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Answer: The following examples show how operational strengths can be used
effectively as competitive weapons:

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An organization can employ its strengths in certain areas of product functionalities and
process capabilities to gain a competitive advantage over its competitors. For instance,
Intel Corporation, USA, has superior computer chip design due to its technological
expertise in producing microchips.

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An organization with flexible capacity and an adaptive production process can produce
a product and satisfy customer needs quickly. One-hour eye glass manufacturing, one-
hour photo developing services and same day dry-cleaning and shoe repair services
are some examples.



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The first company that enters a market usually gains a significant market share over
subsequent entrants. The speed of product introduction is dependent on the flexibility
and adaptability of the production system. A company, which is more adaptable than its
competitors, can introduce a product into the market relatively quickly and will gain the
advantage of untapped market demand and as a result will be able to corner a
significant market share.

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Some organizations specialize in having a highly flexible and responsive operations

environment. Celestica, Inc, a Canadian computer component manufacturer, uses
equipment that is not fixed to the floor. This enables production lines to be reconfigured
within hours or days to make new and different products. This flexibility to expand from
manufacturing a few products for single customer (IBM) to making hundreds of products
for over 40 different companies.
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This has allowed Celestica to expand from manufacturing a few products for a single
customer (IBM) to making hundreds of products for over 40 different companies. Low-
cost Process An organization with an efficient production system or access to low-cost
resources can make standard products at costs lower than its competitors. For
example, steel companies, such as Nucor in the United States, have competed
successfully with larger integrated steel producers like Nippon and US Steel by using
mini-mills (a smaller version of a steel refining mill that can process scrap). The mini-mill
production process allowed Nucor to gain a substantial price advantage over
competitors by reprocessing scrap steel rather than producing primary steel from iron
ore.

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Facility location can provide substantial competitive advantage. For example, local
courier and parcel company, Desk To Desk Couriers (DTDC), is a strong competitor to
foreign multinationals like DHL and FedEx in India, as it has deep penetration and
covers a larger number of Indian towns and cities.

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In some industries, the variety of products offered and the size of

operations can provide competitive advantage. Grocery stores and supermarket
retailers compete by having larger stores that allow them to display a greater variety of
products and to benefit from economies of scale.

 
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Operations managers customized product design when the level of customization is

high and the quantity to be produced is low. Products are designed to satisfy individual
customer needs. The emphasis in this type of product design is on the quality and on
on-time delivery, rather than on cost. Industrial products like boilers and turbines are
Customized product design

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Designing the production system is one of the key responsibilities of any operations
manager. It involves selecting the product design, the production system, and the
inventory policy for finished goods for each product line. Product design Product design
is primarily of two types: p Allocation of resources to strategic alternatives p
Technology selection and process development p Product/service design and
development p Designing the production system pincrease its sales volume even while
commanding a higher price. Such an example is found in Sundaram Fasteners of the
Sundaram Clayton Group. Their radiator caps are standard equipment in major
automobile companies like Daimler Chrysler and General Motors.
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An operations strategy is a high-level integrated plan for business effectiveness or

competitiveness. Key components of operations strategy are described below:
examples of customized products. Standardized product design is employed when an
organization is involved in the production of limited variety of products, which are
produced in large batch sizes. In such systems, importance is given to costcontrol and
quality rather than on the flexibility of the system. Consumer durables like coolers, fans,
and televisions are examples of standardized products. Production system The
production system can

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Product-focused systems are generally employed in mass production organizations

where there are groups of machines, tools and workers arranged according to their
respective tasks in order to put together a product. These systems are suitable for
producing standardized products like cars, televisions, computer systems, etc. Process-
focused systems are designed to support production departments that perform a single
task like painting or packing. These systems are highly flexible. Product-focused
systems be broadly classified into two major categories: can easily be modified to
support other product designs. Hence they are used

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In a produce-to-stock policy, products are produced well in advance and are stored in
warehouses, from where they are dispatched as per customer orders. This policy is
suitable for organizations manufacturing products, parts or components, which have
seasonal demand (like refrigerators and air-coolers) or those, which have general
applications (like bolts and nuts). A produce-to-order policy allows production to start
only after the company receives customer orders and halts production until another
order is received. This policy is suitable for organizations that produce products, parts or
components of high value (like spares of an aircraft engine) or those that are meant
exclusively for specific purposes (like dyes, castings, etc.).

