Performance Issues In Operations Management:

A SAP-LAP Analysis
Nikitha Joy, Pradeep Thangaraj, Paras Bharel, Vishnu Raj
#

Symbiosis Institute of operations management, Nashik

Abstract The importance of operations management holds

great value in present context. An improper and unplanned
operations plan can lead to severe adverse effects. Continuous
evaluation and improvement remains as the key parameter to be
involved. The study gives an analysis of issues related operations
management with an example of a particular industry. A SAPLAP analysis is carried out to find the factors related to it.
Keywords Operations Management, SAP-LAP

I. INTRODUCTION
In any business enterprise, products are produced or
services are provided. For this, some operations are done out
through a combination of raw material, processing or
assembling the various components, using the services of
labour, machines and tool. In any enterprise the items are
produced or service is given with least waste of raw material
and consumption of time and effort while assuring the quality.
II. LITERATURE REVIEW
An Operation may be defined as the process of changing
inputs into outputs also adding value to some entity. Value is
added to the product by one or more of the following ways i.e.
1.

Adding the form of inputs

2.

Transportation of the materials to where they are

required

While establishing the unit, an entrepreneur is required to

pay attention to various aspects like size, location and layout
as these affect the efficiency of the operations. Such factors
should preferably be considerably the entrepreneur at the
project planning stage and need to be taken care of at the
project implementation stage.
* Size The size of the unit refers to the installed capacity
of the plant. The size is important as it determines the use of
technology and in most cases the layout of the production
process. Economy of scale also needs to be taken into
consideration. Size also includes factors like land, building,
etc. size of land should be such to take care of storage of raw
materials, finished goods as well as construction of factory for
processing / manufacturing. The future expansion of the plant
also should be taken into account while designing and
building. This would also apply to the building which may be
constructed or rented.

* Location Proper location of an enterprise is crucial for

success. Raw material, skilled labour, and market are the
factors that help in production.
Location of manufacturing establishments would depend
upon their type. Resource based units like agro-industry;
nearness to the source of raw material is a definite advantage.
Similarly for demand based industries location near the
market is advisable and for skill based industry. A unit to be
located in a residential or commercial area has to take note of
local bye-laws and should not be a disturbance to the
surroundings.
It is difficult to set down rules, whereby, the problem of
location can be decided but there are number of factors which
should be considered. It is worth differentiation between the
problems of location and of site, the location is the general
area, and the site is the place chosen within the location. The
decision on selecting, thus probably proceeds in 2 stages in
the first stage the general area is chosen followed by survey of
the area is carried out to find possible locations.
* Plant layout Layout involves finding the space
requirement for the facilities and arranging them in a way to
ensure proper flow of operations with minimum overall cost.
In other words, a layout is a floor plan for arranging the
desired facilities, machinery, and equipment in optimum
locations so as to permit the fastest flow of materials and
labour at the lowest cost and with the least amount of process
handling from receipt of raw material to shipment of finished
products.
Layout once made cannot be changed easily and without
considering cost on one hand and disrupting the operations on
the other hand, therefore, layout decisions are strategic
decisions and have to be considered at the time of planning a
new venture. A good layout results in comfort, convenience,
better appearance, safety, efficiency and profits.
A badly designed and planned layout causes congestion,
disruption in flow of manpower and materials, cause accidents,
delays, rejections leading to problems and inefficiency.
Layout differs from industry to industry e.g. in a production
unit layout includes factory design that is layout of workshop,
raw material stock yards, finished goods stores, generator,
compressor room will be considered

Irrespective of the type and level of layout, the following

aspects are to be kept in view like.

1. Standardisation.

1. Maximum use of the available space.

2. Reliability.

2. Compatibility with the production technology and

product

3. Maintainability.
4. After sales service.

3. Minimum movement of people and material

5. Reproducibility.
4. Provision of proper space for working and maintenance.
6. Sustainability.
5. Arrangement of proper in movement storage and
stacking space.

7. Simplification.

6. Supervision can be promoted.

8. Quality of product.

7. Proper lighting and ventilation.

9. Cost of product.

8. Provision of maximum flexibility.

10. Product value.

9. Operators safety.

11. Customer friendly features.

10. Minimum handling of the materials

More features can be added depending on the product.

11. Future expansion provisions.

12. Security and safety against fire, theft and deterioration.
13. Flexibility to accommodate changes in production
volume and product mix.
14. Should meet the specific requirements of the production
process.
Besides, the factory building and the manufacturing process
is required to be approved by the government and the local
authorities.
As such it would be wise to consult with an experienced
person in the field.
* Product design The product or the service offered is the
backbone of any enterprise. Therefore, what and how to
produce is the first step in an operational system. The image
of an enterprise and its profit making capacity are influenced
by the product design.

