company is credited for developing the following? 10: It is the machine design to affect the 1940 – First Walkie-Talkie 11: This was created by a group of professors at 1973 – First Mobile Phone 1985 – Six Sigma Technique. DOWN 5: This systematic technique for failure analysis was developed by the US army 8 principle of Jidoka in TPS MIT Sloan School of Management in early 1960s to demonstrate a number of key principles of supply chain management. It is played by teams of at least four players, often in heated competition, and takes one to one and a half hours to complete. What in the world of Supply Chain Management is am I referring to?
  • 11 OPSWORLD 4 EFFICIENCY IN SUPPLY CHAIN FOR MILK AND MILK PRODUCTS AN INDIAN PERSPECTIVE Abstract: This article is aimed at providing a quick look into some of the issues and challenges in managing the supply chain of milk and milk products, with specific emphasis on Indian scenario. We briefly look at the basic milk supply chain. Further, we discuss the issues and challenges like demand management, quality, handling of milk, transportation and adopting the change. We hope this article will provide some useful information to the practicing managers and researchers alike. Dr. Omkarprasad S Vaidya is a faculty at Indian Institute of Management Lucknow. His areas include Operations management and quantitative techniques. His areas of research include Multi Criterion Decision Making, Supply Chain Modelling and Performance evaluation in Operations. He can be contacted at vomkarin@yahoo.co.in
  • 12 Opsworld 4 EFFICIENCY IN SUPPLY CHAIN FOR MILK AND MILK PRODUCTS: AN INDIAN PERSPECTIVE Introduction Mother Dairy procures its requirement of liquid India is the world’s largest milk producer, which milk from dairy cooperatives. Mother Dairy sells accounts for more than 13% of world’s total milk approximately 3.2 million litres of milk daily in production. The huge volume of milk being the markets of Delhi, Mumbai, Saurashtra and produced in India is consumed almost entirely in Hyderabad. Mother Dairy milk has a market India, with a very less proportion of milk (or its share of 66% in the branded sector in Delhi products) being exported. In India, milk was where it sells 2.5 million litres of milk daily and (and still is) primarily supplied by the local undertakes its marketing operations through farmers. They deliver milk directly to the around 1400 retail outlets and over 1000 customers. This unorganized mechanism is being exclusive outlets of Mother Dairy. replaced by the organized sector, wherein many co-operative/private/government Raipur Sahkari Dugdh Sangh Maryadit organizations (RSDSM) was established in 1985-86 by the have taken a step to deliver quality milk and National Dairy Development Board under the milk products to the customers. Some of the Operation Flood-II Scheme. It was then operated leading milk suppliers in India are: AMUL under the brand name ‘Sanchi’. RSDSM’s main (Anand Milk Union Limited) an Indian dairy plant was established on 1st October 1987 with cooperative body organized by Gujarat Co- the help of National Dairy Development Board operative Ltd. in Urla (District Durg). Till 11th September, (GCMMF). The ‘AMUL’ model is known to 2011, it continued to operate under the brand have initiated the white revolution in India and name of Sanchi, when it was rechristened as helped India emerge as the largest milk producer ‘DEOBHOG’. Milk Marketing Federation in the world. More than 15 million milk producers and 144246 dairy AAVIN is a major player in Tamil Nadu. cooperative The dairy development department of Tamil societies across the country operate with them. Nadu oversaw and regulated milk production and Milk is processed in 177 district co-operative commercial distribution in the state. The Dairy unions and marketed in 22 states in India. Development Department took over the control Mother Dairy was set up in 1974 under of the milk cooperatives. It was replaced by the the ‘Operation Flood Programme’ initiated by National Development Diary Board (NDDB). 10 Tamil Federation Limited in the year 1981. In February Nadu Cooperative Milk Producers
  • 13 Opsworld 4 1981, the commercial activities of farmers) can be optimized through milk run cooperative were handed over to Tamil Nadu modelling. Milk run route or vehicle routing Co-operative Milk Producers' Federation Limited problem is a widely known logistics model that which sold milk and milk products under the can be used effectively here. trademark “AAVIN”. From Plant to Distributors With many brands in the organized The collected milk from the local farmers sector, the milk industry is thriving in economic is then processed and toned. From the factory the terms. This sector is the largest contributor to the processed milk is then moved to the distribution GDP among the agriculture sector. centres. This is usually done as a long distance The demand for milk in India is expected haul. Depending on the distance, the milk is to rise by 29% in the next five years. Hence there treated is a need of effectively utilizing the available optimizing the transportation between factory milk, mostly by minimizing the wastages therein and distribution centre can be effectively used and/or managing effectively and efficiently the here. supply chain. In this paper, we discuss some of From Distributors to Retailers the issues and challenges faced in the supply enroute. Transportation model, for From the distribution centre the milk is chain in the organized sector. then sent to the retail customers. This happens The Milk Supply Chain similar to stage one: through Milk run. The supply chain of milk begins from the local Various parameters involved in this three farmers, where it is collected and sent to the staged process makes the optimization more processing plant. Milk is then processed in the complex. The constraints in each stage vary and plants and distributed by the local distribution so do the objective function. Usually, the centre/s. Through the distribution centres it optimization model depends on the organization reaches the retail outlets. In the supply chain, the strategy. The objective function needs to be in milk, at times is taken through temperature line with strategy of the organization. For controlled transportation systems, hence the instance: for an organization which has speed to name, cold chain. The cold supply chain of milk, market as their strategy, minimize the time given a three staged process, is explained as follows: budgetary constraints will be the problem and for From Farmer to Plant In the first phase, the milk is collected organizations which focuses on cost reduction to minimization of cost given time constraints will be the problem at hand. A from the local farmers and sent to the industry skeleton view of milk supply chain structure is for processing. Milk collection process (from the Efficiency in Supply Chain for Milk and Milk Products: An Indian perspective the represented in Figure 1. 11
  • 14 Opsworld 4 Demand Supply Mismatch The demand and supply gap varies as a result of seasons and spikes due to festivals. This is due to the fact that supply and demand have a significant impact based on the seasons. It is seen that in the spring season cows/buffaloes produce more milk and are milked twice in a day leading to an increase in the supply of the milk. The milking cycle goes down to ‘dry–off’ in the autumn Figure 1 Milk Supply chain Model season, where supply is reduced. This creates a cyclic nature in the supply of milk. The demand Issues and Challenges in Supply Chain also varies as the consumption of milk during The chain partners include the farmers, summer reaches a peak and during the winter plant, distributors and retailers and of course the when the demand goes down. Thus there are customers. Managing such a chain requires the “flush periods” when supply is more than coordination of chain elements using appropriate demand and “lean periods” when demand is technology that includes product, process, more than the supply. information technology, management practices Milk being a perishable product the and systems. The challenges faced in ‘milk’ supply chain is under high constraint to make supply chain are briefly explained as follows: sure that everything supplied is consumed. In the Challenges in Demand Management flush period, care has to be taken in meeting the With more than 20 million people as potential demand without moving excess goods. In Andra customers every year, and an increasingly Pradesh affluent population, the demand for milk Federation (APDDCF) faced the problem of continues to grow at a rapid pace. Annual surplus of milk. So as to counter this challenge, consumption, is forecasted to reach around 180- they had planned to have a fortnightly milk 200 million tonnes by the end of the decade. This holiday. demand poses challenges to the supply chain in the form of supply-demand mismatch and lead time. 12 Dairy Development Cooperative
