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Internal Assignment Feb 2012

Name: ____ AMBROSE RAI___________________ Registration No. :__521011937______________ Course: ___MBA___ Sem: ___3rd____________

Subject Name : _ Research Methodology ________ Subject Code : __ MB0050_____________________________ LC Code : _____1531_________________________ LC Center: Poddar Institute of Information & Technology Module No.:_________________________________ Date of Submission: _ 10th January 2012 ________ Marks Awarded:_____________________________

___________ Signature of Student

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Master of Business Administration- MBA Semester 3 MB0050 Research Methodology (Book ID: B1206) Assignment Set- 1

Q.1 a. Differentiate between nominal, ordinal, interval and ratio scales, with an example of each. Ans. Ratio measurement This is the highest level of measurement and is appropriate when measuring characteristics which have an absolute zero point. This level of measurement has all the three characteristics order, distance and origin. Examples Height, weight, distance and area. Since there is a natural zero, it is possible to multiply and divide the numbers on a ratio scale. Apart from being able to use all the statistical techniques that are used with the nominal, ordinal and interval scales, techniques like the geometric mean and coefficient of variation may also be used. The main limitation of ratio measurement is that it cannot be used for characteristics such as leadership quality, happiness, satisfaction and other properties which do not have natural zero points. The different levels of measurement and their characteristics may be summed up. In the table below Levels of measurement Nominal Ordinal Interval Ratio Characteristics No order, distance or origin Order, but no distance or origin Both order and distance, but no origin Order, distance and origin

Qb. What are the purposes of measurement in social science research? Ans. Definition and Purpose of Measurement Different definitions of measurement have been offered by different authors 1. According to Stevens, measurement is the assignment of numerals to objects or events according to rules. A simple example of assignment of numerals according to a rule is described below Suppose a survey is conducted to study the applicants of an MBA program and one of the objectives of the study is to find out the sex-wise break-up of applicants. In this case, we may assign the number 0 to male applicants and the number one to female applicants. Thus numbers may be used to label individuals, events or things. 2. Campbell defines measurement as the assignment of numbers to represent properties. 3. In the words of Torgerson, measurement is the assignment of numbers to objects to represent amounts or degrees of a property possessed by all of the objects. In research, it is necessary to distinguish between objects and properties or characteristics of these objects. For example, a person is an object and his/her physical characteristics include

height, weight, color, etc. while his or her psychological characteristics include intelligence and attitudes. The important point to remember is that the researcher is concerned with measuring properties and not the objects themselves. While physical properties may be directly observed, psychological properties such as intelligence are inferred. For example, a childs score in an IQ test indicates his or her level of intelligence. Measurement also has several purposes The researcher constructs theories to explain social and psychological phenomena (e.g. labor unrest, employee satisfaction), which in turn are used to derive hypotheses or assumptions. These hypotheses can be verified statistically only by measuring the variables in the hypotheses. Measurement makes the empirical description of social and psychological phenomena easier. Example When conducting a study of a tribal community, measuring devices help the researcher in classifying cultural patterns and behaviors. Measurement also makes it possible to quantify variables and use statistical techniques to analyze the data gathered. Measurement enables the researcher to classify individuals or objects and to compare them in terms of specific properties or characteristics by measuring the concerned variables. Q.2. a. What are the sources from which one may be able to identify research problems? Ans. The selection of a problem is the first step in research. The term problem means a question or issue to be examined. The selection of a problem for research is not an easy task; itself is a problem. It is least amenable to formal methodological treatment. Vision, an imaginative insight, plays an important role in this process. One with a critical, curious and imaginative mind and is sensitive to practical problems could easily identify problems for study. The sources from which one may be able to identify research problems or develop problems awareness are: Review of literature Academic experience Daily experience Exposure to field situations Consultations Brain storming Research Intuition Qb. Why literature survey is important in research? Ans. Review of Literature Frequently, an exploratory study is concerned with an area of subject matter in which explicit hypothesis have not yet been formulated. The researchers task then is to review the available material with an eye on the possibilities of developing hypothesis from it. In some areas of the subject matter, hypothesis may have been stated by previous research workers. The researcher has to take stock of these various hypotheses with a view to evaluating their usefulness for further research and to consider whether they suggest any new hypothesis. Sociological journals, economic reviews, the bulletin of abstracts of current social sciences research, directory of doctoral dissertation accepted by universities etc afford a rich store of valuable clues. In addition to these general sources, some governmental agencies and voluntary organizations publish listings of summaries of research in their special fields of service. Professional organizations,

research groups and voluntary organizations are a constant source of information about unpublished works in their special fields.

Q.3. a. What are the characteristics of a good research design? Ans. Characteristics of a Good Research Design 1. It is a series of guide posts to keep one going in the right direction. 2. It reduces wastage of time and cost. 3. It encourages co-ordination and effective organization. 4. It is a tentative plan which undergoes modifications, as circumstances demand, when the study progresses, new aspects, new conditions and new relationships come to light and insight into the study deepens. 5. It has to be geared to the availability of data and the cooperation of the informants. 6. It has also to be kept within the manageable limits

Qb. What are the components of a research design? Ans. Components of Research Design It is important to be familiar with the important concepts relating to research design. They are: Dependent and Independent variables: A magnitude that varies is known as a variable. The concept may assume different quantitative values, like height, weight, income, etc. Qualitative variables are not quantifiable in the strictest sense of objectivity. However, the qualitative phenomena may also be quantified in terms of the presence or absence of the attribute considered. Phenomena that assume different values quantitatively even in decimal points are known as continuous variables. But, all variables need not be continuous. Values that can be expressed only in integer values are called non-continuous variables. In statistical term, they are also known as discrete variable. For example, age is a continuous variable; whereas the number of children is a non-continuous variable. When changes in one variable depends upon the changes in one or more other variables, it is known as a dependent or endogenous variable, and the variables that cause the changes in the dependent variable are known as the independent or explanatory or exogenous variables. For example, if demand depends upon price, then demand is a dependent variable, while price is the independent variable. And if, more variables determine demand, like income and prices of substitute commodity, then demand also depends upon them in addition to the own price. Then, demand is a dependent variable which is determined by the independent variables like own price, income and price of substitute. Extraneous variable: The independent variables which are not directly related to the purpose of the study but affect the dependent variable are known as extraneous variables. For instance, assume that a researcher wants to test the hypothesis that there is relationship between childrens school performance and their self-concepts, in which case the latter is an independent variable and the former, the dependent variable. In this context, intelligence may also influence the school performance. However, since it is not directly related to the purpose of the study undertaken by the researcher, it would be known as an extraneous variable. The influence caused by the extraneous variable on the dependent variable is technically called as an experimental error. Therefore, a research study should always be framed in such a manner that the dependent

variable completely influences the change in the independent variable and any other extraneous variable or variables.

Control: One of the most important features of a good research design is to minimize the effect of extraneous variable. Technically, the term control is used when a researcher designs the study in such a manner that it minimizes the effects of extraneous independent variables. The term control is used in experimental research to reflect the restrain in experimental conditions. Confounded relationship: The relationship between dependent and independent variables is said to be confounded by an extraneous variable, when the dependent variable is not free from its effects. Research hypothesis: When a prediction or a hypothesized relationship is tested by adopting scientific methods, it is known as research hypothesis. The research hypothesis is a predictive statement which relates a dependent variable and an independent variable. Generally, a research hypothesis must consist of at least one dependent variable and one independent variable. Whereas, the relationships that are assumed but not be tested are predictive statements that are not to be objectively verified are not classified as research hypothesis. Experimental and control groups: When a group is exposed to usual conditions in an experimental hypothesis-testing research, it is known as control group. On the other hand, when the group is exposed to certain new or special condition, it is known as an experimental group. In the afore-mentioned example, the Group A can be called a control group and the Group B an experimental one. If both the groups A and B are exposed to some special feature, then both the groups may be called as experimental groups. A research design may include only the experimental group or the both experimental and control groups together. Treatments: Treatments are referred to the different conditions to which the experimental and control groups are subject to. In the example considered, the two treatments are the parents with regular earnings and those with no regular earnings. Likewise, if a research study attempts to examine through an experiment regarding the comparative impacts of three different types of fertilizers on the yield of rice crop, then the three types of fertilizers would be treated as the three treatments. Experiment: An experiment refers to the process of verifying the truth of a statistical hypothesis relating to a given research problem. For instance, experiment may be conducted to examine the yield of a certain new variety of rice crop developed. Further, Experiments may be categorized into two types namely, absolute experiment and comparative experiment. If a researcher wishes to determine the impact of a chemical fertilizer on the yield of a particular variety of rice crop, then it is known as absolute experiment. Meanwhile, if the researcher wishes to determine the impact of chemical fertilizer as compared to the impact of bio-fertilizer, then the experiment is known as a comparative experiment. Experiment unit: Experimental units refer to the predetermined plots, characteristics or the blocks, to which the different treatments are applied. It is worth mentioning here that such experimental units must be selected with great caution.

Q.4. a. Distinguish between Doubles sampling and multiphase sampling. Ans. Double Sampling and Multiphase Sampling Double sampling refers to the subsection of the final sample form a pre-selected larger sample that provided information for improving the final selection. When the procedure is extended to more than two phases of selection, it is then, called multi-phase sampling. This is also known as sequential sampling, as sub-sampling is done from a main sample in phases. Double sampling or multiphase sampling is a compromise solution for a dilemma posed by undesirable extremes. The statistics based on the sample of n can be improved by using ancillary information from a wide base: but this is too costly to obtain from the entire population of N elements. Instead, information is obtained from a larger preliminary sample nL which includes the final sample n.

Qb. What is replicated or interpenetrating sampling? Ans. Replicated or Interpenetrating Sampling It involves selection of a certain number of sub-samples rather than one full sample from a population. All the sub-samples should be drawn using the same sampling technique and each is a self-contained and adequate sample of the population. Replicated sampling can be used with any basic sampling technique: simple or stratified, single or multi-stage or single or multiphase sampling. It provides a simple means of calculating the sampling error. It is practical. The replicated samples can throw light on variable non-sampling errors. But disadvantage is that it limits the amount of stratification that can be employed.

Q.5. a. How is secondary data useful to researcher? Ans. Use of Secondary Data The second data may be used in three ways by a researcher. First, some specific information from secondary sources may be used for reference purpose. For example, the general statistical information in the number of co-operative credit societies in the country, their coverage of villages, their capital structure, volume of business etc., may be taken from published reports and quoted as background information in a study on the evaluation of performance of cooperative credit societies in a selected district/state. Second, secondary data may be used as bench marks against which the findings of research may be tested, e.g., the findings of a local or regional survey may be compared with the national averages; the performance indicators of a particular bank may be tested against the corresponding indicators of the banking industry as a whole; and so on. Finally, secondary data may be used as the sole source of information for a research project. Such studies as securities Market Behavior, Financial Analysis of companies, Trade in credit allocation in commercial banks, sociological studies on crimes, historical studies, and the like, depend primarily on secondary data. Year books, statistical reports of government departments, report of public organizations of Bureau of Public Enterprises, Censes Reports etc, serve as major data sources for such research studies.

Advantages of Secondary Data Secondary sources have some advantages: 1. Secondary data, if available can be secured quickly and cheaply. Once their source of documents and reports are located, collection of data is just matter of desk work. Even the tediousness of copying the data from the source can now be avoided, thanks to Xeroxing facilities. 2. Wider geographical area and longer reference period may be covered without much cost. Thus, the use of secondary data extends the researchers space and time reach. 3. The use of secondary data broadens the data base from which scientific generalizations can be made. 4. Environmental and cultural settings are required for the study. 5. The use of secondary data enables a researcher to verify the findings bases on primary data. It readily meets the need for additional empirical support. The researcher need not wait the time when additional primary data can be collected.

Qb. What are the criteria used for evaluation of secondary data? Ans. Evaluation of Secondary Data When a researcher wants to use secondary data for his research, he should evaluate them before deciding to use them. 1. Data Pertinence The first consideration in evaluation is to examine the pertinence of the available secondary data to the research problem under study. The following questions should be considered. What are the definitions and classifications employed? Are they consistent? What are the measurements of variables used? What is the degree to which they conform to the requirements of our research? What is the coverage of the secondary data in terms of topic and time? Does this coverage fit the needs of our research? On the basis of above consideration, the pertinence of the secondary data to the research on hand should be determined, as a researcher who is imaginative and flexible may be able to redefine his research problem so as to make use of otherwise unusable available data. 2. Data Quality If the researcher is convinced about the available secondary data for his needs, the next step is to examine the quality of the data. The quality of data refers to their accuracy, reliability and completeness. The assurance and reliability of the available secondary data depends on the organization which collected them and the purpose for which they were collected. What is the authority and prestige of the organization? Is it well recognized? Is it noted for reliability? It is capable of collecting reliable data? Does it use trained and well qualified investigators? The answers to these questions determine the degree of confidence we can have in the data and their accuracy. It is important to go to the original source of the secondary data rather than to use an immediate source which has quoted from the original. Then only, the researcher can review the cautionary and other comments that were made in the original source. 3. Data Completeness

The completeness refers to the actual coverage of the published data. This depends on the methodology and sampling design adopted by the original organization. Is the methodology sound? Is the sample size small or large? Is the sampling method appropriate? Answers to these questions may indicate the appropriateness and adequacy of the data for the problem under study. The question of possible bias should also be examined. Whether the purpose for which the original organization collected the data had a particular orientation? Has the study been made to promote the organizations own interest? How the study was conducted? These are important clues. The researcher must be on guard when the source does not report the methodology and sampling design. Then it is not possible to determine the adequacy of the secondary data for the researchers study.

Q.6. What are the differences between observation and interviewing as methods of data collection? Give two specific examples of situations where either observation or interviewing would be more appropriate. Ans. Observation vs interviewing as methods of data collection Collection of data is the most crucial part of any research project as the success or failure of the project is dependent upon the accuracy of the data. Use of wrong methods of data collection or any inaccuracy in collection data can have significant impact on the results of a study and may lead to results that are not valid. There are many techniques of data collection along a continuum and observation and interviewing are two of the popular methods on this continuum that has quantitative methods at one end while qualitative methods at the other end. Though there are many similarities in these two methods and they serve the same basic purpose, there are differences that will be highlighted in this article. Observation Observation, as the name implies refers to situations where participants are observed from a safe distance and their activities are recorded minutely. It is a time consuming method of data collection as you may not get the desired conditions that are required for your research and you may have to wait till participants are in the situation you want them to be in. classical examples of observation are wild life researchers who wait for the animals of birds to be in a natural habitat and behave in situations that they want to focus upon. As a method of data collection, observation has limitations but produces accurate results as participants are unaware of being closely inspected and behave naturally. Interviewing Interviewing is another great technique of data collection and it involves asking questions to get direct answers. These interviews could be either one to one, in the form of questionnaires, or the more recent form of asking opinions through internet. However, there are limitations of interviewing as participants may not come up with true or honest answers depending upon privacy level of the questions. Though they try to be honest, there is an element of lie in answer that can distort results of the project. Though both observation and interviewing are great techniques of data collection, they have their own strengths and weaknesses. It is important to keep in mind which one of the two will produce desired results before finalizing.

Master of Business Administration- MBA Semester 3 MB0050 Research Methodology (Book ID: B1206) Assignment Set- 2

Q.1 a. Explain the General characteristics of observation. Ans. General Characteristics of Observation Method Observation as a method of data collection has certain characteristics. 1. It is both a physical and a mental activity: The observing eye catches many things that are present. But attention is focused on data that are pertinent to the given study. 2. Observation is selective: A researcher does not observe anything and everything, but selects the range of things to be observed on the basis of the nature, scope and objectives of his study. For example, suppose a researcher desires to study the causes of city road accidents and also formulated a tentative hypothesis that accidents are caused by violation of traffic rules and over speeding. When he observed the movements of vehicles on the road, many things are before his eyes; the type, make, size and color of the vehicles, the persons sitting in them, their hair style, etc. All such things which are not relevant to his study are ignored and only over speeding and traffic violations are keenly observed by him. 3. Observation is purposive and not casual: It is made for the specific purpose of noting things relevant to the study. It captures the natural social context in which persons behavior occur. It grasps the significant events and occurrences that affect social relations of the participants. 4. Observation should be exact and be based on standardized tools of research and such as observation schedule, social metric scale etc., and precision instruments, if any.

Qb. What is the Utility of Observation in Business Research? Ans. Use of Observation in Business Research Observation is suitable for a variety of research purposes. It may be used for studying (a) The behavior of human beings in purchasing goods and services.: life style, customs, and manner, interpersonal relations, group dynamics, crowd behavior, leadership styles, managerial style, other behaviors and actions; (b) The behavior of other living creatures like birds, animals etc. (c) Physical characteristics of inanimate things like stores, factories, residences etc. (d) Flow of traffic and parking problems (e) movement of materials and products through a plant.

