Amity Campus

Uttar Pradesh
India 201303

Subject Name
Management
Study COUNTRY
Roll Number (Reg.No.)
Student Name

ASSIGNMENTS
PROGRAM: MBA IB
SEMESTER-III
: Operations and Supply Chain
: Egypt
: IB01362014-2016016
: HEBA MOURAD EL BEKALY

INSTRUCTIONS
a) Students are required to submit all three assignment sets.
ASSIGNMENT
Assignment A
Assignment B
Assignment C

DETAILS
Five Subjective Questions
Three Subjective Questions + Case
Study
Objective or one line Questions

MARKS
10
10
10

b)
c)
d)
e)

Total weightage given to these assignments is 30%. OR 30 Marks

All assignments are to be completed as typed in word/pdf.
All questions are required to be attempted.
All the three assignments are to be completed by due dates and
need to be submitted for evaluation by Amity University.
f) The students have to attached a scan signature in the form.
Signature :
Date
:

_______
___________28/11/2015______________________

( ) Tick mark in front of the assignments submitted

Assignmen
Assignment

Assignment
t A
B
C

Operations and Supply Chain Management

Assignment - A
Question 1: Discuss what do you understand by operations? Is
operations management important for organisations? Why?
Differentiate between manufacturing operations and service
operations?
Answer: Based on my understanding, Business operations are those
ongoing recurring activities involved in the running of a business for the
purpose of producing value for the stakeholders. They are contrasted
with project management (business change managers are responsible for
bridging the gap between the projects and business operations), and consist
of business processes.
The outcome of business operations is the harvesting of value from assets
owned by a business. Assets can be either physical or intangible. An example
of value derived from a physical asset like a building is rent. An example of
value derived from an intangible asset like an idea is a royalty. The effort
involved in "harvesting" this value is what constitutes business operations.
Business operations encompass three fundamental management imperatives
that collectively aim to maximize value harvested from business assets (this
has often been referred to as "sweating the assets"):
1. Generate recurring income
2. Increase the value of the business assets
3. Secure the income and value of the business
Yes Operations management is very important for organizations as it is the
field concerned with managing and directing the physical and/or technical
functions of a firm or organization, particularly those relating to
development, production, and manufacturing. Operations Management
programs typically include instruction in principles of general management,
manufacturing and production systems, plant management, equipment
maintenance management, production control, industrial labor relations and
skilled trades supervision, strategic manufacturing policy, systems analysis,
productivity analysis and cost control, and materials planning.
Manufacturing operations differ in service operations as its primary concern
is the operation of a facility as opposed to maintenance, supply and
distribution, health and safety, emergency response, human resources,

security information
organizations.

technology

and

other

infrastructural

support

Question 2: Describe the TQM philosophy and identify its major

characteristics. Explain how TQM is different from the traditional
notions of quality.
TQM is an approach for continuously improving the quality of goods and
services delivered through the participation of all levels and functions of the
organization. TQM is about building quality in from the beginning and
making quality everyone's concern and responsibility. Consumers are willing
to pay a premium for higher-quality goods and services. Organizations that
employ TQM (or a similar philosophy) work on the premise that any product
or service can be improved upon and this improvement equals reduced cost,
better performance and higher reliability. The simple objective of TQM is do
things right the first time, every time.

Characteristics of TQM can be listed as follows:

1. Target:
In TQM, the most important target to achieve is Quality; Quality policy must
be set toward customer. Meeting customer's needs mean satisfying every
customer requirement but not trying to reach some quality standards set
before. Never stop innovating - never stop perfecting the quality is one of the
most important principles of TQM.
2. Scope:
To ensure the quality of service and product, TQM system requires the
extending of production process to suppliers and sub-contractors. Normally,
the trading of material in production may account for 70% of final product
cost (depend on types of product). Therefore, to ensure the quality of the
input material, it is necessary to set up specific standards for each type of
material to control its quality. It is also necessary to change the method of
placing order to make it suitable with the production process.
3. Form:

Instead of controlling the quality of the finished product (after production),

TQM sets up plans and programs to supervise and prevent problems right
before the production process. Statistical tools are used to supervise,
quantitatively analyze the results as well as factors affecting the quality,
consider the reasons and take appropriate prevention methods.
4. Basis of TQM system:
The basis of TQM practice in the company is Human. Talking about quality,
people usually think about the product quality. But it is the quality of
employees that is the main concern of TQM. Of the three factors of Business,
which are hard factor (machines, equipments, money...), Soft factor
(methods, secrets, information...) and Human factor, Human is of the first
concern to TQM.
The basic principle for implementation of TQM is that the qualification of
employees is developed fully and integrated through training, delegation and
assignment.
5. Organization:
TQM system is cross organized and functioned in order to manage,
integrated corporate with different activities of the system and facilitate
group working. The implementation of TQM requires the participation of high
and middle level managers. A proper organization will help duties to be
assigned clearly. Thus, TQM needs new management model, with different
characteristics from the previous model.
6. Management skills and tools:
Methods to implement must be based on the principle "do correctly at the
very beginning", in researching and designing to minimize economic cost.
Strictly apply DEMMING circle (PDCA) to make foundation for the continuous
quality improvement.
The Six Sigma process improvement originated in1986 from Motorolas drive
towards reducing defects by minimizing variation in processes through
metrics measurement Applications of the Six Sigma project execution
methodology have since expanded to include practices common in Total
Quality Management and Supply Chain Management, such as
increasing customer satisfaction, and developing closer supplier
relationships.
The main difference between TQM and Six Sigma (a newer concept) is the
approach. TQM tries to improve quality by ensuring conformance to internal

requirements, while Six Sigma focuses on improving quality by reducing the

number of defects and impurities.
Question 3 (a): Describe each of the four costs of quality:
prevention, appraisal, internal failure, and external failure.
Quality costs can be broken down into four broad groups. These four
groups are also termed as four (4) types of quality costs. Two of these groups
are known as prevention costs and appraisal costs. These are incurred in an
effort to keep defective products from falling into the hands of customers.
The other two groups of costs are known as internal failure
costs and external failure costs. Internal and external failure costs are
incurred because defects are produced despite efforts to prevent them
therefore these costs are also known as costs of poor quality.
The quality costs do not just relate to just manufacturing; rather, they relate
to all the activities in a company from initial research and development (R &
D) through customer service. Total quality cost can be quite high unless
management gives this area special attention.
Prevention Costs: Generally the most effective way to manage quality costs
is to avoid having defects in the first place. It is much less costly to
prevent a problem from ever happening than it is to find and correct the
problem after it has occurred. Prevention costs support activities whose
purpose is to reduce the number of defects. Companies employ many
techniques to prevent defects for example statistical process control,
quality engineering, training, and a variety of tools from total quality
management (TQM).
Prevention costs include activities relating to quality circles and statistical
process control. Quality circles consist of small groups of employees that
meet on a regular basis to discuss ways to improve quality. Both
management and workers are included in these circles.
Appraisal Costs: Any defective parts and products should be caught as early
as possible in the production process. Appraisal costs, which are
sometimes called inspection costs, are incurred to identify defective
products before the products are shipped to customers. Unfortunately
performing appraisal activates doesn't keep defects from happening
again and most managers realize now that maintaining an army of
inspectors is a costly and ineffective approach to quality control.
Employees are increasingly being asked to be responsible for their own
quality control. This approach along with designing products to be easy to

manufacture properly, allows quality to be built into products rather than

relying on inspections to get the defects out.
Internal failure Costs: Failure costs are incurred when a product fails to
conform to its design specifications. Failure costs can be either internal or
external. Internal failure costs result from identification of defects before
they are shipped to customers. These costs include scrap, rejected
products, reworking of defective units, and downtime caused by quality
problem. The more effective a company's appraisal activities the greater
the chance of catching defects internally and the greater the level of
internal failure costs. This is the price that is paid to avoid incurring
external failure costs, which can be devastating.
External Failure Costs: When a defective product is delivered to customer,
external failure cost is the result. External failure costs include warranty,
repairs and replacements, product recalls, liability arising from legal
actions against a company, and lost sales arising from a reputation for
poor quality. Such costs can decimate profits.
External failure costs usually give rise to another intangible cost. These
intangible costs are hidden costs that involve the company's image. They
can be three or four times greater than tangible costs. Missing a deadline or
other quality problems can be intangible costs of quality.
Internal failure costs, external failure costs and intangible costs that impair
the goodwill of the company occur due to a poor quality so these costs are
also known as costs of poor quality by some persons.
Question 3 (b): Explain the meaning of the plandoactstudy cycle.
Why is it described as a cycle?
Answer: It is also known as PDCA (plan-do-check-act cycle) which is an
iterative four-step problem-solving process typically used in business process
improvement. The concept of PDCA is based on the scientific method, as
developed from the work of Francis Bacon (Novum Organum, 1620). The
scientific method can be written as "hypothesis""experiment""evaluation"
or plan, do and check. Shewhart described manufacture under "control"
under statistical controlas a three step process of specification, production,
and inspection. He also specifically related this to the scientific method of
hypothesis, experiment, and evaluation. Shewhart says that the statistician
"must help to change the demand [for goods] by showing how to close up
the tolerance range and to improve the quality of goods". Clearly, Shewhart
intended the analyst to take action based on the conclusions of the
evaluation. According to Deming, during his lectures in Japan in the early
1950s, the Japanese participants shortened the steps to the now

