Case Study

CASE STUDY
INVENTORY MANAGEMENT
QUALITY ASSURANCE
STRATEGY MANAGEMENT
SELF MANAGED TEAM CONCEPT
NAME : ASHWANI MALHOTRA
REGISTRATION NUMBER : 200742588
SYMBIOSIS CENTRE FOR DISTANCE LEARNING
ACADEMIC YEAR : 2007

TELESYS VENTURES INC.

Objective:
The Case Study helps to understand the requirement of inventory management
The various constraints encountered during inventory management
The different approaches utilized to overcome the above said constraints
Evaluation of different proposed changes
Optimization and implementation of Solution
Measurement of Effectiveness of the changes.
Telesys Inc. is a leading manufacturer of Laptops & desktop in India. It imports

Monitors from China. Earlier the company was performing very well but now the situation
has changed. There is a reduction in the gross profit. There are various reasons like
changing suppliers, complicated customs procedures, entry of new competitors, the
resurfacing of high sea piracy and economic slowdown. On the other hand most of the
company cash is blocked in inventory. This has led to a situation of the cash crunch and
Management is seeking for a mean to overcome from this problem.
Lead time also fluctuates at around an average of 21 working days. To facilitate a desired
service level of 95% and avoiding lockout condition / late delivery penalty, company
spends Rs 150000 per year in administering a perpetual review system (Fixed Quantity
interval system).
To avoid the high monitoring costs for the perpetual system, Rohit, a young Industrial
Engineer, has proposed to change to a Periodic Review system (Fixed order Interval
system). Without any additional investment, Rohit found that administrative costs would
drop by 75% approximately. But management was in a dilemma whether to implement the
proposed solution or not. The review period for the system was one month.
A local supplier promises to deliver any order within 7 working days. It reduces the Order
cost to Rs 25000 per order, but the unit price increases by 2%.
Submitted By: Ashwani Malhotra Page |2

The Information provided by purchase department is written below.
1. Per unit price for monitor is Rs.4200

2. Ordering & Shipping cost is Rs. 65000 per shipment.
3. Inventory holding costs are 20% p.a. of average inventory
4. Forecasted Daily demand is normally distributed and averages 100 units
5. The minimum Lot size ordered is 15,00
6. The maximum lot size per shipment is 40,00
7. As per company policy five days demand to be kept for safety stock
The questions before management are:
Deciding appropriate amount of order for the monitors

To procure from local vendor or kept outsourcing through China
Solution:
Rohit checked for scientific inventory control method. The excess inventory is already
eating up the company liquidity. The expenses are in the form of raw material cost ,in
process work ,finished goods ready to sale .It also include the expenses incurring to meet
storage, transportation, approximation for losses arising out of pilferage , insurance and
damages. He wanted to minimise this cost (holding cost or carrying cost)
On the other hand, if he thoughts for opting very less or no inventory then company face
lockout situation. In that case with addition to late delivery Penalty Company may suffer
from the important order /customer losing and the company reputation is also on the stack
in the market.
He analyses the requirement of inventory based on below written parameters:
• Priority to customer
• Effective Capital utilisation
• Economy in buying
The different methodology adopted is
(a) Fixed Order Quantity system.
(b) Fixed Order Interval System.

In each methodology again evaluation is done for both Local supplier and manufacturer
(from china) for the feasibility. The results are tabulated below after the calculations.
(A) FIXED ORDER QUANTITY SYSTEM WHEN SUPPLY IS FROM CHINA

D (Daily Demand) = 100 unit
S (Ordering & shipment cost IN Rs.) = 65000
C (Unit Cost in Rs.) = 4200
I (Average inventory holding cost) = 20% of average inventory investment
P (Annual consumption in units) =Daily demand x No. Of days in year
= 100 x 365
= 36500
Q (Economic Order Quantity in units) =Sqrt ((2 x S x P)/(C x I))
= 2 x 36500 x 65000
4200 x 0.2
= 2377
Annual Total Cost: = Basic cost + Procurement cost + Carrying cost
Basic cost (Rs.)= Unit cost x Annual consumption
= 4200 x 3650 = 153300000

Procurement Cost(Rs.) = (Ordering cost per order x Annual consumption)
Ordered quantity
= (65000 x 36500)
2377
= 998223
Carrying Cost(Rs.) = (Inventory carrying cost in decimal x Unit cost x Order quantity)
2
= (0.2 x 4200 x 2377)
2
= 998223
Annual Total Cost (Rs.) =153300000 +998223 + 998223 =155296447

'm (minimum stock in units) = 5 day demand

= 5 x 100 = 500
L (Lead time in days) = 21
C (Daily consumption in units) = 100
Re-Order Level (Units) = m + LC
= 500+21 x 100
=2700
M (Maximum stock in Units) = minimum stock + economic order quantity
= 500+ 2377
= 2877
(A) FIXED ORDER QUANTITY SYSTEM WHEN SUPPLY IS FROM LOCAL
SUPPLIER
D (Daily Demand in Units) = 100
S (Ordering & shipment cost in Rs.) = 250000
C (Unit Cost in Rs.) = 4200 x 1.02 = 4284
I (Average inventory holding cost) = 20% of average inventory investment
P (Annual consumption in Units) =Daily demand x No. Of days in year
= 100 x 365
= 36500
Q (Economic Order Quantity in Units) =Sqrt ((2 x S x P)/(C x I))
= 2 x 36500 x 250000
4284 x 0.2
= 1459
Basic cost (Rs.)= Unit cost x Annual consumption
= 4284 x 36500 = 156366000

Procurement Cost(Rs.) = (Ordering cost per order x Annual consumption)
Ordered quantity
= (250000 x 365000)
14595
= 625232

Carrying Cost (Rs.) =(Inventory carrying cost in decimal x Unit cost x Order quantity)
2
= (0.2 x 4284 x 14595)
2
= 625232
Annual Total Cost (Rs.) =156366000+ 625232+625232 =157616464
'm (minimum stock in units) = 5 day demand