Q.2. a. Briefly explain Interviewing techniques in Business Research? Ans. Interviewing techniques in Business Research The interview process consists of the following stages: Preparation Introduction Developing rapport Carrying the interview forward

Recording the interview Closing the interview

Preparation The interview requires some preplanning and preparation. The interviewer should keep the copies of interview schedule/guide (as the case may be) ready to use. He should have the list of names and addresses of respondents, he should regroup them into contiguous groups in terms of location in order to save time and cost in travelling. The interviewer should find out the general daily routine of the respondents in order to determine the suitable timings for interviewer. Above all, he should mentally prepare himself for the interview. He should think about how he should approach a respondent, what mode of introduction he could adopt, what situations he may have to face and how he could deal with them. The interviewer may come across such situations as respondents; avoidance, reluctance, suspicious, diffidence, inadequate responses, distortion, etc. the investigator should plan the strategies for dealing with them. If such preplanning is not done, he will be caught unaware and fail to deal appropriately when he actually faces any such situation. It is possible to plan in advance and keep the plan and mind flexible and expectant of new development. Introduction The investigator is a stranger to the respondents. Therefore, he should be properly introduced to each of the respondents. What is the proper mode of introduction? There is no one appropriate universal mode of introduction. Mode varies according to the type of respondents. When making a study of an organization or institution, the head of the organization should be approached first and his cooperation secured before contacting the sample inmates/employees. When studying a community or a cultural group, it is essential to approach the leader first and to enlist cooperation. For a survey or urban households, the research organizations letter of introduction and the interviewers identity card can be shown. In these days of fear of opening the door for a stranger, residents cooperation can be easily secured, if the interviewer attempts to get him introduced through a person known to them, say a popular person in the area e.g., a social worker. For interviewing rural respondents, the interviewer should never attempt to approach them along with someone from the revenue department, for they would immediately hide themselves, presuming that they are being contacted for collection of land revenue or subscription to some government bond. He should not also approach them through a local political leader, because persons who do not belong to his party will not cooperate with the interviewer. It is rather desirable to approach the rural respondents through the local teacher or social worker. After getting himself introduced to the respondent in the most appropriate manner, the interviewer can follow a sequence of procedures as under, in order to motivate the respondent to permit the interview: With a smile, greet the respondent in accordance with his cultural pattern. Identify the respondent by name Describe the method by which the respondent was selected

Mention the name of the organization conducting the research. Assure the anonymity or confidential nature of the interview Explain their usefulness of the study Emphasize the value of respondents cooperation, making such statements as you are among the few in a position to supply the information. Your response is invaluable. I have come to learn from your experience and knowledge. Developing report Before starting the research interview, the interviewer should establish a friendly relationship with the respondent. This is described as rapport. It means establishing a relationship of confidence and understanding between the interviewer and the respondent. It is a skill which depends primarily on the interviews commonsense, experience, sensitivity and keen observation. Start the conversation with a general topic of interest such as weather, current news, sports event, or the like perceiving the probable of the respondent from his context. such initial conversation may create a friendly atmosphere and a warm interpersonal relationship and mutual understanding. However, the interviewer should guard against the over rapport as cautioned by Herbert Hyman. Too much identification and too much courtesy result in tailoring replied to the image of a nice interviewer. The interviewer should use his discretion in striking a happy medium.

Carrying he interview forward After establishing rapport, the technical task of asking questions from the interview schedule starts. The task requires care, self-restraint, alertness and ability to listen with understanding, respect and curiosity. In carrying on this task of gathering information from the respondent by putting questions to him, the following guidelines may be followed: Start the interview. Carry it on in an informal and natural conversation style. Ask all the applicable questions in the same order as they appear on the schedule without any elucidation and change in the wording. Ask all the applicable questions listed in the schedule. Do not take answers for granted. If interview guide is used, the interviewer may tailor his questions to each respondent, covering of cause, the areas to be investigated. Know the objectives of each question so as to make sure that the answers adequately satisfy the question objective. If a question is not understood, repeat it slowly with proper emphasis and appropriate explanation, when necessary. Talk all answers naturally, never showing disapproval or surprise. When the respondent does not meet the interruptions, denial, contradiction and other harassment, he may feel free and may not try to withhold information. He will be motivated to communicate when the atmosphere is permissive and the listeners attitude is non-judgmental and is genuinely absorbed in the revelations. Listen quietly with patience and humility. Give not only undivided attention, but also personal warmth. At the same time, be alert and analytic to incomplete, non specific and inconsistent answers, but avoid interrupting the flow of information. If necessary, jot down unobtrusively the

points which need elaboration or verification for later and timelier probing. The appropriate technique for this probing is to ask for further clarification in such a polite manner as I am not sure, I understood fully, is this. What you meant? Neither argue nor dispute. Show genuine concern and interest in the ideas expressed by the respondent; at the assume time; maintain an impartial and objective attitude. Should not reveal your own opinion or reaction. Even when you are asked of your views, laugh off the request, saying well, your opinions are more important than mine. At times the interview runs dry and needs re-simulation. Than use such expressions as UhHuh or that interesting or I see can you tell me more about that? and the like. When the interviewee fails to supply his reactions to related past experiences, represent the stimulus situation, introducing appropriate questions which will aid in revealing the past. under what circumstances did such and such a phenomenon occur? or How did you feel about it and the like. At times, the conversation may go off the track. Be alert to discover drifting, steer the conversation back to the track by some such remark as, you know, I was very much interested in what you are said a moment ago. Could you tell me more about it? When the conversation turns to some intimate subjects, and particularly when it deals with crises in the life of the individual, emotional blockage may occur. Then drop the subject for the time being and pursue another line of conversation for a while so that a less direct approach to the subject can be made later. When there is a pause in the flow of information, do not hurry the interview. Take it as a matter of course with an interested look or a sympathetic half-smile. If the silence is too prolonged, introduce a stimulus saying You mentioned that What happened then? Additional sittings In the case of qualitative interviews involving longer duration, one single sitting will not do, as it would cause interview weariness. Hence, it is desirable to have two or more sittings with the consent of the respondent. Recording the interview It is essential to record responses as they take place. If the note taking is done after the interview, a good deal of relevant information may be lost. Nothing should be made in the schedule under respective question. It should be complete and verbatim. The responses should not be summarized or paraphrased. How can complete recording be made without interrupting the free flow of conversation? Electronic transcription through devices like tape recorder can achieve this. It has obvious advantages over non-taking during the interview. But it also has certain disadvantages. Some respondents may object to or fear going on record. Consequently the risk of lower response rate will rise especially for sensitive topics.

If the interviewer knows short-hand, he can use it with advantage. Otherwise, he can write rapidly by abbreviating word and using only key words and the like. However, even the fast writer may fail to record all that is said at conversational speed. At such times, it is useful to interrupt by some such comment as that seems to be very important point, would you mind repeating it, so that I can get your words exactly. The respondent is usually flattered by this attention and the rapport is not disturbed.

The interviewer should also record all his probes and other comments on the schedule, in brackets to set them off from responses. With the pre-coded structured questions, the interviewers task is easy. He has to simply ring the appropriate code or tick the appropriate box, as the case may be. He should not make mistakes by carelessly ringing or ticketing a wrong item. Closing the interview After the interview is over, take leave off the respondent thanking him with a friendly smile. In the case of a qualitative interview of longer duration, select the occasion for departure more carefully. Assembling the papers for putting them in the folder at the time of asking the final question sets the stage for a final handshake, a thank-you and a good bye. If the respondent desires to know the result of the survey, note down his name and address so that a summary of the result could be posted to him when ready. Editing At the close of the interview, the interviewer must edit the schedule to check that he has asked all the questions and recorded all the answers and that there is no inconsistency between answers. Abbreviations in recording must be placed by full words. He must ensure that everything is legible. It is desirable to record a brief sketch of his impressions of the interview and observational notes on the respondents living environment, his attitude to the survey, difficulties, if any, faced in securing his cooperation and the interviewers assessment of the validity of the respondents answers.

Qb. What are the problems encountered in Interview? Ans. In personal interviewing, the researcher must deal with two major problems, inadequate response, non-response and interviewers bias. Inadequate response Kahn and cannel distinguish five principal symptoms of inadequate responses. They are: Partial response, in which the respondent gives a relevant but incomplete answer. Non-response, when the respondent remains silent of refuses to answer the question. Irrelevant response, in which the respondents answer is not relevant to the question asked. Inaccurate response, when the reply is biased or distorted and Verbalized response problem, which arises on account of respondents failure to understand a question or lack of information necessary for answering it. Interviewers Bias The interviewer is an important cause of response bias. He may resort to cheating by cooking up data without actually interviewing. The interviewers can influence the responses by inappropriate suggestions, word emphasis, tone of voice and question rephrasing. His own attitudes and expectations about what a particular category of respondents may say or think may bias the data. Another source of response of the interviewers characteristics (education, apparent social status, etc) may also bias his answers. Another source of response bias arises from

interviewers perception of the situation, if he regards the assignment as impossible or sees the results of the survey as possible threats to personal interests or beliefs he is likely to introduce bias. Interviewers are human beings. Such biasing factors can never be overcome completely, but their effects can be reduced by careful selection and training of interviewers, proper motivation and supervision, standardization or interview procedures (use of standard wording in survey questions, standard instructions on probing procedure and so on) and standardization of interviewer behavior. There is need for more research on ways to minimize bias in the interview.

Non-response - Non-response refers to failure to obtain responses from some sample respondents. There are many sources of non-response; non-availability, refusal, incapacity and inaccessibility. Non-availability - Some respondents may not be available at home at the time of call. This depends upon the nature of the respondents and the time of calls. For example, employed persons may not be available during working hours. Farmers may not be available at home during cultivation season. Selection of appropriate timing for calls could solve this problem. Evenings and weekends may be favorable interviewing hours for such respondents. If someone is available, then, line respondents hours of availability can be ascertained and the next visit can be planned accordingly. Refusal - Some persons may refuse to furnish information because they are ill-disposed, or approached at the wrong hour and so on. Although, a hardcore of refusals remains, another try or perhaps another approach may find some of them cooperative. Incapacity or inability may refer to illness which prevents a response during the entire survey period. This may also arise on account of language barrier. Inaccessibility - Some respondents may be inaccessible. Some may not be found due to migration and other reasons. Non-response reduces the effective sample size and its representativeness.

Q.3. a. What are the various steps in processing of data? Ans. Data in the real world often comes with a large quantum and in a variety of formats that any meaningful interpretation of data cannot be achieved straightaway. Social science researches, to be very specific, draw conclusions using both primary and secondary data. To arrive at a meaningful interpretation on the research hypothesis, the researcher has to prepare his data for this purpose. This preparation involves the identification of data structures, the coding of data and the grouping of data for preliminary research interpretation. This data preparation for research analysis is teamed as processing of data. Further selections of tools for analysis would to a large extent depend on the results of this data processing. Data processing is an intermediary stage of work between data collections and data interpretation. The data gathered in the form of questionnaires/interview schedules/field notes/data sheets is mostly in the form of a large volume of research variables. The research variables recognized is the result of the preliminary research plan, which also sets out the data processing methods beforehand. Processing of data requires advanced planning and this planning

may cover such aspects as identification of variables, hypothetical relationship among the variables and the tentative research hypothesis. The various steps in processing of data may be stated as: Identifying the data structures Editing the data Coding and classifying the data Transcription of data Tabulation of data.

Qb. How is data editing is done at the Time of Recording of Data? Ans. Data Editing at the Time of Recording of Data Document editing and testing of the data at the time of data recording is done considering the following questions in mind. Do the filters agree or are the data inconsistent? Have missing values been set to values, which are the same for all research questions? Have variable descriptions been specified? Have labels for variable names and value labels been defined and written? All editing and cleaning steps are documented, so that, the redefinition of variables or later analytical modification requirements could be easily incorporated into the data sets.

Q.4a. What are the fundamental of frequency Distribution? Ans. Frequency Distribution and Class Intervals Variables that are classified according to magnitude or size are often arranged in the form of a frequency table. In constructing this table, it is necessary to determine the number of class intervals to be used and the size of the class intervals. A distinction is usually made between continuous and discrete variables. A continuous variable has an unlimited number of possible values between the lowest and highest with no gaps or breaks. Examples of continuous variable are age, weight, temperature etc. A discrete variable can have a series of specified values with no possibility of values between these points. Each value of a discrete variable is distinct and separate. Examples of discrete variables are gender of persons (male/female) occupation (salaried, business, profession) car size (800cc, 1000cc, 1200cc) In practice, all variables are treated as discrete units, the continuous variables being stated in some discrete unit size according to the needs of a particular situation. For example, length is described in discrete units of millimetres or a tenth of an inch.

Qb. What are the types and general rules for graphical representation of data? Ans. Graphs and General Rules

The most commonly used graphic forms may be grouped into the following categories: a) Line Graphs or Charts b) Bar Charts c) Segmental presentations. d) Scatter plots e) Bubble charts f) Stock plots g) Pictographs h) Chesnokov Faces The general rules to be followed in graphic representations are: The chart should have a title placed directly above the chart. The title should be clear, concise and simple and should describe the nature of the data presented. Numerical data upon which the chart is based should be presented in an accompanying table. The horizontal line measures time or independent variable and the vertical line the measured variable. Measurements proceed from left to right on the horizontal line and from bottom to top on the vertical. Each curve or bar on the chart should be labelled. If there are more than one curves or bar, they should be clearly differentiated from one another by distinct patterns or colours. The zero point should always be represented and the scale intervals should be equal. Graphic forms should be used sparingly. Too many forms detract rather than illuminating the presentation. Graphic forms should follow and not precede the related textual discussion. Line Graphs The line graph is useful for showing changes in data relationship over a period of time. In this graph, figures are plotted in relation to two intersecting lines or axes. The horizontal line is called the abscissa or X-axis and the vertical, the ordinal or Y-axis. The point at which the two axes intersect is zero for both X and Y axis. The O is the origin of coordinates. The two lines divide the region of the plane into four sections known as quadrants that are numbered anti-clockwise. Measurements to the right and above O are positive (plus) and measurements to the left and below O are negative (minus). Is an illustration of the features of a rectangular coordinate type of graph? Any point of plane of the two axes is plotted in terms of the two axes reading from the origin O. Scale intervals in both the axes should be equal. If a part of the scale is omitted, a set of parallel jagged lines should be used to indicate the break in the scale. The time dimension or independent variable is represented by the X-axis and the other variable by Y-axis. Q.5. Strictly speaking, would case studies be considered as scientific research? Why or why not? Ans.Research simply means a search for facts answers to questions and solutions to problems. It is a purposive investigation. It is an organized inquiry. It seeks to find explanations to unexplained phenomenon to clarify the doubtful facts and to correct the misconceived facts. The search for facts may be made through either:

Arbitrary (or unscientific) Method: Its a method of seeking answers to question consists of imagination, opinion, blind belief or impression. E.g. it was believed that the shape of the earth was flat; a big snake swallows sun or moon causing solar or lunar eclipse. It is subjective; the finding will vary from person to person depending on his impression or imagination. It is vague and inaccurate. Or Scientific Method: this is a systematic rational approach to seeking facts. It eliminates the drawbacks of the arbitrary method. It is objective, precise and arrives at conclusions on the basis of verifiable evidences. Therefore, search of facts should be made by scientific method rather than by arbitrary method. Then only we may get verifiable and accurate facts. Hence research is a systematic and logical study of an issue or problem or phenomenon through scientific method. Young defines Research as a scientific undertaking which, by means of logical and systematic techniques, aims to: (a) Discover of new facts or verify and test old facts, (b) Analyze their sequences, interrelationships and causal explanations, (c) Develop new scientific tools, concepts and theories which would facilitate reliable and valid study of human behavior. (d) Kerlinger defines research as a systematic, controlled, empirical and critical investigation of hypothetical propositions about the presumed relations among natural phenomena. Research and Scientific Method Research is a scientific endeavor. It involves scientific method. The scientific method is a systematic step-by-step procedure following the logical processes of reasoning. Scientific method is a means for gaining knowledge of the universe. It does not belong to any particular body of knowledge; it is universal. It does not refer to a field of specific subject of matter, but rather to a procedure or mode of investigation. The scientific method is based on certain articles of faith. These are: Reliance on Empirical Evidence: Truth is established on the basis of evidence. Conclusion is admitted, only when it is based on evidence. The answer to a question is not decided by intuition or imagination. Relevant data are collected through observation or experimentation. The validity and the reliability of data are checked carefully and the data are analyzed thoroughly, using appropriate methods of analysis. Use of Relevant Concepts: We experience a vast number of facts through our sense. Facts are things which actually exist. In order to deal with them, we use concepts with specific meanings. They are symbols representing the meaning that we hold. We use them in our thinking and communication. Otherwise, clarity and correct understanding cannot be achieved. Commitment of Objectivity: Objectivity is the hallmark of the scientific method. It means forming judgment upon facts unbiased by personal impressions. The conclusion should not vary from person to person. It should be the same for all persons. Ethical Neutrality: Science does not pass normal judgment on facts. It does not say that they are good or bad. According to Schrdinger Science never imposes anything, science states. Science aims at nothing but making true and adequate statements about its object. Generalization: In formulating a generalization, we should avoid the danger of committing the particularistic fallacy, which arises through an inclination to generalize on insufficient or

incomplete and unrelated data. This can be avoided by the accumulation of a large body of data and by the employment of comparisons and control groups. Verifiability: The conclusions arrived at by a scientist should be verifiable. He must make known to others how he arrives at his conclusions. He should thus expose his own methods and conclusions to critical scrutiny. When his conclusion is tested by others under the same conditions, then it is accepted as correct. Logical reasoning process: The scientific method involves the logical process of reasoning. This reasoning process is used for drawing inference from the finding of a study or for arriving at conclusion. Q.6. a. Analyse the case study and descriptive approach to research. Ans. Case Study Case study is a method of exploring and analyzing the life of a social unit or entity, be it a person, a family, an institution or a community. The aim of case study method is to locate or identify the factors that account for the behavior patterns of a given unit, and its relationship with the environment. The case data are always gathered with a view to attracting the natural history of the social unit, and its relationship with the social factors and forces operative and involved in this surrounding milieu. In short, the social researcher tries, by means of the case study method, to understand the complex of factors that are working within a social unit as an integrated totality. Looked at from another angle, the case study serves the purpose similar to the clueproviding function of expert opinion. It is most appropriate when one is trying to find clues and ideas for further research. The major credit for introducing case study method into social investigation goes to Frederick Leplay. Herbert Spencer was the first social philosopher who used case study in comparative studies of different cultures. William Healey used case study in his study of juvenile delinquency. Anthropologists and ethnologists have liberally utilized cast study in the systematic description of primitive cultures. Historians have used this method for portraying some historical character or particular historical period and describing the developments within a national community. Research Approaches There are two main approaches to research, namely quantitative approach and qualitative approach. The quantitative approach involves the collection of quantitative data, which are put to rigorous quantitative analysis in a formal and rigid manner. This approach further includes experimental, inferential, and simulation approaches to research. Meanwhile, the qualitative approach uses the method of subjective assessment of opinions, behavior and attitudes. Research in a situation is a function of the researchers impressions and insights. The results generated by this type of research are either in non-quantitative form or in the form which cannot be put to rigorous quantitative analysis. Usually, this approach uses techniques like depth interviews, focus group interviews, and projective techniques. Descriptive Study

It is a fact-finding investigation with adequate interpretation. It is the simplest type of research. It is more specific than an exploratory research. It aims at identifying the various characteristics of a community or institution or problem under study and also aims at a classification of the range of elements comprising the subject matter of study. It contributes to the development of a young science and useful in verifying focal concepts through empirical observation. It can highlight important methodological aspects of data collection and interpretation. The information obtained may be useful for prediction about areas of social life outside the boundaries of the research. They are valuable in providing facts needed for planning social action program.

Qb. Distinguish between research methods & research Methodology.

Ans. Research Methods vs Research Methodology

Research Methods and Research Methodology are two terms that are often confused as one and the same. Strictly speaking they are not so and they show differences between them. One of the primary differences between them is that research methods are the methods by which you conduct research into a subject or a topic. On the other hand research methodology explains the methods by which you may proceed with your research. Research methods involve conduct of experiments, tests, surveys and the like. On the other hand research methodology involves the learning of the various techniques that can be used in the conduct of research and in the conduct of tests, experiments, surveys and critical studies. This is the technical difference between the two terms, namely, research methods and research methodology. In short it can be said that research methods aim at finding solutions to research problems. On the other hand research methodology aims at the employment of the correct procedures to find out solutions. It is thus interesting to note that research methodology paves the way for research methods to be conducted properly. Research methodology is the beginning whereas research methods are the end of any scientific or non-scientific research. Let us take for example a subject or a topic, namely, employment of figures of speech in English literature. In this topic if we are to conduct research, then the research methods that are involved are study of various works of the different poets and the understanding of the employment of figures of speech in their works. On the other hand research methodology pertaining to the topic mentioned above involves the study about the tools of research, collation of various manuscripts related to the topic, techniques involved in the critical edition of these manuscripts and the like. If the subject into which you conduct a research is a scientific subject or topic then the research methods include experiments, tests, study of various other results of different experiments performed earlier in relation to the topic or the subject and the like. On the other hand research methodology pertaining to the scientific topic involves the techniques regarding how to go about conducting the research, the tools of research, advanced techniques that can be used in the conduct of the experiments and the like. Any student or research

candidate is supposed to be good at both research methods and research methodology if he or she is to succeed in his or her attempt at conducting research into a subject.

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Poddar Institute of Information and Technology

Internal Assignment Feb 2012

Name: ____ AMBROSE RAI___________________ Registration No. :__521011937______________ Course: ___MBA___ Sem: ___3rd____________ Subject Name : __ Legal Aspects of Business _____ Subject Code : __ ___MB0051____________________ LC Code : _____1531_________________________ LC Center: Poddar Institute of Information & Technology Module No.:_________________________________ Date of Submission: _ 10th January 2012 ________ Marks Awarded:_____________________________

___________ Signature of Student

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____________ Signature of Examiner

Master of Business Administration- MBA Semester 3 MB0051 Legal Aspects of Business (Book ID: B0764) Assignment Set- 1 Q.1 Distinguish between fraud and misrepresentation.
Ans. Fraud vs Misrepresentation People treat fraud and misrepresentation as being same and they even use the terms

interchangeably but there is a difference between the two concepts in the eyes of law and cases are dealt with according to the provisions of either. Though both fraud and misrepresentation have similar effects and there may be just a difference of intensity or magnitude, fraud is willful and attracts more severe penalty than misrepresentation that is less severe.
Fraud (Secs. 17 and 19)

Fraud is done with the intention of wrongful personal gains or to cause damage to another person. Fraud can be anything from claiming false health benefits from a product to giving false information for monetary gains. Embezzlement, identity fraud, deceit in gambling or other sports, forging figures in income statements, claiming wrong insurance claims, falsifying as a witness, inflating the invoices, forging signatures, forging currencies and so on. Fraud is a crime that has strict provisions in the law and is accordingly dealt with. Fraud means and includes any of the following acts committed by a party to a contract with in intent to deceive the other party thereto or to induce him to enter into a contract: (i) the suggestion as a fact of that which is not true by one who does not believe it to be true; (ii) active concealment of a fact by one having knowledge or belief of the fact; (iii) promise made without any intention of performing it; (iv) any other act fitted to deceive; (v) any such act or omission as the low specifically declares to be fraudulent.
Misrepresentation (Secs.18-19)

Misrepresentation, on the other hand, is mostly used in the context of contracts where a party may present facts in such a way so as to lure other party into signing the contract. Sometimes a manufacturer may not disclose all the facts about the product and by withholding these facts, he is trying to misrepresent the facts in the hope that consumers may fall in trap and buy the product. At times, it is innocent misrepresentation where the person presenting the facts may not be in the know of all the facts and thus may create misrepresentation. If information is presented in such a way that it looks true, but the picture becomes clear only when all relevant facts are presented, it becomes a case of misrepresentation. Misrepresentation is also known as simple misrepresentation whereas fraud is known as fraudulent misrepresentation. Like fraud, misrepresentation is an incorrect or false statement but the falsity or inaccuracy is not due to any desire to deceive or defraud the other party. Such a statement is made innocently. The party making it believes it to be true. In this way, fraud is different from misrepresentation.

Q.2 What are the remedies for breach of contract.

Ans. When someone breaches a contract, the other party is no longer obligated to keep its end of the bargain. From there, that party may proceed in several ways: (i0 the other party may urge the breaching party to reconsider the breach; (ii) if it is a contract with a merchant, the other party may get help from consumers association; (iii) the other party may bring the breaching party to an agency for alternative dispute resolution;(iv) the other party may sue for damages; or (v) the other party may sue for other remedies. In addition to the rights of a seller against goods provided in Secs. 47 to 54, the seller has the following remedies against the buyer personally. (i) suit for price (sec.55 ;) (ii) Damages for non-acceptance of goods (Sec.56); (iii) suit for interest (Sec.56). Rescission of the contract: when a breach of contract is committed by one party, the other may treat the contract as rescinded. In such a case the aggrieved party is freed from all his obligations under the contract.

Damages (Sec.75): Another relief of remedy available to the promise in the event of a breach of promise by the promiser is to claim damages or loss arising to him there form. Damages under Sec.75 are awarded according to certain rules as laid down in Secs. 73-74. Sec. 73 contains three important rules: (i) compensation as general damages will be awarded only for those losses that directly and naturally result from the breach of the contract. (ii) Compensation for losses indirectly caused by breach may be paid as special damages if the party in breach had knowledge that such losses would also follow from such act of breach. (iii) The aggrieved party is required to take reasonable steps to keep his losses to the minimum. What is the most common remedy for breach of contracts: The usual remedy for breach of contracts is suit for damages. The main kind of damages awarded in a contract suit is ordinary damages. This is the amount of money it would take to put the aggrieved party in as good a position as if there had not been a breach of contract. The idea is to compensate the aggrieved party for the loss he has suffered as a result of the breach of the contract. Suit for price (Sec.55): Where under a contract of sale the property in the goods has passes to the buyer and the buyer wrongfully neglects or refuses to pay the price, the seller can sue the buyer for the price of the goods. Where the property in goods has not passed to the buyer, as a rule, the seller cannot file a suit for the price; his only remedy is to claim damages. Suit for damages for non-acceptance (Sec.56): Where the buyer wrongfully neglects or refuses to accept any pay for the goods, the seller may sue him for damages of non-acceptance. Where the property in the goods has not passed to the buyer and the price was not payable without passing of property, the seller can only sue for damages and not for the price. The amount of damages is to be determined in accordance with the provisions laid down in Sec.73 of the Indian Contract Act, 1872. Thus, where there is an available market of the goods prima facie, the differences between the market price and the contract price can be recovered. Suits for interest (Sec.61): When under a contract of sale, the seller tenders the goods to the buyer and the buyer wrongfully refuses or neglects to accept and pay the price, the seller has a further right to claim interest on the amount of the price. In the absence of a contract to the contrary, the court may award interest at such rate as it thinks fit on the amount of the price. the interest may be calculated from the date of the tender of the goods or from the date on which the

price was payable. It is obvious that the unpaid seller can claim interest only when he can recover the price, i.e., if the sellers remedy is to claim damages only, then he cannot claim interest. Buyers remedies against seller : The buyer has the following rights against the seller for breach of contract: (i)damages for non-delivery (Sec.57); (ii) right of recovery of the price; (iii) specific performance (Sec.58); (iv) suit for breach of condition; (v) suit for breach of warranty (Sec.59); (vi) anticipatory breach (Sec.60); (vii) recovery of interest (Sce.61).

Q.3 Distinguish between indemnity and guarantee.

Ans. Indemnity vs Guarantee

Indemnity and guarantee are two important ways to safeguard ones interests when entering into a contract. There are many similarities between the two concepts though they differ a lot also. This article will highlight the differences between Indemnity and guarantee to enable readers to choose one of the two depending upon circumstances and requirements.
Indemnity

When you agree to an indemnity agreement, you agree to assume all responsibility and liability for any injuries or damages to someone else. Whenever there is an indemnity contract and one party suffers any losses, the other has the liability to indemnify for the consequences. The common phrases that are included in indemnity contracts say that the person agrees to indemnify and hold harmless or to defend, indemnify and hold harmless. If there is a clause or obligation to defend, you should also get a clause included requiring the person who is being indemnified to tender the defense to you. At least you should get the clause of right to control defense. In the absence of these provisions, the party that you are indemnifying can cost you dearly by raking up huge attorney fees and other sundry expenses. But if you are controlling the defense, you can have a say in the selection of attorney thereby minimizing litigation costs. In general indemnity agreement covers damages, loss, costs, expenses and fees of attorneys. If there is no mention of attorney fees, the court may not require the person promising to indemnify to pay attorney fees.
Guarantee

Guarantees and indemnities are both long established forms of what the law terms suretyship. There are important legal distinctions between them. In sharp contrast to an indemnity, a guarantee is a promise to answer for debt, default or other financial liability of another. You promise to pay for any damages or default in the event of the principal person refusing to do so or when he cannot do so. If you are a guarantor, once you have paid the principal obligation, your obligation is terminated. Guarantee clause is not the main agreement and is generally collateral to some other obligation or debt. You are held accountable or liable for this debt or obligation after you have fulfilled your obligation as a guarantor. It is therefore prudent to study all clauses or underlying contract before signing any guarantee contract.

Q.4 What is the distinction between Cheque and bill of exchange. Ans. Cheque vs Bill of Exchange

A lot of business activities are going on round the clock in all parts of the world. All business activities involve exchange of goods and services. These goods and services are sold for cash or on credit. In daily life, it is impractical to issue Cheque for all the transactions that we carry out and as such we make use of either cash or use our credit cards to make payments at cinema halls, restaurants or when buying something from the market. But when it comes to receiving payment for the service that we render to our employer or our client, we tend to receive money in the form of Cheque that are cashed when we present them in our banks. It is impractical to give or receive huge sums of cash which is why people prefer to give or receive Cheque. In practice, businessmen make use of documents called negotiable instruments to give and receive money. Cheque and bills of exchange are examples of these negotiable instruments. In this article we will attempt to find out differences between these two types of documents; Cheque and bills of exchange. Bill of exchange is another important type of negotiable instrument that is used to make or receive payments in businesses. Let us understand it through an example. Let us assume Tom has given a loan of $1000 to John. But Tom has to make a payment of $1000 to Roger from whom he has either taken goods or services. If Tom does not have cash, he can issue a document directing John to make a payment of $1000 to Roger whenever Roger demands or after the expiry of a period. This document is referred to as a bill of exchange which can be further transferred

Q.5 Distinguish between companies limited by shares and companies limited by guarantee.
Ans. Companies Limited by Shares vs Companies Limited by Guarantee

There are several ways of structuring a company to start a business. Different nomenclatures are adopted for the purpose of taxation and profit sharing. Two such formations are Companies Limited by Shares and Companies Limited by Guarantee that are more prevalent in Britain and Ireland. People are often confused between these two entities and do not know which one they should adopt for their purposes. This article will differentiate between Companies Limited by Shares and Companies Limited by Guarantee by discussing their features and pros and cons. There are both similarities as well as differences in the two types of companies. A company limited by guarantee is lesser known of the two types and is generally formed in case of non profit companies. It tends to have members rather than shareholders. The most notable difference between these two entities is that companies limited by shares exist for making profit whereas companies limited by guarantee are non profit making companies. Guarantee companies are formed to provide a specific service to public. These two entities also differ in their articles of association and memorandum as companies limited by shares have very general clauses that give them liberty to engage in any legal trade or business activity. On the other hand, companies limited by guarantee have specific clauses and rules dictating their areas of operation. Prominent example of companies limited by guarantee are charities that have self imposed restrictions on them to assure the donors that their donations are spent according to their wishes and not in a manner that they do not approve. This one point helps companies limited by guarantee to raise funds more easily than companies limited by shares as they can show how they propose to use the money.

There are no major differences in the structure of the two types of companies and both Companies Limited by Shares and Companies Limited by Guarantee have at least one director, a secretary and a declarant at the time of coming into existence. Another major difference between Companies Limited by Shares and Companies Limited by Guarantee is the absence of share capital in the case of companies limited by guarantee. There are members and not shareholders in case of a guarantee company where members pledge to contribute a predetermined sum at the time of formation of the company (Pound 1). Guarantee company structure is mostly used by schools, clubs, churches, research organizations and to purchase freehold property.

Q.6 What is the definition of cyber crime. Ans. Cybercrime is criminal activity done using computers and the Internet. This includes anything from downloading illegal music files to stealing millions of dollars from online bank accounts. Cybercrime also includes non-monetary offenses, such as creating and distributing viruses on other computers or posting confidential business information on the Internet. Perhaps the most prominent form of cybercrime is identity theft, in which criminals use the Internet to steal personal information from other users. Two of the most common ways this is done is through phishing and pharming. Both of these methods lure users to fake websites (that appear to be legitimate), where they are asked to enter personal information. This includes login information, such as usernames and passwords, phone numbers, addresses, credit card numbers, bank account numbers, and other information criminals can use to "steal" another person's identity. For this reason, it is smart to always check the URL or Web address of a site to make sure it is legitimate before entering your personal information. Because cybercrime covers such a broad scope of criminal activity, the examples above are only a few of the thousands of crimes that are considered cybercrimes. While computers and the Internet have made our lives easier in many ways, it is unfortunate that people also use these technologies to take advantage of others. Therefore, it is smart to protect yourself by using antivirus and spyware blocking software and being careful where you enter your personal information The term cyber crime is a misnomer. This term has nowhere been defined in any statute /Act passed or enacted by the Indian Parliament. The concept of cyber crime is not radically different from the concept of conventional crime. Both include conduct whether act or omission, which cause breach of rules of law and counterbalanced by the sanction of the state. Before evaluating the concept of cyber crime it is obvious that the concept of conventional crime be discussed and the points of similarity and deviance between both these forms may be discussed.