traditional plan, do, check, act. Deming preferred plan, do, study, act because
"study" has connotations in English closer to Shewhart's intent than "check".
A fundamental principle of the scientific method and PDSA is iterationonce
a hypothesis is confirmed (or negated), executing the cycle again will extend
the knowledge further. Repeating the PDSA cycle can bring us closer to the
goal, usually a perfect operation and output.
PDSA should be repeatedly implemented in spirals of increasing knowledge
of the system that converge on the ultimate goal, each cycle closer than the
previous. One can envision an open coil spring, with each loop being one
cycle of the scientific method - PDSA, and each complete cycle indicating an
increase in our knowledge of the system under study. This approach is based
on the belief that our knowledge and skills are limited, but improving.
Especially at the start of a project, key information may not be known; the
PDSAscientific methodprovides feedback to justify our guesses
(hypotheses) and increase our knowledge. Rather than enter "analysis
paralysis" to get it perfect the first time, it is better to be approximately right
than exactly wrong. With the improved knowledge, we may choose to refine
or alter the goal (ideal state). Certainly, the PDSA approach can bring us
closer to whatever goal we choose.
Question 4 (a): Why do organisations keep inventory? What are the
different types of costs associated with inventory?
Inventory means a list compiled for some formal purpose, such as the
details of an estate going to probate, or the contents of a house let
furnished. This remains the prime meaning in British English.
In the USA and Canada the term has developed from a list
of goods and materials to the goods and materials themselves, especially
those held available in stock by a business; and this has become the primary
meaning of the term in North American English, equivalent to the term
"stock" in British English. In accounting, inventory or stock is considered
an asset.
There are three basic reasons for keeping an inventory:
1. Time - The time lags present in the supply chain, from supplier to user
at every stage, requires that you maintain certain amounts of
inventory to use in this "lead time."
2. Uncertainty - Inventories are maintained as buffers to meet
uncertainties in demand, supply and movements of goods.
3. Economies of scale - Ideal condition of "one unit at a time at a place
where a user needs it, when he needs it" principle tends to incur lots

of costs in terms of logistics. So bulk buying, movement and storing

brings in economies of scale, thus inventory.
Where these stocks contain the same or similar items, it is often the work
practice to hold all these stocks mixed together before or after the subprocess to which they relate. This 'reduces' costs. Because they are mixed up
together there is no visual reminder to operators of the adjacent subprocesses or line management of the stock, which is due to a particular
cause and should be a particular individual's responsibility with inevitable
consequences. Some plants have centralized stock holding across subprocesses, which makes the situation even more acute.
Below are the costs associated with inventory:
1. Item (set-up ) costs
2. Storage costs
3. Shortage costs (demand > product)
Question 4 (b): What is JIT?
disadvantages of JIT approach?

Discuss

the

advantages

and

Just-in-time (JIT) is an inventory strategy that strives to improve a

business's return on investment by reducing in-process inventory and
associated carrying costs. Just In Time production method is also called
the Toyota Production System. To meet JIT objectives, the process relies on
signals or Kanban between different points in the process, which tell
production when to make the next part. Kanban are usually 'tickets' but can
be simple visual signals, such as the presence or absence of a part on a
shelf. Implemented correctly, JIT can improve a manufacturing
organization's return on investment, quality, and efficiency.
Quick notice that stock depletion requires personnel to order new stock is
critical to the inventory reduction at the center of JIT. This
saves warehouse space and costs. However, the complete mechanism for
making this work is often misunderstood.
For instance, its effective application cannot be independent of other key
components of a lean manufacturing system or it can "...end up with the
opposite of the desired result." In recent years manufacturers have continued
to try to hone forecasting methods (such as applying a trailing 13 week
average as a better predictor for JIT planning, however some research
demonstrates that basing JIT on the presumption of stability is inherently
flawed.