= 5 x 100
= 500
L (Lead time in days) = 7
C (Daily consumption in units) = 100
R (Review time Days) = 30
Re-Order Level (Units) = m + LC
= 500+7 x 100
=1200
M (Maximum stock in Units) = minimum stock (Units) + economic order quantity
= 500+ 1459
= 1959
(B) FIXED ORDER INTERVAL SYSTEM WHEN SUPPLY IS FROM CHINA
Review Period (Days) = 30
Lead Time (Days) = 21
Average monthly consumption (Units) = 30 x 100 = 3000
(m) Minimum Stock =Safety Stock (Units) = 5 days demand

=5 x 100 = 500
(M) Maximum Stock = minimum stock +review time stock + Lead time stock
(R) Review Stock (Units) = 30 x 100 = 3000
(L) Lead Time Stock (Units) = 21 x 100 = 2100
(P) Stock at the time of review (Units) = 500

M=m+R+L

M = 500 +3000+2100 = 5600
Re Order quantity (Units) = Maximum stock – Stock held at the time of review
= 5600-500 = 5100
Average Inventory (Units) =0.5 x (minimum stock + maximum stock)
= 0.5 x (500+5600) = 3050
Annual Inventory cost (Rs.) =0.2 x 3050 x 4200 = 2562000
Annual Ordering Cost (Rs.) = 150000

Annual Procurement cost (Rs.) = (0.25 x 65000 x 365)/30
= 197708
• Annual Basic cost (Rs.) = Unit cost x Annual consumption
= Rs.4200 x 36500 = 15330000

• Procurement Cost per review (Rs.) = 25 % of procurement cost
=0.25 x 650000 = 16250
Annual procurement cost = (Procurement cost per review x No. of days in Year)
Review period
= (16250 x365)/30 =197708
Annual Ordering Cost (Rs.) = 150000
Total Annual Ordering & Procurement cost (Rs.) = 197708 + 150000 = 347708
Carrying Cost (Rs.) = Inventory carrying cost in decimal x Unit cost x Avg. Inventory
= (0.2 x 4200 x 3050) = 2562000
Annual Total Cost (Rs.) =153300000 +347708 + 25 62000=156209708

(B) FIXED ORDER INTERVAL SYSTEM WHEN SUPPLY IS FROM LOCAL

SUPPLIER
Review Period (Days) = 30
Lead Time (Days) = 7
Average monthly consumption (Units) = 30 x 100 = 3000
Minimum Stock =Safety Stock (Units) = 5 days demand

=5 x 100 = 500
Maximum Stock = minimum stock +review time stock + Lead time stock
M=m+R+L
(R) Review Stock (Units) = 30 x 100 = 3000
(L) Lead Time Stock (Units) = 7 x 100 = 700

(P) Stock at the time of first review (Units) = 500
M = 500 +3000+700 = 4200
Re Order quantity (Units) = Maximum stock – Stock held at the time of interview
= 4200-500 = 3700
Average Inventory (Units) =0.5 x (minimum stock + maximum stock)
= 0.5 x (500+4200) = 2350
Administrative Cost per review (Rs.) = 25 % of initial cost
=0.25 x 25000 = 6250
Annual Administrative cost (Rs.) = (6250 x 365)/30 = 76042
Additional Monitoring cost (Rs.) = 150000
Annual Total Cost (Rs.) = Basic cost + Procurement cost + Carrying cost
Basic cost(Rs.) = Unit cost x Annual consumption
=.4284 x 36500 = 157616464
Annual Total ordering & Procurement Cost (Rs.) = 150000 + 76042 =226042
Carrying Cost (Rs.) = Inventory carrying cost in decimal x Unit cost x Avg. Inventory
= (0.2 x 4284 x 2350) = 2013480
Annual Total Cost =156366000+226042+2013480=158605522

FIXED ORDER QUANTITY SYSTEM

CHINA LOCAL
DESCRIPTION SUPPLIER SUPPLIER
Unit cost (Rs.) 4200 4284
Daily Demand (Units) 100 100
Annual Consumption (Units) 36500 36500
Ordering cost & Procurement cost per order
(Rs.) 65000 25000
Lead Time ( Days) 21 7
Lead time stock (Units) 2100 700
Minimum stock (Days) 5 5
Minimum stock (Units) 500 500
Economic Order Quantity (Units) 2377 1459
Annual Basic cost (Rs.) 153300000 156366000
Annual Procurement cost (Rs.) 998223 625232
Annual carrying cost (Rs.) 998223 625232
Annual total cost (Rs) 155296447 157616464
Minimum stock (Rs) 500 500
Lead stock (Units) 2100 700
Reorder level (units) 2600 1200
Maximum Stock (Units) 2877 1959

FIXED ORDER INTERVAL SYSTEM

LOCAL
DESCRIPTION CHINA SUPPLIER SUPPLIER
Review stock (Units) 3000 3000
Lead stock (Units) 2100 700
Stock at review (Units) 500 500
Average Inventory (Units) 3050 2350
Reorder Quantity (Units) 5100 3700
Additional Monitoring cost (Rs.) 150000 150000
Procurement cost per review (Rs.) 16250 6250
Annual procurement cost (Rs.) 197708 76042
Total ordering & procurement cost (Rs.) 347708 226042
Annual basic cost (Rs.) 153300000 156366000
carrying cost (Rs.) 2562000 2013480
Other cost (Rs.) 2909708 2239522
Annual total cost (Rs.) 156209708 158605522
On comparison of the Total annual cost Rohit present the procurement

by Fixed Order Quantity System from the china Supplier and
Management approved the same.
CLOSE
Submitted By: Ashwani Malhotra P a g e | 10