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Every product has a life cycle. The first stage in the life cycle of a product, after it is
designed and developed, is the: introduction stage In this stage, sales are dependent on
promotion and other marketing efforts. Profits are either negative or quite insignificant.
The products that successfully survive this stage enter the growth stage. In the growth
stage, sales volume increases exponentially. During the growth stage, organizations
take decisions regarding production capacity expansion. These decisions are
dependent on the response to the product in the market. In the maturity stage, sales
growth becomes stagnant.

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There are two types of policies relating to finished goods inventory: ity stage,
organizations focus on improving efficiency of the processes, minimizing costs, etc.
Finally, the product enters the decline stage. In this stage, sales show a downward
trend, because of obsolescence of technology used

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Prototype Design Prototype Testing Initial Design of Production Model Economic

Evaluation Market Testing Final Design of Production Model New product development
always starts with idea generation. Ideas in the product, changing customer
requirements, and the availability of substitute or complementary products.

The operations department plays a significant role in the initial stage of the product life
cycle. Its role diminishes as the product moves up in the life cycle and the organization¶s
focus shifts towards maintaining or increasing the market share and improving the
quality of the product and the production process.

The following are the important steps in the development of new products: can come
from various sources such as employees, customers, intermediaries, vendors, market
research and so on. After a new idea is selected, it is screened to ascertain its feasibility
in implementation. Feasibility studies consider whether the idea generated is feasible
both technically and economically. Such studies test whether the production of the
product is technically feasible and profitable to produce and market. If the idea is found
to be both technically and economically feasible, then a prototype of the product is
developed. The prototype may not have all the features of the final product, but it has all
the basic characteristics of the product. The prototype is tested under standard
conditions and defects are noted. On the basis of the results of testing, the necessary
changes are made in the prototype. Then the prototype is tested again. This process is
carried out until the performance of the prototype reaches a satisfactory level. Once the
final structure of the prototype is in place, the prototype design is evaluated for
profitability. If the production of the model is profitable, then the prototype enters the
production design stage. The initial production design is transformed into final
production design after performance testing, production trials and testing, economic
studies and test marketing. These steps ensure that the final product performs
satisfactorily and can be produced efficiently in the desired quantities. The product
development process continues even after the launch of the product. The product is
modified or upgraded to adapt to changing market conditions and/or to adopt new
technology.
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Once the design of the product is finalized, managers concentrate on determining how
the product will be produced. This involves thorough analysis and planning of the
production processes and facilities. Every step in the process of production is planned
in detail. The technology to be used in the production process is selected from a range
of options. Allocation of resources to strategic alternatives Production companies have
to continuously deal with the problem of scarce resources like capital, machines and
materials and so on. As these resource inputs are vital to production activities, their
shortages can influence production performance significantly. Hence operations
managers have to plan the optimal use of resources, both in terms of minimizing
wastage, and in terms of their allocation to the best strategic use.

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The location of the production facilities is one of the key decisions and operation
manager has to make since it is critical to the competitiveness of the organization.
Setting up production facilities with adequate capacity involves massive initial
investment. Therefore, strategically right options should be carefully weighed against all
available alternatives. These decisions also influence the future decisions on probable
capacity expansions plans. Managers have to take into account factors like the
availability of raw materials and access to the market when making their decisions.
Operations managers also make layout decisions, i.e. decisions on the internal
arrangement of workers and departments within the facility.

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The operations strategy should be in line with the organization strategy, and the
organization strategy should be in line with the corporate vision and mission. If the
organization strategy is not consistent with the corporate vision and mission, the
organization cannot survive in the competitive marketplace.