* Production design After product design,the production

which is divided into the 2 phases, which is Scheduling and
Inspection.
Scheduling is considered for batch production, as also for
continuous process production, because the primary objective
of scheduling is the smooth flow of materials through the
production process. Simply stated, scheduling is a system of
planning and maintaining track of manpower, machine and
materials used. It decides time to start the work on a given
order and by when it should be completed. Scheduling is
usually done with timetables. An ideal master schedule
indicates the total number of products to be produced per
week or per month. However, the ideal schedule is seldom
realised in actual practice because it is not always possible to
ensure all variable inputs to be available at the right time and
right quantity.

Scheduling is generally based upon a sales forecast. It should

ensure that raw materials used in production are available,
otherwise delays in production will result in non-meeting of
deadline. Raw materials should be available exactly on time,
not early nor late. Scheduling decisions may be centralised,
Product design once decided, continues for a long time, hence where a office called the production control office gives job
you should keep in mind the probable changes in environment, assignments. It can be decentralised, where each and every
technology and consumer tastes for the next 5 years at least. It department prepares its own schedule. In practice, enterprises
is said that more the time one spends on product design, better combine both these methods for scheduling to get benefits.
are ones chances of success.
Schedules can be prepared by using charts and graphs or by
The following considerations apply in designing a new operational research methods. A Gantt chart, which is a
product:
horizontal bar chart, is a means to visualise the planning of
production.
Operations
research
methods
involve
mathematical formulae and analysis. PERT & CPM

(Progressive Evaluation Review Technique & Critical Path

Method) are popular operation research methods, which break
the job into its various parts and then these are related to each
other in a network. Using this method we can determine the
total amount of time needed to complete the job and activities
where delays in performance may arise.
Product inspection ensures the quality of the product
produced. Earlier there used to exist a separate department
called the Inspection Department. Now the trend is for the
production department to inspect their own products.
Normally there is stage wise inspection, right from the stage
of receipt of material to the stage of final packing, so that any
error can be detected and corrected at that stage itself. There
are various methods of inspection like visual inspection to
critical inspection using modern complicated equipment.
l Inventory Control A business requires to keep
inventories of raw materials, goods in progress, and finished
goods, both in stock and in transit. It has many advantages
which is:
1. Materials should be readily available when required for
production or use.
2. Quantity discounts results in large number of orders
3. The finished goods inventory allows a organisation to
meet the requirements of the customers promptly
4. The demand may deviate over time and the finished
goods inventory helps in reducing the impact of such
fluctuations on the process of production.
In order to decide when to order an inventory, one has to
decide
1. Order lead time: Average time that elapses between
placing an order and receiving of the goods
2. Usage rate: The average rate at which the inventory is
drawn down over a period of time
3. Reorder point: The level at which a new order must be
placed so that the inventory is replenished before the stock
reaches zero level.

2. Arrange these items in progressively decreasing order

3. Calculate and write the cumulative total cost
4. Then compute the percent of cumulative total to total
cumulative and percent of cumulative total to total number of
items
Inventory is also classified as
Fast moving : This is indicated by high inventory turnover
ratio- the items of high demand and sufficient stock is to be
maintained for smooth and continuous operation.
Slow moving: Low turnover ratio which indicates slow
turnover. Such items are maintained at the minimum level.
Obsolete items, having no demand. An item not issued for
2-3 years can be completely moved out.
Quality control Quality refers to the intended use and the
price of a product. A technically brilliant product may be
prohibitively costly, and there is no point in making a product
that the customers cannot afford to buy.
Even though we all speak of quality, it is not easily defined.
One of the accepted definitions if quality is fitness for use.
An equally good definition is conformance to requirements.
Quality is thus a relative to use than as a general characteristic.
If a product or service lives up to expectations, it is of high
quality. Merely extra fine finish or use of stronger material
than required does not add any quality. Quality is difficult to
measure.
Quality is an overall concept and is distributed throughout
the organisation. Cost of quality is not only the cost of Quality
Control department. Cost of bad workmanship, wastages,
rework etc are also to be included in cost of quality.
Quality is free, but it is not a gift, which sums up the
opinion that effective, permanent quality improvement,
though difficult to achieve, yet pays for itself in increased
productivity. The Entrepreneur is to ensure that the level of
quality is to be maintained consistently i.e. the variations in
the quality of products / services must be kept within the
specified tolerance limits.