  • 15 Opsworld 4 the milk procurement during both the seasons driven demand i.e. lead time. Lead time in the has to be planned based on the estimates. milk industry is the time between initiations of a Safety process of request for milk to meet the demand Safety of a food product is gaining lots of to the actual receipt of milk. Lead time has to be importance across globe from consumer point of shortened so as to meet the requirements of the view. The presence of additives to increase the customer and natural shelf life and the packaging type is critical in constituents of milk. The information from the making certain about the products’ safety. Rigid downstream has to be made available to the norms on the safety of food products have been supply end so as to achieve this. There has to be designed for meeting compliance. Safety is also sufficient capacity (in terms of lead time) to meet affected by issues like tampering of packings. fluctuations without sufficient notice. Tampering could lead to serious safety issues to Quality: For a consumer, the quality of the the consumers. In 2009, when packets of milk product implies ‘taste and safety’. This can be supplied to the area of Kondhwa in Pune were ensured from the time of procurement, through tampered and were replaced by synthetic milk it the processes and delivering it to them. The resulted in a serious safety issue. primary challenges faced are in procurement, Packing also to retain the safety and packaging. The packaging is an important aspect of Procurement milk supply chain and the challenges faced in it Procurement of milk from the farmers is are from ecological point of view to safety. the primary stage of the process. Procurement Packaging has to comply the standards set by management significant Food Safety and Standards (Packaging and importance in the supply chain, as raw milk Labelling) Regulations, 2011. Packaging in India forms an integral part in the entire value chain. It is witnessing various innovations since the day determines the success of the complete value of retail boom in India. It is seen with higher chain. It involves the functions of pickup, testing significance and delivery of milk. The pickup of milk takes production, storage, transporting, marketing and place The distribution. Packaging is not only done with the procurement during the flush season and during perspective of selling but also to prevent the the lean season varies hugely and gives rise to quality from deteriorating. The challenges in many challenges to be dealt with. The issue is packing include: from has the gained local its co-operatives. due to ‘variations’ not so well known in advance, from the point of view of Efficiency in Supply Chain for Milk and Milk Products: An Indian perspective Lead Time: The next issue is meeting the market 13
  • 16 Opsworld 4 1. Protection against distributional hazards, contamination, micro-organisms and heat. transportation and handling must be taken special care during loading and unloading of the product at various locations. The vehicle has to 2. Recycling of packets. be maintained so as to transport the milk without 3. Reduction in weight of the packaging. wastages. Reducing the number of handling The factors that affect the quality of the milk are points will help in improving the handling of contact surfaces, temperature, and the storing milk. The storing of milk during the supply chain medium. Now-a-days with tetra pack, paper should be in less than 5oC as specified by food board made from select woods, organizations safety and standards authority in India. Since the like entire operation is happening in a cold chain the AAVIN are adopting good packing procedures. However, scope exists to modify the existing practices for betterment. challenges can be even more. The transportation of perishable products Milk Handling always requires special handling. Distance plays Handling of milk includes the first phase (i.e. a major role in the supply chain of milk. As collection of milk from farmers), till it reaches discussed earlier, with a shorter shelf life, the the consumer. The handling primarily consists of decision to move the milk is based on the storing and transporting of milk. The handling of climate, transport conditions and economies of milk during the entire transportation has to scale. The long distance haul in the second stage ensure that the quality of milk is not degraded. has to be taken care with these issues posing a The quality of the milk can be ensured only by major challenge. having proper mechanisms to handle milk. The Optimization Complexities ways in which the milk can are stacked and As discussed previously, the three stages transported also create damages to the packaging add to the complexity of optimization planning during transportation. This damage caused might in the supply chain. The complexities makes the result in wastage of milk. planning cycle difficult. These complexities Organizations like Amul make use of the existing in the chain can be simplified with some bulk chillers at the collection level so as to assumptions, but at the cost of optimized value. improve the micro biological quality of the milk. For instance: now-a-days, organizations like This ensures the good returns to the farmer who Deobhog are giving incentives to the retailers to produces and customer who gets to buy a better plan and lift the material from the distributor. product. The tankers which transport the milk Thus the third stage, which is milk run, in the need to be properly insulated to avoid wastage of supply chain is eliminated. This simplifies their milk and to ensure the quality of the milk. The 14
  • 17 Opsworld 4 structure and helps in achieving a better integration in the supply chain. For instance optimization. Gujarat’s Managing Third Party Service Providers (3PL) Federation (GCMMF) has their entire supplier Co-operative Milk marketing network information integrated. They have the the milk producing units are engaging in only information on amount of procurement, quality production of milk and depend on the 3PL for and composition of the product and payment logistics. In this 3PL sector, there are a number terms which can be accessed by all through of players from the unorganized sector. With databases. IT has brought in transparency and milk being a perishable product, managing and ease controlling in the value chain is a huge challenge cooperatives. The use of IT has enabled them to for managers. As the third parties perform, it is capture ‘end to end’ data adding value to the essential to develop mechanisms to maintain entire chain. control and make timely delivery. Impact of Unorganized sector of handling for more than 11,000 Communication with the 3PL provider is The major portion of dairy business in India is very essential. Both the parties involved will contributed by the unorganized sector, especially have a clear expectation from one another. in rural or semi-urban area. The unorganized Having clear expectations will help in managing sector milk is comparatively cheaper than the and communicating better with them. one available from the organized one. There Information Systems (IT): exists a co-opetition and (unseen) competition Every supply chain faces with a common between unorganized sector and organized challenge in communication. The databases sector. It is the company’s move to make them operating at different locations need to be work aligned with them to achieve their goals. integrated. Delays in information sharing and Conclusions retrieval will result in forecast errors. Both the In this article we provide a glimpse of the suppliers and the customers need to be in problems, issues and challenges faced by the continuous collaboration so that supply meets the ‘milk’ supply chain. The issues exist both within demand. Relationship between the partners in the and outside the boundaries of company. These supply chain becomes critical. The sustainability challenges need to be handled by practices that of better makes the delivery systems more effective. Use communication process. The system requires of technology and knowledge in products and data input from both manual and automated practices in making the delivery more effective sources through the supply chain. To gather such should prove beneficial. In addition to the one level of information we require complete discussed the relationship leads to a other challenges like delay Efficiency in Supply Chain for Milk and Milk Products: An Indian perspective With the concepts of core competencies, in 15
  • 18 Opsworld 4 transportation, inadequate roadway infrastructure  Lee, H. L., & Billington, C. (Spring to support long distance travel, may also create 1992). supply chain disruptions. With growing demand Inventory: Pitfalls and Opportunities. and supply, a more agile supply chain would be MIT Sloan Management Review, 65. required with a capability of handling these  challenges. Managing DANIEL International  Chain Management, E. L.-C. ARTHUR HSU and Further Reading Supply D. ZENG. Journal of (2005) Intelligent Control & Systems, 10 (4), 286-295. A Review of the Milk Supply Chain. Safe  Ronald H. Ballou, S. M. (2000). New Food. Acessed on March 5, 2013, from Managerial http://www.safefood.eu/SafeFood/media/ Chain SafeFoodLibrary/Documents/Publication Marketing Management , 29, 7-18. s/Research%20Reports/safefood_dairy_r  Sridhar, Challenges from Opportunities. V. (2010). Supply Industrial Public Private eport_web_version.pdf Initiating White Revolution - II. CII. Accessed http://knowledge.wharton.upenn.edu/pap http://www.technopak.com/resources/ ers/download/BCGSupplyChainReport.p Food/PPP%20in%20Indian%20Dairy%2 df 0Industry_Technopak_CII_Background Douglas M. Lambert, M. C. (2000), %20Paper_May08,2010%20pdf%20ver.p Issues in Supply Chain Management.  BCG. Creating the Optimal Supply Chain. Acessed on March 5, 2013, from  Partnership in Indian Dairy Industry df Industrial Marketing Management Vol 29,  65–83. March 5, 2013, from Supply Chain Agility: A study of supply chain maturity . KPMG. Retrieved March http://www.cob.unt.edu/slides/swartzs/M 8, KTG%206040%20Spring%202009/Artic http://www.kpmg.com/LV/en/IssuesAndI les/T2%20Spatial%20Economics/Lamber nsights/ArticlesPublications/ t%20cooper%20IMM%202000%20Issue Publicationseries/Documents/supply- s%20in%20supply%20chain%20manage chain-agility-study.pdf ment.pdf Acessed on March 5, 2013,   2013, from Tirupati, P. C. (2003, April). Business Lee, H. L. (2004, October). The triple A Strategies for Managing Complex Supply supply chain. Harvard Business Review , Chains in Large Emerging. Ahmedabad, 2-12. Gujarat, India. Accessed March 8, 2013, from 16
  • 19 OPSWORLD 4 http://www.iimb.ernet.in/~chandra/AMU Lpaper2.pdf TOYOTA RECALL: ARE THE LEAN OPERATIONS AT BLAME? Abstract: 7.43 million vehicles were recalled because of faulty power window, 2.77 million vehicles were recalled because of water pump problem and steering effect. Are Toyota’s lean techniques to blame upon or is it some other factors? This article focus on the cause of the problem. Neha Makdey has completed her B.E. in Mechanical Engineering and has 22 months of work experience in Tata Motors Limited in the Customer Support Department. Presently she is pursuing her MBA from IIM Trichy. She loves reading fiction, but dancing is her passion. She can be reached at neha.p12031@iimtrichy.ac.in