For example, let us assume that the operations strategy of an organization focuses on
cost reduction by specializing production processes and utilizing long production runs,
while the marketing strategy focuses on product customization and quick response.
These strategies are in conflict with each other. In such a case, it will be difficult for the
organization to achieve its corporate vision and mission. Strategic planning is different
from operations planning in the scope of its application. Strategic planning is concerned
with long-term planning and involves selection of target markets and distribution
channels, whereas operational planning is concerned with short term, day-to-day
planning. Selections of markets are the key to any strategy. After markets are analyzed
for their attractiveness, operations managers develop appropriate processes and
designs to achieve the organization¶s objectives. As mentioned earlier, the operations
strategy is developed in line with organization strategy, which, in turn, is derived from
corporate objectives.
Organization strategies focus on achieving corporate objectives by utilizing a company's
current strengths and identifying capability to improve the company¶s competition. In the
face of global competition, many Indian manufacturers suffered declining sales, market
share, and profitability, during the early 1990s. One of the main reasons for this decline
was the ineffectiveness of the operations strategy. Managers now realize the
significance of operations strategies and are using them as competitive weapons.

Operations strategy, in general, involves planning, allocation of resources i.e. man,

material and machine to gain competitive advantage. A firm¶s overall competitive
position is influenced by both extern al factors like social, political, legal and
technological factors, and internal factors like employee skills, product range, technical
expertise, infrastructure, and financial position. So, operations managers should be
conversant with both internal and external situations. In the past, managers
concentrated most of their efforts on finance and marketing strategies. However,
companies started recognizing the significance of operations strategies. Wickham
Skinner, a Harvard Professor opined - ³A firm lacking proper operations strategy is like
an anchored ship. Finance, design, and marketing may set the rudder and expect the
ship to steam off, but with anchor set, the ship won¶t move, or moves reluctantly,
dragging its burden.´ Conclusion The value chain, or known as value chain analysis, is
a concept from business management that was first described and popularized by
Michael Porter. (Porter) Most of business strategy is to achieve a sustainable
competitive advantage. Cost advantage and differentiation advantage are the two basic
types of competitive.

According to the resource-based view, in order to develop a competitive advantage, the

firm must have resources and capabilities that are superior to those of its competitors.
Resources are the firm-specific assets useful for creating a cost or differentiation
advantage and that few competitors can acquire easily. Capabilities refer to the firm¶s
ability to utilize its resources effectively. The firm¶s resources and capabilities together
form its distinctive competencies. All of these activities can be obtained through value
chain analysis. Competitive advantage cannot be understood by looking at a firm as a
whole. It stems from the many discrete activities a firm performs. Each of these
activities can contribute to a firm¶s relative cost position and create a basis for
differentiation. It is necessary to have a systematic way of examining all the activities a
firm performs to analyze the sources of competitive advantage. Value chain is the basic
tool for doing so.

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Answer: 0 
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production practice that considers the expenditure of resources for any goal other than
the creation of value for the end customer to be wasteful, and thus a target for
elimination. Working from the perspective of the customer who consumes a product or
service, "value" is defined as any action or process that a customer would be willing to
pay for. Basically, lean is centered on ï

 

  
  . Lean
manufacturing is a generic process management philosophy derived mostly from
the Toyota Production System (TPS) (hence the term Toyotism is also prevalent) and
identified as "Lean" only in the 1990s. It is renowned for its focus on reduction of the
original Toyota 

 
 to improve overall customer value, but there are varying
perspectives on how this is best achieved. The steady growth of Toyota, from a small
company to the world's largest automaker, has focused attention on how it has achieved
this.

Lean manufacturing is a variation on the theme of efficiency based on optimizing flow; it

is a present-day instance of the recurring theme in human history toward increasing
efficiency, decreasing waste, and using empirical methods to decide what matters,
rather than uncritically accepting pre-existing ideas. As such, it is a chapter in the larger
narrative that also includes such ideas as the folk wisdom of thrift, time and motion
study, Taylorism, the Efficiency Movement, and Fordism. Lean manufacturing is often
seen as a more refined version of earlier efficiency efforts, building upon the work of
earlier leaders such as Taylor or Ford, and learning from their mistakes.

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Whilst Lean is seen by many as a generalization of the Toyota Production System into
other industries and contexts there are some acknowledged differences that seem to
have developed in implementation.

1. )' &
 is a relentless focus for Toyota exemplified by the profit
maximization principle (Price ± Cost = Profit) and the need, therefore, to practice
 systematic cost reduction (through TPS or otherwise) to realize benefit. Lean
implementations can tend to de-emphasise this key measure and thus become
fixated with the implementation of improvement concepts of ³flow´ or ³pull´.
However, the emergence of the "value curve analysis" promises to directly tie
lean improvements to bottom-line performance measuments.