Benefits
Main benefits of JIT include:
Reduced setup time. Cutting setup time allows the company to reduce
or eliminate inventory for "changeover" time. The tool used here
is SMED (single-minute exchange of dies).
The flow of goods from warehouse to shelves improves. Small or
individual piece lot sizes reduce lot delay inventories, which simplifies
inventory flow and its management.
Employees with multiple skills are used more efficiently. Having
employees trained to work on different parts of the process allows
companies to move workers where they are needed.
Production scheduling and work hour consistency synchronized with
demand. If there is no demand for a product at the time, it is not made.
This saves the company money, either by not having to pay workers
overtime or by having them focus on other work or participate in
training.
Increased emphasis on supplier relationships. A company without
inventory does not want a supply system problem that creates a part
shortage. This makes supplier relationships extremely important.
Supplies come in at regular intervals throughout the production
day. Supply is synchronized with production demand and the optimal
amount of inventory is on hand at any time. When parts move directly
from the truck to the point of assembly, the need for storage facilities
is reduced.
Problems within a JIT system
Just-in-time operation leaves suppliers and downstream consumers open
to supply shocks and large supply or demand changes. For internal reasons,
Ohno saw this as a feature rather than a bug. He used an analogy of lowering
the water level in a river to expose the rocks to explain how removing
inventory showed where production flow was interrupted. Once barriers were
exposed, they could be removed. Since one of the main barriers was rework,
lowering inventory forced each shop to improve its own quality or cause a
holdup downstream. A key tool to manage this weakness is production
leveling to remove these variations. Just-in-time is a means to improving
performance of the system, not an end.

Very low stock levels means shipments of the same part can come in several
times per day. This means Toyota is especially susceptible to flow
interruption. For that reason, Toyota uses two suppliers for most assemblies.
As noted in Liker (2003), there was an exception to this rule that put the
entire company at risk because of the 1997 Aisin fire. However, since Toyota
also makes a point of maintaining high quality relations with its entire
supplier network, several other suppliers immediately took up production of
the Aisin-built parts by using existing capability and documentation. Thus, a
strong, long-term relationship with a few suppliers is better than short-term,
price-based relationships with many competing suppliers. Toyota uses this
long-term relationship to send Toyota staff to help suppliers improve their
processes. These interventions have been going on for twenty years and
have created a more reliable supply chain, improved margins for Toyota and
suppliers, and lowered prices for customers. Toyota encourages their
suppliers to use JIT with their own suppliers.
Question 5 (a): Distinguish between Statistical Quality Control and
Statistical Process Control?
Statistica1 quality control (SQC) is the term used to describe the set of
statistical tools used by quality professionals. Statistical quality control can
be divided into three broad categories:
1. Descriptive statistics are used to describe quality characteristics and
relationships.
Included are statistics such as the mean, standard deviation, the range, and
a measure of the distribution of data.
2. Statistical process control (SPC) involves inspecting a random sample
of the output from a process and deciding whether the process is producing
products with characteristics that fall within a predetermined range. SPC
answers the question of whether the process is functioning properly or not.
3. Acceptance sampling is the process of randomly inspecting a sample of
goods and deciding whether to accept the entire lot based on the results.
Acceptance sampling determines whether a batch of goods should be
accepted or rejected.
Statistical process control (SPC) is the application of statistical methods
to the monitoring and control of a process to ensure that it operates at its full
potential to produce conforming product. Under SPC, a process behaves
predictably to produce as much conforming product as possible with the
least possible waste. While SPC has been applied most frequently to
controlling manufacturing lines, it applies equally well to any process with a