  • 20 Opsworld 4 TOYOTA RECALL: ARE THE LEAN OPERATIONS AT BLAME? As an automobile enthusiast, I have always been running on the road. Due to this recall work (free flabbergasted by Toyota cars, not just because service), bay productivity reduces as few bays they are fuel efficient and environmental friendly must be allocated for this work. So the company but is has to incur spare parts cost, pay taxes on these generations apart. What is interesting to observe parts, transportation and packaging cost, training in Toyota cars is that they are remarkably elegant and labour cost to resolve this problem. In a with lot of technology riding behind them – state short run, it affects the company’s sales as well. of the art aerodynamics, smartly contoured Since these painful recalls of 2009, Toyota’s new nooks and crannies and Toyota’s much talked motto is “Moving Forward”, an attempt to about “Hybrid Synergy Drive” in hybrid cars. communicate to consumers that the company’s Toyota cars are user-friendly, refined and desire to start afresh and look toward a better reliable eco friendly cars which give a sheer future. because the Toyota Technology driving pleasure. Are the lean operations at blame for these Toyota is considered to be the pioneers of recalls? Has Toyota’s disruptive innovation hybrid technology and is renowned for this become destructive? The Toyota Production worldwide. But in October 2012, it recalled 7.43 System (TPS) was established based on two million vehicles worldwide for a faulty power- concepts: The first is called "jidoka" (automation window switch that could cause fires. It recalled with a human touch) which means that when a 2.77 million vehicles around the world for a problem water pump problem and steering defect. immediately, preventing defective products from These recalls not only damage the company’s brand image but the company has to incur huge cost to fix the defect. The damaged part must be arranged from the vendors and must occurs, the equipment stops being produced. The second is the concept of Just-in-Time (JIT) or lean operations in which each process produces only what is needed by the next process in a continuous flow. come to the Toyota spare parts warehouse and then it must be distributed to dealers. The take into account the cost, quality, delivery, Technicians must be trained to fix the recall. safety and morale. Lean operations are viewed as Service engineers need to follow up the progress the system of 21st century. It is about improving and ensure the safety of all Toyota vehicles 18 When we talk about lean operations, we the inefficient processes and reducing the errors
  • 21 Opsworld 4 and defects. It is about doing more with less: less Commission's time, inventory, space, labour, and money. It Centre (JRC), reveals that Toyota reduces waste by 80%, labour and production led in total R&D dollars spent in cost by 50%, and inventory by 80%. Lean 2009 whereas Ford (32.4 percent), operations not only reduce the cost but it Renault improves the quality at the same time. General Motors (24.1 percent) The future of innovation lies in product and competitors will replicate the technology within 6 months. If the company has to gain advantage over its competitors it must improve its value chain. It's not just a matter of making things lean. It's also about incremental improvement. If we look a big part of Toyota’s success has been constant improvement. Research percent), and reduced their R & D expense.  Toyota has replaced management and invested more in quality testing since the 2009-2010 unintended acceleration crises that resulted in the recall of millions of vehicles after several severe accidents, some including fatalities.  During recession, Toyota didn't lay off people, even though their sales were down by about 40 percent. They used If the defect is detected within 1-2 that time to train the people and use months after the car sales then the defect might them for thinking of ways to reduce be due to production error but if the defect is waste, to eliminate cost. Kaizen was detected 6 months after the sale then it is because implemented in all operations. of the defective design. In Toyota’s case lean  Toyota has always believed in being operations is not the major reason for recall. competitive by continually reducing the Some of the strong reasons supporting the claim price of goods, giving the customer are: more for less and developing your  Toyota has been successful in achieving customer satisfaction as well as dealer satisfaction as it continuously strives to employees so they can continuously improve the system After the recall, Toyota hired 150 improve its value chain using lean engineers, technicians and researchers who will operations. Toyota Recall: Are the Lean Operations at blame? improvement in value chain. Innovate the (26.5 Joint focus on the areas like power train, mechanical A study by of design, electrical engineering, electronics, and Industrial Research & Innovation advanced research, according to the automaker. (IRI), one of seven scientific Toyota has invested huge amount to reduce the institutes cost and make the process efficient. It is of Economics the European 19
  • 22 Opsworld 4 expected that the coming Toyota cars will not 2. http://pressroom.toyota.com/releases/ have any design defects. 3. http://www.sae.org/manufacturing/lean/c We believe that the Toyota recalls are not because of lean operations but due to some design defects. Toyota is trying to correct these R&D defects by using its lean operation techniques and its efficient value chain. olumn/leanjun01.htm 4. http://www.toyotaglobal.com/company/vision_philosophy/t oyota_production_system/ 5. Lean Manufacturing and the Toyota Production System- Ronald M. Becker 6. http://www.1000advices.com/guru/proces References: 1. Economics of Industrial Research & Innovation Report 20 ses_lean_tps_7principles.html 7. http://www.1tech.eu/clients/casestudy_to yota3
  • 23 OPSWORLD 4 LEAN NEW PRODUCT DEVELOPMENT Abstract: A dominant fraction of cost saving opportunity lies in product development process where approximately 95% of cost is committed. Little known Toyota’s lean new product development system is equally counter intuitive and productive as its production system based on lean principles is. It has contributed a significant competitive edge to Toyota over their western counter parts. This article describes different nature of NPD, four major pillars of Lean NPD and outlines their differences with traditional NPD process. Sudeep has done Masters in Mechanical Engineering from IIT Bombay and has Close to 4 years of experience in R & D, product development in TATA Motors where he was member of product development team for Xenon SUV pick up vehicle for Thailand market and team lead for Xenon CNG Engines. He has interests in ‘New Product Development’ and R & D management initiatives. He is currently pursuing post-graduation in management from IIM Lucknow with Majors in Operations and Finance
  • 24 Opsworld 4 LEAN NEW PRODUCT DEVELOPMENT Toyota product development system is often overlooked in the shadow of its production system (TPS), despite being equally innovative and counter-instinctive to conventional engineering management as lean manufacturing is to mass production. People tend to forget is that no production system is good enough if firm doesn’t have a competent and complimentary product development system in place. WHY -- The Figure 1 Effect of design on product figure 1 below answers the question – close to lifecycle costs 95% of cost commitment is done in NPD stages traditional style NPD. Its design team is not and biggest cost reduction opportunity lies at this stage and not during manufacturing. Since TPS is nothing but a continual exercise in waste elimination, why not start at source itself. Table 1 Comparison of development times collocated. With the exception of chief engineer and his staff, other engineers are not dedicated a particular vehicle program. It doesn’t follow six sigma, reengineering or design automation practices. Toyota Engineers rarely use QFD or Toyota’s equally product development counter-instinctive to process is conventional engineering management as lean manufacturing is to mass production. Toyota does not follow many practices which are considered critical for 22 Taguchi methods instead they excel at Value engineering. There is nothing exceptional about its CAD / CAE systems. Toyota’s Lean NPD (like TPS) seems wasteful but result in a more efficient development system. Toyota delays
  • 25 Opsworld 4 decisions and considers a broader range of 3. Waiting: delays due to inessential design options and yet has the fastest and most authorization or testing, Information efficient development record. US National created too early Center for Manufacturing Sciences report that 4. Inventory: redundant, Toyota NPD projects deploy 150 engineers per information project versus 600+ for twice as long at unsynchronized processes and stoppage data in system, Chrysler.(table 1) What is Lean NPD? Lean NPS is fundamentally different from Lean Manufacturing and thus tools for the later cannot be used. Manufacturing is a repetitive process for value creation in a sequential and deterministic manner. Product development on the other hand, is non-repetitive and nonprocess for knowledge and information creation. For example - while lean manufacturing aims for elimination of 5. Motion: erroneous flow of information variability lean NPD aim for filtering good to people, seeking for superfluous variability from bad variability and thus require approvals a certain quantum of risk to nurture creativity. Lean NPD is applying lean principles of waste elimination to product development. Waste in the context of product development are redefined as – 1. Over Production: Too many products / projects, Redundant development (re-use not practiced) 2. Transportation: unproductive flow of information and information sharing, communication, Lack of use of standard parts and / or lack of commonality 6. Over processing: superfluous gates due to design of stage gate processes, excessive analysis, and circulation of incorrect decisions and out of place information 7. Defects: failures in tests, erroneous data, and warranty and recall costs. It is much harder to identify waste in product development because of its Lean: New Product Development sequential non-physical nature—information and knowledge, unlike manufacturing where you can observe waste in the form of rework and inventory. 23