2. 1 
  is a tendency in many programs to elevate mere tools
(standardized work, value stream mapping, visual control, etc.) to an unhealthy
status beyond their pragmatic intent. The tools are just different ways to work
around certain types of problems but they do not solve them for you or always
highlight the underlying cause of many types of problems. The tools employed at
Toyota are often used to expose particular problems that are then dealt with, as
each tool's limitations or blindspots are perhaps better understood. So, for
example, Value Stream Mapping focuses upon material and information flow
problems (a title built into the Toyota title for this activity) but is not strong on
Metrics, Man or Method. Internally they well know the limits of the tool and
understood that it was never intended as the best way to see and analyze every
waste or every problem related to quality, downtime, personnel development,
cross training related issues, capacity bottlenecks, or anything to do with profits,
safety, metrics or morale, etc. No one tool can do all of that. For surfacing these
issues other tools are much more widely and effectively used.

3.   '
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   " ' ' has been a principle in
Toyota from the early 1950s when they started emphasizing the development of
the production manager's and supervisors' skills set in guiding natural work
teams and did not rely upon staff-level change agents to drive improvements.
This can manifest itself as a "Push" implementation of Lean rather than "Pull" by
the team itself. This area of skills development is not that of the change agent
specialist, but that of the natural operations work team leader. Although less
prestigious than the TPS specialists, development of work team supervisors in
Toyota is considered an equally, if not more important, topic merely because
there are tens of thousands of these individuals. Specifically, it is these
manufacturing leaders that are the main focus of training efforts in Toyota since
they lead the daily work areas, and they directly and dramatically affect quality,
cost, productivity, safety, and morale of the team environment. In many
companies implementing Lean the reverse set of priorities is true. Emphasis is
put on developing the specialist, while the supervisor skill level is expected to
somehow develop over time on its own.
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Ans. Recent Trends In OM

Organizations must improve their products as well as productivity to retain their

market share. The long-term success of an organization requires investments in
technology because new technologies can improve efficiency and productivity. In
this chapter, we discussed how organizations can benefit from automation.

Some of the recent technological developments in the field of operations

management, which include computer-aided design (CAD), direct and indirect
computer-aided manufacturing (CAM), flexible manufacturing system (FMS), and
computer integrated manufacturing (CIM) were discussed in the chapter.

Computer Aided Design (CAD) is used for designing products and processes on a
computer terminal. Computer systems assist in the creation, modification, analysis
and optimization of a design. In Computer Aided Manufacturing (CAM), computers
are used either directly to control the processing equipment, or indirectly to support
manufacturing operations.

Automated machines usually perform a variety of operations, depending on the

instructions received from the computer with respect to the sequence and
operational specifications of a process. FMS is a form of flexible automation in which
several machine tools are linked to the materials-handling system.

A central computer controls all aspects of the system. CIM refers to a computer
application that connects various computerized systems into a single multi-functional
system. Another development in the field of technology is artificial intelligence (AI).
AI enables computers to exhibit some of the characteristics of human intelligence,
like the capacity for learning, understanding language, reasoning and problem
solving.

EDI is a system, wherein standardized forms of electronic documents are transferred

between two computer systems. Customers and suppliers or departments within the
same organization can share and transmit information electronically in real time
using EDI.
Q ± 2 What is Rapid Prototyping? Explain how concept time to market can be
drastically reduced using this technique.

Ans. *
 "

Rapid Prototyping (RP) can be defined as a group of techniques used to quickly

fabricate a scale model of a part or assembly using three-dimensional computer aided
design (CAD) data. What is commonly considered to be the first RP technique,
Stereolithography, was developed by 3D Systems of Valencia, CA, USA. The company
was founded in 1986, and since then, a number of different RP techniques have
become available.

Rapid Prototyping has also been referred to as solid free-form manufacturing, computer
automated manufacturing, and layered manufacturing. RP has obvious use as a vehicle
for visualization. In addition, RP models can be used for testing, such as when an airfoil
shape is put into a wind tunnel. RP models can be used to create male models for
tooling, such as silicone rubber molds and investment casts. In some cases, the RP part
can be the final part, but typically the RP material is not strong or accurate enough.
When the RP material is suitable, highly convoluted shapes (including parts nested
within parts) can be produced because of the nature of RP.