CONVENTIONAL CRIME-

Crime is a social and economic phenomenon and is as old as the human society. Crime is a legal concept and has the sanction of the law. Crime or an offence is a legal wrong that can be followed by criminal proceedings which may result into punishment. (1) The hallmark of criminality is that, it is breach of the criminal law. Per Lord Atkin the criminal quality of an act cannot be discovered by reference to any standard but one: is the act prohibited with penal consequences. (2) A crime may be said to be any conduct accompanied by act or omission prohibited by law and consequential breach of which is visited by penal consequences.

CYBER CRIME Cyber crime is the latest and perhaps the most complicated problem in the cyber world. Cyber crime may be said to be those species, of which, genus is the conventional crime, and where either the computer is an object or subject of the conduct constituting crime (13). Any criminal activity that uses a computer either as an instrumentality, target or a means for perpetuating further crimes comes within the ambit of cyber crime(12) A generalized definition of cyber crime may be unlawful acts wherein the computer is either a tool or target or both(3) The computer may be used as a tool in the following kinds of activityfinancial crimes, sale of illegal articles, pornography, online gambling, intellectual property crime, e-mail spoofing, forgery, cyber defamation, cyber stalking. The computer may however be target for unlawful acts in the following cases- unauthorized access to computer/ computer system/ computer networks, theft of information contained in the electronic form, e-mail bombing, data didling, salami attacks, logic bombs, Trojan attacks, internet time thefts, web jacking, theft of computer system, physically damaging the computer system. DISTINCTION BETWEEN CONVENTIONAL AND CYBER CRIMEThere is apparently no distinction between cyber and conventional crime. However on a deep introspection we may say that there exists a fine line of demarcation between the conventional and cyber crime, which is appreciable. The demarcation lies in the involvement of the medium in cases of cyber crime. The sine qua non for cyber crime is that there should be an involvement, at any stage, of the virtual cyber medium. MODE AND MANNER OF COMMITING CYBER CRIME: Unauthorized access to computer systems or networks / Hacking- This kind of offence is normally referred as hacking in the generic sense. However the framers of the information technology act 2000 have no where used this term so to avoid any confusion we would not interchangeably use the word hacking for unauthorized access as the latter has wide connotation.

Theft of information contained in electronic form- This includes information stored in computer hard disks, removable storage media etc. Theft may be either by appropriating the data physically or by tampering them through the virtual medium. Email bombing- This kind of activity refers to sending large numbers of mail to the victim, which may be an individual or a company or even mail servers there by ultimately resulting into crashing. Data diddling- This kind of an attack involves altering raw data just before a computer processes it and then changing it back after the processing is completed. The electricity board faced similar problem of data diddling while the department was being computerised. Salami attacks- This kind of crime is normally prevalent in the financial institutions or for the purpose of committing financial crimes. An important feature of this type of offence is that the alteration is so small that it would normally go unnoticed. E.g. the Ziegler case wherein a logic bomb was introduced in the banks system, which deducted 10 cents from every account and deposited it in a particular account. Denial of Service attack- The computer of the victim is flooded with more requests than it can handle which cause it to crash. Distributed Denial of Service (DDoS) attack is also a type of denial of service attack, in which the offenders are wide in number and widespread. E.g. Amazon, Yahoo. Virus / worm attacks- Viruses are programs that attach themselves to a computer or a file and then circulate themselves to other files and to other computers on a network. They usually affect the data on a computer, either by altering or deleting it. Worms, unlike viruses do not need the host to attach themselves to. They merely make functional copies of themselves and do this repeatedly till they eat up all the available space on a computer's memory. E.g. love bug virus, which affected at least 5 % of the computers of the globe. The losses were accounted to be $ 10 million. The world's most famous worm was the Internet worm let loose on the Internet by Robert Morris sometime in 1988. Almost brought development of Internet to a complete halt. Logic bombs- These are event dependent programs. This implies that these programs are created to do something only when a certain event (known as a trigger event) occurs. E.g. even some viruses may be termed logic bombs because they lie dormant all through the year and become active only on a particular date (like the Chernobyl virus). Trojan attacks- This term have its origin in the word Trojan horse. In software field this means an unauthorized programme, which passively gains control over anothers system by representing itself as an authorised programme. The most common form of installing a Trojan is through e-mail. E.g. a Trojan was installed in the computer of a lady film director in the U.S. while chatting. The cyber criminal through the web cam installed in the computer obtained her nude photographs. He further harassed this lady. Internet time thefts-Normally in these kinds of thefts the Internet surfing hours of the victim are used up by another person. This is done by gaining access to the login ID and the password. E.g. Colonel Bajwas case- the Internet hours were used up by any other person. This was perhaps one of the first reported cases related to cyber crime in India. However this case made the police infamous as to their lack of understanding of the nature of cyber-crime.

Web jacking- This term is derived from the term hi jacking. In these kinds of offences the hacker gains access and control over the web site of another. He may even mutilate or change the information on the site. This may be done for fulfilling political objectives or for money. E.g. recently the site of MIT (Ministry of Information Technology) was hacked by the Pakistani hackers and some obscene matter was placed therein. Further the site of Bombay crime branch was also web jacked. Another case of web jacking is that of the gold fish case. In this case the site was hacked and the information pertaining to gold fish was changed. Further a ransom of US $ 1 million was demanded as ransom. Thus web jacking is a process whereby control over the site of another is made backed by some consideration for it.

Master of Business Administration- MBA Semester 3 MB0051 Legal Aspects of Business (Book ID: B0764) Assignment Set- 2

Q.1 What are the situations which cannot be referred to arbitration. Ans. Indian legal system is known for its delays and disparities. It is a known fact that our courts are over-burdened with the pending cases and it is almost impossible to provide quick and efficient relief to the aggrieved parties. Therefore, to meet the situation, nowadays, the alternative Dispute Resolution (ADR) mechanism is used all over the world which is more effective, faster and less expensive. Under ADR mechanism, there are basically four methods: (a) Negotiation (b) Mediation (c) Conciliation (d) Arbitration While the first two methods are not recognized by law, the methods of conciliation and arbitration are quasi-judicial methods to resolve a dispute with minimum court intervention. The same is now recognized by the Arbitration and Conciliation Act, 1996 (Act 26 of 1996). The courts have always assisted in proper conduct of the arbitration proceedings and enforcement of arbitration awards. ARBITRATION can be defined as a method by which parties to a dispute get the dispute settled through the intervention of a third independent person. Parties can also settle their disputes through a permanent arbitral Institutions like, Indian Council of Arbitration, Chamber of Commerce, etc. Halsbury has defined Arbitration as follows: "Arbitration is the reference of dispute between not less than two parties, for determination, after hearing both sides in a judicial manner, by a person or persons other than a court of competent jurisdiction. ARBITRATION AGREEMENT Section 7(1) of the Act mentions that Arbitration Agreement means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement should be in writing and signed by both the parties. It need not be in a particular form. However, the intention to refer to arbitration must be established. Arbitration can be agreed by way of exchange of letter, telex, telegram fax, etc. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract. An Arbitration Agreement is a contract and it must satisfy all the essential elements of a contract. As per the Contract Act, 1872, an agreement between two parties which is enforceable by law is a contract.

DISPUTES EXCLUDED FROM ARBITRATION Generally speaking all disputes of a civil nature can be referred to Arbitration e.g. breach of a contract, question of assignment or right to hold premises etc. However, certain disputes where the law has given jurisdiction to determine certain matters to specified tribunal only cannot be referred to arbitration. An illustrative list of such matters is given below: Testamentary matters involving questions about validity of a will. Disputes relating to appointment of a guardian. Disputes pertaining to criminal proceedings Disputes relating to Charitable Trusts Winding up of a company Matters of divorce or restitution of conjugal rights Lunacy proceedings Disputes arising from an illegal contract Insolvency matters, such as adjudication of a person as an insolvent. Matters falling within the preview of the M.R.T.P. Act.

Q2. What is the role of a Conciliator? Ans. Role of a Conciliator- The conciliator induces the parties to a course of action? His intervention in the dispute creates for the parties a situation different from the direct confrontation they had had before. The conciliator establishes for the parties a need to reexamine their positions in this new situation and to consider possible alternatives or options. The need to make a choice of possible options continues after his initial intervention; and depending on the shifting pressures on the parties he can sharpen or blunt the need to make a choice.
As a Discussion Leader: As a discussion leader the conciliator reduces irrationality and

antagonism between the parties. He guides them towards a problem-solving approach to their dispute; he ensures that they discuss their differences in as friendly a manner as possible; he helps them to analyze their problem, always striving to keep the analysis on rational ground; he identifies the elements of the problem, both for the parties benefit and for his own.
As a Safety Valve: The conciliator places himself in the position of an alternative target when he

feels that the parties are in an aggressive mood. By setting a substitute target, the parties can achieve an emotional release without direct and immediate damage to the negotiations.
As a Communication Link: The conciliator fulfils an important function as a communication link

between the parties: serving as a communication link may either constitute his main conciliatory effort or be a contribution to it. He not only works as a conduit through which messages relayed from one side to the other, are passed, but he also provides a thorough explanation and interprets the intention of the party.
As a Stimulator-Sensing the need for positive action, the conciliator can provide necessary

impulse; he makes a concise statement, supplies some date, gives a hint or suggestion. He crystallizes changes of opinions, in course of discussions, by intervening at the appropriate moment and giving such ideas a concrete form.

As an Adviser: The conciliator tries to remove misunderstandings regarding the others position,

intentions and capabilities. He tries to see that such misinterpretations do not occur and that each side thoroughly understands the others point of view obtains a picture of the opponents strength and realizes its own limitations and weaknesses.
As a Promoter of Collective Bargaining: While intervening in a dispute, he is not only concerned

with obtaining settlement, but often he assists and promotes collective bargaining and helps and guides the parties in the development of their relationship. Thus, a conciliator has to play a wide variety of roles of roles. When a strike or lock-out is threatened it is his duty to advise the party concerned on the legality of the proposed action and to use all his powers of pursuing so that at least the action can be postponed while conciliation is going on. He makes all efforts to persuade the parties against violent or disorderly behavior in carrying out the proposed action which might lead to bitterness. He also tries to bring the parties together to negotiate before the factory is shut down or any damage to equipment or property is done. He also ensures that work is immediately resumed when the strike or lock-out is terminated Q3. What are the unfair trade practices under the MRTP Act? Ans. The MRTP Act, 1969- Post independence, many new and big firms have entered the Indian market. They had little competition and they were trying to monopolize the market. The Government of India understood the intentions of such firms. In order to safeguard the rights of consumers, Government of India passed the MRTP bill. The bill was passed and the Monopolies and Restrictive Trade Practices Act, 1969, came into existence. Through this law, the MRTP commission has the power to stop all businesses that create barrier for the scope of competition in Indian economy. The MRTP Act, 1969, aims at preventing economic power concentration in order to avoid damage. The act also provides for probation of monopolistic, unfair and restrictive trade practices. The law controls the monopolies and protects consumer interest.
Unfair Trade Practice

An unfair trade practice means a trade practice, which, for the purpose of promoting any sale, use or supply of any goods or services, adopts unfair method, or unfair or deceptive practice. Unfair practices may be categorized as under: 1. False Representation - The practice of making any oral or written statement or representation which: Falsely suggests that the goods are of a particular standard quality, quantity, grade, composition, style or model; Falsely suggests that the services are of a particular standard, quantity or grade; Falsely suggests any re-built, second-hand renovated, reconditioned or old goods as new goods; Represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which they do not have; Represents that the seller or the supplier has a sponsorship or approval or affiliation which he does not have; Makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;

Gives any warranty or guarantee of the performance, efficacy or length of life of the goods, that is not based on an adequate or proper test; Makes to the public a representation in the form that purports to bewarranty or guarantee of the goods or services, a promise to replace, maintain or repair the goods until it has achieved a specified result, if such representation is materially misleading or there is no reasonable prospect that such warranty, guarantee or promise will be fulfilled Materially misleads about the prices at which such goods or services are available in the market; or Gives false or misleading facts disparaging the goods, services or trade of another person. 2. False Offer Of Bargain Price -Where an advertisement is published in a newspaper or otherwise, whereby goods or services are offered at a bargain price when in fact there is no intention that the same may be offered at that price, for a reasonable period or reasonable quantity, it shall amount to an unfair trade practice. The 'bargain price', for this purpose means: the price stated in the advertisement in such manner as suggests that it is lesser than the ordinary price, or the price which any person coming across the advertisement would believe to be better than the price at which such goods are ordinarily sold. 3. Free Gifts Offer And Prize Scheme - The unfair trade practices under this category are: Offering any gifts, prizes or other items along with the goods when the real intention is different, or Creating impression that something is being offered free along with the goods, when in fact the price is wholly or partly covered by the price of the article sold, or Offering some prizes to the buyers by the conduct of any contest, lottery or game of chance or skill, with real intention to promote sales or business. 4. Non-Compliance Of Prescribed Standards - Any sale or supply of goods, for use by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by some competent authority, in relation to their performance, composition, contents, design, construction, finishing or packing, as are necessary to prevent or reduce the risk of injury to the person using such goods, shall amount to an unfair trade practice. 5.Hoarding, Destruction, Etc. -Any practice that permits the hoarding or destruction of goods, or refusal to sell the goods or provide any services, with an intention to raise the cost of those or other similar goods or services, shall be an unfair trade practice. 6. Inquiry Into Unfair Trade Practices -The Commission may inquire into any unfair trade practice: Upon receiving a complaint from any trade association, consumer or a registered consumer association, or Upon reference made to it by the Central Government or State Government Upon an application to it by the Director General or Upon its own knowledge or information.

Relief Available - After making an inquiry into the unfair trade practice if the Commission is of the opinion that the practice is prejudicial to the public interest, or to the interest of any consumer it may direct that The practice shall be discontinued or shall not be repeated; The agreement relating thereto shall be void in respect of such unfair trade practice or shall stand modified. Any information, statement or advertisement relating to such unfair trade practice shall be disclosed, issued or published as may be specified The Commission may permit the party to carry on any trade practice to take steps to ensure that it is no longer prejudicial to the public interest or to the interest of the consumer. However no order shall be made in respect a trade practice which is expressly authorized by any law in force. The Commission is empowered to direct publication of corrective advertisement and disclosure of additional information while passing orders relating to unfair trade practices

Q4. What are essentials of a valid offer? Ans. Essential of a valid offer: 1. A valid offer must intend to create legal relations. It must not be a casual statement. If the offer is not intended to create legal relationship, it is not an offer in the eyes of law. for example; Sunil invites Sridhar to a dinner party and Sridhar accepts the invitation. Sridhar does not turn up at the dinner party. Sunil cannot sue Sridhar for breach of contract as there was no intention to create legal obligation. Hence, an offer to perform social, religious or moral acts without any intention of creating legal relations will not be a valid offer. 2. The terms of an offer must be definite, unambiguous and certain. They must not be loose and vague. A promise to pay an extra Rs. 500 if a particular house proves lucky is too vague to be enforceable. for example; Sridhar says to Sunil "I will give you some money if you marry my daughter". This is not an offer which can be accepted because the amount of money to be paid is not certain. 3. An offer may be made to a definite person or to the general public. When offer is made to a definite person or to a special class of persons, it is called "specific offer". When an offer is made to the world at large or public in general, it is called "general offer". A specific offer can be accepted only by that person to whom it has been made and a general offer can be accepted by any person. for example; Sunil promises to give Rs.100 to Sridhar, if he brings back his missing dog. This is a specific offer and can only be accepted by Sridhar. Sunil issues a public advertisement to the effect that he would give Rs.100 to anyone who brings back his missing dog. This is a general offer. Any member of the public can accept this offer by searching for and bringing back Sunil's missing dog. 4. An offer to do or not to do must be made with a view to obtaining the assent of the other party. Mere enquiry is not an offer. 5. An offer should may contain any term or condition. The offer or may prescribe any mode of acceptance. But he cannot prescribe the form or time of refusal so as to fix a contract on the acceptor. He cannot say that if the acceptor does not communicate his acceptance within a specified time, he is deemed to have accepted the offer.