  • 26 Opsworld 4 2. Set based concurrent engineering – It How does Lean NPD work? Similar to Lean Manufacturing, Lean NPD is is a well-known fact that front loading in not a collection of best practices but rather a NPS realizes significant savings in costs “sub-system” and part of larger Toyota System and time. It is seldom achieved in which can be shown in figure 2. The four major traditional NPD. Reason lies in the pillars of lean NPD are different approaches used. Traditional design approach tends to quickly converge on a point in solution space and iteratively refine it to meet objectives. This is effective unless one start with wrong point, refining which can be time consuming and sub optimal. On the other hand SBCE begin by considering a large number of acceptable design solutions and gradually narrowing the net to Figure 2 Toyota: System view (4) converge. 1. Chief Engineer concept paper -- Counter the beginning and their consent is product managers, the chief engineer in required for each step. By frontloading Toyota is first and foremost a technical and delaying decisions Toyota actually expert having a large input in the vehicle’s despite being responsible for the product from concept to market. Instead he is mostly recognized by his experience, technical and communication skills. He commands a very small team of experienced engineers but all his other resources are in the functional organization. saves time and costs. 3. Detailed design with standards – After the noisy and messy front end Toyota aims for reduction in ‘bad’ variability part of the development process by system design phase. 24 relying on standardization of skills, processes, and design itself. In line with lean manufacturing principal on the shop floor Toyota uses a number of standardization tools, such as: He condenses vision for the vehicle in a “concept paper” which leads into the is involved in forming the sets right from intuitive to the concept of traditional architecture with loose formal authority Manufacturing Figure 3 SBCE methodology (7)
  • 27 Opsworld 4 • Checklists (process checklists this stage to construct product prototype and and product checklists) dies. Toyota must also be credited for use of • Standardized process sheets flexible die designs for proto typing which • Common construction sections. actually save a lot of time and cost while Toyota’s practice of maintaining and sharing its learning continually with young engineers makes sure that wheel in not reinvented every time. These practices make sure that much of the design work is standardized with valuable time saved. providing unrivalled flexibility. In summary – Toyota’s competitive advantage lies in its focus on value creation instead of product, out learning the competition and heavy front loading in the form of detailed discussion of manufacturing issues at the early stages, Lean during which its rivals are mostly concerned Manufacturing -- Toyota develops two with styling and engineering. Toyota invests different series of prototypes, which are not time and effort in learning early on, to make 4. Prototype to test (unlike Tools designs with Table 2: Lean NPD vs. Traditional western NPD counterparts) but to choose the different subsystems and check their integration and identify manufacturing / assembly issues. sure that the end solution is truly the best. References Lean: New Product Development used and 1. Morgan, J. M., & Liker, J. K. (2006). Beyond this stage no engineering change The Toyota product development request is accepted and design is frozen for system. New York: Productivity press. serial manufacturing. Key differentiator for 2. Sorli, M., Sopelana, A., Taisch, M., Al- lean Shaab, A., Keast, J., Flores, M., & manufacturing tools like checklists right from Martinez, L. (2010, October). Applying Toyota is the fact that it uses 25
  • 28 Opsworld 4 lean thinking concepts to new product development. In APMS 2010 7. Raudberget, D. (2010). Practical applications of set-based concurrent International Conference Advances in engineering in industry. Strojniški Production Management Systems Book vestnik-Journal of Mechanical of Abstracts (p. 50). PoliScript. Engineering, 56(11), 685-695. 3. NATIONAL CENTER FOR MANUFACTURING SCIENCES, Product Process Development – Methodology &Performance measures, 2000. 8. J. Morgan, “Applying Lean Principles to Product Development”, www.sae.org/topics/leanfeb02.htm, June 20, 2005 9. http://www.designnews.com/document.a 4. Ballé, F., & Ballé, M. (2005). Lean sp?doc_id=230445&dfpPParams=ind_1 development. Business Strategy Review, 16(3), 17-22. 82,aid_230445&dfpLayout=article 10. D. Sobek, A. Ward and J. Liker, 5. Haque, B., & James-Moore, M. (2004). “Toyota’s Principles of Applying lean thinking to new product Concurrent introduction. Journal of Engineering Management Review, Winter 1999,vol. Design, 15(1), 1-31. 40, no. 2, pp. 67-83 6. Steven D. Eppinger and Anil Engineering”, Set-Based sloan R. 11. Oppenheim, B. W. (2004). Lean product Chitkara, The New Practice of Global development flow. Systems Engineering, Product Development, SUMMER 2006 7(4). VOL.47 NO.4 SMR210, MIT Sloan Management review 26
  • 29 OPSWORLD 4 OPERATIONS AND SUPPLY CHAIN MANAGEMENT – THE AKSHAYA PATRA WAY The Akshaya Patra Foundation runs school lunch programs across India. The organization distribute freshly cooked, healthy meals daily to 1.3 million underprivileged children in 9,000 government scho through 20 locations in 9 states across India.
  • 30 Opsworld 4 KEY OBJECTIVE “Safe, Nutritious, Tasty Food on Time and Every Time “ Everyone’s of raw materials into an organization and Responsibility and is everybody’s business in processing of materials into finished goods. It our Organization. Quality can be achieved also only when every stake holder in the whole management of all activities involved in supply chain does their job with high Quality. sourcing, Therefore Quality starts with the design of the logistics recipe and then suppliers who are going to coordination and collaboration with channel supply the raw material and then various people partners, within our organization who are going to intermediaries, third-party service providers, or follow various systems and process to produce customers. the final product (Quality Meal) and deliver to integrates supply and demand management the children in various schools. For example- within and across companies. Our SQM assume that we have world class infrastructure, process which covers sub processes like people, suppliers, raw material, processes etc., sourcing, but if you have poor recipe then the result is qualification, procurement, logistics, supplier low quality output. Similarly without right rating, supplier development etc. will ensure people and people with right skills we cannot that we work with the right and best supplier achieve the high Quality and so on. who are aligned with our organization. Supply Chain Management and Operations  We believe Quality is encompasses the procurement, conversion, management. which Supply supplier planning It may chain also be and and includes suppliers, management selection, supplier Supplier Selection & Qualification Process Management are two key areas of focus in is followed to select the suppliers based on achieving our Objective, Mission and Vision. the ability to meet our requirements with Supplier Quality Management (SQM): Supply chain management is a cross-functional approach that includes managing the movement 28 respect to quality, cost and delivery and their ability to support in low cash flow situations
  • 31 Opsworld 4  Incoming Quality Control (IQC) Process is controlling the process of production of goods followed to ensure that we accept only right or services. It involves the responsibility of product which meets all our raw material specification requirements. Raw specifications are material generally taken and adopted from FSSA 2006 ensuring that business operations are efficient in terms of using as few Supplier Selection & qualification Process resources as needed, and effective in terms of meeting customer requirements. It is concerned with (Food managing process that Standards Supplier development al programs Act 2006) Incoming Quality control process Supplier Quality Management latest converts inputs the forms of materials, revision.  labor, and energy) Supplier Rating Process ensures into outputs (in the form of goods Supplier rating process that we assess their services with respect to quality, delivery, and/or services). This is where we embraced frequency and will be used as to continuously supplier strive to so that improve the ISO ISO22000 cost etc., parameters at a defined feedback – Food standard Safety Management System and also taken they their inputs from ISO9001- Quality Management System and designed and established the performance.  (in systems Our Supplier Development programs aimed requirements at sharing our knowledge and best practices with suppliers so that they get benefited and improve their processes which intern delivers better product to us. We also work with suppliers and deliver the training as required by the supplier which indirectly helps in improving their product and services. Operations Management (OM): Operations and processes to meet our Once Processes are established then we need to monitor Without and data improve and them continually. measurements no improvement is possible simply because we don’t know where we are? So process Safe, Nutritious, Tasty Food on Time and Every Time Safety the performance measurements are vital and hence we established metrics for key processes in operations. For example: Food Quality Index (on a 10 point scale), On time delivery, management is linked with designing, and 29