QUALITY ASSURANCE
Objective:
• Application of check sheet, brainstorming and flow chart usage in problem

solving.
A reputed FMCG company of India was very much upset

regarding the rejection of material at customer end within the guarantee period. The
company manufacturing operation is done by vendors spearheaded in North India in
Delhi & Himachal Pradesh. The Design, marketing & servicing is taken care by company
itself. The above said product, water heater, is a volumetric and major profit shared part
of particular strategic business unit.
The company Vice President called the Chief Manager QC Mumbai for the business
review meeting. In the meeting Regional sales manager, South raised the issue of
rejection and complained that he has lost a number of customers and large money is also
blocked in the payment due to the same reason. Next day, Mr. Mahesh instructed his
Engineer (Mr. Vineet Dhiman) to do the method study.
Mr. Vineet made the check sheet to gather the information regarding various elements of
the defective material returned from all over the branches in terms of branch, model,
under guarantee, problem. The compiled data is as follow.
Sr. No. Problem Quantity Commutative Quantity

1 Leakage form welding 146 146 71.5%
2 Leakage from Apparatus plate 37 183 18.1%
3 Not operating 11 194 5.4%
4 Body Damage 6 200 2.94%
5 Others 4 204 1.96%
Total 204 100%
Table I: Defective Return data in FY 2005-06

QUALITY ASSURANCE
The Process of making Tank for water heater starts from drawing the two identical half
tanks from Copper sheet circle, trunking the hole in one doom in flat portion, fitting the
Cast iron ring in cut-out part. Then two halves are put over each other and brazing with
Oxy-acetylenes torch.
The tank is immediately put in the water for cooling. Then tank is fitted with apparatus
plate and checked for leakage by filling the water at pressure 6 kg/cm2.The tank which
are passed in leakage test assembled with other subassembly to make finish product.
Start
PROCESS 1
Copper Sheet circle
Draw of half Tank

PROCESS 2
PROCESS 3 Cutting of hole in one half
PROCESS 4
Fitting of Cast Iron ring
Brazing of two half

PROCESS 5
PROCESS 6 Cooling in water tub
PROCESS 7
Fitting of Apparatus Plate
Open the Apparatus
plate
Leakage Testing
PROCESS 8
PROCESS 9 NO
Is Test Passed
YES
PROCESS 10 Complete Assy.
END

QUALITY ASSURANCE
CAST TRON RING
Brazing Brazing
Tank
Figure 1: Tank Interlocking (Before Improvement)
After compiling the result from check sheet the major problem found was leakage from
brazing. Its Share is 71.5%.
Mr. Vineet, at the vendor place conducted brainstorming meeting. In the session
major cause come up and then listed down for future reference.
1. Brazing rod is of poor Quality or not suitable for particular application

2. The process of Brazing is not appropriate
3. The vendor is interested in fast production and hence fast operation cast a thin
layer of brazing.
Mr. Vineet checked for each cause to determine the potential effect one by one.
The first cause state that brazing rod is of poor quality. The currently using
material has 6 % phosphorous content. The suggested material is brazing rod with
2% silver composition. It is 30 % costlier than earlier used one.

QUALITY ASSURANCE
Ten water heaters were manufactured using the silver brazing rod
and installed in coastal area for testing. The result was collected after one month.
It was found that three of the heaters started leaking from the brazing.
For the second cause, the close monitoring of process revealed that before
brazing no oil/dirt/grease was removed from the surface.
Practically before brazing there should be no any oil/grease over the surface as
this would create the problem in adhesion of two metals. In manufacturing
process before brazing fifty tanks were thoroughly cleaned then brazed using old
Phosphorous rod, with aceton to remove the oil/dirt.
The cooling of joined halves carried out in normal air rather than cooling in the
water (as it was done previously practiced) because immediate cooling affects the
brazing strength. During the pressure testing there was improvement in the
outcome. As earlier, in a lot of fifty there used to be five to seven rejections during
leakage testing. But implementation of the before said two processes (Precleaning
and cooling in air) reduced the rejection to half of the previous rejection.
For the third cause, time and motion study of brazing process was done to find
the discrepancy in observed time and standard time. The comparison of this
report with earlier report showed no abnormal variation.
In actual practice after usage of water heater in coastal areas the leakage starts at
brazing. This is mainly due to the high salt concentration in the water. This salt
after evaporation of water comes in directly contact with brazing material and
start deteriorating it. A new interlocking mechanism was developed so as to
minimize the water contact with brazing material. Again, ten samples were made
with new interlocking system and installed in coastal areas. The Tank interlocking
is given in Figure 2 & figure 4.
After one month of continues operation no leakage was observed in any of the
samples.

QUALITY ASSURANCE
The recommended solution suggested to the management is as follow.
1. Incorporation of new interlocking Technique.

2. Precleaning of copper halves before brazing with acetone.
3. Cooling of Brazed tank in Air
The revised process of manufacturing is also presented. The Highlighted process are
added as part of the improvement and to provide Quality assurance rather than
Quality control
Cast Iron Ring
Brazing Brazing
Figure 4: New Tank interlocking

QUALITY ASSURANCE
START
PROCESS 1
Copper Sheet circle
PROCESS 2 Draw of half Tank
Cutting of hole in one half

PROCESS 3
PROCESS 4 Fitting of Cast Iron ring
Pre-cleaning
PROCESS 5
Brazing of two half

PROCESS 6
PROCESS 7 Cooling in Air
Fitting of Apparatus Plate

PROCESS 8
PROCESS 9 Open the

Leakage Testing apparatus plate
PROCESS 10 Is Test
Passed
PROCESS 11 Complete Assembly
END