There is a multitude of experimental RP methodologies either in development or used

by small groups of individuals. This section will focus on RP techniques that are
currently commercially available, including Stereolithography (SLA), Selective Laser
Sintering (SLS®), Laminated Object Manufacturing (LOMŒ), Fused Deposition
Modeling (FDM), Solid Ground Curing (SGC), and Ink Jet printing techniques.

Rapid Prototyping improves product development by enabling better communication in

a concurrent engineering environment.

The basic methodology for all current rapid prototyping techniques can be summarized
as follows:

1. A CAD model is constructed, then converted to STL format. The resolution can be
set to minimize stair stepping.
2. The RP machine processes the .STL file by creating sliced layers of the model.
3. The first layer of the physical model is created. The model is then lowered by the
thickness of the next layer, and the process is repeated until completion of the
model.
4. The model and any supports are removed. The surface of the model is then
finished and cleaned.

Timberland is a cultural icon, a dream brand. The nickname ³Timbs´ is name-checked

on dozens of hip-hop lyrics, and one of the genre¶s best-selling producers, Timbaland, is
named after the company¶s footwear. On the corporate side, Timberland¶s commitment
to social responsibility is respected and emulated worldwide.

Hand Craft Meets Digital

Timberland has made the transition to its new last production process in just over two
years by implementing DSSP, a collection of technology components that enables users
to quickly create accurate digital models of complex physical objects.

DSSP is used by manufacturers worldwide to capture a part with a 3-D scanner,

reconstruct the measurement data (point clouds) into highly accurate polygon or
NURBS surfaces, and use the resulting digital model for applications such as product
design, tool and mold design and verification, customized manufacturing, recreating
legacy parts, engineering analysis, digital archiving and computer-aided inspection.

Design conceptualization can be done in minutes by making changes to the 3-D model.
In cases where a physical prototype is needed, Timberland sends the Geomagic data to
a Z Corp. rapid prototyping system, which can produce a realistic physical model for
design and engineering review in three or four hours.

DSSP is a vehicle for exploring the type of eclectic designs and customization that
defines brands in today¶s consumer market.

At the back end of the process is archiving, formerly a process involving a lot of
manual labor and physical space to store and retrieve hundreds of historical lasts.
Now, Timberland transfers the Geomagic 3-D models of lasts to an electronic library
managed using 3Shape software.
Q3. Explain the seven types of wastes w.r.t. just in time. Explain what is Kanban and its
types.

Ans. The seven types of wastes w.r.t. just in time are under below:

-+" 

The simplest form of waste is components or products that do not meet the
specification. We all know about the Japanese scaring us with their target of single-
figure reject rates when we realised that they measured in parts per million and that 1%
defects gave a figure of 10,000. Of course, the key point of Japanese quality
achievement came with the switch from Quality Control to Quality Assurance - efforts
devoted to getting the process right, rather than inspecting the results.

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A key element of JIT was making only the quantity required of any component or
product. This challenged the Western premise of the Economic Order Quantity (EOQ)
which was built on acceptance of fixed ordering costs, built around set-up times, and
thus the need to spread these fixed costs over large batches. Another Japanese guru
who contributed to this change is Shigeo Shingo who led Toyota's move from long set-
ups to Single Minute Exchange of Die (or SMED).

5 '

Time not being used effectively is a waste - we are incurring the cost of wages and all
the fixed costs of rent, rates, lighting and heating so we should use every minute of
every day productively. Ohno looked at the reasons for machines or operators being
under-utilised and set about addressing them all. Thus we have learnt about preventive
maintenance and the creation of flow through our factories with the emphasis on takt
time, the rate at which a component or product moves to the next stage.

1
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Items being moved incur a cost, if it is only the energy needed to initiate the movement -
such as the electricity absorbed by a fork lift truck. Of course, movement brings another
cost, which is less visible but more significant. Managing a factory with operations
spread apart is much more difficult than when the subsequent stages are adjacent to
one another. This can be seen as the primary driver behind cellular manufacturing
(though some would point out that Group Technology is very similar and came from
Sweden, rather than from the Orient).