  • 32 Opsworld 4 incoming lots acceptance %, Customer Cold rooms are used as temporary storage Complaints Index etc.  to store vegetables/ cut vegetables/ curds etc., as required. Custom designed vehicles People are the key to our success and we of different sizes and capacities are used to strongly believe that if we make them successful organization in their we job achieve then the as transport the cooked food to the schools in an targeted results. So focused efforts been put on safe and secured manner.  the desired state, we need to improve People Development and Training. A performance dedicated team established at HO and they leads to next level of achievement. So we Application, Lean & Kaizen as mandatory adopted a holistic approach to design a and every employee needs to go through all Continual Improvement Program called these programs twice a year. Apart from “Akshaya Pragathi “Program in Akshaya this HR coordinates TNA (Training Needs Patra. As a part of the program we have Analysis) exercise and ensures various adopted and implemented Kaizen, CI trainings that are imparted as per the plan. Projects and Six Sigma methodologies to Our Quarterly people engagement programs ensure ensure that all employees come together themselves or with the help of their We have first class infrastructure in terms colleagues or at the most with the help of also their supervisor. Very less capital intensive standardized our kitchen designs to bring by experts. Steam is used for all our cooking activities and SS 304 grade vessels are used for cooking, storing and transporting the food to the destinations. 30 employee where they get the idea and implement by and relationships for a cause Flow model kitchens are well appreciated every Kaizen is aimed at working level staff spirit and improve the inter personal skills consistency in our processes. Our Gravity make any one type of methodology. For example: programs are aimed at improving the team We and practically part of at least one project using and join hands for a common cause. These building. processes process and every cycle of improvement topics: GMP, 5S, ISO 22000 Awareness & equipment, various next mile stone and this is a continuous across Pan India. We also made 4 training of of continuously so that we can reach to the support all technical training programs  While we all agree that Status Quo is not and a small improvement.  CI Projects are little complex, PDCA methodology driven supported by 7Quality Tools aimed executives/supervisors/team at leads the level,
  • 33 Opsworld 4 leads to savings or improvements related to Quality/ Cycle Time. data from these audits will be reviewed by Six Sigma Projects are more complex in Quality Team and appropriate improvement/ terms of size and scope which leads to huge Corrective actions are triggered and monitored improvements related to Quality/ Cycle till the concerned completes the effective time/ Cost. Currently we have more than  Food Safety & Quality etc. to name a few. The implementation of the same. 100 GBs (Green Belts) working across the and running improvement projects. Also  various Quality Metrics Performance is reviewed on monthly basis by Quality & FSMS we have Manager and appropriate improvement/ produced & implemented 600Kaizens in the Corrective last 6 months. actions are triggered and Audits & Review Quality metrics • Review done on monthly basis by quality & FSMA manager Performance • Improvement / correctyive actions are implemented ISO audits Management Review Customer satisfaction survey • Conducted twice a year by internal auditors • Certification body DNV does surveillance audits twice a year • Conducted twice a year to review the suitability and effectiveness of FSMS • Conducted twice a year • Day to day feedback are also recorded to properly analyze and take corrective actions Yes... All these are fine! But how do we now monitored till the concerned completes the we are in the right direction…!! As we all know Audit & Review mechanisms effective implementation of the same.  Safe, Nutritious, Tasty Food on Time and Every Time organization ISO 22000 Internal Audits are done twice plays a key role in monitoring the key year by qualified internal auditors lead by processes & systems and their performance. So Quality & FSMS we have institutionalized GMP monthly audits, Certification body Surprises Audits by Sr. Management Staff on surveillance audits twice a year. Manager DNV and our does the 31
  • 34 Opsworld 4  Management reviews are done twice a year to review the continued suitability and effectiveness of FSMS. Deficiencies found are addressed with appropriate improvement/ Corrective actions.  Detailed Customer Satisfaction Surveys are done by the Quality Staff twice a year apart from the day to day feedback we take during the delivery of food on daily basis. CSS (Customer Satisfaction Survey) data is analysed in details and appropriate improvement actions/ corrective actions will be taken immediately. In Short, it is all about People, Processes & Performance of the People and Processes which makes the difference and ensure we continue to serve “Very Safe & High Quality Food on Time and Every Time “ 32
  • 35 OPSWORLD 4 UNIFIED EFFICIENCY MEASUREMENT OF THERMAL POWER PLANTS USING DEA BACKGROUND Abstract: There is significant pressure in protecting the environment especially from excess emission of Greenhouse gases and other harmful pollutants. The major source of the greenhouse gases and pollutants are the thermal power plants. This study discusses a new DEA (Data Envelopment Analysis) approach to measure the efficiency of Thermal power plants, by including both desirable output (Electrical Energy) and Undesirable output (CO2, SOx, NOx, SPM, RPM, Oil & Grease, Suspended Solids...etc.). The output of DEA is validated by carrying out Multiple Discriminant Analysis on the group assigned (Environmentally efficient and inefficient) and to determine the factors which discriminates between the groups and quantify their effect on the environmental efficiency score. Divya S has completed her graduation in Rubber & M. Mohan is a graduate in Electrical and Plastic of Electronics Engineering from NIT Trichy. He has Technology, Chennai. She has a work experience work experience of 3 years in NTPC ltd.. in Japan polymers. Presently she is in second year Presently pursuing his post-graduation from pursuing her Post graduation from IIM Lucknow. IIM Lucknow. Technology in Madras Institute
  • 36 Opsworld 4 UNIFIED EFFICIENCY MEASUREMENT OF THERMAL POWER PLANTS USING DEA BACKGROUND Background: The paper by Wade D.Cook and efficiency is measured, which includes both Joe zhu (2006) applied DEA model in undesirable and desirable outputs. This study comparing the efficiencies of a set of thermal provides power plants with desirable outputs. The DEA environmentally model was applied where the decision making environmentally units are comparable but possess unique enabling the government to reward or penalize circumstances and characteristics. In our accordingly. current study the same principle of DEA was Input and output parameter setting: The extended to study the set of power plants current study analyses the efficiency of 20 within the region along with its environmental power plants with uniform capacity in a region. effects. Mika Goto et al (2011) devised similar The core material components such as Coal, methodology to compute unified efficiency Air, Energy, cooling water required for power which includes both undesirable and desirable generation are taken as inputs for all the units. outputs, but their methodology segregates The power generated in MU (million units) and inputs into energy and non-energy input and ESP Index are considered as desirable outputs. the distance The undesirable outputs such as bottom ash, fly measure for computing the unified efficiency ash, SS, oil & grease are also considered in this and the study doesn’t determine the major DEA. factor contributing to the difference between measuring the particular matter (SPM and efficient and inefficient DMU and doesn’t RPM), higher values of ESP index indicates quantify the effect of each undesirable factor lower level of particulate matters emitted into on environmental efficiency of each power air. Hence, ESP index was set as desirable plant. outputs in the problem setting. The problem setting: The usual practice of Advantage of Our Approach: This approach comparing the efficiency of thermal power identifies plants by comparing the PLF (Plant Load differentiate the DMU’s as environmentally Factor) is not correct, as, measuring plant load efficient and inefficient. Thus helps in focusing factor considers only availability and computes on those factors which are statistically different utilization of plants based on the availability. In between the two groups. Those factors which the current study, the environmental pollutants are not statistically differentiating, implies that model computes directional are taken as undesirable outputs and a unified 34 an approach to segregate the efficient DMU’s and inefficient DMU’s, thus The ESP index acts as proxy for all the critical factors which
  • 37 Opsworld 4 the environmental limits for those factors are . easily attainable by both the groups. n ESP _ Index   i 1 NOCi 100 FLCi Programming Model: Objective Function: where E is the Efficiency Score for a DMUi Input Constraints: Minimizing the input Output Constraints: Minimizing Undesirable outputs (Pollutants) Canonical Discriminant Function coefficients Coal Air Energy Water Function 1 0.059 SS Oil and Grease Power Generated ESP_Index (Constant) -.019 -.037 .053 Bottom Ash .100 Fly Ash -.002 Unstandardized coefficients Function 1 .019 -.005 -.002 -.047 -2.538 Output Constraints: Maximizing the output (Desirable output) Unified Efficiency measurement of Thermal Power Plants using DEA Background Where, NOC: Normal Operating Current FLC: Full Load Current 35