STRATEGY MANAGEMENT
DELTACOM GmBH
Objective: The case study helps to understand the perception & application of
strategy formulation.
The company is established in Germany and it is into the business of IT solution provider
to various customers all over the globe. Recently in Chine, the company has participated in
the International Bidding and awarded the contract. The company has made huge effort to
get the order as it was very competitive, financially as well as from Technical specification
point of view.
The project duration is within the range of 7 to 10 years and it also outlay larger chunk of
money. So after winning the contract, management called for Executive level meeting in
Berlin for overall framework. The agenda of the meeting distributed to them was to decide
upon the formulation & evaluation of various strategies to be adopted for the project.
The major participants of projects are enlisted below.
(1) Exclusive Partner (2) Integrated Partner
(3) Project Solution seeker (4) Body Shopper
(A) PARTNERS SEGMENTATION
(B) BUSINESS DIMENSION FOR DIFFERENT CUSTOMER
(C) VALUE PROPOSITION FOR DIFFERENT CUSTOMERS
(D) BUNDLE OF COMPETENCES ANALYSIS
(E) MISSION OF BUSINESS
(F) STRATEGIC TEST
(G) SCOPE OF TRANSFORMATION
(H) STRATEGIC AGENDA

STRATEGY MANAGEMENT
PROCESS OF FORMULATION OF STRATEGY
SLI
TCS BP
CUSTOMER SEGMENTATION & VALUE PROPOSITION
THE BUNDLE OF COMPETENCES
MISSION OF BUSINESS
THE STRATEGIC AGENDA
OPERATIONAL EXCELLENCE INNOVATION
CUSTOMER TARGETING
AGGREGATE/GRANULAR METRICS
EXPERIMENTATION AND FEEDBACK
FINANCIAL EVALUATION & MATCHING

STRATEGY

STRATEGY MANAGEMENT
LEGENDS :->
TCS ---- TOTAL CUSTOMER SOLUTION
BP – BEST PRODUCT
SLI – SYSTEM LOCK IN
(A) Partner Segmentation
Tier 1: Exclusive Partner

• Japan based organisations provides outsourcing of IBM mainframe applications
• Opportunity for customer lock-in
• Joint Venture with IBM, the main source of Mainframe developer
• Existing customers: GE Japan, JBCC, and AIG
Tier 2: Strategic/Integrated Partner
• Long term symbiotic partnership with high value added
• Existing customers: GE China, GE US, Kawasaki and Unisys.
Tier 3: Project Solution Seekers
• Full project ownership and solution delivery responsibility without established (but
potential) for long-term client relationship
• Existing customer: Toyota, Honda, US prospects, Dept. of Transportation China
Tier 4: Body Shoppers
• Transactional relationship to provide supplemental staff without much end client
relationship
• Existing customers: IBM
DELTACOM GmBH has to choose the partner for project operation in Chins. Every
business Partner has some strength & weakness in terms of their competency in
different field. So the Company made the business dimension & value proposition
analysis for each partners. So the cost comparison, Timely delivery as well as Quality
of operation can be judged on the same platform.

STRATEGY MANAGEMENT
(B) Business Dimension for Tier 1 -“Exclusive Partner”
Products Critical partner to client providing highly integrated, customer

specific, high-value added turnkey solutions for legacy
mainframe applications in Japanese market
Services 24x7 Maintenance of mission-critical mainframe legacy
.Application extension through analysis, design and development
of new, integrated modules.
Customer Japanese Corporations in Financial Services, Insurance, etc.
industries.
Channels Direct, Referrals from highly satisfied existing clients
End Users Japanese Corporations, Japanese Government organizations.
Complementors IBM (as an h/2 and s/2 partner), existing clients, Accenture.
Unique Competencies 1. Combination of deep knowledge of mainframe applications.
2. High level of Quality combined with all the other cost
advantage available to Chinese companies.
(B) Business Dimension for Tier 2 -“Strategic /Integrated Partner”
Customer Dimension Description

Products Long-term relationship with client to provide customized and
integrated solutions across multiple business units
• T&M and Fixed price application development across multi-
phase projects
• Joint application development enabled through deep
Services
understanding of client culture and methodology
• Dedicated retained teams as extension of clients IT
organization
Customer GE US, GE China, Kawasaki, Unisys
Channels Direct
End Users N/A
Complementors Other GE partners, IBM, other software partners, Accenture
1. One of 12 exclusive outsourcing vendors or GE
Unique Competencies
2. Six-Sigma quality combined with China’s cost advantage

STRATEGY MANAGEMENT
(B) Business Dimension for Tier 3 -“Project Solution seeker”

Products Individual project solutions without committed long-term
relationship
T&M and Fixed price application development of discrete
Services
projects
Customer Toyota, Honda, Department of Transportation China, US
prospects
Channels Direct
• Consulting partners such as IBM
• Strategic partners such as GE
End Users N/A
Complementors Other GE partners, IBM, other software partners, Accenture
1. One of 12 exclusive outsourcing vendors or GE
Unique Competencies 2. Six-Sigma/CMM level-5 quality combined with China’s cost
advantage
(B) Business Dimension for Tier 4-“Body Shoppers”

Products Individual resources to supplement existing project teams and
fill skills gaps(transactional)
Services • T&M and retained resources for fixed time durations
• Provide specific technology development skills on projects
Customer IBM Japan, NEC
Channels Direct
• Consulting partners such as IBM
End Users Corporation
Complementors N/A
1. Consulting partnerships
Unique Competencies
2. Technology skill differentiation

STRATEGY MANAGEMENT
(C) Value Proposition for Tier 1 -“Exclusive Partner”
Value Proposition Description

Element
Experiences Seamless extension of Client team with integrated culture, skilled
technologists with deep understanding of clients business.
Value Delivery • Dedicated client-focused team immersed in all aspects of client’s

Systems culture • Network integration to seamlessly extend client
environment
• Open communication of all relevant information on both sides

• Executive sponsor, CEO oversight, an full corporate reach
• CMM and Six-Sigma delivery methodologies for delivery
• Value added reselling of hardware and software for one-stop-
shopping
Value • Value gained by customer: Superior ROI, improved time-to-
Appropriation market, Security, Resource stability
• Value gained by Deltacom: Exclusive long-term relationship,
higher margins, predictable revenue
• Value shared by both: Shared IP, shared learning, shared risk
C) Value Proposition for Tier 2 -“Strategic /Integrated Partner”
Value Proposition Element Description
Experiences Integrated teams of skilled technologists

with deep understanding of client’s business
Value Delivery Systems • Dedicated client-focused teams fully
trained in clients methodologies
• Joint development plans
• Cross-training and periodic two-way
knowledge transfer
• Business Relationship Manager, CEO
oversight and full corporate reach

