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Write short notes on:

Outsourcing strategies for capital productivity
Implementation of operations
Basic competitive priorities
Market survey method of forecasting
1. Outsourcing strategies:
When capacity requirements are determined, it is easy to figure out whether
some goods or services can be outsourced. Outsourcing can reduce the
capital and manpower requirements. Also, the available capacities can be
used to augment the core competencies thus reducing the cost of the product
or service to the customer. Further, outsourcing also helps in improved
product design and even enables better networking and collaborations.
However, lack of expertise, quality considerations, nature of demand, and
cost factors may restrict outsourcing.
Lack of expertise The outsourced firm may not have the requisite expertise
to do the job required.
Quality considerations Loss of control over operations may result in lower
Nature of demand When the load is uniform and steady, it may not be
worthwhile to outsource. Absence of supervision and control may be a
hindrance to meet any urgent requirements of the customer. This affects the
business, especially if no production facilities are built in the organisation.
Cost It may not be worthwhile when the fixed costs that go along with
making the product does not get reduced considerably.
E.g. Siemens ROLM in collaboration with an outsourced agent, designed
and implemented an on-site Client Call Center. Within a period of six
months, the company generated 116% of goals for sales leads, grossed over
$4.2 million in MAC sales and produced leads valued as high as $1M.
2. Implementation of operations:
Implementation is the process of executing the planned operations. When
planning and controlling functions are put together, we call it as
Implementation of Operations. The planning is the process of estimating,
routing, and scheduling. The controlling functions are conducted while the

manufacturing is going on, like dispatching and expediting.

Estimating Estimating gives the quantities to be made at each workstation
depending on the sales forecast, provision for buffer stock, quantities bought
out, services outsourced, likely shortfalls, and others. It is made on the basis
of capacity.
Routing Routing determines the sequence of operations and the machines
that do them, so that work flow, as determined by the processes, is smooth
resulting in minimum inventory.
Scheduling Scheduling is mainly concerned with allocating time slots for
different jobs. It specifies as to when the jobs start and end at particular
workstations. The purpose is to prevent the imbalances among work centres
and to utilise the labour hours in such a way that established lead times are
Dispatching Dispatching is concerned with moving of the materials with
tools, jigs, and fixtures to specific machines along with the drawings and
ensuring inspections at specific nodes, so that the materials move in the
supply chain.
Expediting Expediting ensures that all the above are being done properly.
Reports are generated and any bottleneck that gets created is removed.
3. Basic competitive priorities:
Operations stategy reflects the long-term goals of an organisation in its
corporate strategy. To achive good results, a clear understanding of the
operating advantages and a good cross functional coordination between
functional areas of marketing, production, finance, and human resources
departments are required. Operating advantages depend on its processes and
competitive priorities considered while establishing the capabilities. The
basic competitive priorities are:
Cost - Cost is one of the primary considerations while marketing a
product or a service. Being a low cost producer, the product accepted by the
customer offers sustainability and can outperform competitors.
Quality - Quality is defined by the customer. The operations manager
looks into two important aspects namely high performance design and
consisitent quality. High performance design includes superior features,
greater durability, convenience to services, etc where as consistent design
measures the frequency with which the product meets its design
specifications and performs best.
Time - Faster delivery time, on-time delivery, and speedy development

cycle are the time factors that operations strategy looks into.
Flexibility - Flexibility is the ability to provide a wide variety of
products, and it measures how fast the manufacturer can convert its process
line used for one product to produce another product after making the
required changes.
4. Market survey method of forecasting:
Conducting surveys among the prospective buyers or users is a very old
method of forecasting. Here, a questionnaire is prepared and circulated
among the people and their responses are obtained. The responses are
collated and analysed to reveal possible clues towards acceptance or
otherwise about a new product or service. Based on the overall decision, the
forecasting is done. This method is typically done for new products or at
new places where a product is to be launched. In this method, the number of
respondents and how responses are gathered like through oral interviews,
personal talks, internet based, postal ballots, etc, have to be established
before survey. The common limitations are the sample size and the way of
drawing the sample like random, convenient, or judgmental. Sample bias is
not completely ruled out.

Q2.: Gujarats emergence as an auto hub is a positive for the

Ans.: General factors that favour Gujarat as a destination for
automobile manufacturing
Gujarat has leveraged its locational advantages, with relatively low
transaction costs for accessing markets in the western and northern India.
Good rail connectivity is slated to improve significantly with the opening of
the dedicated freight corridors to Dahej and Nhava Sheva passing through
large parts of Gujarat.
Special factors that favour Gujarat as a destination for automobile
Gujarats port development also could permit economical transportation to

other off, thus diversifying transport modes.