#

 On a related note, people spending time moving around the plant is equally wasteful.
The time a machine operator or fitter wastes walking to the toolroom or the stores for a
fixture or a component could be far better utilised if our plant layout and housekeeping
were geared around having everything that is required close to hand.

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The most obvious example of inappropriate processing from my own experience relates
to surface finishes that required components to be moved to grinders for completion,
when in fact such finishes served no purpose. A basic principle of the TPS is doing only
what is appropriate.

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The element that Western industry immediately focused upon when confronted with JIT
was the cost reduction available from holding less inventory. The fact that the initial fact-
finding trips to Japan took place when interest rates were at breathtakingly high levels
(my own mortgage was at 15%) perhaps contributed to our failing to see the other costs
that Ohno had considered in his own interpretation. We now know that stock hides
problems and that problems are pearls in that finding a problem is a good thing - now
wecan solve it, which we couldn't until it came to light! Kanban Systems

This article describes the 8 types of Kanban system available and what you need to do
to choose, design, implement, and operate Kanban systems, size buffer stocks (the
number of Kanbans), choose containers and signalling mechanisms. It shows the need
to integrate the system with your planning systems. It includes the impact on people,
accounting, materials handling systems and some important do's and don'ts. This type
of system belongs to a category of materials management systems called "pull"
systems. (See Materials Management & Stock Control.)

18&   8 


You may previously have thought that there was only one, or maybe two types of
Kanban system! In fact there are 6 main types, (plus two significant variants), (excluding
2 bin & 3 bin systems) and here they are:
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In the above diagram:

A signal is sent back from the consuming process to supplying process (or supplier).
This is a signal:

a. To send some more (a transfer batch), via a buffer stock.

b. To produce some more (a process batch), at the supplying work centre.

NB. Empty containers acting as a signal are a potential hazard as 8 empty container
is a signal to fill it. Also occasionally containers have been known to go missing!
Usually, for these reasons, the signal is separated from the container.

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Sometimes called the ConWip (constant work in process) system, this type imposes
input / output control, where the signal travels directly from the end of a line or section to
the preceding section or raw material stores. In this case the supply chain is treated as
one unit rather than a series of linked operations. So, as one transfer batch is
completed (output) another is launched on the first operation (input), thus ensuring that
work in process cannot build up. However there are some special considerations
required in the operation of the system, to avoid hidden capacity problems, which are
not so clearly visible when this method is used.

We have used adaptations of this system to manage workflow and capacity rather than
materials in a number of environments including job shop & clerical / technical process
environments.
  ""
 


In this method Kanban signals are allowed to accumulate at the supplying work centre
until the production batch size is reached.

In this case buffers can be depleted or exhausted depending on the accumulation

rules. Also because buffers can be exhausted, slightly higher mixes can be
accommodated.

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First used by Toyota, there are in fact now two types of two card system. The first
method separates the replenishment (send some) signal, which is produced from the
Kanban system, from the "produce" signal, which is produced by a scheduling system
such as MRP. The purpose of each of the cards is as follows:

Ö The scheduling system says which job is next.

Ö The Kanban says make it now. (I need some.)

The second variant of this method generates the second card (after authorisation) as a
result of one or more replenishment requests in a similar way to Kanban accumulators
above.

These methods can deal with higher mixes. They can also deal with larger batch sizes,
caused by long changeovers, where scheduling is necessary, although you should be
trying to reduce batch sizes (See Previous Technique: T019 Avoiding set ups and
Reducing Changeover Times). In this case the buffer is depleted, and can be
exhausted. In addition a longer planning system such as MRP1 (See "Levels of
Planning & Control") is also necessary to that the system is durable. Kanban systems
operate at level 3 in this model.

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In some situations it is more convenient to replenish items used, by fixed frequency

deliveries (or collections), rather than respond to fixed quantity replenishment requests.
This method forms the basis of supplier "top up at point of use" systems, where a
supplier visiting your point of use will top up stocks to a predefined maximum level. We
have also used this method as the mechanism to drive "replacement systems" for
maintaining stocks of critical spares items or maintaining "van stock" for on-the-road
service engineers.