SABMiller revamped its supply chain management system to reduce stock-outs caused by an increasingly complex market. The brewing company developed a new system using SAP to better predict demand and ensure a 98% target availability for brands. Brooks Sports also changed its forecasting process from relying on sales teams to using collaborative forecasting to address inconsistent growth, long production lead times, and increasing "at once" orders as it shifted to high-performance running products. Risk management aims to identify risks and minimize their impact on projects through risk assessment, control, prioritization, and mitigation. Redesigning factory layouts may be necessary due to inefficient operations, safety hazards, or changes to product lines that require differentiating between product and

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Master of Business Administration - MBA Semester 2
MB0044-Production and Operation Management-4 Credits
(Book ID: B1627)
Assignment (60 Marks)
Note: Answer all questions must be written within 300 to 400 words each. Each Question carries
10 marks 6 X 10=60.
Q1. What is value engineering? List the main benefits of value engineering?
 Definition and explanation of Value Engineering (VE)
 Listing of the main benefits (any four)
Answer. The concept of value engineering originated during the Second World War was developed
by the General Electric Corporations (GEC). Value Engineering has gained popularity due to its
potential for gaining high Returns on Investment (ROI). This methodology is widely used in business
re-engineering, government projects, automakers, transportation and distribution, industrial
equipment, construction, assembling and machining processes, health care and environmental
engineering, and many others. Value engineering process calls for a deep study of a product and
the purpose for which it is used, such as, the raw materials used; the processes of transformation;
Q2. Case study: SABMiller revamps supply chain management
SABMiller, the $24bn global brewing giant, is revamping its supply chain management system to
reduce stock-outs caused by an increasingly complex and hard to predict market. The firm is
developing and testing the new system in South Africa with an eye on rolling it out to group
companies worldwide, says SABMiller programme manager Rudi van Schoor.
"Our brands are the same as any other brand, especially those at the luxury end," says Van
Schoor. "If the customer comes into the shop and can't find our product, he or she has the
disposable income and self-confidence to substitute our brand for our competitors'. That's
dangerous."
Van Scoor says the group has an average stock availability target of 98%. "But for some premium
brands the target is 100%," he says. That means it will live with excess stocks of some products,
just to ensure that a thirsty customer can get his or her favourite drink, every time.
(Source:http://www.computerweekly.com/feature/Case-study-SABMiller-revamps-supply-
chainmanagement)

2. Why did SABMiller revamp its supply chain? Describe the domain application used for SCM
integration?
 Analysis of the major and minor issues for revamping the supply chain with evidence
 Description of the SAP system, why it was used and the benefits from using the system
Answer. Revamping:-
Q3. Write short notes on:
 Ingredients of a business process
 Acceptance sampling
 Work Breakdown Structure
 Productivity
Answer. a. Ingredients of a business process: - The ingredients that might be used in a business
process can be briefly outlined as follows.
Q4. Collaborative Forecasting Running Smoothly at Brooks Sports designs and develops high-
performance running footwear, apparel and accessories which are sold in 80 countries worldwide.
In 2001, when the company shifted from a broad product line to focus on high-performance
products targeted at serious runners, it was clear that the forecasting process needed to change
to support the strategic direction of the company. The existing forecasting process, based entirely
on the judgment of the sales team, was limiting the company’s ability to grow.
The strategy shift created a number of forecasting challenges for Brooks including:
♦ Inconsistent style growth: the new line of products experience growth rates anywhere from 0 to
50 percent annually.
♦ Long production planning horizon coupled with short product life: production and capacity
decisions are typically made 18 months before a style is launched, average lead time for a style is
6 months and the product life of Brooks’ styles range from 6 to 24 months. This means that
planners must sometimes set the entire demand plan for a style prior to ever receiving a customer
order, underscoring the importance of accurate forecasts.
♦ Increasing “at-once” orders: “at once” orders, which are placed for immediate shipment,
historically accounted for less than 20 percent of total sales. Since 2001, however, “at once”
orders have increased to nearly 50 percent of total sales.
♦ Evolving size curves: with its new focus on serious runners, the standard footwear size curve
would not adequately reflect distribution of sales by sizes.
♦ No exposure to retail sell-through: the high-performance products are sold primarily through
independent specialty stores who don’t have the capability to share sales data with vendors.
What is the main issue of the case study? Analyse the forecasting solution.
 Description of the main issue(forecasting process needed to change), forecasting challenges
 Evaluation of the collaborative forecasting process
 Conclusion on whether the solution could be improved or not

3. Answer. Issues:-
Q5. Explain the risk management and its various components.
 Definition of risk management and what it entails
 Description of the four components of risk management
a. Risk assessment
b. Risk control
c. Risk prioritising
d. Risk mitigation
Answer. Risk Management
Risks are those events or conditions that may occur and whose occurrence has a harmful or negative
impact on a project. Risk management aims to identify the risks and then take actions to minimise
Q6. Why redesign of layouts may be necessary? List the differences between product and process
layout.
 Listing of reasons why redesigning of existing layout is required
 Listing of any five differences
Answer. Most Common reasons for redesigns:-
1. Inefficient Operations.
2. Accident or safety hazards.
Winter-2015
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