STRATEGY MANAGEMENT
Value Appropriation • Value gained by customer: Superior ROI,

improved time-to-market, Security,
Resource stability, Shared risk, Continuous
improvement
• Value gained by DMK: Access to client
network as sales channel, credibility,
learning
• Value shared by both: Co-development of
shared standards and processes
(C) Value Proposition for Tier 3 -“Project Solution seeker”
Value Proposition Element Description
Experiences End-end-end delivery of a project with high

quality and competitive price
Value Delivery Systems • Structured processes and teams with high
quality of performance • Ability to quickly
ramp-up on clients business and culture
• Process for seamless transition at end of
project
• Dedicated project team manager with
executive oversight
Value Appropriation • Value gained by customer:
Experimentation , learning, flexibility,
reduced time-to-market, high quality, ROI
Value gained by DMK: Opportunity for long-
term relationship, ROI, learning •
• Value shared by both: Shared learning in
business domain and new technology

STRATEGY MANAGEMENT
(C) Value Proposition for Tier 4 -“Body Shoppers”

Description
Value Proposition Element
Experiences Supplement team with individual resources
and fill gaps with skill expertise
Value Delivery Systems • Strong bench that can be tapped on demand

• Mix of skills and expertise
Value Appropriation • Value gained by customer: Resources of
demand and skills on demand
• Value gained by DMK: Opportunity to up-
sell, learning, improved bonding
• Value shared by both: Exchange of skills
(D) Bundle of competencies analysis
Systems Lock-In
Dominant Exchange
Exclusive Channel
Customer Integration
Total customer solution Low Cost
Horizontal Breadth Differentiation
Redefining Experience

STRATEGY MANAGEMENT
Sr. No. Description Current Situation Desired Situation

1 System Lock In No Specific competency that Company has to set
create industry standard by competency skills for
the company. capturing the future market.
2. Low Cost Wage differential with Chinese wages are very low.
reference to US, Europe,
Japan & India.
A large pool of computer
Availability of Large pool of science graduate for long term
skill in that Area.
Expertise in managing in
Experience Leveraging sudden change in demand and
workloads & resource supply profitability
profitability.
3. Dominant No Specific competency Company should develop

Exchange that create strong bondage strong coordination expertise
creation with Tier 1 specialist in
China.
4 Exclusive One of few firms with low It is required to barrier the

Channel cost mainframe expertise. entry of new competitors
High Switching cost for It acts as barrier to the exit of
fully integrated clients. customer as highly tacit
knowledge acquired about
customer process through
long interaction also
5. Customer Dedicated Team, Experience It also allow the expertise

Integration in Outsourcing transferable to other function
Joint venture with IBM Due to this Company is able
to integrate some of
technologies of IBM with
their own application
6. Horizontal Mainframe & new language It strengthens the financial &

Breath expertise. Multiple industry insurance segment but slow
verticals development in other areas.
System development, testing Architecture & consulting
& maintenance
expertise is a new challenge

STRATEGY MANAGEMENT
Sr. No. Description Current Situation Desired Situation

7. Redefining Processes & expertise at end Its provides very cost
Experience – to – end projects controlled atmosphere for
operation
8. Differentiations Japanese speaking personnel, The firm has to recruit local

IBM mainframe expertise person that can speak & are
familiar with the social &
business manner of China.
CMM5 Level of operation,
Six sigma approach for all It is necessary to maintain the
functions quality level of project & to
eliminate chance of any
redraft.
(E) Mission
Become the #1 provider of Business Process Outsourcing and IT Services in

China:
• Analyzing, designing, developing, deploying, and maintaining software systems

and solutions.
• Delivering the highest quality of service and unparalleled value
• Integrating seamlessly with complementary local service providers
• Servicing large and mid-sized corporations, government departments and non-
profit organizations
• Through experienced, passionate and hard-working associates driven to provide
outstanding service
• Focusing first on China, Japan and US and expanding next into Europe and
Latin American markets.

STRATEGY MANAGEMENT
(F) TRANSFORMATION REQUIRED
Sr. Scope Now Future

No.
1. Customer Primarily large corporations, Expand to include Service
Scope Government departments of providers at the high-end of the
China software services value chain.
2. End-User Scope Expand to include mid-sized
Large Corporations,
corporations, State and Federal
Government departments in
government departments, non-
China
profit organization
3. Channel Scope Direct, Joint Venture Exclusive offshore service delivery
partner-ships that allow white
labelling of Deltacom services
4. Hardware and software Business Consulting, IT
Complementor
product companies Strategy/Architecture consulting
Scope
firms
5. Geographical Japan and China with limited U.S. and U.K. expand into
Scope presence in the U.S. countries where language of
business is non-English and where
cost of IT services is higher than
China. (Indian firms do not have
language advantage while China-
based firms have significant cost
advantage.)
6. Service Scope Lower end of software
Integrated service that captures the
services value chain:
entire value chain through strong
Application development,
collaboration with complementors
system integration, system
at the high-end of the software
conversation ,maintenance &
service value chain
support
7. Product Scope Technology base such as 1. Horizontal Application
J2EE framework, frameworks such as Portal toolkits,
Microsoft.NET framework, Content Management toolkits, etc.
etc. for rapid code 2. Solutions frameworks such as
development wealth management solutions for
financial services, employee
portals as HR solutions, etc. that
leverage competencies/expertise of
strategic and exclusive
8. Unique 1. High maturity in 1. Ability to build teams that
Competencies Software development can integrate to other service
process organizations
2. Six-Sigma certified 2. Develop professional
project and operations relationships with other culture.
managers 3. Develop technical
3. Low cost of China- knowledge of specific domain
based delivery

