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Enterprise Resource Planning at Jayant Dairy

Jayant Dairy was set up ten years ago by the Government of Karnataka to supply milk and
milk products. It is located in the interior of Karnataka and has been catering to the needs of
almost the entire state for more than 30 years. Most of the big cities depend on it for their
milk requirements. It has set up its own retail shops in different parts of the state to sell milk
and milk products. These shops are attached to small hotels, pan shops, etc. It also sells its
products through other retail units like supermarkets and general stores. Off late, two other
dairy firms have started functioning at Bangalore and Mysore. They deal in pasteurized milk
only. Although they are nowhere near Jayant Dairy in terms of sales or distribution network,
it started feeling the pinch in these cities. These two firms have cut into the revenues of
Jayant Dairy in a very short span of time. Moreover, they have plans to engage in joint
operations in other cities. These firms are also tryin2 to market their own dairy products. As
the Government is trying to reduce its ownership and wants to hand over the dairy to private
owners, it wants to improve the profitability of the dairy. Upendra was therefore made the
Chairman and Managing Director of the company. He was given the task of turning around
the company so that the government could get higher price for it. Upendra had earlier worked
as consultant with several organizations in different areas including logistics, SCM, ERP etc.
As soon as he took over, he noticed that the employee morale was low. They were
apprehensive about their future because they had heard that the company was going to be
privatized. He also came to know that for the past two years there had been a rumor that the
company was to be restructured. The distribution network was in disarray. Jayant Dairy had
its own fleet of refrigerated tankers, which collected milk from far off places and brought it to
the plant. Often there was a shortage of tankers and the milk collected by small vendors was
spoilt. The pasteurized milk was supplied to different retail shops all over the state by
refrigerated trucks. These trucks were taken on lease from transport companies and were in
poor conditions. Moreover, these companies diverted trucks in good condition to other clients
like seafood transporters who paid them more. Often, it was not able to deliver milk to some
areas in the morning. Since its rivals were located in the cities, they could deliver the milk at
the correct time. Though demand had grown and supply of milk had also increased, plant
modernization and expansion had not taken place. Upendra had six months to set things right.
Questions for Discussion:
I. What according to you should the CMD take care of first? Give a reasoned answer.
2. What should he do to ensure proper functioning of the distribution system?

Maintenance Management at FlowerChem


FlowerChem is a fertilizer company located in Uttar Pradesh. It manufactures mild fertilizers,
which are used for bonsai plants, potted plants and small scale vegetable cultivation in
homes. Ashish Malve is the Chairman and Managing Director (CMD) of the company. He
has three VPs to assist him - Marketing, HR, and Operations. The demand for such fertilizers
is high as FlowerChem is the only manufacturer and supplier in North India which caters to
the needs of this niche market. The raw materials i.e. the chemicals are outsourced from other
chemical plants in and around North India. Therefore, the timely availability of raw materials
is ensured. In the last six months, there have been more than 10 machine breakdowns in the
plant. Furnaces, boilers, and pumps faced frequent breakdowns. These breakdowns worried
the VP Operations. The problems arose even though the company used to shut down all the
plants for annual maintenance work. The frequent breakdowns caused delays in meeting
delivery schedules. This created huge backlogs and customer complaints. Often the company
had to buy these fertilizers from its competitor in the south and transport it to North India.
The VP could not understand why the machines broke down frequently. To find out what the
problem was and its solution, he hired a consultant, Raghu Raman. Raman studied the
process at the plant carefully. He noticed that more than 50 percent of a workers' time was
wasted in the maintenance of machines in the plant. When a motor or any other machine was
having problems or broke down, the worker had to inform his plant manager. The plant
manager had to issue a request to the maintenance department to look into the matter. Often
the matter was not attended to immediately due to shortage of manpower. He also discovered
that the operators and other employees were often transferred within the company in the
name of job rotation. This rendered the employees less proficient and familiar about the
different machines they were operating. Raghu sat down to analyze the situation on the basis
of this information.
After he had analyzed the situation Raghu discussed the matter with Ashish. He told Ashish
that annual maintenance does not ensure that the machine will run for the year without any
problem. He also said that it was necessary to monitor the critical attributes of a machine to
know whether it was functioning properly. When a failure takes place one should try to find
the root cause of the problem rather than just fixing the symptoms, he added. Ashish now
understood what was required to solve the problem and improve the productivity of the plant.
Questions for Discussion:
1. What kind of maintenance did Raghu hint at and why?
2. What will FlowerChem achieve on implementation of this kind of maintenance?