A re-order point is estimated by using the formula :

A typical quality control programme includes;
Reorder Point is given by = Usage Rate X Lead Time
1. prevention of the occurrence of a fault
To know which items constitute the bulk of the value of
total inventory, a technique commonly known as the ABC
analysis is used. The steps involved in ABC analysis are:

2. detection of it as soon as it occurs, and

3. rectifying it at the earliest.

1. For each item calculate the total cost

Recently the concept of Quality Circles has been a runaway

success in Japanese industries. A quality circle is a group of
employees whose assignment is to identify problems,
formulate solutions, and present their results to management
with suggestions for implementation. It is getting increasingly
popular with employees and management in India also.
While the benefits, both tangible and intangible, of quality
control are many, there are also costs involved in the process.
As the quality control is made rigorous, the costs tend to
increase. One has to strike a balance between the costs and the
benefits arising out of quality control. This balance will
depend upon the quality control needs of a particular
organisation.
III RESEARCH METHODOLOGY
SAP LAP methodology (Sushil, 2000) is used to
analyze supply chain issues in an organization from
manufacturing sector in this study. It does in-depth study
of an organization and there is interplay between SAP
and LAP. A framework of SAP-LAP is shown in Figure
1. The paradigm considers three basic entities in any
management context, i.e. situation, actor, and process. It
could be seen that a situation is to be dealt by an actor or
set of actors through a process or set of processes. The
freedom of choice exists with an actor, who could be an
individual, a group or the organization as a whole. The
obtained learning would direct the possible actions to be
taken for handling the situation, which would result into
the performance of the system (Sushil, 2000). SAP-LAP

methodology has been used extensively by researchers for

the case studies of different sectors. Majumdar and Gupta
(2001) have used SAP-LAP analysis to study initiatives
of Indian car manufactures in developing internet and
e-business technology. Arshinder et al. (2007) used
SAP-LAP model to analyze the status of coordination in
supply chain of a leading automotive parts manufacturer
in India.
The steps for case analysis using SAP-LAP framework
are: understanding situation, actors and roles, evolving
process, learning issues, suggested actions, and expected
performance. The situation represents the present status,
environment of an organization, and the driving forces for
operations management of an organization. The actors are
the individual participants, or group of members, which
influence the situation and define an organization culture
to evolve business processes.
The process is an overall transformation process that
converts a set of inputs into outputs to recreate the situation.
Understanding situation brings out key points of the
emerging situation of the case in terms of historical
perspective,
external
environment,
competition,
government policies, market condition, and organizational
performance and so on.
Second step actors and their roles identify key actors in the
case and their roles. Usually, this aspect of case analysis is
not well addressed in the traditional case methods.
Third step evolving processes critically analyzes the key

process evolving in the case and portrays their key issues.

The processes could be of any type.
The traditional models are not able to capture the overall
issues of operations management in a holistic manner. The
traditional models are also weak in capturing the dynamics
of changing environment and flexibility required to face
dynamics. The proposed model not only discusses the
issues of operations management but also explains how to
work with related functions and issues for various changes.
Sushil (2000) has recommended the use of SAP-LAP
methodology for critically examining a case organization.
This methodology consists of two steps. In the first step,
the SAP analysis, the dynamic parameters of a case are
highlighted through the three dynamic interface of any
business system. These interfaces are situations (S), actors
(A), and processes (P). The next step is LAP synthesis.
LAP has three components. These are learning issues (L),
actions recommended (A), and anticipated improvement
in performance (P). The actors consistently evaluate the
situation, follow processes, and take actions to improve
their coordination and responsiveness and depending
on the results either the processes are modified or same
processes are followed in future.
The SAP-LAP paradigm incorporates both learning and
action in a symbiotic manner coupled with performance.
It not only takes into consideration optimization of
processes, but also incorporates multiple perspectives
of various participating actors in a managerial process.
Thus, SAP-LAP analysis offers a learning and interpretive
framework of inquiry into the problem under consideration.
Therefore, for the organizations, which are in the process
of adopting new and complex technologies, SAP-LAP
framework provides one of the most useful methodologies
of analysis and synthesis.
The situation is treated like a journey and examines the
past, present, and the expected trends in future. For the
various actors under consideration, it inquires about their
worldviews, roles and capabilities, and their respective
freedom of choice. The process is examined in terms of
three seminal questions, i.e. what, why, and how? The
basic purpose of the process is questioned and then the
questions are asked to generate the alternatives (Sushil,
2000).

The LAP is carried out for situation, actor, and process

independently leading to a synthesis. The key learning
issues about the SAP are to be identified synthesizing into
overall learning issues. This will lead to key suggested
actions to improve the situation, actor and process
respectively. Finally, the impacts of these actions on
the performance of the situation, actor, and process are
explored (Sushil, 2000, 2001).