STRATEGY MANAGEMENT
(G) Strategic Agenda: Quality Tests

Sr. No. Dimension Description
1 Comprehensiveness The agenda extends across all of functions services,

geographies and market segments including
geographies including customers, end users, channels
and Complementors.
2. Stretch Performance /measures for each thrust provide
achievable but stretched goals for the organization.
3. Monitoring and Milestones established throughout the process allow
control for continuous monitoring and change in strategy if
and as required.
4. Motivation The mission combined with clear strategic thrust

energizes the organization with a common set of goals
and flexibility to innovate and grow.
5. Vulnerability No material vulnerabilities have been identified at this
time. Aligning execution with this strategic agenda
time will be critical to the success of Delta Brake
(H) Strategic Agenda
Sr. Strategic Thrust Primary Secondary

No. Responsibility responsibility
1. Invest in people Train & VP HR CEO
motivate. Hire outstanding talent.
Develop strong design VP Operation CFO
capabilities.
2. Expand delivery & customer CEO VP Sales , VP HR, VP

support centre throughout china Marketing
3. Work with exclusive partners for CEO ,VP Marketing VP Sales

rapid response & operation. VP Operation
4. Develop engagement program of VP HR VP Operation

Deltacom team for better
understanding of Chinese culture
for easy flow of work
5. Strengthen the relationship with CEO CFO

the IBM for better understanding
& solution of customer needs. VP Operation

SELF MANAGE TEAM CONCEPT
Durga Industries Limited
OBJECTIVE OF CASE STUDY
The major objectives behind taking the project are outlined below.
SCOPE:
• The purpose of the project is to study the self managed team concept.
• What are the limitations & constraint during its realization
• How to measure the effectiveness of model?
Concept of self-managed team
The self-managed team or SMT is a special kind of team. It can be highly effective. It can
be phenomenally productive. And it is an autonomous entity. An entity with the endurance
and power of a machine and the cunning and adaptability of an animal.
A SMT isn't just a group of people working together but a genuine collaboration: A team
in the true sense of the word. And it is a team which is measured by its results, not the
performance of its individual members.
Are more independent than other types of team

Help to flatten organizational structure
Handle intermediate levels of responsibilities.
OBJECTIVES OF TRAINING
1) To impart basic knowledge and skill to the new entrants and enable them to
perform their jobs well.
2) To equip the employees to meet the changing requirements of the job and the
organization.
3) To teach the employees the new techniques and ways of performing the job or
operations.
4) To prepare the employees for higher level tasks and built up a second line of
component managers.

CRITERIA FOR MEASURING TRAINING EFFECTIVENESS:
1. Trainee’s reaction towards the objectives:

A training program can be evaluated in terms of trainee’s reaction to the objectives,
contents and method of training. In case the trainee consider the program
worthwhile and like it, the training can be considered effective.
2. Extent of learning:
The extent to which the trainees have learned desired knowledge and skills during
the training period is a useful basis for measuring the training effectiveness.
3. Behaviour of trainees:
Improvement in job behaviour of trainees reflects the manner and extent to which
learning has been applied to job.
4. Result of training:
The ultimate result in term of productivity improvement, quality improvement, cost
reduction, accident reduction, and reduction in labour turn over are the best criteria
for evaluating the effectiveness.
NEED FOR EVALUATION:

It is necessary to evaluate the extent to which training program have achieved the aim
for which they were designed. It would provide information effectiveness of training as
well as about the design of future training program. It helps to monitor and modify
such program in future
.1. QUESTIONAIRES: Comprehensive questionnaires are used to obtain options,

reactions and various views of trainees. A training evaluation form is formed and
circulated among all the trainees. The trainees fill in their responses asked in the form. The
responses are then analyzed and an evaluation of the training program is done.
2. TESTS: Standard tests are used to find out whether trainee has learnt practical aspects
of work during and after training or not.
3. INTERVIEWS: Personal interviews of the employees are conducted in order to find
usefulness of the training offered to operatives.
4. STUDIES: Comprehensive studies are carried out eluting the opinions and guidelines of
the trainer’s superiors and peer groups about the training.
5. FEEDBACK: A feedback report is prepared by evaluation at every stage of training.

AREAS OF TRAINING
The areas in which training is offered can be classified into following categories:
KNOWLEDGE Employee is taught about a set of rules and regulations about

the job and products and services offered by the company
TECHNICAL SKILL Employee is taught a specific skill (e.g. operating a machine)

so that he can acquire that skill and contribute meaningfully
SOCIAL SKILL Employee is made to learn him and other develop a right
mental attitude towards the job, colleagues and the company.
ATTITUDE This involves molding of employee’s attitude towards

various on the job situations.
QUESTIONNAIRE FOR DATA COLLECTION:

AGE :- SBU : - GENDER (M / F):-
1. There is an up gradation in my skills during this training program:
(a)Strongly agree. (b)Agree
(c) Strongly disagree. (d) Disagree.
(e) Can’t say.
2. I feel confident due to my knowledge enrichment in these 3 months:
(e) Can’t say.
3. My attitude has changed during the training:
(e) Can’t say.
4. The teachers in the institute were effective in communicating their knowledge.
(e) Can’t say.