measurable output. Key tools in SPC are control charts, a focus on continuous
improvement and designed experiments.
Much of the power of SPC lies in the ability to examine a process and the
sources of variation in that process using tools that give weight to objective
analysis over subjective opinions and that allow the strength of each source
to be determined numerically. Variations in the process that may affect the
quality of the end product or service can be detected and corrected, thus
reducing waste as well as the likelihood that problems will be passed on to
the customer. With its emphasis on early detection and prevention of
problems, SPC has a distinct advantage over other quality methods, such as
inspection, that apply resources to detecting and correcting problems after
they have occurred.
In addition to reducing waste, SPC can lead to a reduction in the time
required to produce the product or service from end to end. This is partially
due to a diminished likelihood that the final product will have to be reworked,
but it may also result from using SPC data to identify bottlenecks, wait times,
and other sources of delays within the process. Process cycle time reductions
coupled with improvements in yield have made SPC a valuable tool from
both a cost reduction and a customer satisfaction standpoint.
Question 5 (b): What are control charts? What are the different
types of control charts?
Answer: Control charts, also known as Shewhart charts or processbehavior charts, in statistical process control are tools used to determine
whether or not a manufacturing or business process is in a state of statistical
control.
If analysis of the control chart indicates that the process is currently under
control (i.e. is stable, with variation only coming from sources common to the
process) then data from the process can be used to predict the future
performance of the process. If the chart indicates that the process being
monitored is not in control, analysis of the chart can help determine the
sources of variation, which can then be eliminated to bring the process back
into control. A control chart is a specific kind of run chart that allows
significant change to be differentiated from the natural variability of the
process.
The control chart can be seen as part of an objective and disciplined
approach that enables correct decisions regarding control of the process,
including whether or not to change process control parameters. Process
parameters should never be adjusted for a process that is in control, as this
will result in degraded process performance.
The control chart is one of the seven basic tools of quality control.

Control charts fall into two categories: Variable and Attribute

Control Charts.

Variable data are data that can be measured on a continuous scale

such as a thermometer, a weighing scale, or a tape rule.
Attribute data are data that are counted, for example, as good or
defective, as possessing or not possessing a particular characteristic.

The type of control chart you use will depend on the type of data
you are working with.
It is always preferable to use variable data.

Variable data will provide better information about the process than
attribute data.
Additionally, variable data require fewer samples to draw meaningful
conclusions.

Assignment - B

Question 1: Define Process? Identify different types of Processes?

Discuss the factors that influence Process Selection?
Process or processing typically describes the act of taking something
through an established and usually routine set of procedures to convert it
from one form to another, as a manufacturing or administrative procedure,
such as processing milk into cheese, or processing paperwork to grant
a mortgage loan, or converting computer data from one form to another.
There are many types of Process but I will be limiting it for business:
A business process or business method is a collection of related,
structured activities or tasks that produce a specific service or product (serve
a particular goal) for a particular customer or customers. It often can be
visualized with a flowchart as a sequence of activities.
Industrial
processes are
procedures
involving chemical or mechanical steps to aid in the manufacture of an item
or items, usually carried out on a very large scale. Industrial processes are
the key components of heavy industry.
Most processes make the production of an otherwise rare material vastly
cheaper in price, thus changing it into a commodity; i.e. the process makes it
economically feasible for society to use the material on a large scales, in
machinery, or a substantial amount of raw materials, in comparison to batch
or craft processes. Production of a specific material may involve more than
one type of process. Most industrial processes result in both a desired
product(s) and by-products, many of which are toxic, hazardous, or hard to
deal with. Very, very few processes are self-contained.
Selection of an individual for a given role is not an easy task. It does not only
consist of the communication skills or technical expertise of an individual but
a lot of many other parameters such as relevant experiences, cultural
fitment, personality traits. The organization must be very careful in selection
process.
Crucial Factors in Selection Process:
1.
2.
3.
4.
5.

Relevant experience
Industry type
Willingness to relocate
Education
Salary budget

Question 2: Define competitiveness? What different operations

strategies can a company adopt to become competitive? Discuss
using examples of specific organisations.
Competitiveness is a comparative concept of the ability and performance
of a firm, sub-sector or country to sell and supply goods and/or services in a
given market.
Although
widely
used
in
economics and business
management, the usefulness of the concept, particularly in the context of
national competitiveness, is vigorously disputed by economists, such as Paul
Krugman.
The term may also be applied to markets, where it is used to refer to the
extent to which the market structure may be regarded as perfectly
competitive. This usage has nothing to do with the extent to which individual
firms are "competitive'.
Empirical observation confirms that resources (capital, labor, technology)
and talent tend to concentrate geographically (Easterly and Levine 2002).
This result reflects the fact that firms are embedded in inter-firm
relationships with networks of suppliers, buyers and even competitors that
help them to gain competitive advantages in the sale of its products and
services. While arms-length market relationships do provide these benefits,
at times there are externalities that arise from linkages among firms in a
geographic area or in a specific industry (textiles, leather goods, silicon
chips) that cannot be captured or fostered by markets alone. The process of
clusterization, the creation of value chains, or industrial districts is
models that highlight the advantages of networks.
Within capitalist economic systems, the drive of enterprises is to maintain
and improve their own competitiveness, this practically pertains to business
sectors.
Technology is one operation strategies that a company can employ to gain a
distinctive advantage over its competition. A good example is the TV
Network War that is currently happening in the Philippines. Currently there
are 2 major networks in the said country vying for the top spot. A third
network is on the rise but as of now is not a threat. The 2 networks use
technology to make their shows and programs appealing to the masses who
will be considered as their customers.
They invested on high-end electronics bought from abroad to enhance their
newsrooms and studios. There were improvements made to the facilities to
make it look updated and big. One network was able to move up due to
increasing knowledge towards technology and marketing.

