Introduction

Company Introduction
In 1952 shortage of foreign exchange started making difficulties for the importers.
Giving careful though to the problem, the shop owners of Nila Gumbad sketched a
plan to form a bicycle-manufacturing factory within the country on co-operative
basis. As such 22 persons got together and put down the establishment of a cooperative society. Its first meeting was held on 17th July 1953, later, on 8th
September 1953, the society was registered under section 9 of Co-operative
societies

Act

II

of

1912.

The success of the society can be viewed by the facts and figures numbered below.
1- The number of its members has increased from 22 to 228.
2- The fixed capital, which was initially of Rs- 22,000/- has grown up now to the tune
of Rs- 67,670,000/-.
3- Area of the Factory has increased from 3 1/2 Kanal to 25 Acers.
4- In the beginning, there were a few workers in the factory, while the factory has
2,300 workers now.
5- The production of factory has increased from 5 bicycles per day to 2,000
(approx.) bicycles per day.

The society is playing a crucial role as a Leader of cycle manufacturing industry.

The company has entered in a new age with the production of fancy bicycles,
different types of sports model bicycles like VIP, student and panda have been
introduced in the market and are being sold successfully.

Introduction of Problem Area

Operations management is very important to a success of a company it includes
managing the production, forecasting, distribution and inventory controlling

processes. There should be a well-developed department allocated to look after and

manage these needs of the organization.
Supply Chain Management
The supply chain management is the main area of company in failure modes.
Supply chain management is the transformation of the all activities, processes
and flow of information from raw material to finished goods to end customers.
Capacity Management
It is the management of overall capacity of intensive resources including
facility, equipment and labor force.
Quality Management
Quality management is the satisfaction of the customers with respect to the
product characteristics and features.

Problem Background
This portion of the report is based on the background of the problem and how it
relates to the market conditions and forces (Porter Five Forces).

Background of the Problems

Supply Chain Management
1) To maintain the quality standards in product there should be quality material to
be used. If there is some quality problem in material that is going to be used
for the production then chances of the rejection of the product also increases.
2) In production line or assembly line the flow of information is a key factor to
firms success. If a company has a better and proper system of flow of
information from one department to other then the efficiency of production
process increase in a great extent with speed. If slower the production
process, it can influence every step of production system.
3) The distributors, retailers are the main aspects of marketing and selling of the
product/services to end customers. If distributers are satisfied then they work
with great courage. The distributer or retailers are the main stimulus to make
a long term customer of the Company.
Capacity Management
4) Problems face by under developed countries like short fall of electricity,
natural gas, etc. also affects their industries and overall economy. As we all
are Pakistanis, we better know the energy crises, how it has punched our
every aspect of life. (We are also writing these lines in sunlight on register
because of absence of electricity). This is also one of the issues of this
industry as well.
Quality Management
5) Employee empowerment means the involvement of the employees in the
decision making process whether in product design or process design. The
employees who are working in an organization are the most effective

customers because they usually knew everything about the organizational

environment and market condition of the specific product at specific condition

Problem Analysis
This section gives you the details of what and how, we have collected data, presents
the analysis of the data, the issues we have identified, their causes, and their effects
that makes inefficiencies in the operations of the company.

Collection of Data
We make interview questions to collect data. The questions were made to get an
overview of their supply chain management, capacity management, & quality
management. The data is of qualitative type. We collect data through interview &
discussion with technical staff of Sohrab, we have also done telephonic interview
with one their technical assistant and at last we visit the head office named Sohrab
House at Shahrah-e-Quaid-e-Azam, Lahore, as well as the factory at SheikupuraLahore Road, Shadara. They also take us to their production shops like bulging
Shop (Shop # 82), Shop for wheel production, and electrolyte plant in the factory.