  • 38 Opsworld 4 Discriminant Analysis: Tests of Equality of Group Means Wilks' F df1 Lambda .689 8.127 1 Coal df2 Sig. 18 .011 Air .998 .042 1 18 .840 Energy .999 .020 1 18 .890 Water .713 7.254 1 18 .015 Bottom_Ash .630 10.590 1 18 .004 Fly_Ash .923 1.512 1 18 .235 SS .899 2.032 1 18 .171 Oil_Grease .999 .012 1 18 .915 Power_Generated .862 2.882 1 18 .107 ESP_Index .728 6.714 1 18 .018 Result: DMU1 DMU2 DMU3 DMU4 DMU5 DMU6 DMU7 DMU8 DMU9 DMU10 DMU11 DMU12 DMU13 DMU14 DMU15 DMU16 DMU17 DMU18 DMU19 DMU20 DEA with Undesirable output 1 Efficient 1 Efficient 0.9819 In-Efficient 0.8103 In-Efficient 0.9782 In-Efficient 0.8404 In-Efficient 0.99 In-Efficient 0.9844 In-Efficient 0.7898 In-Efficient 0.9254 In-Efficient 0.9992 In-Efficient 1 Efficient 1 Efficient 0.8497 In-Efficient 1 Efficient 1 Efficient 1 Efficient 0.9822 In-Efficient 0.8733 In-Efficient 1 Efficient The Efficiency score was calculated using the Linear Programming model mentioned above. The DMU’s efficiency score which equal to 1 are environmentally efficient and those DMU’s whose score are less than 1 are environmentally In-efficient. The 20 DMU’s are segregated into efficient (8 DMU’s) and In-efficient (12 DMU’s). Multiple Discriminant Analysis was carried out on the groups, the result of the discriminant analysis states that for this sample of power plants, the discriminating factors are Coal & water input, Bottom Ash, ESP Index and Power generated. Since most of the inputs and outputs are correlated because of the constant return to scale characteristics of the power plant. The canonical coefficient quantifies the effect of 36
  • 39 Opsworld 4 the statistically significant factors for this boiler, clean coal technology, use of sample, on the efficient score. Bottom ash beneficiated/ blended coal. has the greatest effect on efficiency score followed by coal, water and ESP index References: closely. So, by this analysis we can 1978. Measuring the efficiency of maximizing ESP index (SPM & RPM) decision making units. European which are related to environment protection, Journal of Operational research 2(6), we can improve the efficiency score. C 428-44. - Conclusion: The DEA analysis DEA: An Analysis of Power Plant Efficiency. European Journal of effect of environmentally undesirable factor operational research 178(2007) 207- in Efficiency calculation. The current study 216. was limited to small set of decision making - units. This study elucidates the link between Toshiyuki Sueyoshi, Mika Goto, 2011. DEA approach for unified environmental protection and efficiency. efficiency measurement: Assessment This has a potential to influence major of Japanese fossil fuel power power producers throughout the country to environmentally Wade, D., Cook, Joe, Z., 2006. Within- Group Common Weights in and the Multiple Discriminant Analysis has substantiated the install Charnes, A.,Copper, W., Rhodes, E., generation. Energy Economics 33 preferable (2011) 292–303. technology like super critical and critical . Unified Efficiency measurement of Thermal Power Plants using DEA Background - conclude that minimizing Bottom Ash and 37
  • 40 Opsworld 4 Appendix: SS1: Suspended Solids Coal DMU1 DMU2 DMU3 DMU4 DMU5 DMU6 DMU7 DMU8 DMU9 DMU10 DMU11 DMU12 DMU13 DMU14 DMU15 DMU16 DMU17 DMU18 DMU19 DMU20 38 Input Air Energy 120 135 128 148 145 150 114 145 156 135 140 125 112 146 125 116 139 152 128 135 640 655 620 675 670 668 638 645 665 684 635 655 690 695 640 685 657 675 665 684 30 50 40 54 60 55 25 36 49 56 36 50 40 54 60 55 30 50 49 67 Water 150 160 145 187 165 180 174 155 170 167 154 135 139 178 165 180 137 165 189 145 Bottom Ash 9.6 10.8 10.24 11.76 10.16 13 9.12 15 18 14.67 10.3 18 10.24 14 15.3 7.9 12.89 15 18 14.67 Fly Ash 20 47 55 67 46 67 53 58 39 65 39 67 55 47 53 45 53 63 56 45 SS 1 100 101 119 122 185 157 101 134 134 124 113 98 136 122 172 110 101 120 134 102 Output Oil & Power Grease Generated 20 200 38 210 22 190 31 175 26 205 35 180 24 165 32 200 35 168 24 201 26 200 38 187 26 194 38 189 15 205 35 204 15 189 25 210 35 185 45 201 ESP Index 80.00 53.00 47.00 55.00 84.00 41.00 48.00 49.00 45.00 35.00 56 53 42 55 84 79 65 49 45 80.00
  • 41 OPSWORLD 4 BRAIN AND HEART OF OPERATIONS Abstract: Efficiency and Productivity are just the difference between quality and quantity. It is always about the right mix between productivity and efficiency, as industry can never achieve 100% efficiency while operating at maximum productivity. This will result in bottlenecks of resources or under- utilization of some of the processes. Focusing only on one item not only undermine other but degrade the level that one can achieve. It is like increasing the defects per item in manufacturing industry if focus is on productivity, while trying to remove all the defects i.e. focusing on efficiency will hamper the productivity. So, the underlying imperative always lies in right mix between Productivity and Efficiency. Ankit Kumar Narsaria is currently pursuing his MBA from Indian Institute of Management, Shillong. He has completed his Bachelors in Technology in Information Technology from RCC Institute of Information Technology, Kolkata in 2011. He has 20 months of work experience under a role of Functional Business Analyst in Cognizant Technology Solutions. His focus of research lies in Operations, and Economics. He has worked with Biometric Security and identification systems as well. Apart from this he likes playing cricket and table tennis. He can be reached at ankit.k13@iimshillong.in.
  • 42 Opsworld 4 BRAIN AND HEART OF OPERATIONS  What is Productivity and Efficiency? Is Full Time Equivalent (FTE) indicates there any difference between them? How the they relate to each other? These are the employees in a standardized way. efficiency/workload of the questions which come into mind when one comes across these two terms. To compete effectively, in an increasingly commoditized Efficiencies are not just related to making marketplace where price pressures are inherent, companies need to profits but it is the way of doing things smartly and looking into new ways of working and delivering values. While, heart of any effective business operations is Productivity. It has a direct impact on an organisation's capacity to efficiently create value. In recent years, competition among companies, capital constraints and skilled labour shortages have made productivity and efficiency even more achieve greater operational efficiency by important than ever. embedding creativity, relevance, innovation So, and market responsiveness into their operations that supports production of new Efficiency = Input to run a Business Operation Output gained from the Business products and services. Both companies and customers want services and products that are innovative, which meet their ever-expanding Productivity = Change in Economic Profit FTE needs which are in terms more than just affordability. True operational optimization begins by trading off between productivity and Economic Profit helps us to determine:  Compares efficiency, by willing to look at all aspects of Total use of capital productivity industries  Determines shareholder’s return operations. Thus, approach to operational across optimization focuses on applying the right methodology at the right time and situation while understanding the culture, financial constraints, framework. 40 environments and regulatory
  • 43 Opsworld 4 Take for example, Apple, the heart of this that it can offer distinctive customer organization value propositions. lies in delivering constant innovation in the form of designs that are 2. Establish the right structure: attractive and extremely user-friendly. To Competitive essence can only be deliver this and at the same time maintaining a maintained if the company took right competitive edge over others, Apple focuses strategic on its talent, passion, and organizational structure. dedication of decisions which fits employees to drive excellence at all levels of 3. Out-execute: Profit is the main motive company. It has effectively utilised its of any organization. And to achieve it, operations (efficiency) and energised its organization workforce (productivity) by focusing energy limitation in the daily work processes and talent on a select set of devices and which when solved can increase the services. iPod which was developed in less cost efficiency and labour productivity. than nine months sets an example, which 4. Balance structure and execution: brought together teams combined with should identify the Determine the unique balance between structural alignment and execution that According to the study done by Accenture [1], will drive operational excellence. the following five imperatives should be kept 5. Choose the right journey: Identify the in mind to balance operational efficiency with type of journey and level of change innovation and responsiveness: that will work best for the 1. Identify competitive essence: Every organization: continuous improvement, company should identify its points of targeted interventions or top-down parity and points of difference such transformations. 5 imperatives for balancing operational efficiency with innovation Identify competitiv e essence Establish the right structure Outexecute Balance structure and execution Brain and Heart of Operations expertise and existing technologies. Choose the right journey 41
  • 44 Opsworld 4 Companies also need to match its productivity and focused its investment in an e-commerce with the changing and demanding world. structure and global technology platform. To There are certain attributes which helps in achieve achieving the productivity growth: company is trying to reduce 1% of its 1. Digitisation: Leveraging on e- greater efficiency, operating expenses as a percentage of total commerce and internet to improve revenues. digital assets such that processes operational Thus, productivity and are Global integration optimized and hence Knowledge intensity efficiency goes hand in hand and an organization Digitisation is Complexity Productivity productively increases productivity. 2. Global Integration: efficient when it utilizes all its Integrating scalability in business operations by efficiently configuring its allocated resources, resulting in its position in the productivity frontier. global resources. References: 3. Knowledge Intensity: Organization 1) http://www.accenture.com/us- should have the broad understanding en/outlook/Pages/outlook-online- and knowledge of its functions which 2010-balancing-efficiency- helps in productivity growth. operations.aspx 4. Complexity: It is associated with every process, but how an organization simplifies its complexity, achieve line balance in its activities thus increasing overall efficiency of workstations determine productivity. Wal-Mart is a perfect example on how it brought Operational efficiency and Productivity. It focused on small format stores 42 2) http://en.wikipedia.org/wiki/Operat ional_efficiency