Developing domestic and international financial services, improving road
and air connectivity and focusing on affordable housing and other amenities
could further add to Gujarats locational advantage.
Factors favour Gujarat as automobile manufacturing hub
There are several reasons why Gujarats emergence as an auto hub is a
positive for Indias economy. First, the auto sector is a mother industry and
for every direct job in the OE, minimum 5-7 indirect jobs are created in tier
I, II and III, not including jobs for drivers, service station attendants and
mechanics that form a well paying proposition for many relatively less
skilled, but aspirational Indians.
Secondly, importance of transport equipment, which includes all types of
motorised vehicles, in Indias trade has been increasing.
Thirdly, healthy competition among auto hubs in Tamil Nadu, Maharashtra
and Gujarat will be a positive for the manufacturing productivity.
Finally, it would assist India in progressing towards the goal of increasing
the share of manufacturing in GDP from 16% in 2010 to 25% by 2022.
From our point of view, we dont see it as Tamil Nadu versus Gujarat but
Tamil Nadu and Gujarat, says Joginder Singh, President and Managing
Director of Ford India. We have excellent relationships with both
governments. In Gujarat, since it is a new plant, we have the advantage of
bringing in new technology.
Gujarat is a better location for manufacturing automobiles
Gujrat is the larger share of non-fertile agricultural land. Gujarats land bank
could thus be an attractive factor. Gujarat Industrial Development
Corporation (GIDC) deserves credit for turning the above potential into
actual accomplishments.

Q. 3: Write short notes on:

5Ss system of waste elimination
Scheduling in services
Vendor managed inventory
Subcontracting capacity (production) option
1.) 5Ss system of waste elimination :
Operations managers have improvised housekeeping to include a checklist
commonly known as the 5Ss. The Japanese developed the initial 5Ss where
each S stands for a Japanese word.
The 5Ss are as follows:
Sort/segregate Keep what is needed and remove everything else from
the work area; when in doubt, throw it out. Identify non-value items and
remove them. Getting rid of these items makes space available and usually
improves the work flow.
Simplify/straighten Arrange and use analysis tools to improve the work
flow and reduce wasted motion. Consider long-run and short-run ergonomic
issues. Label and display for easy use only what is needed in the immediate
work area.
Shine/sweep Clean daily; eliminate all forms of dirt, contamination,
and clutter from the work area.
Standardise Remove variations from the process by developing
standard operating procedures and checklists; develop good standards.
Standardise equipment and tooling so that cross-training time and cost are
reduced. Training and retraining the work team eliminate deviations.
Sustain/self-discipline Review periodically to recognise the efforts and
motivate the workforce to sustain progress. Use visuals wherever possible
for easy communication and implementation.
2. Scheduling in services
There are distinctive difference between the scheduling followed for
manufacturing and services. All these differences have a direct impact on
scheduling. These differences are:
Service operations cannot create inventories to provide buffer for
demand uncertainties

Demand in service operations cannot be predicted accurately

Demand for service are initiated mostly as unplanned event and hence,
there may be certain distortions in scheduling
Providing the required manpower and skills for the sudden demand in
scheduling a service activity is challenging and sometimes becomes
Scheduling customer demand
Normally the service centre capacity is fixed, but the demand will be
varying. Forecasting the demand in advance for service activities is difficult
and scheduling such variable demand poses certain problems.
There are three methods normally used by the scheduler in services. They
i) Backlogs: Service centres allow backlogs to develop so that they can
plan their capacity better. Priority rules can be applied to determine which
order to process next. The usual rule is first come first served. Industry
customs and previous experience often changes the priority. For example,
servicing of cars, two wheelers, etc.
ii) Reservations: Services provided by hospitals, travels, trades, etc. The
reservation for the services in advance is the norm. This system is used when
the customer uses service facilities based on their requirements.
iii) Appointments: Here the customer is specified with the time of
services. The advantage is that the service is customised and utilisation of
the capacity will be high. For example, surgery in hospitals.
3. Vendor managed inventory:
Vendor Managed Inventory (VMI) is a process in which a supplier generates
orders for its distributor based on demand information sent by the
VMI was first applied to the grocery industry, between companies like
Procter & Gamble (supplier) and Wal-Mart (distributor).
With VMI, suppliers generate orders based on mutually agreed upon
objectives for inventory levels, fill rates and transaction costs, and demand
information sent by their distributor customers.
In this process, the buying function moves from the distributor back to the
supplier, who takes over responsibility for placing orders.
With VMI, suppliers and distributors can both focus on the same issue - how
to sell more product to the end-user more efficiently. This changes the
supplier's focus from how to get the distributor to buy more, to how to get
the distributor to sell more.

This change in the supplier/distributor relationship is the most exciting

feature of vendor managed inventory.
4. Subcontracting capacity (production) option:
A firm can acquire temporary capacity by subcontracting work during peak
demand periods. Subcontracting, however, has several pitfalls. First, it may
be expensive; second, it risks opening the clients door to a competitor.
Third, it is often hard to find the perfect subcontract supplier, one who
always delivers the quality product on time. However, of late outsourcing
has become a complete business policy and cost of operations may be cited
as the main reason. Thus, it is possible to partly produce the items outside or
completely procure from outside. Depending on who is stronger and
controlling the whole process the subcontracting costs will vary and could be
even low.