Issues Identified through Analysis & their Causes

We have identified these issues as hurdle in the efficient working of the company.
We have also explained the cause of each issue.
Supply Chain Management
1) Low Quality Raw Material Supplied by Local Suppliers
The first problem they face in supply chain management is in the area of
procurement of raw material. They do not have any problem in purchasing
raw material from foreign suppliers but in case of local suppliers, they face the
problem that sometime they are not provided with the material of the quality
they have ordered for.

2) Slow Information Flow along Production Shops and with Vendors

The Rustam & Sohrab Company have manual information system (Registers,
Printed Documents) due to which the information processing & flow is slow.
3) Less Number of Distributors of Motorcycle
The problem which Rustam & Sohrab is facing in this respect is that they have
less number of distributors of the motorcycle. Mostly distributors do not have
much money to pay dues of company in advance. This is a very important
aspect that company should use credit base distribution following current
distribution trends. We found that the main cause of this problem is that the
company does not have distribution on credit.
Capacity Management
4) Lower Production
The problem that they face in capacity management is lower production
because of energy crises. The analysis of interview reveals that they are not
meeting their target, because energy crises have lowered their capacity of
production.
Quality Management
5) No Employee Empowerment.
In Rustam & Sohrab Company, after analyze the data we get to know that the
higher management take the decision and the lower management is not given
opportunity in decision making. If there is any suggestion from any employee
it is not considered important and refer to the technical staff which may or may
not accept the suggestion.

Effects of Identified Issues

The following are the effects of the identified issues, how these issues are causing
inefficiencies.
Supply Chain Management
1) Low Quality Raw Material Supplied by Local Suppliers
The quality assurance procedure becomes more time consuming and costly.
They complain their suppliers and return the low quality raw material which is
also time consuming procedure. This makes the productivity low that in turn

results in postponement of order or delay of target production in a specific

time.

2) Slow Information Flow along Production Shops and with Vendors

Because of slow information, the production and assembly line speed is
affected, and also it is more costly to organize and manage the information.
As we know that information technology is supply chain enabler, so, without
use of IT, the company is becoming less productive as compared to its
motorcycle manufacturing rivals.
3) Less Number of Distributors of Motorcycle
Due to the less number of distributors of motorcycles they have fewer sales of
motorcycles as compared to competitors and have covered small market. This
makes it less competitive in the market.
Capacity Management
4) Lower Production
Because of lower production they have also lowers their production target
now. As they have lowered their production because of shortage of power
their sales also lower and result in negative growth of the company. In
Pakistan, every company in this industry is facing the same problem, but their
competitors like Honda have solved the problem by having its own power
plant. But they are still not considering any option; this gives their competitors
a competitive advantage.
Quality Management
5) No Employee Empowerment
No employee empowerment results in lower quality of output by employees. If
company make the employee involve in the decision making process related
to product they make work with more interest and make the quality much
better. This provides the company a distinctive edge, which it is losing right
now.

Recommendations

In this section, we have given following recommendations for each issue to

practically resolve it. We have discussed the benefits for the company because of
resolving the issues and also relate it to whats happening in the market place.
Supply Chain Management
1) Low Quality Raw Material Supplied by Local Suppliers
The Company should search for new suppliers that can meet its requirements,
standards and that are trust worthy. The company should revise its vendor
development standards and should keep consistent eye on their suppliers. The
company should also use reverse auction for raw material on internet where the
suppliers can bid on it.

2) Slow Information Flow along Production Shops and with Supplier.

The Company should use information technology in their entire operations. They
should interlink all departments like productions shops using online information
systems.
3) Less Number of Distributors of Motorcycle
The Company should supply motorcycle to its distributors on credit in the very
same way its competitors are supplying.
Capacity Management
4) Lower Production
This problem can be solved, if company globalize its operations mainly
production by establishing another facility in a location that is more productive
and less costly like China, where the labor is cheap, technology is cheap, and
utility bills are for sure cheap.

Quality Management
5) No Employee Empowerment

The suggestion about employees empowerment is that company should involve

its employee in product improvements and innovation. Make them involve in
different decision making processes that can influence the working of the
company.