5. The training aids provided during the training period were sufficient & helpful.
(e) Can’t say.
6. The coordination training was enough:
(e) Can’t say.
7. The time allotted to every subject was enough:
(e) Can’t say.
8. I feel improvements in my communication after the training:
(e) Can’t say.
9. There is improvement in my personality during the training program:
(e) Can’t

1. The perception of SMT’s regarding up gradation of their skills.

Strongly Grand
GENDER Agreed % Agreed % Total
Female 13 43.33 0.00 13
Male 8 26.67 9 30.00 17
Total 21 70.00 9 30.00 30
Strongly Grand
AGE Agreed % Agreed % Total
18 Years 4 13.33 1 3.33 5
19 Years 6 20.00 3 10.0 9
20 Years 4 13.33 2 6.67 6
21 Years 6 20.00 2 6.67 8
22 Years 1 3.33 1 3.33 2
Total 21 70.00 9 30.00 30
Strongly Grand
SBU Agreed % Agreed % Total
Meter 11 36.67 4 13.33 15
T&D 10 33.33 5 16.67 15
Total 21 70.00 9 30.00 30

2. The perception of SMT’s regarding knowledge enrichment in the 3 months :
Strongly Can't Strongly Grand

GENDER disagreed % say % Agreed % Agreed % Total
Female 1 3.33 0.00 10 33.33 2 6.67 13
Male 0.00 2 6.67 9 30.00 6 20.00 17
Total 1 3.33 2 6.67 19 63.33 8 26.67 30
AGE Strongly Can't Strongly Grand

Year disagreed % say % Agreed % Agreed % Total
18 0.00 0.00 4 13.3 1 3.33 5
19 0.00 2 6.67 6 20.0 1 3.33 9
20 0.00 0.00 4 13.3 2 6.67 6
21 0.00 0.00 4 13.3 4 13.33 8
22 1 3.33 0.00 1 3.3 0.00 2
Total 1 3.33 2 6.67 19 63.33 8 26.67 30
Strongly Can't Strongly Grand

SBU disagreed % say % Agreed % Agreed % Total
Meter 0 0.00 9 30.0 6 20.0 15
T&D 1 3.33 2 6.67 10 33.3 2 6.6 15
Total 1 3.33 2 6.67 19 63.3 8 26.6 30

3. The perception of SMT’s about change in their attitude in the 3 months:
Can't Strongly Grand

GENDER say % Agreed % Agreed % Total
Female 2 6.67% 11 36.67% 0.00% 13
Male 2 6.67% 7 23.33% 8 26.67% 17
Total 4 13.33% 18 60.00% 8 26.67% 30

AGE say % Agreed % Agreed % Total
18 Years 1 3.33% 3 10.00% 1 3.33% 5
19 Years 0.00% 6 20.00% 3 10.00% 9
20 Years 0.00% 4 13.33% 2 6.67% 6
21 Years 3 10.00% 4 13.33% 1 3.33% 8
22 Years 0.00% 1 3.33% 1 3.33% 2
Total 4 13.33% 18 60.00% 8 26.67% 30

SBU say % Agreed % Agreed % Total
Energy
meter 2 6.67% 8 26.67% 5 16.67% 15
Transformer 2 6.67% 10 33.33% 3 10.00% 15
Total 4 13.33% 18 60.00% 8 26.67% 30

4. The perception of SMT’s regarding communication improvement:
Strongly Grand
Female 11 36.67% 2 6.67% 13
Male 15 50.00% 2 6.67% 17
Grand Total 26 86.67% 4 13.33% 30
Strongly Grand
18 Years 4 13.33 1 3.33 5
19 Years 8 26.6 1 3.33 9
20 Years 6 20.00 0.00 6
21 Years 6 20.00 2 6.67 8
22 Years 2 6.67 0.00 2
Total 26 86.67 4 13.33 30
Strongly Grand
Meter 13 43.33 2 6.67 15
T &D 13 43.33 2 6.67 15
Total 26 86.67 4 13.33 30

5. The perception of SMT’s regarding adequacy training aids:
Strongly Grand
Female 8 26.67 5 16.67 13
Male 13 43.33 4 13.33 17
Grand
Total 21 70.00 9 30.00 30
Strongly Grand
18 Years 2 6.67 3 10.00 5
19 Years 6 20.0 3 10.00 9
20 Years 4 13.33 2 6.67 6
21 Years 7 23.33 1 3.33 8
22 Years 2 6.67 0.00 2
Grand Total 21 70.00 9 30.00 30
Strongly
SBU Agreed % Agreed % Grand Total
Meter 11 36.67 4 13.33 15
T&D 10 33.33 5 16.67 15
Grand Total 21 70.00 9 30.00 30

6. The perception of SMT’s regarding co-ordination :
Strongly Grand
Female 4 13.33 9 30.00 13
Male 6 20.00 11 36.67 17
Grand Total 10 33.33 20 66.67 30
Strongly Grand
AGE Years Agreed % %
Agreed Total
18 2 6.67 3 10.0 5
19 2 6.67 7 23.3 9
20 2 6.67 4 13.3 6
21 4 13.33 4 13.3 8
22 0.00 2 6.67 2
Grand Total 10 33.33 20 66.6 30
Strongly Grand
Meter 5 16.67 10 33.33 15
T&D 5 16.67 10 33.33 15
Grand Total 10 33.33 20 66.67 30

7. The perception of SMT’s about time allotted to each subject was enough.
Dis- Can't Strongly Grand

GENDER agreed % say % Agreed % Agreed % Total
Female 2 6.67 2 6.67 9 30.00 0.00 13
Male 1 3.33 4 13.33 11 36.67 1 3.33 17
Total 3 10.00 6 20.00 20 66.67 1 3.33 30
AGE Dis- Can't Strongly Grand

Years agreed % say % Agreed % Agreed % Total
18 0.00 1 3.33 4 13.33 0.00 5
19 1 3.3 1 3.33 7 23.33 0.00 9
20 1 3.33 1 3.33 4 13.33 0.00 6
21 1 3.33 1 3.33 5 16.67 1 3.33 8
22 0.00 2 6.67 0.00 0.00 2
Total 3 10.00 6 20.00 20 66.67 1 3.33 30

SBU Disagreed % say % Agreed % Agreed % Total
Meter 2 6.67 2 6.67 11 36.67 0.00 15
T&D 1 3.33 4 13.33 9 30.00 1 3.33 15
Total 3 10.00 6 20.00 20 66.67 1 3.33 30

8. The perception of SMT’s about improvement in their communication.

GENDER say % Agreed % Agreed % Total
Female 1 3.33 7 23.33 5 16.67 13
Male 0.00 12 40.00 5 16.67 17
Total 1 3.33 19 63.33 10 33.33 30
AGE Can't Strongly Grand