Using Technology in Operations


Aspinwall and Co is a Hyderabad based C&F agent of major shipping companies. Aspinwall
has branch offices at three ports Mumbai, Vizag, and Chennai other than its headquarters
at Hyderabad. It deals in air conditioned containers, which are used to transport perishables
like seafood including prawns, fish, vegetables, milk and milk products, etc. to foreign
countries. These containers belong to different liners like Maersk Sealand, P&O, Tanker
Pacific, Hyundai, etc. Due to lack of C&F agents in Hyderabad, Aspinwall enjoys virtual
monopoly in this segment. A major chunk of the materials from Hyderabad are routed
through Aspinwall and Co. After the cargo is loaded on to the carrier trucks or on to the
goods wagon it is the property of Aspinwall. It has to provide insurance cover for the cargo it
is forwarding and is responsible for it till it reaches the customers' warehouse. In the case of
seafood, the operation is even more tedious. The refrigerated containers cannot be out of
power supply for more than three hours continuously and the export of prawns to certain
countries like Japan causes some added operational difficulties. This is because Japan rejects
any assignment of prawns if the container is delayed by more than a week at the port of
origin. These rejected prawns then have to be sold in local markets to avoid loss.
This process is handled by a team of persons in operations and logistics in the company
headquarters at Hyderabad. These people follow traditional systems with outdated software.
The data related to consignments has to be keyed in manually. If a customer wants
information related to a consignment, he has to call up the Hyderabad office to find out. The
schedules for forwarding and receiving different consignments at different ports are tracked
with the use of the card system. That is each port has a separate rack in which cards are
placed. Each card has information regarding the consignments like its place of origin, its
route, the date and time of arrival and also the total time it is likely to take. The Hyderabad
office never gets proper information on whether the port has space to accommodate the
container arriving. With the number of containers being handled increasing over the years,
the Hyderabad head office finds it increasingly difficult to control and coordinate. Moreover,
customer complaints regarding the delay caused in the transportation of their goods has been
on the rise. Some perishable goods consignments are also being rejected. In order to tackle
these problems, the management of the company has decided to implement an innovative
tracking and controlling software package.
Questions for Discussion:
1. A significant amount of investment is necessary to introduce the new technology.
Therefore, it is necessary that Aspinwall approaches the issue systematically. Discuss how
can it implement technology successfully.
2. What are the features that the management should look for in the software package?

