Application Exercise

(Assignment to be submitted) (150 min)

Identify the constraints (undesirable effects) (physical policies, measurement related) in your organization/system which affect performance Identify the assumptions and core conflicts that arises from these constraints
(The focus of the exercises should be restricted to a project)

Tejas Networks Limited is optical networking equipment manufacturers. Tejas Networks provides equipments to all major telecom services providers and PSU in India. It also is an OEM to international telecommunication vendors who dont have expertise in this segment. The constraints in this study are with respect to capturing more market share for our equipment business. Since we compete in a market which is dominated my major vendors(Alcatel Lucent, Nokia Siemens Networks, Ericsson) etc. we have to follow a unique strategy of compete and collaborate to sustain in this segment. Generally majority of our competitors are able to provide E2E solutions to the customer, it is always a very difficult task for us to convince customer to break up one segment, out of nearly 17 processes to provide us for the managed services. So in this case we propose to customer, to make these major vendors to subcontract this segment of the E2E solution to us and provide services thru them. A bottleneck or constraint is actually the limits which are hit and would further impact performance/productivity of the unit. The constraints affecting our performance can be broadly classified into the following headings:

Solution Constraints: As already mentioned, as we are small company compared to giants competing in the Telecom equipment space in India, we have to majorly focus on providing customer value proposition of splitting our segment of the E2E solution from the major players. Generally it is done by collaborating with few of the major players who have week portfolio in our segment, and hence are forced by the customer to go along with us while providing the complete solutions. Also since deployed globally, technology advances in India currently are already executed by these vendors in multiple developed geographies, so they have advantages of deploying a time tested solutions, wheras in our case lot of these are virgin deployments. Manpower Constraints: As services to be provided for these products is very people intensive , and we have to provide manpower to service our equipments all over India. The SLAs are very stringent such as 4 hours MTTR for equipment deployed anywhere across india. This forces us to position manpower at multiple location, but since MTBF of these equipments is very high, lot of time this manpower remains underutilized. Financial Constraints: Lot of these companies based out of Europe and US, have advantages of being in very high margin markets, so providing low cost solution out in India, can be majorly looked to improve Economies of Scale and provide options of cross subsidizing. Also, one of our major competitions are the Chinese vendors, which are known to have financial backing from the government, and it allows them provide much longer credit terms

then us. There are cases in which loans to Indian operators have been extended by Chinese banks at very low interest rate, for purchase of these equipments. o Supplier/Contract Manufacturer Constraints: Since majority of the manufacturing is being handled thru large contract manufacturers, it is difficult to locate and retain good CMs as the volumes provided by us are much on the lower side, and they dont find value in deploying complete production chain for our products. They generally multiplex our production, with various other vendors, and it lead to low quality and longer lead times. Also, since our supplier also faces the same volume issues, our lead time for components is generally longer than the majority of our competitors.

Answer 2.
The constraints mentioned above, have not been able to slow down our growth, and we have countered lot of the above mentioned constraints in the following manner: o Solution Constraints: To counter the global experience constraint, we have developed lot of features which are of importance to Indian customer. India, being a very different market compared to other markets, as vendors are looking for major expansion at the minimum capex. We have developed lot of various products to meet each customer requirement. This high level of customization, which was possible due to strong R&D force based in India, we have made solution which customers have pushed the E2E services provider vendors. Secondly, we have forged partnerships with few of the vendors weak in this segment, to become their OEM partners which have resulted in significant experience for International deployements also. Manpower Constraints: We have countered this by drastically improving the user friendliness of the equipment. Thus, it is easier for the Vendor personnel(already present at the location) to reduce the dependency on our Manpower. We have also started extensive certification program, in colleges and other technical people thru Tejas certified SDH engineer to get more people trained on our devices. Also, multiple training programs have been developed for customer and vendor personnels Financial Constraints: This is being countered in multiple ways, we have managed government funding to work with Indian government organization like CDoT to develop joint products, which can be used by them for the Government project, and also free to be sold by us in other markets. Also, we are working with Indian government to boost manufacturing in India. This is been recently pushed as a bill in NTP12, that Indian government organization/PSUs would do major procurement from Indian vendors to help the domestic companies.

Supplier/Contract Manufacturer Constraints: NTP12 also has pushed other vendors to develop contract manufacturers in India, this is helping us also, as now for these contract manufacturer we are one of the major customers.

In addition to this, we are continuously looking for reducing bottlenecks/constraints to continuously sustain and grow in this highly competitive market.