Years say % Agreed % Agreed % Total
18 0.00 4 13.3 1 3.33 5
19 1 3.3 4 13.3 4 13.33 9
20 0.0 4 13.3 2 6.67 6
21 0.0 5 16.6 3 10.0 8
22 0.0 2 6.67 0.0 2
Total 1 3.33% 19 63.33% 10 33.33% 30

SBU say % Agreed % Agreed % Total
Meter 0.00 11 36.67 4 13.33 15
T&D 1 3.33 8 26.67 6 20.00 15
Grand
Total 1 3.33 19 63.33 10 33.33 30

9. The perception of SMT’s about improvement in their personality.
Strongly Grand
Female 10 33.4 3 10.0 13
Male 11 36.6 6 20.0 17
Grand Total 21 70.0 9 30.0 30
Strongly Grand
18 Years 4 13.33 1 3.33 5
19 Years 4 13.33 5 16.67 9
20 Years 5 16.67 1 3.33 6
21 Years 6 20.00 2 6.67 8
22 Years 2 6.67 0.00 2
Grand
Total 21 70.00 9 30.00 30
Strongly Grand
Energy meter 11 36.67 4 13.33 15
Transformer 10 33.33 5 16.67 15
Grand Total 21 70.00 9 30.00 30

FINDING, INFERENCES AND RECOMMENDATION

In our research process, the effectiveness of training imparted to the SMT’s is measured on
the basis of 10 different parameters. On the basis of data collected on these parameters we
found the following results:
1.) Skill up gradation:
All the SMT’s are either agreed or strongly agreed on this statement.
2.) Knowledge enrichment:
91% of people are agreed at this point.
3.) Attitude change:
87% people feel change in their attitude after training.
4.) Communication effectiveness of teachers at institute:
All SMT’s are satisfied with the teacher’s effectiveness.
5.) Content covered:
Only 75% SMT’s feel that the whole content was covered during the program.
6.) Good training aids :
All are agreed at this point.
7.) Full co-ordination:
All are agreed to this statement.
8.) Time adjustment:
There were only 73% of people who are easily adjusted with the timing of training
program.
9.) Knowledge gained & expected knowledge:
Only 60% of SMT’s feel that knowledge gained by them & expected knowledge is
equal.
10.) Proper time allocation to each subject:
70% are agreed to this statement.
Conclusion:
The effectiveness of training imparted to SMT’s measured from the fact that the SMT’s are
very well trained on different aspects. It provide them a good learning opportunity,
improvement in personality & increasing employability skill
For the company it acts as long term investment in the building of talent pool.

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CASE STUDY

SELF MANAGED TEAM CONCEPT

NAME : ASHWANI MALHOTRA

REGISTRATION NUMBER : 200742588

SYMBIOSIS CENTRE FOR DISTANCE LEARNING

ACADEMIC YEAR : 2007

TELESYS VENTURES INC.

The Case Study helps to understand the requirement of inventory management

The various constraints encountered during inventory management

The different approaches utilized to overcome the above said constraints

Evaluation of different proposed changes

Optimization and implementation of Solution

Measurement of Effectiveness of the changes.

Telesys Inc. is a leading manufacturer of Laptops & desktop in India. It imports

Submitted By: Ashwani Malhotra Page |2

The Information provided by purchase department is written below.

1. Per unit price for monitor is Rs.4200

Deciding appropriate amount of order for the monitors

He analyses the requirement of inventory based on below written parameters:

Submitted By: Ashwani Malhotra Page |3

(A) FIXED ORDER QUANTITY SYSTEM WHEN SUPPLY IS FROM CHINA

Basic cost (Rs.)= Unit cost x Annual consumption

= 4200 x 3650 = 153300000

Submitted By: Ashwani Malhotra Page |4

'm (minimum stock in units) = 5 day demand

= 4284 x 36500 = 156366000

Submitted By: Ashwani Malhotra Page |5

Annual Total Cost (Rs.) =156366000+ 625232+625232 =157616464

'm (minimum stock in units) = 5 day demand

(m) Minimum Stock =Safety Stock (Units) = 5 days demand

(L) Lead Time Stock (Units) = 21 x 100 = 2100

(P) Stock at the time of review (Units) = 500

Submitted By: Ashwani Malhotra Page |6

M = 500 +3000+2100 = 5600

Annual Ordering Cost (Rs.) = 150000

Annual Total Cost: = Basic cost + Procurement cost + Carrying cost

• Annual Basic cost (Rs.) = Unit cost x Annual consumption

= Rs.4200 x 36500 = 15330000

=0.25 x 650000 = 16250

Annual Ordering Cost (Rs.) = 150000

= (0.2 x 4200 x 3050) = 2562000

Annual Total Cost (Rs.) =153300000 +347708 + 25 62000=156209708

Submitted By: Ashwani Malhotra Page |7

(B) FIXED ORDER INTERVAL SYSTEM WHEN SUPPLY IS FROM LOCAL

Minimum Stock =Safety Stock (Units) = 5 days demand

(L) Lead Time Stock (Units) = 7 x 100 = 700

=.4284 x 36500 = 157616464

= (0.2 x 4284 x 2350) = 2013480

Annual Total Cost =156366000+226042+2013480=158605522

Submitted By: Ashwani Malhotra Page |8

FIXED ORDER QUANTITY SYSTEM

Submitted By: Ashwani Malhotra Page |9

FIXED ORDER INTERVAL SYSTEM

On comparison of the Total annual cost Rohit present the procurement

Submitted By: Ashwani Malhotra P a g e | 10

• Application of check sheet, brainstorming and flow chart usage in problem

A reputed FMCG company of India was very much upset

Sr. No. Problem Quantity Commutative Quantity

Table I: Defective Return data in FY 2005-06

Submitted By: Ashwani Malhotra P a g e | 11

Draw of half Tank

PROCESS 3 Cutting of hole in one half

Brazing of two half

PROCESS 6 Cooling in water tub