Another tactic is getting a steady pool of qualified and hardworking

personnel from the rank and file to the main artists. By getting the big stars
and competent staff, a network can increase its viewing share over the
competition.
Question 3: What are the different steps to be followed during
product development process? How are these guidelines different
for services?
Answer: In business and engineering, new product development (NPD) is
the term used to describe the complete process of bringing a new product or
service to market. There are two parallel paths involved in the NPD process:
one involves the idea generation, product design and detail engineering; the
other involves market research and marketing analysis. Companies typically
see new product development as the first stage in generating and
commercializing new products within the overall strategic process of product
life cycle management used to maintain or grow their market share.
Five steps in the New Product Development Process, as understood by most
marketing textbooks
1. Idea Generation

brainstorming - thinking about it

creating a new product based on some observed need

thinking of a new product based on some accident or chance

circumstance

2. Screening
getting opinions from
o employees
o

potential customers

media

government

what are the weaknesses of existing products that are similar

is there any competition for a new product

What are the industry sales and market trends the product idea is
based on

3. Idea Evaluation / Concept Development

estimate costs, revenue, profit,
do market research

target market segmentation

describe the main group of people who will be the first customers

4. Development of Product / Business Analysis

physically design and manufacture the product
estimate likely selling price based upon competition and customer
feedback

estimate sales volume based upon size of market

produce a physical prototype or mock-up

test the product (and its packaging) in typical usage situations

5. Commercialization
"make enough to sell"
manufacture a large amount to send out to the stores that will stock
the items so enough inventory on hand for the public to buy

launch "promotion campaign"

CASE STUDY
Question 1: Discuss the strategies and initiatives taken by Ashok
Leyland to revamp its supply chain? Elaborate how these initiatives
helped the organisation.
Answer: In order for the organization to survive, AL conducted several
brainstorming sessions to elicit ideas on cost cutting. A team that was named
Quality Circle was formed for the purpose of getting ideas on how to
conserve resources and minimize wastes.
The organization also implemented
the joint improvement program
which replaced their Just in Tim ordering system. By doing so, they were able

to set up different tier-levels to improve the quality of the suppliers. Tiers

formed the basis of the vendor consolidation drive.
AL also placed emphasis on optimizing the inventory and vendors were
required to progressively meet "Just-in-Time" requirements. Delivery mode as
well as packaging were required to minimize the handling/loading and
unloading time. AL preferred a manufacturing/assembly/ support base at
close proximity to the production units. The organization also came up with
vendor quality initiatives to ensure that their suppliers provide quality
products minimizing wastes and rework.
The company also came up with a project aptly named OSCARs which
identified 2 methods in reducing costs in the inbound supply chain. To reduce
material costs and optimize inventory levels and reduce the invisible
inventory carrying costs. The basic premise of OSCARS was a single sourcing
agency at the corporate level with local counterparts who are responsible for
scheduling and coming up with vendor preference to determine which
vendors have access to technology and who can help in bringing down chain
costs.
Question 2 (a): What are inbound and outbound supply chains?
Answer: Inbound supply chains are considered to be the receiving, storing,
and disseminating of incoming goods or materials for use. Inbound supply
chain also refers to activities/actions required before physical production of a
product can begin or before service can be performed (inputs such as
materials handling, warehousing, inventory control, vehicle scheduling and
returns to suppliers). The outbound supply chains are the complete set of
firms, facilities, and logistics activities that are involved in distributing
finished products to customers. Mainly the organizations tasked to deliver
the goods to the end users.
Question 2 (b): What is reverse auctioning and how did Ashok
Leyland used it to their advantage?
Based on the case study, reverse auctioning is a form of auction wherein the
buyer sets the ceiling price for a specific product that the organization is
looking for. Once there are interested parties who bid on the ceiling price, the
buyer then gradually decreases the price until there is only one supplier who
can accept the last price given by the buyer.
In regards to ALs use of reverse auctioning, it was a gamble but one which
paid off for them. They were able to get their needed items for a lower price.
Due to reverse auctioning, they were able to save the organization some
much needed funds that proved to be helpful during the recession.