6. The offer or is free to lay down any terms any terms and conditions in his offer. If the other party accepts it, then he has to abide by all the terms and conditions of the offer. It is immaterial whether the terms and conditions were harsh or ridiculous. The special terms or conditions in an offer must be brought to the notice of the offered at the time of making a proposal. 7. An offer is effective only when it is communicated to the offeree. Communication is necessary whether the offer is general or specific. The offeror may communicate the offer by choosing any available means such as a word of mouth, mail, telegram, messenger, a written document, or even signs and gestures. Communication may also be implied by his conduct. A person can accept the offer only when he knows about it. If he does not know, he cannot accept it. An acceptance of an offer, in ignorance of the offer, is no acceptance at all

Q5. Find out a case where a person appealed under the Consumer protection Act and won. Ans. Case: Governmental responsibility for food in Canada is divided among the federal, 10 provincial, three territorial, and thousands of municipal governments. Some 77 pieces of legislation govern food inspection among three levels of government. Federal responsibility centers on export and inter-provincial trade: protecting and expanding export markets for Canadian food products, and facilitating interprovincial trade. In addition, the federal government sets food safety, quality and grading standards for products sold interprovincial and internationally and administers regulations aimed at preventing the production or sale in Canada of dangerous, adulterated or misbranded products. Provinces and municipalities are responsible for: The interprovincial aspects of the food industry, including local food processing, the food service industry, and the food retail industry. They decide whether and how to inspect local operations, including restaurants and grocery stores, as well as dairies and meat plants whose products are sold within the province. (Moore and Skogstad, p.130). The federal government of Canada faced a number of food security problems in the early 1990s, which facilitated adoption of innovative reform measures: Canadas reputation for high quality food had been damaged by the tained tuna scandal. Resources for additional inspection of fish products were not available; resources were not only scarce but shrinking. The Government wanted to reform its public service along the lines achieved in the United Kingdom and New Zealand, where separate agencies were spun off from government. Developments in international trade and potential developments in interprovincial trade: Industry and governments favored harmonized standards and streamlined inspection to ensure the competitiveness of the Canadian food industry domestically & internationally. Canadian producers/processors were vulnerable to trade challenges in a fragmented system. Gaps resulting from non-inspection or non-rigorous inspection were perceived by processors as a weak link, despite the small percentage of overall production represented and assurances outlined in the Auditor General of Canadas 1994 Report. Closer integration of the US and Canadian markets under free trade agreements made the industry anxious to reduce the costs and inefficiencies resulting from differing provincial standards e.g. fluid milk.

The national treatment principle in the North American Free Trade Agreement could be interpreted to mean that imports must meet the provincial standard of the province they enter rather than the standard required for inter-provincial or international trade. This could drag down Canadian food standards to the lowest common denominator. Canadian exporters were concerned about being denied access to external markets on the grounds that Canadian food safety standards and inspection systems were not equivalent to those of the markets into which they were shipping. The 1994 SPS Agreement required that countries use their food safety and animal, plant and health regulations only to the extent necessary to protect human, animal life or health, not for trade protection purposes. Emergence of alternatives to high-cost prescriptive regulation; New scientific and technological tools furnished the Government with opportunities to shift additional costs and a significant degree of responsibility for food safety to the food industry itself. Risk assessment methods allowed the allocation of food inspection resources on a risk basis. One such risk-based tool, the Hazard Analysis Critical Control Point (HACCP) system, developed for the US space program, was deemed more effective than existing systems in ensuring food safety. Canada was the first government to adopt this system, for its fish inspection program. It was so well accepted internationally that Canadian meat packing plants were subsequently required to conform to US regulations requiring large American meat packing plants to implement a HACCP plan by January 1998. National unity was threatened, and solutions suggested in the winning Liberal platforms in the 1993 and 1997 elections were renewal of the federation, including better coordination of services and reduction in overlap and duplication among governments. The Government of Canada consolidated all of its food inspection and quarantine services from Health Canada, Fisheries and Oceans, and Agriculture and Agri-Food Canada into one selfstanding Agency effective April 1, 1997. The Agency reports not to a deputy minister but directly to the minister of Agriculture and Agri-food. The Agency has separate employer status, and so can hire and fire its own employees, rather than working through the Public Service commission. It also has a number of financial flexibilities not available to Government departments, most notably the capacity to retain revenues. Protecting the public interest is a major concern in creating alternate Service Agencies (ASDs) in Canada. Employing the Auditor General of Canadas definition of the public interest when assessing ASDs, the CFIA addressed whether there was an appropriate focus on public objectives, maintenance of public service values and adequate control over public funds and assets. On all counts the CFIAs self-assessment concluded it was serving the public interest. The Auditor General of Canada was appointed as an external auditor under assess the fairness and reliability of the performance information provided in the Agencys Annual Report to Parliament. The Auditor General also has authority to conduct periodic value-for-money audits of the Agency. Clarification of food-related roles and responsibilities of federal government departments has led to: A more integrated and comprehensive approach (gate-toplate) to trichinosis in swine, tuberculosis in cattle and zoonotic diseases such as salmonella enteritis in poultry. Improved capacity to respond to outbreaks of food-borne illness and threats to the food system presented by medicated feeds and antibiotic residues.

Separation of health and safety standard setting from inspection, permitting new flexibilities for inspection. Separation of health risk analysis from risk management, thereby fulfilling a World Health Organization principle. Reduced criticism of conflict of interest because the same department was responsible for promoting and regulating an industry. (fisheries)...

Q6. What does the Information Technology Act enable? Ans. In may 2000, at the height of the dot-com boom, India enacted the IT Act and became part of a select group of countries to have put in place cyber laws. In all these years, despite the growing crime rate in the cyber world, only less than 25 cases have been registered under the IT Act 2000 and no final verdict has been passed in any of these cases as they are now pending with various courts in the country. Although the law came into operation on October 17, 2000, it still has an element of mystery around it. Not only from the perception of the common man, but also from the perception of lawyers, law enforcing agencies and even the judiciary. The prime reason for this is the fact that the IT Act is a set of technical laws. Another major hurdle is the reluctance on the part of companies to report the instances of cyber crimes, as they dont want to get negative publicity or worse get entangled in legal proceedings. A major hurdle in cracking down on the perpetrators of cyber crimes such as hacking is the fact that most of them are not in India. The IT Act does give extra-territorial jurisdiction to law enforcement agencies, but such powers are largely inefficient. This is because India does not have reciprocity and extradition treaties with a large number of countries. The Indian IT Act also needs to evolve with the rapidly changing technology environment that breeds new forms of crimes and criminals. We are now beginning to see now categories and varieties of cyber crimes, which have not been addressed in the IT Act. This includes cyber stalking, cyber nuisance, cyber harassment, cyber defamation and the like. Though section 67 of the Information Technology Act, 2000 provides for punishment to whoever transmits or publishes or causes to be published or transmitted, any material which is obsence in electronic form with imprisonment for a term which may extent to two years and with fine which may extend to twenty five thousand rupees on first convection and in the event of second may extend to five years and also with fine which may extend to fifty thousand rupees, it does not expressly talk of cyber defamation. The above provision chiefly aim at curbing the increasing number of child pomography cases and does not encompass other crimes which could have been expressly brought within its ambit such as cyber defamation. The objectives of the Act as reflected in the preamble to the Act are: To provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as electronic commerce, which involves the use of alternatives to paper-based methods of communication and storage of information; To facilitate electronic filing of documents with the government agencies,

To facilitate electronic storage of data in place of paper-based methods of storage of data. To amend the Indian Penal Code, the Indian Evidence Act, 1872, the Bankers Books Evidence Act, 1891, and the Reserve Bank of India Act, 1934, and To provide for matters connected therewith or incidental thereto.

Authorized Learning Centre

Poddar Institute of Information and Technology

Internal Assignment Feb 2012

Name: ____ AMBROSE RAI___________________ Registration No. :__521011937______________ Course: ___MBA___ Sem: ___3rd____________ Subject Name : ___ Operations Management_____ Subject Code : ___ OM0010____________________ LC Code : _____1531_________________________

Master of Business Administration - MBA Semester III OM0010 Operations Management - 4 Credits (Book ID: B1232) Assignment - Set- 1 (60 Marks)
1. Do most of the principles, tools and techniques of Operations Management apply to both manufacturing and service sectors? Justify with examples.

Ans: Manufacturing & Service are the major economic activities in any country. InIndia, manufacturing and services together constitute nearly 75% of the GDP. In recent years, growth in GDP has been primarily due to the growth in these sectors of the economy. Therefore, managing manufacturing and service operations are important economic activities. Utilising appropriate methods for planning and control of Operations in manufacturing and service organizations can result in significantproductivity improvements and cost savings. It can also positively influence the overall health of the economy. Operations Management is a discipline that focuses on this aspect Operations Management is an exciting and vital field, especially in the new millennium that we have entered. Operations have become increasingly competitive on a global basis. Therefore, it becomes necessary for students of MBA courses to understand the field of operations an essential function in every business. The importance of Operations Management both for organizations and for society should be fairly obvious: the consumption of goods & services is an integral part of our society. Operations management is responsible for creating those goods and services.

Organizations exist primarily to provide services or create goods. Hence, Operations is the core function of an organization. Furthermore, the operations function is responsible for a major portion of the assets in most organizations. Operations Management, as a field, deals with the production of Goods & Services. The abundant variety and types of Goods & Services that we see everyday are produced under the supervision of operations managers. A modern industrialized society cannot exist without effective management of operations. Operations managers have important positions in every company. The Plant Manager, Production Manager, Inventory Control Manager, Quality Manager and Line Supervisors are all operations managers. This group of managers, (plus a few more factory managers), is collectively responsible for producing the supply of products in a manufacturing business. We need to include in this group, those managers at the corporate level (e.g. Vice President) who are overall in charge or are holding staff functions related to operations. Wealth is created in the global economy through excellent operations management, when the value of outputs in goods & services exceeds the cost of the inputs used. Wealth can only be created by manufacturing and service operations that add more value than the costs of the inputs they use. The wealth created is reflected in the standard of living of the people, and is a function of constantly increasing productivity. Raising productivity of operations, - the ratio of output to input, - is therefore, the primary basis for creating wealth. Thus, in the global economy, a company or a country cannot prosper in the long run unless it has higher productivity than its domestic and foreign competitors. The primary task of Operations Manager, therefore, is one of the wealth creators. Operations should lead the way in enhancing our ability to create wealth, improve productivity, and raise the standard of living for all people. This is the challenge for the coming years. In the early days of manufacturing, goods were produced using craft production: highly skilled workers using simple, flexible tools produced goods according to customer specifications. Craft production was slow & costly. And when parts failed, the replacements also had to be custom made, which was again slow & costly. Also, production costs did not decrease as volume increased; i.e. there were no Economies of Scale, which might have provided incentives for companies to expand. Instead, many companies emerged, each with its own set of standards. A major change occurred that gave the industrial revolution a boost: the development of standard gauging systems. This greatly reduced the need for custom-made goods. Factories began to spring up and grow rapidly, providing jobs for countless people. Despite the major changes that were taking place, management theory and practice had not progressed much from early days. What was needed was an enlightened and more systematic approach to management. The scientific-management era brought widespread changes to the management of factories. The movement was spearheaded by the efficiency engineer and inventor Frederick W. Taylor, who is often referred to as the father of scientific management. Taylors methods emphasized maximizing output. They were not always popular with workers as the latter felt they were exploited. Eventual, the public outcry reached the halls of congress, and hearings were held on the matter. In 1911, Taylors classic book, The Principles of Scientific Management, was published; and the publicity from the hearings actually helped scientific management principles to achieve wide acceptance in the industry. The function of an operating system is a reflection of the purpose it serves for its customer, i.e. the utility of its output to the customer. Four principal functions can be identified:

Manufacture, in which, the principal common characteristic is that something is physically created, i.e. the output consists of goods which differ physically in form or content from those materials which form the inputs to the system. Manufacture, therefore, requires some physical transformation, or a change in form utility of resources. Service, in which the principal characteristic is the treatment oraccommodation of something or someone. There is primarily a change in state utility of a resource. Unlike in supply systems, the state or condition of physical outputs will differ from inputs by virtue of have been treated in some way. The service sector encompasses a wide spectrum of activities in every country. The growth of the service sector in India in the last five years has been very significant. Between the years 1998 to 2004: the GDP growth of services of Trade, Hotels, Transport & Communication have consistently risen year after year at rates ranging between 6.8% and 11.8%; the corresponding growth of GDP in Community, Social & Personal Services have ranged between 3.9% and 12.2%; Financial Services have recorded GDP growth ranging between 3.5% and 10.6%; The GDP growth of overall services have ranged between 5.5% and 10.1%. Although services are often classified separately from manufacturing in a macroeconomic sense, from the perspective of operations management, the separation is artificial. From the operations management perspective, the notion of a pure product and pure service is just two ends of a spectrum. In reality, a vast majority of operations share a continuum of services and products. Therefore, most of the principles and tools and techniques of operations management apply to both these sectors.

Service operations are different from manufacturing operations in terms of: tangible and intangible output customer consumption use of labor and equipment customer contact customer participation in conversion process measuring activities and resourcesManufacturing is characterized by tangible output, outputs that consumer consumes over time, jobs that use less labor and more equipment, little consumer contact, no consumer participation in conversion process (in production), and sophisticated methods for measuring activities and resource consumption as products are made.Service on the other hand is characterized by intangible outputs, outputs that customer consumes immediately, jobs that uses more labor less equipment, direct customer contact, frequent customer participation in conversion process and elementary methodsfor measuring conversion activities and resource consumption. Productivity is more easily measured in manufacturing operations than services. Quality standards are more difficult to establish and product quality is more difficultto evaluate in service operations. Manufacturing operations can increase and decrease finished goods inventorylevels in response to change in customer demand patterns. In services, the most expensive resource is people, while in manufacturing themost expensive resource is machinery

Manufacturing is one where in production process service orientations is done where inservice sector is to completely to serve with service and no production involved in this process

2. Both Manufacturing, as well as service industries has experienced far-reaching impact on their operations because of automation. Explain with an example.

Ans.

Both Manufacturing, as well as service industries has experienced far-reaching impact on their operations because of automation. The initial disadvantages of high investments in automation are outweighed by not only lower manpower costs, but also by improved productivity, improved quality, reduced wastage and scrap, quicker response to customers and more frequent introduction of new products and services. One of the examples of automation is Computer and Software Technology. Computer applications and software have helped companies replace labour-intensive processes such as payroll, billing, sales order processing, inventory control, etc. with computerised software. Integrated ERP software systems facilitate real-time data and information to support decision making. However, competitive advantage resulting out of a companys automation does not last long since competitors invariably duplicate such innovations. At the same time, companies cannot avoid innovating since doing so renders them at a competitive disadvantage. Continuous growth of service sector In more recent times, there has been a sudden growth in service industries. It has far outstripped the growth of the manufacturing sector. This fact is no indication of any appreciable decline in the manufacturing sector. Rather, the steep growth in number of service industries reflects the fact that more and more service products are in demand, and much of this increased demand is generated by the manufacturing sector. Hence, a strong and steady manufacturing sector is necessary for the growth of service sector.

3. Is pay-back period analysis a measure of the investments profitability? Comment.

Ans.

The answer, in general, is NO since it ignores benefits that occur after the payback period. The major criticism with this analysis is that it ignores the time value of money. Pay-back period analysis tells us how long it will take to earn back the money we spent on the asset. Pay-back period analysis has been used when new assets have been purchased with a large capital amount. Pay-back Period Analysis is a simple way to decide whether one should analyse the acquisition as a viable investment decision. The formula to calculate the pay-back period is: Cost of Asset / Annual Cash Inflow = Payback Period Thus, if an asset costs Rs. 150 million and is expected to generate a return of Rs. 30 million annually, the pay-back period would be 150 / 30 = 5 years. However, it is possible that the annual

return varies from year to year. In such a case, the annual returns need to be added up till a point that it reaches the cost of the asset this would indicate the pay-back period. An asset with a shorter back period would rank higher than one with longer paybacks. The theory is that assets with shorter paybacks are more liquid, and thus less risky they allow us to recoup our investments sooner, so that the money can be re-invested elsewhere. Moreover, with any asset, the risk increases as we look further ahead. With shorter payback period, there is less of a chance that market conditions, obsolescence, interest rates, the economy, or other factors affecting the asset will drastically change. Obviously, the period for both capital recovery and return has to be lower than the economic life of the asset. After the payback period, the asset contributes to profits because the invested amount has been recovered. Importance of Pay-back Analysis It is the most popular method used in industry for making decisions on investments. It is a means of establishing an upper bound on the acceptable degree of risk where one can appraise the near future with some confidence. Payback period is an appealing unit of measurement because it is easily understood when interpreted. The Pay-back Period analysis is very important for new companies with poor economic resources. This method can also be used in firms where the products are not used for a longer period of time, for example, consumer electronics.