Q. 4: Describe the post implementation review of a project.

Explain the tools that may be considered for post
implementation review.
Ans.: Post implementation review:
After every stage of a project is implemented, it may so happen that there
could be a minor change or modification which has to be reviewed. This is
known as post implementation review. The review is performed in four
1. Final product review: The product obtained after every stage must meet
the requirements of that stage. If it completely meets the stated objectives,
then focus on the issues of maintenance of the processes and product
performance. If the final product does not completely meet the objectives
then identify the variations in the product and analyse the variation. Study
the factors responsible for the change and evaluate each one separately.
2. Outstanding project work review: Many times it is found that there may
be some item of the project which is still not in its finished form. It may be
insignificant as it may be a by-product of that stage which may not be
required immediately for the next stage. Then the items that are open should
be resolved and necessary steps be taken to close such open items.
3. Project review: Every aspect of a project from start to end has to be

reviewed. The objectives, performance criteria, financial criteria, resource

utilisation, slips and gains of time, adherence to the project definition, and
plans have to be reviewed. All such review details and reports have to be
well documented for future use.
4. Process review: Every process is important in any project. One may
review the process to see, if any changes can be made to improve its
Tools for post implementation review:
There are various tools for post project implementation review that may be
considered for improving and developing processes of the project.
Some of the tools that may be considered for post implementation review are
1. Final product evaluation: Final product evaluation may be done through
regularly organised meetings and quality reviews.
2. Outstanding project work evaluation: All outstanding works of a
project can be reviewed to check its output quality and performance.
3. Project review questionnaire: Project review questionnaire may become
important if the reviews are to be structured. Group discussion may be
initiated depending upon the points to be discussed.
4. Process evaluation: Evaluation of any process is one of the key issues of

Q. 5: Explain the steps to set data in logical order so that the

business process may be defined.
List the ingredients of a business process.
Ans.: In business process modelling, the purpose of the process is to be
written in a statement. The statement should carefully include only those
purposes that are relevant and capable of being achieved. Using this as a
reference, the business analyst will make notes regarding the inputs that are
required. When the purpose is referred to as continuous, irregularities come
to light either because the inputs are insufficient or the purpose may not be
The activities stated above, are concerned with collecting data and verifying
whether they are sufficient or not. Before, we attempt to define the business

process; the data collected should be set in a logical order, making the
logical data model complete in all respects.
The following steps should be considered for setting the data in a logical
1. Check whether the participants in the process that is, people, teams, and
electronic applications are sufficient or, any changes and additions need to
be made.
2. Ensure that all the data expected is included or not. Generally, we start
with an initial set of data which we have. When we check them with the
requirements of the process for the desired outcomes, we find gaps. These
gaps help us in determining which subset of the data is appropriate at each
task in the process.
3. Check whether the data is sufficient for the implementation of the process.
This can be achieved by answering the following questions:
i. What is the path the process should take?
ii. What decisions are to be made at any point in the process?
iii. Are data available at those points?
4. State the rules used to define the various parts of the process. At this
stage, the naming conventions are also included. This is important to be
included at the process definition stage.
5. Determine the disposition of data at the end of the process and decide the
a. Do we plan to keep the data or delete them?
b. If they are to be stored, where and in what form will be used?
c. What are the measures of security for access?
6. Determine the other elements depending upon the business process and
the need. The elements added must be questioned to collect a detail data.
Process definition enables us to go into details at every stage of the process
and verify the adequacy of data, the sequential steps in the process and fill
the gaps before attempting implementation.
The purpose of setting the data in a logical order is to, locate deficiencies
and remove them. Therefore, the decisions about process and sequence can
be taken and a model can be designed which is useful in all perspectives.
Ingredients of a business process:
The ingredients that might be used in a business process can be briefly
outlined as follows:

The data which accomplishes the desired business objective

Acquisition, storage, distribution, and control of data which undertakes
the process across tasks
Persons, teams, and organisational units which helps to perform and
achieve the tasks
Decisions which enhance the value of data during the process

Q. 6: Describe the dimensions of quality.

Ans.: Dimensions of quality:
Quality is inherent in the product or service that is rendered to the customer.
Since we are attempting to measure the same, we will look into those aspects
of quality, called dimensions of quality.

Quality of design A product is designed keeping in view the customers

requirement. For designing a product, the manufacturer or service provider
should be aware of the specifications of different features required to
incorporate in the product. Some of the features to be known for designing a
product include material, dimensions, and characteristics. The quality of
the product is introduced by the design of these features. Inspection of the
manufacturing processes is of utmost importance in ensuring quality of

Conformance to design Conformance to design is the degree to which the

manufactured product or delivered service meets the parameters that have
been incorporated in the design. It verifies that the variability in the process
is within acceptable limits so as not to compromise the functionalities that
the designer wanted.

Utilisation conditions Utilisation conditions refer to the necessity of the

customer being informed or trained so that, the purpose for which the
product was made is realised by the customer in total, thus enhancing the
customers satisfaction. Instructions, manuals, help-lines, and on-site
training by the manufacturers personnel improve the perception of quality.

After sales service There are so many reasons why products do not

function to the expected levels. It may be improper use, unexpected or

additional demands, improper assembly or even manufacturing defects.
There is a need to rectify these and make products or services perform up to
the expected standard. The firm should put in place a system by which these
possibilities are anticipated and attended to give customer satisfaction. This
is an important, but often neglected dimension of quality.