Operational Issues in a Restaurant


Raj Malhotra (Malhotra) took over a small family-owned restaurant and fast food center from
his father. It was situated at one of the key shopping areas in Bangalore. The restaurant was
opened way back in 1960 and was one of the landmarks in the city. Malhotra took over the
operations from his father in 2001. His father was instrumental in improving and maintaining
the position of the restaurant in the city. It was considered as a place where people could get
good food to eat at a reasonable price. As the restaurant was old, it had a nostalgic appeal to
it. When Malhotra took over the restaurant, he knew that the nostalgic factor and old world
charm of the place might attract few people but he also had to find ways to attract new
customers. One option was to offer customers a wider choice in the menu. Thus, he included
fast food item like burgers, pizzas etc. in the menu. But he didn't want the nostalgia
associated with the restaurant be lost with these new additions. So he decided to separate the
two and expanded at the same location a new fast food section. In this section, he adopted the
self-service approach to minimize the cost of operations. As the people who came to the fast
food section were very cost conscious, the food had to be priced low. Hence, it was necessary
to keep the cost of operations low. Around fifty percent of the people who come to the fast
food section asked for parcels. Out of the remaining customers, most of them ate quickly and
leave and only a few sat there and had meals. But it was difficult to determine the number of
people eating at a particular time. This made it difficult to decide on its capacity. As the fast
food section was an expansion of the old restaurant, the proprietor didn't have much space.
Therefore, it was difficult for him to decide on the number of chairs and tables to be kept. He
did not want the customers eating there to face any problems in seating arrangements.
Malhotra was also aware that in any service organization, the customers' perception of the
service was important. Satisfied customers were the best form of advertising that a service
organization could count on. So he ensured that the ingredients they used in the preparation
of food were fresh and of good quality. The restaurant used to procure various food items
from one supplier. However, Malhotra felt that overdependence on one supplier was not good
for the business in the long run. Accordingly, he consulted his father and made him aware of
the problems that could be faced if he used a single supplier. His father told him that
changing suppliers was not a good idea. In the business, the relationship between and
commitment of buyer and supplier is essential for the growth and survival of the business.
But Malhotra was not convinced. Therefore, he decided to make the change and started the
search for new suppliers who could give him better value. Some suppliers were willing to
supply the required items at a lower price than the previous supplier. Once the supplies
started coming in from the new suppliers, there were occasional problem with the quality of
items supplied and delivery dates. Malhotra was unhappy with new suppliers and decided to
go back to the previous suppliers.
Questions for Discussions:
1. Which would have been a better option for Malhotra opening the fast food section at
a new location or at the same location as given in this case? Justify your answer.
2. Which operational factor plays major role in establishing and running a restaurant.
3. Should the selection of the supplier be totally based on the least price offered? Justify
your answer.

A Productivity Problem
Naidu and Sons Private Ltd is a leading maker of wooden artifacts. Manohar Naidu (Naidu)
established the company in 1970, and he and his sons are now managing the company. The
company had a humble beginning with two employees and a production rate of two or three
artifacts per day. In the early days, the customer reach of the company was limited to the twin
cities of Hyderabad and Secunderabad. Later, it expanded its reach to other parts of the
country. The company paid special attention to the quality of the output and products were
checked for the quality at every stage of production. Soon, the products of the company were
renowned for their quality. The company has grown considerably and the number of
employees is now 100. The demand for the company products has also increased
significantly. Traditional Indian artifacts have a large foreign market as well and the price
commanded by these products abroad is very high. The company therefore, expanded its
reach to foreign markets. To meet the erowing demand, the company automated its
production processes. As there were not many players in this sector in the country, it was
difficult for Naidu to benchmark the company performance. His focus was always on
improving the efficiency and effectiveness of the production processes. Recently, Naidu
noticed that in spite of automation and other facility upgradations, the improvement in
productivity was negligible; further, during his round of the factory, he saw that people were
working without any interest and enthusiasm. Being a considerate man, instead of
reprimanding the employees, he wanted to know the reason for their apparent lack of interest
and enthusiasm. lie tried to analyze the reasons for it but could not come up with any reasons.
He knew that human knowledge and skill was the key for the survival of the business. He
also understood that if he did not attend to the problem now, it might become severe and
difficult to handle. He therefore decided to conduct an organization-wide employee
satisfaction survey to find out why productivity had not improved. He appointed an external
consultant to design the survey questionnaire and analyzed the findings. He made it clear to
the employees that their identity would not be disclosed. and requested them to be frank
while answering the questions. The consultant conducted the survey and presented the
analysis to Naidu. On the basis of the opinions expressed in the survey, he found that only a
few employees were happy with the job they were doing. Most of them stated that their work
was boring. The satisfied workers were those involved in the final carving of the artifacts.
The workers, who did the cutting, polishing and basic shaping of the artifacts, were not
satisfied with their jobs. They said that their tasks were highly repetitive and did not provide
them with any challenge. With this analysis, Naidu was able to understand the cause of the
problem. In order to obviate the dissatisfaction among the workers and provide them with
new challenges, he decided to rotate workers among tasks that required similar skill levels.
Workers were given basic training in all the low-skills jobs. For instance, a cutter was trained
in polishing and vice-versa. After some time, Naidu could see the effects of these endeavors
in the form of increased productivity, and improvement in the satisfaction level of the
employees.
Questions for Discussions:
1. What problems could Naidu face in future due to lack of interest and enthusiasm in
the employees? How could the concept of job rotation help Naidu improve the morale
and enthusiasm of employees? What are the other advantages that he will get from
implementing job rotation?
2. What additional steps would you suggest to improve the situation in the company?