4. Time taken by three machines on five jobs in a factory is tabulated below in table below. Find out the optimal sequence to be followed to minimise the idle time taken by the jobs on the machines.
Job A B C D E Machine 1 (M1) 6 4 5 3 4 Machine 2 (M2) 8 5 5 4 3 Machine 3 (M3) 7 3 7 6 4

Ans. Consider M1 and M3

JOB A B Machine(M1) Machine(M3) 6 7 4 3

C D E

5 3 4

7 6 4

The optimal sequence is JOB = D E C A B

5. Explain the method of work study and method study in the form of a flow chart. Differentiate between work study and method study.

Ans. Work Study Flow Diagram

Method Study
To simplify the job & to develop more economical methods of doing it.

Work Study

Work Measurement Work Study is the systematic examination of the methods of carrying on activities so as to improve the effective use of resources and to set up standards of performance for the activities being carried out.
Systematic application of various techniques

Higher Produc tivity

Method Study Flow Diagram Select Record Examine Develop Evaluate Define Install Maintain by Challenging purpose, place, sequence, and method of work new methods drawing on contributions of those concerned results of different alternative solutions]

The job to be studied by collecting data or by direct

observation

new method and present it new method and trainpersons in applying it and establish control procedures

Work Study When analysing work methods and performing a job on a machine or equipment, we say that work study is being conducted. The study helps in designing the optimum work method and standardisation of the work method. This study enables the methods engineer to search for better methods, higher utilisation of man and machine, and accomplishment of higher productivity. The study gives an opportunity to the workmen to learn the process of study and will be able to offer suggestions to improve methods. This encourages workmen participation, permits them to make changes, and report the advantages that can be derived from those. This course is in line with the principle of constant improvement and helps the organisation in the long run. Reward systems may be implemented for recognising contributions from the workmen. Work study comprises of work measurement and method study. Work measurement focuses on the time element of work, while method study focuses on the methods deployed and development of better methods. Methods Study Here the focus is on studying the method currently being used and developing a new method for performing the task in a better way. Operation Flow Charts, Motion Charts, Flow Process Charts are studied to find the purpose of each activity that is an element of the task, the sequence in which they are done, and the effect of these on the work. The study may help in changing some of them and even eliminate some of them to effect improvements. The new method must result in saving time, reduce motions and simplify activities.

6. What is Failure? Explain with an example. What are the three main causes of failures? Ans. Failure is when something does not work as it should do. For example, if the shop assistant who sells you an item of clothing fails to inform you the fact that it should be dry cleaned, it is technically a failure. Yet, frequently in operation management, we use the term failure to denote a more dramatic event. There is a clear spectrum of failure which goes from regular minor failures
to very serious and/or catastrophic. Usually, the minor failures are addressed in quality management.

There is always a chance that in developing a product or providing a service, things might go wrong. Mistakes are inevitable and are an intrinsic part of life. Nothing is perfect. Accepting that failure occurs is not equivalent to ignoring it, and this does not imply that operations cannot or should not attempt to minimise failure. Not all failures are equally serious. Some failures are incidental and may not be noticed. In the finale of a concert performance a violinist may play a wrong note and the effect is unlikely to have any great impact. If he or she is giving a solo performance, however, then the error may sour the whole performance. The concert like all systems may be more tolerant to some types and some levels of failure than others. For example, if the cigarette lighter in a car or the pen used by a police officer to write a statement fails, the effect may be irritating but not necessarily serious. Conversely, the failure of one component of a system may threaten the whole system. For example, leaking hydraulics in a car or a prisoner not informed of his or her rights can put the whole process at risk. Failure is perceived differently from the viewpoints of the evaluators. For a person who is only interested in the final result of an activity would consider it to be an Outcome Failure if the core issue has not been resolved or a core need is not met.

A failure can also be a process failure, wherein the activity is completed successfully but a person may still feel dissatisfied if the underlying process is perceived to be below expected standard or benchmark.
Failure in an operation can occur because of many different reasons. Machines can break down, customers might make unexpected demands which the operation fails to meet, staff may make simple errors in their jobs which prevent normal working, materials from suppliers could be faulty and so on. The three main causes for failures are: Those which have their source inside the operation because its overall design was faulty, or because its facilities (machines, equipment and buildings) or staff fail to operate as they should Those caused by faults in the material or information inputs to the operation Those caused by the actions of customers

Master of Business Administration - MBA Semester III OM0010 Operations Management - 4 Credits (Book ID: B1232) Assignment - Set- 2 (60 Marks)
1. One of the serious drawbacks of Indian manufacturing organisations compared to their counterparts in Japan and Korea was the predominant domestic focus in their approach to business. Elucidate. Site an example.

Ans. General Motors and Motorola are preparing to build plants in western and southern India.Posco of South Korea and Mittal Steel of the Netherlands have each announced plans toerect giant steel

mills in eastern India, where Reliance of India will soon construct one of the world's largest coalfired power plants.They are finding India's labor force well suited to their goals. When LG set out in 2005 tofill 458 assembly line jobs at its factory here at a starting wage of $90 a month, it requiredthat each applicant have at least 15 years of education -- usually high school plustechnical college.Seeking a young work force, the company decided that no more than 1 percent of theworkers could have had any prior work experience. Despite the limitation, 55,000 youngpeople met its criteria for interviews. An Unexpected Boom In Manufacturing Sprawling across more than a square mile next to a gray tidal estuary, the scale of theEssar Group's complex in Hazira is already impressive. Essar has its own port to bring iniron ore and its own large gas-fired power plant for electricity. At the steel mill, giantbuckets pour 150 tons of molten metal at a time to form slabs 2 yards wide and up to 10yards long.But the complex is just starting to grow. Essar is quintupling steel production and pushingforward a sevenfold increase in power generation, most of it for sale to a national griddesperately short of electricity.Growth on that scale, especially in industries like steel and power but also in areas likecar parts and household appliances, is what India has long lacked. Industrial productionaccounts for only a fifth of India's economic output, compared with two-fifths of China's.But this ratio is starting to rise in India as manufacturing, led by exports, grows faster thanagriculture and even some service industries.But a result was hundreds of thousands of businesses too small to be competitive; Indialags behind even the impoverished Bangladesh next door in exports of garments, a bigcreator of jobs for China. The Indian government has responded by narrowing the list of protected industries to 326 categories of goods from 20,000 and has lowered tariffs. The drawback is that the nation's manufacturing boom, built on higher-qualitygoods made under more modern conditions than in China, is not likely to create asmany factory jobs as India needs. The Essar steel mill, for example, has been replacing old, labor-intensive equipment withmore modern gear. ''We were having it all done manually, but because the customersdemand very high quality, we have to do it automatically,'' yelled Rajesh Pandita, anEssar manager, over the roar of a house-size machine that was stretching a minivan-sizecoil of steel back and forth through large rollers until it was little thicker than plastickitchen wrap.The Whirlpool factory in Pune uses machines, not people, to fold the steel exteriors of refrigerators. It has some of the highest productivity per worker of any Whirlpool factory inthe world, with just 208 line workers producing up to 33,000 refrigerators a month.Labor laws, however, discourage flexibility. They still ban companies from allowingmanufacturing workers to put in more than 54 hours of overtime in a three-month periodeven if the workers want to earn extra money. Firing workers is extremely difficult.''Companies think twice, 10 times before they hire new people,'' said Sunil Kant Munjal,the chairman of the Hero Group, one of the world's largest manufacturers of inexpensivemotorcycles.Hero in Gurgaon, on the southern outskirts of New Delhi, and its archrival, the LifanGroup in Chongqing, a city in western China, produce comparable motorcycles but thesimilarity ends there. Hero markets heavily to its domestic market, protected from foreigncompetition by high import tariffs, while Lifan emphasizes exports. Resources: Are naturalresources fundamental to the development of these economies? How were East Asiancountries able to develop considering their relative lack of natural resources? If naturalresources include human capital, e.g. educated workers, do you consider East Asianeconomies resource rich?Education: To nurture human capital, the government needs to educate the people. Almost all scholars agree on this issue. However, some East Asian governments putspecial emphasis on certain types of vocational education and special undergraduate andgraduate schools focused on technology and engineering. Do you think these

educationprograms helped their economic development? Also, there is a remarkable differencebetween East Asia and Latin America in terms of the quality of K-12 education. What are the key differences? How does the rate of literacy in a country effect its economicdevelopment? Why is K-12 education so important relative to higher education? Is basiceducation related to income distribution? Is it related to the quality of products producedby a given economy?Development Strategy: What kind of role do you think government should play ineconomic development? Do you agree with neoliberal economists who would limit therole of government in order to promote the growth of a market economy? Or do you agreewith the development state argument that emphasizes the role of government inselecting, nurturing, and encouraging particular industries? Are you convinced that somegovernments have displayed an ability to predict which industries will grow? Or do youthink it was mere coincidence that East Asian governments seem to have chosen theright industries? Another relevant issue here is export. Do you think East Asiaseconomic success is related to its focus on export? Was it a strategic choice for East Asian governments or did they have to focus on exports given their relatively smalldomestic markets? What kind of benefits have exports had? Does the focus on exportshelp improve the quality of products in foreign markets? How about the relationshipbetween government intervention and export? Do export results provide a dependablegauge by which governments can judge economic performance?Culture: Can the superior performance of East Asian economies to those of Latin Americabe solely attributed to the cultural differences? Do you think Confucianism and/or Buddhism are better suited to economic development than Christianity and Catholicism,which are predominant in Latin America? If so, why did it take East Asian economiescenturies to become economic powers in the world?International Environment: Would rapid economic development have been possible inEast Asia without security and development assistance from the United States? WouldEast Asian governments have been so serious about economic development without thefear of Communism? Alternatively, in spite of the lack of damage caused by World War II,why did Latin American economies fail to continue develop at high rates? Why did theUnited States funnel its economic support to East Asia rather than Latin America?Society and Government: What kind of social legacy affected economic development inEast Asia and Latin America? Do you think the colonial legacy in Latin America hinderedthe long-term economic development in the region? In spite of devastating losses of life and property, do you think World War II contributed to post-war economic development inEast Asia? How do you explain the relatively egalitarian income distribution in East Asiaeven under dictatorial regimes? Almost all countries in East Asia and Latin Americaachieved high-economic growth under authoritarian governments. Do you think it isnecessary to have an authoritarian government to achieve rapid economic growth? Whyor why not? If yes, why havent all dictatorships produced economic expansion?

2. The entire world can be perceived today as a Global Village, wherein economic events in one country promptly affect other countries. Explain the statement citing an example.

Ans. Due to rapid globalisation, industries in most countries are facing intense competition. Developed countries look for new markets for their products in new countries as their own home markets are maturing, while the emerging economies churn out superior products offered at lower prices since the industries in their countries look for larger markets.
Tremendous growth in transportation and communication has made accessing the modern and distant market easier.

The entire world can be perceived today as a Global Village, wherein economic events in one country promptly affect other countries.

This statement can be understood by the underneath example,

China and India, with their very large populations, have emerged as the biggest markets for the future. On the other hand, the same high population, coupled with improved education levels and experience in many industries, are also posing fresh competition to west-based industries.The above dynamics are giving birth to new international companies whose domain of operations spans several countries. Consequently, operations managers have to coordinate with geographically dispersed operations. On the other hand, several countries have broken trade barriers and are actively cooperating with other countries. For example, the European Union is one such example; even though the countries are separated geographically by thousands of miles they have set up bilateral agreements. These have given rise to more strategic alliances amongst individual companies. Fluctuating international stock markets, currency volatility, fluctuating interest rates, inflation and very high levels of trade imbalances have created turbulence in financial markets, thus affecting international business. Global Environment of Competition A company should be very effective in its operational performance and should have good strategy, to perform well. It is very difficult for a company to outperform others merely on the strength of its operational effectiveness. For example, Japanese companies had developed substantial competitive advantage mainly due to their far superior manufacturing techniques and practices. In course of time, American companies caught up with the Japanese in respect of manufacturing expertise, and overhauled them in performance with the help of superior strategies. Business Strategy is a companys plan as to how it will compete in the market place. However, the competitive environment is constantly changing. This could be largely attributed to the emergence of new technologies in almost all industries. Therefore, a company needs to be alert and have the ability to adjust to the changing environment in order to remain competitive.

Future business conditions across the world can be estimated by understanding the present conditions. Some of the business conditions that affect the current business scenario are as follows: Global competition as prevailing today. Customers increasing demand for quality, customer service and low price. Rapid onset of new and advanced technologies. Rapidly growing service sector. Depleting resources. Increasing concern for social issues.

3. List the assumptions on which Break Even Analysis is based. Explain breakeven point with a sketch.

Ans.
Break-Even Analysis This is also known as the cost volume profit analysis, and is typically based on the following assumptions: Cost can be divided into two broad categories: Fixed Costs and Variable Costs. Unit Selling Price is constant over the entire sales volume. This means that total revenue vary linearly with the volume of sales. Inventory changes are Nil. In other words, whatever is produced during a particular period is sold during the same period The firm either produces a single product, or, if it produces more than one product, it maintains the same product mix. The cost-volume-profit analysis examines alternate levels of profit or loss for different levels (or numbers) of products sold/produced. The choice of the number of products sold/produced obviously depends on the anticipated demand. The point (of level of production/sales) where the total Costs equals the total Revenues is called the break-even point. As cost is an important component in selecting processes and plant and equipment, some of the basics of costs should be examined. The total cost of a product can be seen to have two components if viewed from the perspective of manufacturing: Manufacturing Costs: Traditionally, costs classified as manufacturing costs include direct materials, direct labour and manufacturing overhead.

 Non-Production Costs: In addition to the manufacturing costs, there are non-manufacturing costs that constitute overhead, marketing and overhead costs. Costs can be classified on the basis of their relation to the volume of production. They are: Fixed Costs: These are costs that remain constant irrespective of the volume of production. They represent items of costs such as depreciation, insurance, taxes that are linked to the hiring/owning of the factory premises, plus other costs such as salaries of fixed personnel, interest on long-term debt, etc. Fixed costs arise as a result of capacity creation, and do not vary with the variations of activity (capacity utilisation). They are function (of essentially) of time. Variable Costs: Several important components of cost vary directly with output. For instance, the costs of materials that directly go into the product ,that is, costs of labour hours that are directly utilised for production, costs of power and other utilities that are incurred only during production but do not happen when production is not taking place. All such costs would vary directly with every additional unit produced, and are called Variable Costs. To examine investment proposals in respect of plant and equipment and other fixed assets required for manufacturing, the cost-volume-profit analysis is significant since it indicates the level of capacity utilisation that is required in order to break-even and thereafter to contribute to the firms profits. As mentioned earlier, any manufacturing (whether of products or services) involves the application of human, capital and material resources. Some extent of use of these resources need to be made even before the commencement of production, and persisted within order to carry out production on an on-going basis. Hence, these costs become fixed, and have to be incurred month after month, or year after year, irrespective of the level of production. Apparently, these costs have to be recovered fully through revenue generation which takes place due to production and selling of the companys products and realisation of the money from customers. On the other hand, the revenue generation leads to profits only if the unit price at which the product is sold is (in most cases) greater than the total of the unit-related costs incurred to produce the product otherwise referred to the contribution margin. In other words, each unit produced and sold generates a surplus for the company, and higher the number of units of the product produced / sold, the larger is the total surplus. As a company is able to enlarge market demand for its products and sell more (by producing more), the surplus keeps increasing, and at some point equals the fixed costs incurred by the company month after month. This point (as related to the level of production/sales) is called the break-even point, since at this level of production, the company neither incurs a loss nor gains profit, that is, it breaks even. The significance of this analysis for decision making regarding investments on plant and equipment is that the investment should (preferably) be such that the break-even point is low as far as possible. Which means that the investment should be such that not only the ensuing fixed costs are as low as possible, but also the investment enables to keep the variable costs low on one side and to create larger value (through the resultant product or service) for the customer and thus realise a higher price.