Question 2 (c): How did Ashok Leyland use JIT to reduce their
inventory?
AL implemented several initiatives that combined with the JIT process in
making their inventory leaner and save on inventory costs. The organization
knew that a bloated inventory incurs additional costs for them. They placed
emphasis on optimizing inventory and their respective vendors were given
pre-requisites to adhere with the JIT requirements.
Delivery modes along with packaging were required to minimize the
handling/loading and unloading time. The organization also preferred that
their manufacturing support base was at close proximity to the production
units to save on transportation expenses. In doing so, the organization was
able to stabilized their inward material flows as well as the outbound
material which save them a lot of inventory spaces and storage.
Question 2 (d): Briefly discuss OSCAR I and OSCAR II initiatives
taken by the company?
OSCAR I came up with 2 methods to reduce cost in the inbound supply
chain, material cost and to optimize the inventory levels. The first method
was the Single Window System where it was formed by the CQE team that
contributed to additional knowledge base specializing on commercial and
technical knowledge. It was in this method that there was a centrally
negotiated price and share of business. Unit material functions interacted
with approved vendors to pull materials in line with their production lines.
Their suppliers welcomed this as they have now a single point of contact with
AL for any transactions and processes that deals with quality and
management issues. As for AL this has also benefitted them as consolidation
of business was a by-product of this method. The second mode was Supplier
Tiering where a sort of pyramid like transaction takes place. Tier one
suppliers deal with AL directly while lower tiers deal with higher tiers.
Combined with JIT process this was a sound strategy to which AL used to
steer away from collapse due to recession.
OSCAR II
This was brought about when AL took it upon themselves to revamp the
outbound supply chain. Their objectives for the revamp were centered on
customer satisfaction and reducing finished goods inventories. By doing so,
there will be improved service levels and optimum inventory levels as well.
The organization came up with surveys and determined 3 parameters for
service level targets. The order delivery time, reliability of deliveries and

availability of order status information which the customers thought were

important to them. By achieving the objectives of OSCAR II, there was an
improvement on customer satisfaction and delivery time was shortened
much to the delight of their customers.

Assignment - C

1) Which of the following is not a key activity of an operations manager?

a. Understanding the needs of customer
b. Continually learning
c. Managing cash flows
d. Exploiting technology to produce goods and services
2) Which of the following is generally related to service operations?
a. Tangible product
b. Need for flexible capacity
c. Separation of production from consumption
d. Large amount of inventory
3) A measure of the success of an operation in producing outputs that satisfy
customers is
a. Efficiency
b. Effectiveness
c. Quality
d. Profitability
4) A measure of the success of an operation in converting inputs to outputs
is
a. Efficiency
b. Effectiveness
c. Quality
d. Profitability
5) Operations design choices include all of the following except
a. Operating plans and controls
b. Type of processes and alternative designs
c. Supply chain integration and outsourcing
d. Inventory
6) ____ is the reintroduction of an intermediary in a supply chain.
a. Disintermediation
b. Re-intermediation
c. Channel assembly
d. Warehousing

7) ____ are reductions in unit costs available from increasing the number of
products produced.
a. Global networks
b. Focused operations
c. Economies of scope
d. Economies of scale

8) A ____ layout is an arrangement based on the sequence of operations that

are performed during the manufacturing of a good or the delivery of a
service.
a. Group
b. Process
c. Product
d. Fixed position
9) Location decisions should consider all of the following except
a. Product cost
b. Access to markets
c. Access to labour skills
d. Local government tax incentives
10) A ____ is a one-time variation that is explainable.
a. Cyclical pattern
b. Random Variation
c. Irregular variation
d. Seasonal pattern
11) Which of the following is not a statistical method?
a. Delphi
b. Exponential smoothing
c. Moving average
d. Linear regression
12) Which of the following is not a capacity planning decision option?
a. Promotion and advertising
b. Subcontracting
c. Layoffs

d. Building a new plant

13) The purpose of production planning is to
a. Minimize the work force size
b. Maximize the production rate
c. Minimize the cost of meeting demand
d. Optimize the inventory level
14) Which approach is most appropriate for forecasting demand for a new
product?
a. A causal model
b. A Delphi study
c. A time-series model
d. A regression model
15) A key advantage of a process layout is
a. High levels of inventory
b. High degree of automation
c. Flexible equipment and resources
d. Smooth flow of materials