Scheduling Operations
Avinash Mechanical Works Ltd. is a supplier of 0.25 inch diameter alloy rods, needed for
electric arc welding to a large number of organizations. These include workshops,
manufacturing firms, and fabrication firms. Alloy rods of 0.5-inch diameter are procured by
Avinash from a supplier situated near to the unit. These are then machined to the required
specification and coated with special compounds, which help in the welding process. The
firm has five specialized machines into which these 0.5-inch diameter rods are fed, machined,
shaped, cut and indexed. Then these rods undergo a process of coating with compounds. The
management of Avinash is now facing a problem. The supplier's plant has been closed for an
indefinite period due to labor problems. The inventory management system in Avinash is
strong and since the supplier has stopped the supply, the company is now in danger of
running out of raw material inventory within four days. After an analysis of the situation, the
management found that it had two alternatives. A supplier is willing to supply one-inch
diameter rods to Avinash. Another supplier, situated in another city, is ready to supply 0.5inch rods to Avinash. However, they are charging a premium and need a long-term contract.
If Avinash settles for the one-inch rods available nearby, then it has to modify the existing
five machines so that the rods can be fed into the machines. The machines are costly and very
sensitive. However, there are experts who can adjust the machines within three days. The
labor unrest is expected to last at least for a month.
Questions for Discussion:
1. If you were the MD of the firm what would you do?
2. What should be done to avoid problems of this kind in the future?

Aggregate Planning for an Event


Pristina owns an event management firm, which helps clients organize private parties.
weddings, and other functions. On January 31, 2003, Pristina got a call from her old friend
Maria requesting help plan her wedding which was going to be on February 22, 2003.
Pristina knew that this would be a tough job since the time available was very limited. She
called all her assistants for a brainstorming session. Pristina began to note all the things they
had to do in the next 22 days. The first step was to book the church and a reception hall. Both
required at least 17 days notice for reservation. However, when Pristina consulted the
secretary of the governing body of the church, she was informed that by paying a sum of
Rs.2000 the number of days could be reduced to 10. The order for printing invitation cards
wedding had to be given. The cards were to be ordered from Archies Printing and usually
took 12 days to print. Printing could be completed in 7 days for an extra Rs. 500. Maria
wanted the cards to be sent out to her friends and relatives at least 10 days in advance so that
they could plan their journey. She could not use e-mail invitations because most of her
relatives were not familiar with the Internet. They would also not appreciate invitations by
telephone. Pristina felt that it would take 4 days to mail the cards, but she could save 2 days if
she paid her assistant an extra Rs. 100 a day. It took 2 days to choose the cake and
decorations for the marriage reception. 10 days notice was required for a rehearsal dinner (the
night before the wedding). Maria wanted Ann to be her bridesmaid. However, Ann was on
holidays in Mauritius. She could take a flight back. However, tickets for economy class were
not available and she would have to fly in executive class. This would cost Rs 8000. Maria
wanted to wear her mother's wedding gown for her marriage. However, the dress was not in a
good condition. It could be repaired with a particular lace which was available only in Simla.
It would take 8 days to receive the material. Pristina found out that it could be brought in 5
days if an extra Rs. 900 was paid for airfreight. The specialist in wedding gowns, Maggie,
was the only person who could work on this dress. She said that the stitching would take 11
days and she charged Rs. 1500 a day. After much persuasion, Maggie agreed to cut that down
to 6 days at an additional cost of Rs. 1,500 per day saved.
Questions for Discussion:
1. Identify and list the activities that Pristina needs to carry out to manage Maria marriage
effectively.
2. Find out how much extra cost will be incurred for this wedding.