Break even point explanation by a sketch There are several assumptions that affect the applicability of break-even analysis. If these assumptions are violated, the analysis may lead to erroneous conclusions. A primary key to detecting the applicability of linearity is determining the relevant range of output. If the forecast of demand suggests that 100 units will be demanded, but quantity discounts on materials are

applicable for purchases over 500 units from a single supplier,then linearity is appropriate in the anticipated range of demand (100 units plus or minussome fore-cast error). If, instead, quantity discounts begin at 50 units of materials, thenthe average cost of materials may be used in the model. A more difficult issue is that of volume sales, when such sales are frequently dependent on the ordering patterns of numerous customers. In this case, historical records of the proportionate quantity-discount sales may be useful in determining average revenues.Linearity may not be appropriate due to quantity sales/purchases, as noted, or to thestep-function nature of fixed costs. For example, if demand surpasses the capacity of aone-shift production line, then a second shift may be added. The second-shift supervisor'ssalary is a fixed-cost addition, but only at a sufficient level of output. Modeling the addedcomplexity of nonlinear or step-function costs requires more sophistication, but may beavoided if the manager is willing to accept average costs to use the simpler linear model.One obviously important measure in the break-even model is that of fixed costs. In thetraditional cost-accounting world, fixed costs may be determined by full costing or byvariable costing. Full costing assigns a portion of fixed production overhead charges toeach unit of production, treating these as a variable cost. Variable costing, by contrast,treats these fixed production overhead charges as period charges; a portion of thesecosts may be included in the fixed costs allocated to the product. Thus, full costingreduces the denominator in the break-even model, whereas the variable costingalternative increases the denominator. While both of these methods increase the break-even point, they may not lend themselves to the same conclusion.Recognizing the appropriate time horizon may also affect the usefulness of breakevenanalysis, as prices and costs tend to change over time. For a prospective outlookincorporating generalized inflation, the linear model may perform adequately. Using the earlier example, if all prices and costs double, then the break-even point Q= 200 (20 12) = 200 8 = 25 units, as determined with current costs. However, weakened marketdemand for the product may occur, even as materials costs are rising. In this case, theprice may shift downward to $18 to bolster price-elastic demand, while materials costsmay rise to $14. In this case, the break-even quantity is 50 (200 [18 14]), rather than25. Managers should project break-even quantities based on reasonably predictableprices and costs.It may defy traditional thinking to determine which costs are variable and which are fixed.Typically, variable costs have been defined primarily as "labor and materials." However,labor may be effectively salaried by contract or by managerial policy that supports a fullworkweek for employees. In this case, labor should be included in the fixed costs in themodel. Complicating the analysis further is the concept that all costs are variable in the long run,so that fixed costs and the time horizon are interdependent. Using a make-or-buyanalysis, managers may decide to change from in-house production of a product tosubcontracting its production; in this case, fixed costs are minimal and almost 100 percentof the costs are variable. Alternatively, they may choose to purchase cutting-edgetechnology, in which case much of the variable labor cost is eliminated; the bulk of thecosts then involve the (fixed) depreciation of the new equipment. Managers should projectbreak-even quantities based on the choice of capital-labor mix to be used in the relevanttime horizon.Traditionally, fixed costs have been allocated to products based on estimates of production for the fiscal year and on direct labor hours required for production.Technological advances have significantly reduced the proportion of direct labor costsand have increased the indirect costs through computerization and the requisite skilled,salaried staff to support company-wide computer systems. Activity-based costing (ABC) isan allocation system in which managers attempt to identify "cost drivers" which accuratelyreflect the appropriate usage of fixed costs attributable to production of specific productsin a multi-product firm. This ABC system tends to allocate, for example, the CEO's salaryto a product based on his/her specific time and attention required by this product,

rather than on its proportion of direct labor hours to total direct labor hours.Break-even analysis typically compares revenues to costs. However, other modelsemploy similar analysis.

Crossover Chart of Three Options In the crossover chart, the analyst graphs total-cost lines from two or more options. Thesechoices may include alternative equipment choices or location choices. The only dataneeded are fixed and variable costs of each option. In Figure 2, the total costs (variableand fixed costs) for three options are graphed. Option A has the low-cost advantage whenoutput ranges between zero and X units, whereas Option B is the least-cost alternative between X and X units of output. Above X units, Option C will cost less than either A or B.This analysis forces the manager to focus on the relevant range of demand for theproduct, while allowing for sensitivity analysis. If current demand is slightly less than X Option B would appear to be the best choice. However, if medium-term forecasts indicatethat demand will continue to grow, Option C might be the least-cost choice for equipmentexpected to last several years. To determine the quantity at which Option B wrests theadvantage from Option A, the manager sets the total cost of A equal to the total cost of B(F A+V AQ=FB+VBQ) and solves for the sole quantity of output (Q) that will make this equation true. Finding the breakeven point between Options B and C followssimilar logic.The Economic Order Quantity (EOQ) model attempts to determine the least-total-costquantity in the purchase of goods or materials. In this model, the total of ordering andholding costs is minimized at the quantity where the total ordering cost and total holdingcost are equal, i.e., the break-even point between these two costs.

4. List out the reasons why International companies come to developing countries and locate their business. Name few such companies and their locations in India.

Ans.
Location decisions need to be made both by organisations that are being set up, and by existing organisations. Some existing organisations may look for locations to expand their market or as a part of their marketing strategy, which would generally mean looking for additional locations. Some other firms may look for locations because they experience increasing demand for their products which cannot be fulfilled by mere expansion of existing facilities. Other firms could face deficiency of resources such as raw material, or even skilled labour. Some companies may experience shift in their markets, and consider either changing their location or adding new facilities to better cater to their customers. Sometimes, the cost of continuing

business at existing locations may have become more expensive as compared to other locations that can be considered. Facilities planning are closely linked to an organisations business strategies. A cost-leadership strategy may warrant locating operational facilities either close to their customers to optimise their distribution costs or closer to their suppliers in order to reduce the landed-costs of key inputs. On the other hand, a differentiating strategy may call for a judicious selection of location of facilities in order to provide greater value to their customers through extending better service to them. Rapid pace of economic reforms in most countries have led to globalisation of markets. These have made location decisions more significant in more recent times. Globalisation has opened up new opportunities for multi-national companies as far as location decisions are concerned. For instance, ABB[1], a Swiss-Swedish multinational corporation with headquarters in Zrich, Switzerland, operates mainly in the power and automation technology areas, sought to set up plants capable of producing world-class products at internationally competitive prices. Such factories also required high levels of technical capability and domain expertise. This approach led them to identify Nasik and Vadodara as perfect locations for setting up plants for manufacturing circuit-breakers. ABB also set up a plant at Faridabad in Haryana (the only plant located east of Suez Canal[2] to manufacture variable drive motors for global markets). The above example reflects the close relationship between globalising operations and location decisions. Some of the chief factors which cause globalisation of operations are discussed below, along with how each of these factors affects the location decisions: Regulatory issues: This is the most significant factor. In the early 90s, India initiated a number of regulatory changes that has rendered India as a very attractive destination for locating manufacturing facilities. Removal of entry barriers and reduction in manufacturing costs due to tariff reductions are two important reasons. Another reason is the emergence of regional trading blocs. Factor advantages: Certain specific locations offer organisations factor advantages which promote globalisation. For example, for developed countries in the west, cheaper labour or manpower costs attract them to locate facilities in developing countries. Sometimes, availability of skilled labour in certain locations also is a factor advantage. Some of the other advantages that companies may experience could be in the form of availability of cheaper water or power resources, or availability of better technical infrastructure in the form of ancillary industries. Expanding markets: Certain markets in developing or under developed countries are registering very high growth rate. Such countries offer new opportunities for multi-national companies for expanding into new markets.
It is too specify that the companies come and settle in India to earn profit. A company enlarges its jurisdiction of work beyond its native place when they get a wide scope to earn a profit and such is the case of the MNCs that have flourished here. More over India has wide market for different and new goods and services due to the ever increasing population and the varying consumer taste. The government FDI policies have some how benefited them and drawn their attention too. The restrictive policies that stopped the company's inflow are however withdrawn and the country has shown much interest to bring in foreign investment here. Besides the foreign directive policies the labour competitive market, market competition and the macro-economic stability are some of the key factors that magnetize the foreign MNCs here. Following are the reasons why multinational companies consider India as a preferred destination for business:

Huge market potential of the country FDI attractiveness

Labor competitiveness Macro-economic stability

There are certain advantages that the underdeveloped countries like and the developing countries like India derive from the foreign MNCs that establishes. They are as under:

Initiating a higher level of investment. Reducing the technological gap The natural resources are utilized in true sense. The foreign exchange gap is reduced Boosts up the basic economic structure.

Top MNCs in India

The country has got many M. N. C.s operating here. Following are names of some of the most famous multinational companies, who have their headquarters of operational branches based in the nation: IBM: IBM India Private Limited, a part of IBM has been operating from this country since the year 1992. This global company is known for invention and integration of software, hardware as well as services, which assist forward thinking institutions, enterprises and people, who build a smart planet. The net income of this company post completion of the financial year end of 2010 was $14.8 billion with a net profit margin of 14.9 %. With innovative technology and solutions, this company is making a constant progress in India. Present in more than 200 cities, this company is making constant progress in global markets to maintain its leading position. Microsoft: A subsidiary, named as Microsoft Corporation India Private Limited, of the U. S. (United States) based Microsoft Corporation, one of the software giants has got their headquarter in New Delhi. Starting its operation in the country from 1990, this company has got the following business units:

Microsoft Corporation India (Pvt.) Limited (Marketing Division) Microsoft Global Services India Microsoft Global Technical Support Centre Microsoft India Development Center Microsoft IT Microsoft Research India

The net income of Microsoft Corporation grew from $ 14, 569 million in 2009 to $ 18, 760 million in 2010. Working in close association with all the stakeholders including the Government of India, the company is committed towards the development of the Indian software as well as I. T. (Information Technology) industry. Nokia Corporation: Nokia Corporation was started in the year 1865. Being one of the leading mobile companies in India, their stylish product range includes the following:

Normal mobile handsets Smartphones Touch screen phones Dual sim phones Business phone

The net sales of the company increased by 4 % in the last financial year with sales of EUR 42.4 billion as compared to 2009's EUR 41 billion. Over the past few years, this company in India has been acquiring companies, which have got new and interesting competencies and technologies so as to enhance their ability of creating the mobile world. Besides new developments to fight against mineral conflicts, they are even to set up Bridge Centers in the country for supporting re-employment. Their first onsite for the installation of renewable power generation are already in place.

PepsiCo: PepsiCo. Inc. entered the Indian market with the name of PepsiCo India from the year 1989. Within a short time span of 20 years, this company has emerged as one of the fast growing as well as largest beverage and food manufacturer. As per the annual report of the company in the last business year, the net revenue of PepsiCo grew by 33 %. By the year 2020, this food manufacturing company intends to triple their portfolio of enjoyable and wholesome offerings. The expansion of their Good-For-You portfolio is believed to be assisting the company in attaining the competitive advantage of the growing packaged nutrition market in the world, which is presently valued at $ 500 billion. Ranbaxy Laboratories Limited: Ranbaxy Laboratories Limited, one of the biggest pharmaceutical companies in India, started their business in the country from the year 1961. The company made its public appearance in 1973 though. Headquartered in this nation, this international, research based, integrated pharmaceutical company is the producer of a huge range of affordable cum quality medicines that are trusted by both patients and healthcare professionals all over the world. In the business year 2010, the registered global sales of the company was US $ 1, 868 Mn. Successful development of business forms the key component of their trading strategy. Apart from overseas acquisitions, this company is making a continuous endeavor to enter the new global markets, which have got high potential. For this, they are offering value adding products as well. Reebok International Limited: This global brand is a famous name in the field of sports as well as lifestyle products. Reebok International Limited, a subsidiary of Adidas AG, is based in U. S. A. (United States of America) started its operation in 1890s. During the last financial year, Adidas's currency neutralized group sales increased by 9 %. Apart from their alliance with CrossFit that is among the largest contemporary fitness movements, in the current year, Reebok's announcement of its partnership with artist, designer and producer Swizz Beatz reflects its long term future growth. Sony: Sony India is a part of the renowned brand name Sony Corporation, which started their business operation in the year 1946 in Japan. Established in India in November 1994, this company has captured one of the leading positions in the field of consumer electronics goods. By the end of the business year 2010 on 31st March, 2011, the company showed a remarkable increase in the share related to numerous categories. Sony India is planning to invest around INR. 150 crore for the marketing of the activities related to ATL and BTL. As far as Bravia TVs are concerned, they are looking forward to hold their market share of 30 %. In between the last and the current financial year, the number of their outlets in the country increased by 1, 000. Tata Consultancy Services: Commonly known as T. C. S., this multinational company is a famous name in the field of I. T. (Information Technology) services, Business Process Outsourcing (B. P. O.) as well as business solutions. This company is a subsidiary of the Tata Group. The first center for software researching was established in the country in 1981 in the city of Pune. Tata Consultancy earned a growth of 8.9 % during the latest quarter of this financial year, which ended on 30th September, 2011. This renowned company is presently looking forward to the 10 big deals that they have received besides the Credit Union Australia's contract as well as Government of Karnataka's INR. 94 crore deal for a total period of 6 years. In this current business year, they are about to employ 60, 000 people to meet their business requirement. Vodafone: Vodafone Group Plc is an international telecommunication company, which has got it's headquarter based in London in the United Kingdom (U. K.). Earlier known as Vodafone Essar and Hutchison Essar, Vodafone India is among the largest operators of mobile networking in the country. The parent company Hutchison started its business in the year 1992 along with the Max Group, which was its business partner in India. Much later in 2011, Vodafone Group Plc decided to buy out mobile operating business of Essar Group, its partner. The turnover of the Vodafone Group Plc after the completion of the last financial year grew to 44, 472 m from 41, 017 m that was the turnover of the business year 2009. Tata Motors Limited: The biggest automobile company in India, Tata Motors Limited, is among the leading commercial vehicles manufacturer in the country. They are one of the top 3 passenger vehicle manufacturers. Established in the year 1945, this company, a part of the famous Tata Group, has got its manufacturing units located in different parts of the nation. Some of their well known products of the company are categorized in the following heads:

Commercial Vehicles Defence Security Vehicles Homeland Security Vehicles Passenger Vehicles

Post completion of the financial year 2010 to 2011, the global sales of the company grew by 24.2 % with sales crossing INR. 1 million.

5. Define Statistical Quality Control and explain the various methods associated with it.

Ans.
Statistical Quality control (SQC) is the application of statistical methods to themonitoring and control of a process to ensure that it operates at its full potential toproduce conforming product. Under SQC, a process behaves predictably to produce asmuch conforming product as possible with the least possible waste. While SQC has beenapplied most frequently to controlling manufacturing lines, it applies equally well to anyprocess with a measurable output. Key tools in SQC are control charts, a focus oncontinuous improvement and designed experiments.Much of the power of SQC lies in the ability to examine a process and the sources of variation in that process using tools that give weight to objective analysis over subjectiveopinions and that allow the strength of each source to be determined numerically.Variations in the process that may affect the quality of the end product or service can bedetected and corrected, thus reducing waste as well as the likelihood that problems willbe passed on to the customer. With its emphasis on early detection and prevention of problems, SQC has a distinct advantage over other quality methods, such as inspection,that apply resources to detecting and correcting problems after they have occurred.In addition to reducing waste, SQC can lead to a reduction in the time required to producethe product or service from end to end. This is partially due to a diminished likelihood thatthe final product will have to be reworked, but it may also result from using SQC data toidentify bottlenecks, wait times, and other sources of delays within the process. Processcycle time reductions coupled with improvements in yield have made SQC a valuable toolfrom both a cost reduction and a customer satisfaction standpoint. The various methods associated with statistical quality control are: Descriptive Statistics Stem and leaf Plot Frequency Distribution and Histogram

Descriptive Statistics Descriptive statistics is a process that is used to describe the features of data in terms of quantity. It is generally represented with formal analyses. For example, in a study involving human subjects, there appears a table that provides information such as the overall size of the sample, subgroup sample sizes, and information about the demographic or the clinical characteristics, such as the average age, the proportion of subjects with each gender. However, most statistics can be used either as a statistic that is descriptive or in an inductive analysis. For example, the average reading test score for the students in each classroom in a school can be reported. This could give a descriptive sense of typical scores and their variation. However, when a formal hypothesis test on scores is performed, we are doing inductive rather than the

descriptive analysis. Some of the common examples of the descriptive statistical analysis include measures of central tendency, measures of dispersion and measures of association, cross tabulation, contingency table, and histogram. Thus, descriptive statistics provides various numerical and graphic procedures. This facilitates to summarise a collection of data in a clear and understandable way. Descriptiveness Measures Descriptive statistics provides various numerical and graphic procedures. There are various measures of the descriptiveness statistics. They are as follows: Central Tendency Measures: They are computed in such a way that, a center is achieved around which; the measurements in the data are distributed. However, there are various measures under central tendency measures such as: Mean: It computes the sum of all the measurements and divides by the number of measurements. For example Consider the quantities as mentioned in Table 13.1[1] Table 13.1: Example of Mean

Therefore, the sum of all the quantities X is obtained and the mean is calculates as: MEAN= 40/10 = 4 The mean of all quantities is 4, and the sum of deviations is 0. Median: It is computed in such a way that half of the measurements are below it and half of the measurements are above it. It is illustrated in the table 13.2. Table 13.2: Example of Median

Therefore, Median is (4+5)/2 = 4.5 Thus, only two central values are used in the computation. The median is not sensible to extreme values. Mode: It computes the most frequent measurement in the data. Table 13.3: Example of Mode

In this case, the data has two modes: 5 and 7 because both the measurements are repeated twice. Variation or Variability measure: They are performed to compute how far away the measurements are from the center. For example, consider that a population has four observations {1, 3, 5, 7}. What is the variance?? Solution: First, we need to compute the mean of the population.