16) All of the following are valid purposes for layout studies except
a. Minimize delays in materials handling and customer movement
b. Increase bottlenecks
c. Promote employee morale and customer satisfaction
d. maintain flexibility
17) A pull system
a. Requires high levels of finished goods inventory
b. Relies heavily on accurate sales forecasts
c. Waits for customer orders
d. Necessitates standardized products
18) Steps which can be taken to reduce the impact of the bullwhip effect
include all of the following except
a. Avoiding creating surges in demand due to price cutting and
promotional campaigns

b. Reducing manufacturing lead times

c. Reducing information distortion
d. Adding a supply hub to the chain
19) According to the value chain model of Dell, Inc., which of the following is
not a pre-production activity?
a. Billing
b. Corporate partnerships
c. Purchasing
d. Software and hardware licensing
zi
20) A ____ is a statement of how many finished items are to be produced and
when they are to be produced.
a. Aggregate Plan
b. Master Production Schedule
c. Material Requirements Planning
d. Shop Floor Control
21) Which of the following is not an aggregate planning decision option?
a. Promotion and advertising
b. Subcontracting
c. Layoffs
d. Building a new plant
22) The EOQ model
a. Is very sensitive
b. Is relatively flat (shallow) around the minimum
c. Balances holding costs and stockout costs
d. Allows for variable demand

23) ISO9000 standards consist of all of the following except

a. Definition of key terms
b. Minimum requirements for a quality management system
c. Process simulation
d. A means of demonstrating compliance principles
customers and third-party certification

to

24) All of the following relate to Six Sigma except

a. Clear financial returns
b. Measures defects per unit
c. Output critical to customers
d. A stretch goal
25) Which of the following is most closely related to Statistical Process
Control (SPC)?
a. Acceptance sampling
b. Process specifications
c. Unwanted causes of variation
d. Self-audits
26) Control charts are all of the following except
a. Can determine the source of a problem
b. Useful for process improvement
c. Based on finding values outside of control limits
d. Looks for non-random patterns
27) When examining control charts, variations of characteristic
measurements that are within control limits are assumed to be the result of
a. Chance
b. Defective input materials
c. Assignable causes
d. Poor machine tolerances
28) ____ is defined as the satisfaction of ____.
a. Service quality; expectation
b. Service quality; needs
c. Service value; expectation
d. Service value; imagination
29) A technique used to identify likely causes of failure and their
consequences so that preventative actions can be taken is
a. Statistical quality control
b. Total quality management
c. Failure mode and effects analysis
d. Statistical process control
30) The cost of quality is

a. An expression of an organizations performance in quality in financial

terms.
b. The difference between customers expectations of a product or
service and their perceptions of their experience of it.
c. A proactive approach towards quality management by
seeking to prevent defects ever being produced.
d. The inspection and testing of the outputs from a transformation
process.
31) Six Sigma was first developed at ____ in the late 1970s and early 1980s.
a. Motorola
b. General Electric
c. AlliedSignal
d. None of the above
32) ____ structures are based on loose relationships between different
organizational sub-units
a. Matrix
b. Functional
c. Network
d. Multi-divisional
33) Japanese style teamworking has a number of distinctive features which
include all of the following except
a. Individual reward systems
b. Multi-skilled workers
c. Assignment of tasks to teams
d. Continuous development of workers skills
34) The D in the acronym QFD stands for
a. Development
b. Deployment
c. Design
d. Devolution
35) Regarding the first House of Quality, the interrelationship between any
pair of technical features is found in
a. The voice of the customer
b. The relationship matrix
c. The roof
d. Technical requirement priorities

36) Which of the following is a chronological representation of stages within

the NPD process?
a. Idea selection, preliminary design, testing, prototype
b. Testing, final design, preliminary design, prototype
c. Idea generation, idea selection, prototype, testing
d. Idea selection, prototype, testing, preliminary design
37) Which of the following is not compatible with BPR?
a. Fundamental re-thinking
b. Incremental re-design
c. Dramatic improvements
d. Business processes
38) Smaller batch sizes are facilitated by all the following except
a. Setup time reduction
b. Changes in plant layout
c. JIT policies
d. Changeover time increases
39) ____ is synonymous with environmental concerns.
a. Mass customization
b. Recycling
c. Empowerment
d. Globalization
40) Which is true regarding a responsive supply chain?
a. Demand is stable and predictable.
b. Product life cycles are short and change often because of innovation.
c. Customers require standardization.
d. Contribution margins are low.