  • 45 OPSWORLD 4 OPSWORLD 4 ENHANCING OPERATIONAL EXCELLENCE BY IMPROVING PRODUCTIVITY Abstract: The article discusses how by focusing on improving the productivity an organisation can build operational excellence. Through a literature review the article discusses how by focussing on parameters like setup time, movement time, processing time etc. productivity can be improved. Besides we also look into how improving quality can be a big aid to enhance productivity. The concepts of delayed differentiation, sources of wastages and enhancing overall equipment efficiency are also highlighted. Umang Agarwal has completed his B.Tech in automobile Engineering from SRM University, Chennai. Presently he is persuing his MBA from IIM Raipur. He has keen interest in Operations. He plans to start his own venture in near future. He can be reached at pgp12111.umang@iimraipur.ac.in Anubhav Sood has completed his graduation from Visvesvaraya National Institute of Technology, Nagpur. He has 38 months of work experience. Presently he is persuing his MBA from IIM Raipur. His interest lies in Marketing and operations. He could be reached at pgp12009.anubhav@iimraipur.ac.in
  • 46 Opsworld 4 ENHANCING OPERATIONAL EXCELLENCE BY IMPROVING PRODUCTIVITY Introduction: WHY PRODUCTIVITY CAN BE TARGETED A firm has a competitive advantage if it has the Maintaining high overall productivity is vital to necessary resources (like technology, natural increase the total throughput and hence reduce the resources, skilled labour etc.) which help it to cost of production enabling the company to deliver outperform sustainable the product to customer at sustainable prices along competitive advantage gives an edge as it is with desired quality. A company can neutralise the difficult to be neutralised by the competition. advantages of the competition by focusing on its competitors. A increasing its productivity and quality with same There are three generic strategies to build resources to reduce its costs. competitive advantage, Porter (1985); one is cost leadership where a firm produces the goods at Blackburn (1991) and Stalk and Hout (1990) as lower cost than its rivals, second is differentiation cited by Hastak (2008) describe case studies where where a firm’s goods are perceived as different by manufacturing firms that redesigned their business the customer and he is ready to pay a premium for processes to compress time and achieved higher them and third is focus, where the firm focuses on productivity, increased market share, reduced risk, a very niche market segment. and improved customer service. Syverson (2011) asserts that literature contains a lot of robust In this paper we focus on gaining operational excellence and hence a competitive advantage through cost leadership, focusing on a manufacturing set up. We follow an approach of finding out, through an extensive literature review, first why productivity should be targeted to reduce findings that point out at the linkages of the usage of productivity as a tool for the survival of any business. He points out that, irrespective of country, time or industry, a producer having higher productivity is better positioned for survival than an inefficient one. costs and then exploring the ways in which productivity can be enhanced. Saari (2006) introduced a model which describes how productivity acts as a synonym to competitive A firm can bring down its cost of production by improving its productivity. Using the same resources to achieve more output will give the benefits of low cost production compared to the competitors. The advantage gained by improving productivity helps a firm to gain competitive advantage over its competitors. 44 advantage. According to the model, the business operations are divided into five main processes which are real processes, income distribution processes, business processes, monetary processes and market value processes.
  • 47 Opsworld 4 It is within the real processes where the real as well as labour productivity. Further, reducing production takes place and where the productivity variations in designs and allowing for delayed aspect can have a significant change. As the real differentiation of the product also aid in increasing process plays a major role around which all the productivity. processes revolve, it is only through real processes that a company can have a competitive advantage Productivity definition: According to Syverson (2011), productivity is how much output is over others. For enhancing the productivity in any setup, first the processes are required to be streamlined while targeting throughput time reduction and wastage obtained from a given set of inputs, which is typically expressed as output to input ratio. Productivity in general is the measurement of how level, this may be w.r.t. a machine or a piece of The factors affecting productivity in a manufacturing facility can be controlled by land etc, whereas at macro-level this may be w.r.t. a whole country, Helms (1996). reducing setup times, reducing movement time and As such, productivity is the ratio between the outputs generated from a system and the inputs that are used to create those outputs. The inputs include factors like capital, labor, material, equipment, tools, energy, information etc. The output is a good or service. The productivity of a process can be increased by controlling these factors. Productivity is also measured in terms of single factor or Total factors. Figure 1 - Main Processes of a Company reducing waiting times. An important factor to enhance productivity is by emphasising on first time quality production, which can be achieved by implementing practices and methodologies like TPM, 5S, Kaizen, etc. These practices help in reducing the rework and rejection rates and hence saving valuable production time. Focusing on preventive maintenance, cross-training and skill Single factor productivity is units of output produced per unit of a particular input. It could be in terms of labour, material, capital etc. But this doesn’t allow for a just comparison as two different producers may use different factors depending upon the price they have to pay. A Enhancing operational excellence by improving productivity well a company is doing as a producer. At micro- reduction. better way is to measure total factor productivity, which takes into account all the factors required to produce the output. level of employees helps in increasing the machine 45
  • 48 Opsworld 4 Targeting productivity: Koufteros et al. (2001) operations training material. This suggests that have identified seven key factors affecting time- there exists a potential of around 3 times based manufacturing, these are, shop floor improvement in the actual utilisation of the employee solving, machines by focusing on factors like reducing preventive maintenance, dependable suppliers, breakdown losses, setup times, increasing quality reengineering controls etc. involvement setups, in problem cellular manufacturing, quality improvement efforts and pull production approaches. Improvement in all these areas helps in reducing the cycle time and hence improving the productivity of a manufacturing set up. Various factors improving the productivity are explored below one by one. Setup time: Setup time is the time required to Ignizio (2009) carried out work in semiconductor production facility and concluded that decisions to allocate the machinery or workstations for different jobs influence the productivity of the unit. He found that by optimizing such decisions substantial improvement in production and cost ready the workstation for processing the part through that workstation. Hopp & Spearman (2001) and Suresh & Meredith (1994) have suggested reduction in setup time as a way to improve throughput time. Steudel and Desruelle (1992) have suggested that setup time can be reduced by reducing number of setups, improving savings were achieved. the setup procedures, purchasing equipments with As per Terwiesch (2013), productivity small setup times, using machines with single enhancement can also be seen in terms of minute exchange of dies and dedicating the improving the overall equipment efficiency (OEE), workstations to families of parts with similar setup which can be said to be dependent on various requirements so that common fixtures can be used. factors as described in figure 2 from McKinsey Ross and Taylor (2013) and Terwiesch (2013) further suggest classification of that setup procedures into external and internal setup procedures also reduces the overall setup time. External setups are those tasks which could be done before 46 the machine Figure2 - Operational Equipment Efficiency of a resource stopping or the after machine has started so that the production is held up for a minimum
  • 49 Opsworld 4 time. Whereas internal setups can be done only adding processes, Sarkar (2012). The value adding after the machine has been stopped. activities are those which are necessary from customers point of view, business value adding activities are not important from customers perspective but these activities cannot be avoided and non-value adding activities are those which are being done but activities are not valuable Figure 3- Approach to Achieve Setup Time Reduction Figure 3 shown below is taken from McKinsey operations training material and suggests the steps to reduce the setup time. from the customer’s view point and he will not pay for them. In the more traditional manufacturing setup, seven sources of waste have been identified which are called Mudas. These seven categories are overproduction, waiting, Terwiesch (2013) says that if setup occurs at the transportation, over processing, inventory, motion bottleneck then the batch size should be increased and defects, Womack and Jones (1996). The so as to de-bottleneck this workstation. Otherwise, process can be studied by classifying various if setup occurs at non-bottleneck then batch size activities and wastages must be removed to should be reduced to match with the capacity of increase productivity. the bottleneck. Movement time: It is the time required to move Processing time per part: Processing time is the the parts from one workstation to another. It can be time required by a machine to operate the reduced by reducing the time required per move or designated routine through a unit. Johnson (2003) reducing the total number of moves, Johnson suggests that processing time per part can be (2003). Hopp & Spearman (2001) suggested that it reduced by reducing time per operation by using can also be reduced by designing the layout in a new technology or redesigning the part and also by way that reduces the distance between two reducing number of operations required. Suresh & workstations. Movement time can also be reduced Meredith (1994) have also suggested reduction of by grouping the equipment performing certain processing time to improve the productivity. Enhancing operational excellence by improving productivity should be avoided as these sequential operations as a manufacturing cell, Suresh & Meredith (1994). Processing time can further be reduced by reviewing the processes and classifying them into Resource utilization: Johnson (2003) has pointed value adding, business value adding and non-value out increasing the resource access by cross-training 47
  • 50 Opsworld 4 the operators and increase equipment pooling to postponement, first, inventory levels reduce for improve productivity. The operators should be achieving a given service level. Second, if more trained so that they can work on multiple products can be postponed then it also leads to machining centres as per the requirement on the reduction in inventory levels job. Postponement is exhibited very effectively in the Process variability: According to Hopp & change which paint companies introduced. Instead Spearman (2001) variability can be due to of producing paints in umpteen number of shades controllable or random variation. Controllable they now mix the tints to white paint at the variation is due to the results of decisions like retailer’s end to make whatever shade the customer design differences, transfer batch sizes etc whereas desires. This initiative, while helping to increase random variation occurs due to events which are productivity of paint companies by reducing not in immediate control, for example downtime of number of setups and increasing uniformity in machines or operators, variation in arrival times of production, has also helped to bring down the various batches. Suresh & Meredith (1994) have inventory levels as a result of benefits received noted that variability can be reduced by grouping from aggregation of forecasts. similar jobs, by having dedicated labour and equipment, by stabilizing batch sizes and by improving preventive maintenance. Postponement: Another The manufacturing of the product as per the beneficial approach which can increase the productivity in case of customised production is the Quality as an aid to improve productivity: concept of postponement, which is also known as delayed differentiation. In delayed differentiation the production is done upto the stage till the product remains generic and final addition of differentiated features is delayed until the order is received and then the product is customised as per the required quality goes a long way in enhancing the productivity of any process. Russel and Taylor (2013) estimate that the extra work required to do on account of reworks and rejections is believed to be acting as a second factory inside the factory taking as much as 30 to 35% of the production time (especially in new plants) which otherwise could be utilised for making new products. The various practices and methodologies like quality at source, TPM, 5S, Six Sigma, Kaizen etc can be requirement of the order. utilized as an aid to enhance productivity. Feitzinger and Lee (1997) have defined postponement as a comprehensive approach involving a company’s supply, manufacturing & distribution approach and they say that postponing the decision to differentiate until the latest stages Johnson (2003) has identified improving raw material quality, improving equipment capabilities, implementing poka-yoke, using one piece flow as steps to reduce the rejection rate. of this chain is the key to success. Graman & Bukovinsky 48 Goh (2010) has identified six factors important for success of a six sigma project. These are use of a (2005) state two benefits of
  • 51 Opsworld 4 common and realistic metric for quality assessment Conclusion: and improvement, clear assignment of roles and responsibilities in performance improvement efforts, logical alignment of statistical tools, recognition of the time effects on processes, unprecedented synergy with modern information technology and finally capabilities to grow for larger roles for business competitiveness While many organizations strive to achieve competitive advantage by focusing on marketing and financing, they forget to look into the basics, which is the productivity of the company. It can be argued that when the sales are insufficient there is no use of productivity however it has been observed productivity not only helps increase output but also cut costs which can make a terms of profitability and other considerations for profound effect when the sales are lesser than long as well as short term; Volume, Cost, Price and expected. Quality should be studied in combination with each other. He says that an organisation should attain a marketable standard by this combination and statistical quality control can play a vital role in this by providing correct choices for quality within the capabilities and opportunities of the firm. While suggesting that productivity can be adopted by various organizations to achieve operational excellence; we also acknowledge the applicability of the above mentioned parameters could be context /industry specific. It is not necessary that all the parameters discussed in the paper will be applicable to each and every organization. Certain Although giving importance to quantifiable and parameters like resource utilization, quality control measurable progress is necessary but at the same and movement time are those which would be time Galbraith (1978) as quoted by Goh (2010) applicable for mostly all organizations. Whereas remarks, “To many it will always seem better to parameters like setup time and processing time per have measurable progress toward the wrong goals part are those which would be generally applicable than immeasurable progress toward the right to the manufacturing industry. It is thus very ones”. He warns against the over reliance on the essential that an organization identifies the quantitative data and ignoring the obvious but parameters immeasurable initiatives. In similar zest words of productivity and work towards it. which would help enhance its renowned economist Paul Samueison are also pertinent to quote, “Fortunately, our answers need not be accurate to several decimal places; on the References 1. Ekambaram. S. K. (2011), Effectiveness of contrary, if the right general direction of cause and Statistical effect can be determined, we shall have made a Manufacturing as a Tool of Sound tremendous step forward.” Financial Enhancing operational excellence by improving productivity Ekambaran (2011) says that to meet objectives in Quality Management, Control Journal In of Financial Management and Analysis, Vol. 24, No. 1, pp. 97-101 49
  • 52 Opsworld 4 2. Feitzinger, E. and Lee, H. L. (1997), Mass customisation at Hewlett-Packard: The Power of Postponement, Harvard Business Review, Jan-Feb (1997), pp. 116-121 of Six Sigma, Newyork 11. Porter, M. E. (1985), Competetive Advantage, The Free Press 3. Goh, T.N. (2010), Six Triumphs and Six Tragedies in your Corporation, Simon & Schuster, quality engineering, Vol. 22, pp. 299-305 12. Russel, R. S. and Taylor, B. W. (ed.) (2013), Operations Management, Willey India Pvt ltd, New Delhi 4. Graman, G. A. and Bukovinsky, D. M. 13. Saari, S. (2006), Theory and Measurement (2005), From Mass Production to Mass in Customization: Postponement of Inventory Productivity Conference 2006 Finland. Differentiation, The Journal of Corporate 14. Sarkar, D. (2012), Lessons in Lean Accounting & Finance, Vol. 17, No. 1, pp. 61-65 Business, Presented in European Management, Westland Ltd, Chennai 15. Steudel, H.J. and Desruelle, P. (1992), 5. Hastak, M. et al. (2008), Analysis of Manufacturing in the Nineties: How to Techniques Leading to Radical Reduction Become a Mean, Lean, World-Class in Competitor, Van Nostrand Reinhold, New Project Cycle Construction Time, Journal Engineering of and Management, pp. 915-927 York 16. Suresh, N.C. and Meredith, J.R. (1994), 6. Helms, M. M. (1996), Perspectives on Coping with the Loss of Pooling Synergy quality and productivity for competitive in advantage, The TQM Magazine Volume 8, Management Science, Vol. 40, No. 4, pp. Number 3, pp. 5–10 466-483 7. Hopp, W.J. and Spearman, M.L. (2001), Factory Physics, Irwin McGraw-Hill, Boston 8. Ignizio, J. P. via (2009), Cycle Time Machine-To-Operation Qualification, International Journal of Production Research, Vol. 47, No. 24, pp. 6899–6906 9. Johnson, D.J. (2003), A Framework for Manufacturing Throughput Time, Journal of Manufacturing Systems, Vol. 22, No. 4, pp. 283-298 10. Jones, D. and Womack, J. (1996), Lean Thinking Banish Waste and Create Wealth 50 17. Terwiesch, Management, Pennsylvania Reduction Reducing Cellular Manufacturing C. (2013), MOOC, Systems, Operations University of
  • 54 Opsworld 4 ANSWERS 52
  • 55 IIM Team Raipur Anubhav Sood Bharath Arava Manoj H Gautham Jayan Subhash Kumar Sameer Pandey Sujitha Tikka Thousif Mohammed A Ruchi Sao Vanamamalai. R
  • 56 For Details, Contact Operations and Supply Chain Club Indian Institute of Management Raipur GEC Campus, Old Dhamtari Road, Sejbahar Raipur 492015, India Email: opep@iimraipur.ac.in