It is calculated as: Then, all the values are plugged in the formula for the variance of a population:

Thus a variance value 5 is obtained for the population. Relative Standing Measures: They are computed to describe the relative positions of specific measurements in the data. For Example: Consider a scenario where, the heights of two superstars are compared. NBA superstar Michael Jordan is 78 inch tall and WNBA basketball player Rebecca Lobo is 76 inch tall. By this observation, it is obvious that Jordan is taller by 2inches than Rebecca. But which player is considered taller relatively? Does Jordans height among men exceed Lobos height among women? Consider Men have heights with a mean of 69.0 inches and a standard deviation of 2.8 inches. Consider women have heights with a mean of 63.6 inches and a standard deviation of 2.5 inches. Solution: In order to compare the heights of Michael Jordan and Rebecca Lobo that are relative to the populations of men and woman, we need to standardise the heights by converting them to z scores

Thus, Michael Jordans height is 3.21 standard deviation above the mean. However, Rebecca Lobos height is 4.96 standard deviations above the mean. This means that Rebecca Lobos height among woman is relatively greater than Michaels Jordans height among men.

The Stem-and-Leaf plot Statistics is the science of analysing data and drawing conclusions, taking variation in the data into account. However, no two units of a product that is produced by a manufacturing process are identical. Some variation is inevitable. For example, the net content of a soft drink can vary slightly from, can to can and the output voltage of a power supply is not exactly the same from, one unit to another.[2] There are several graphical methods that are very useful for summarising and presenting data. One of the most useful graphical techniques is the stem-and-leaf display. Suppose that, the data are represented by u1, u2 . . . , un and that each number u1 consists of at least two digits. To construct a stem-and-leaf plot, each number ui is divided into two parts i.e. A Stem: It consists of one or more of the leading digits A Leaf: It consists of the remaining digits. For example: Consider the data that consists of percent defective information ranging between 0 and 100 on various semiconductor wafers. The value 76 can then be divided into the stem 7 and the leaf 6. Once a set of stems has been selected, then they are listed along the left hand margin side of the display. The leaves that correspond to the observed data values are listed in order, beside each stem in the order in which, they are encountered in the data set.

For example, the construction of a stem and leaf plot can is illustrated in the table 13.4. The table represents the weekly yield data from a semiconductor fabrication facility. Table 13.4: Weekly yields

In order to construct a stem and leaf plot, the values 4, 5, 6, 7, 8 and 9 are selected as stems. Thus, the resulting stem and the display of leaf are as shown in the Table 13.5. Table 13.5: Stem-and-leaf display for the data in 13.3

By inspecting the plots, it is clear that the yield distribution has a symmetric shape, approximately with a single peak. shows the dig dot plot for the semiconductor yield data. This display clearly indicates that time is an important source of variability in this production process. More specifically, yields in the first 20 weeks of production are substantially below the yields reported in the last 20 weeks. Something may have changed in the process (or have deliberately changed by operation personnel or the process engineers) that is responsible for the yield improvement.

The Frequency Distribution and Histogram A frequency distribution is an arrangement of the data by magnitude. It is a more compact summary of data, than a stem-and-leaf display. Table 13.6 represents 125 observations on the inside diameter of forged piston rings used in an automobile engine. The data were collected in 25 samples of five observations each. Note that there is some variability in piston-ring diameter. However, it is very difficult to see any pattern in the variability or structure in the data, with the observations arranged as they are in Table 13.7.For example, a frequency distribution of the piston-ring data is shown in Table 13.8. From this table, we note that there was one ring that had a diameter between 73.965 mm and 73.970 mm, eight rings having diameters between 73.980 mm and 73.985 mm, and so forth. Table 13.7: Forged Piston-Ring inside Diameter (mm)

Table 13.8: Frequency Distribution for Piston-Ring Diameter

A graph of the observed frequencies versus the ring diameter is shown in Figure 13.2. This display is called a histogram. The height of each bar in Figure 13.2 is equal to the frequency of occurrence of ring diameter. The histogram represents a visual display of the data in which one may more easily see three properties. They are as follows: Shape Location or central tendency Scatter or spread

Figure 13.2: Histogram for Piston-ring Diameter Data In the piston-ring diameter data, we see that the distribution of ring diameter is roughly symmetric with the central tendency very close to 74mm. Thus; the variability in ring diameter is apparently relatively high, as some rings are as small as 73.967 mm, while others are as large as 74.030 mm. However, there are many factors that have to be considered while constructing histograms such as when the data is large, it is very essential to group data into bins or cells as in the piston ring. The various factors that needs to be considered while constructing histogram is as follows: Use between 4 and 20 bins often choosing the number of bins approximately equal to the square root of the sample size works well. Make the bins of uniform width. Start the lower limit for the first bin just slightly below the smallest data value. Thus, grouping the data into bins condenses the original data. This results in loss of details of some data. Thus, when the number of observations is relatively small, or when the observations only take a few values, the histogram may be constructed from a frequency distribution of the ungrouped data. Alternatively, a stem-an-leaf display could be used. A primary advantage of the stem-an-leaf display is that, the individual observations are preserved, whereas they are lost in a histogram.

6. An employees workplace environment is a key determinant of their level of productivity. Comment. List the workplace environment factors effecting workforce productivity.
Ans. The work environments in which tasks are performed will definitely affect the productivity greatly. The combination of temperature, humidity, and air movements produce a level of comfort or discomfort considering whether they are within a range. All these factors depend on the conditions to which employees are accustomed. A temperature range of 24 to 32 degrees Celsius would be suitable. Good illumination at the workplace helps productivity. Using pleasing colours for the walls and surroundings may also help productivity. Noise levels, when they are continuous and high, affects the concentration of the employees and affects their work. They even become irritable and their interaction with other people produces confusion and conflict. If noise of the machines is inevitable, ear plugs must be supplied to the workmen.

Authorized Learning Centre

Poddar Institute of Information and Technology

Internal Assignment Feb 2012

Name: ____ AMBROSE RAI___________________ Registration No. :__521011937______________ Course: ___MBA___ Sem: ___3rd____________ Subject Name : ___ Enterprise Resource Planning___ Subject Code : ___ OM0011 _________________ LC Code : _____1531_________________________ LC Center: Poddar Institute of Information & Technology Module No.:_________________________________ Date of Submission: _ 10th January 2012 ________ Marks Awarded:_____________________________

___________ Signature of Student

____________ Signature of Center

____________ Signature of Examiner

Master of Business Administration - MBA Semester III OM0011 Enterprise Resource Planning - 4 Credits (Book ID: B1233) Assignment - Set- 1 (60 Marks)

Q1. ERP system can prove to be effective tool in unorganized sectors and in small scale industries. Justify with examples. Ans. An Enterprise Resource Planning (ERP) system is an integrated computer-based application used to manage internal and external resources, including tangible assets, financial resources, materials, and human resources. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise-wide system environment.[1] An ERP system can either reside on a centralized server or be distributed across modular hardware and software units that provide "services" and communicate on a local area network. The distributed design allows a business to assemble modules from different vendors without the need for the placement of multiple copies of complex and expensive computer systems in areas which will not use their full capacity.[2] Effective tool in unorganized sectors: Unorganized retailers in the vicinity of organized retailers experienced a decline in their volume of business and profit in the initial years after the entry of large organized retailers. The adverse impact on sales and profit weakens over time. vii There was no evidence of a decline in overall employment in the unorganized sector as a result of the entry of organized retailers. There is some decline in employment in the North and West regions which, however, also weakens over time. The rate of closure of unorganized retail shops in gross terms is found to be 4.2 per cent per annum which is much lower than the international rate of closure of small businesses. The rate of closure on account of competition from organized retail is lower still at 1.7 per cent per annum. There is competitive response from traditional retailers through improved business practices and technology upgradation. A majority of unorganized retailers is keen to stay in the business and compete, while also wanting the next generation to continue likewise. Small retailers have been extending more credit to attract and retain customers. However, only 12 per cent of unorganized retailers have access to institutional credit and 37 per cent felt the need for better access to commercial bank credit. Most unorganized retailers are committed to remaining independent and barely 10 per cent preferred to become franchisees of organized retailers. Impact on Consumers Consumers have definitely gained from organized retail on multiple counts. Overall consumer spending has increased with the entry of the organized retail. While all income groups saved through organized retail purchases, the survey

revealed that lower income consumers saved more. Thus, organized retail is relatively more beneficial to the less well-off consumers. Proximity is a major comparative advantage of unorganized outlets. Unorganized retailers have significant competitive strengths that include consumer goodwill, credit sales, amenability to bargaining, ability to sell loose items, convenient timings, and home delivery. Impact on Intermediaries The study did not find any evidence so far of adverse impact of organized retail on intermediaries. There is, however, some adverse impact on turnover and profit of intermediaries dealing in products such as, fruit, vegetables, and apparel. Over two-thirds of the intermediaries plan to expand their businesses in response to increased business opportunities opened by the expansion of retail. Only 22 per cent do not want the next generation to enter the same business. Impact on Farmers Farmers benefit significantly from the option of direct sales to organized retailers. Average price realization for cauliflower farmers selling directly to organized retail is about 25 per cent higher than their proceeds from sale to regulated government mandi. viii Profit realization for farmers selling directly to organized retailers is about 60 per cent higher than that received from selling in the mandi The difference is even larger when the amount charged by the commission agent (usually 10 per cent of sale price) in the mandi is taken into account. Impact on Manufacturers Large manufacturers have started feeling the competitive impact of organized retail through price and payment pressures. Manufacturers have responded through building and reinforcing their brand strength, increasing their own retail presence, adopting small retailers, and setting up dedicated teams to deal with modern retailers. Entry of organized retail is transforming the logistics industry. This will create significant positive externalities across the economy. Small manufacturers did not report any significant impact of organized retail. Erp an effective tool in small scale industries:Axis Softech proudly announces the new version of ERP for Small Industries of India and particularly Delhi and NCR. This ERP has all possible modules for all business areas to the optimum value to integrate. Axis Softech is already enabled so many companies to automate the manufacturing sector and the other segment, its services and decisions. The core of the intention of the introduction of the new version of the ERP is to facilitate the customers covered with a low-cost product with excellent properties and widely modules. The basic idea of ERP Software, ERP application tailor-made ERP for ERP users with cheap offers at the same time with the best featured ERP and wide range of modules. Axis Softech is one of the best selling companies in the ERP market for the past seven years and founded on the many catering market demands of the industry. Axis uses the best technology currently available tools on the market. The tools are mainly ASP. NET and SQL. These tools have an edge in order to promote a product by the users in different ways. In particular, these language tools a crucial set of security for the customer in the form of data theft and other related thefts. The language is completely Web-based support from nearly all operating system platforms in every way possible. Not only this, but Axis Softech ERP allows users to access his / her account online, by every possible situation, with the help of the Internet. All you have to do is in the by using a unique ID / password and access to the rights of the super-administrator of the company as the necessary measures to carry out simultaneously and use characters from the application directly after login. This ERP is not only a general ERP, but a revolution in the field of ERP. The company would never get over with the facilities and features of Axis Softech by this means provided. This company offers the best ERP solutions for Small Scale Industries. The company uses the best tools are presented in the

market. Axis Softech has been able to for an online demonstration of the interested buyers and interested parties arranged to send the demo request via the contact details. Conclusion: At the present time the demand for ERP is very fast. Axis Softech is a software company with the best ERP solutions for small industries offers. In addition, the best technology currently uses tools. Q2. The Kanban process of production is sometimes incorrectly described as simple juist-intime management technique. Comment. Ans. KANBAN PROCESS- MORE THAN INTERNAL 'JUST IN TIME PRODUCTION' TECHNIQUES:Most Japanese manufacturing companies view the making of a product as continuous-from design, manufacture, and distribution to sales and customer service. For many Japanese companies the heart of this process is the Kanban, a Japanese term for "visual record", which directly or indirectly drives much of the manufacturing organization. It was originally developed at Toyota in the 1950s as a way of managing material flow on the assembly line (Perelman, 1994: 85). Over the past three decades the Kanban process, which Bernstein (1984: 48) identifies as "a highly efficient and effective factory production system", has developed into an optimum manufacturing environment leading to global competitiveness. The Japanese Kanban process of production is sometimes incorrectly described as a simple just-intime management technique, a concept which attempts to maintain minimum inventory. The Japanese Kanban process involves more than fine tuning production and supplier scheduling systems, where inventories are minimized by supplying these when needed in production and work in progress in closely monitored. It also encourages; Industrial re-engineering, such as a 'module and cellular production' system, and, Japanese human resources management, where team members are responsible for specific work elements and employees are encouraged to effectively participate in continuously improving Kanban processes within the Kaizen concept (Stainer, 1995: 11). THE KANBAN The Japanese refer to Kanban as a simple parts-movement system that depends on cards and boxes/containers to take parts from one work station to another on a production line. Kanban stands for Kan- card, Ban- signal. The essence of the Kanban concept is that a supplier or the warehouse should only deliver components to the production line as and when they are needed, so that there is no storage in the production area. Within this system, workstations located along production lines only produce/deliver desired components when they receive a card and an empty container, indicating that more parts will be needed in production. In case of line interruptions, each work-station will only produce enough components to fill the container and then stop (Roos, 1992: 112). In addition, Kanban limits the amount of inventory in the process by acting as an authorization to produce more inventory. Since Kanban is a chain process in which orders flow from one process to another, the production or delivery of components are pulled to the production line. In contrast to the traditional forecast oriented method where parts are pushed to the line (Roos, 1992: 113). The Kanban method described here appears to be very simple. However, this "visual record" procedure is only a sub-process in the Japanese Kanban management system. Q3. How does ERP inventory module maintain inventory items? List outthe different modules under ERP inventory management. Ans. ERP Inventory module is a simple yet dominant inventory tracking module that facilitates the process of tracking and controlling the inventory and also provides the flexibility of customisation. Earlier, paper based systems were used to process information from various departments of an organisation and it consumed time. ERP inventory management system reduces time lag and makes the entire process efficient, by maintaining the appropriate level of stock in the warehouse. It helps in maintaining the suitable level of stock in the warehouse. The activities of inventory control involve:

 Identifying inventory requirements Setting targets Providing techniques and options Monitoring item usages Integrating inventory balances Reporting Inventory Changes in inventory are automatically updated. This enables inventory management employees to see if an item is currently in stock. Since the database is centralised, the ERP inventory system allows flexibility in customisation and configuration with various applications from different departments of an organisation. However, the systems that deploy ERP management are dependent on networks. Features of ERP Inventory Management ERP inventory management has many features .Some of them include: Quality control based on QC Parameters Analysis which help in maintaining best possible stock level Extensive verification of stock Online status of item quantity in terms of on-hand, on hand available, reserved, ordered, to order, rejected, defective and rework-able quantities High degree of flexibility for managing complex storage needs and automatic update of warehouse ERP management uses bar codes to maintain inventory items. A bar code is a small image that has bars (lines) and spaces fixed on the store items and used as an identification mark of a particular product. This makes tracking stock much easier. Once the items are bar-coded, they get scanned and their product information is entered into the ERP inventory management system. Introducing bar code labels on stock helps companies save money as it keeps the list of stock updated. Employees can easily see when certain quantities are low and need to re-stock. Customers also benefits from this as customers can see what products are currently in stock. The main purpose and benefit that the organisation can derive from ERP management system is that the ERP system is company-wide and has a single software system, where as organisations that do not employ ERP management will have dissimilar and diverse software applications that may not be compatible with one another. Benefits and Limitations of ERP Inventory Management ERP inventory management system has many benefits. Some of them include: Tracking of orders from the point the order is received to its release. Facilitating appropriate communication between different areas. Reducing the threat of loss of information.

 Providing a top down summary of the mechanism of a company. Setting up an outline of security to protect against theft from external or within a company. Replacing old and primitive paper based systems that improves efficiency. Limitations of ERP Inventory Management ERP inventory management helps an organisation in many ways. However, it also has some limitations. They are: Limited customisation Expensive Not friendly with every type of business like small organisations. Harder to fix responsibility as it is a company-wide system that connects all areas When all departments in a company are not willing to share information, maintenance of sensitive data can disturb the work flow Installing ERP Inventory System ERP Inventory systems are expensive, and are complex to install. Usually a third party contractor is hired to install the software and hardware, and these vendors who provide installation also suggest consultation and customise the system to the business needs. However, installation is a tedious task and consumes time depending on the size of the organisation and the requirements of the company. Typically, installing ERP Inventory system takes more than a few months, and larger organisations can take up to a year to install ERP Inventory system. There are many consulting vendors or firms available in the market to install ERP Inventory system; besides installing the system, they also train the employees to use the installed system. An ideal installed inventory system should always be able to have answers to the most anticipated questions such as: What and how much stock is available in the warehouse? What is sold and to which organisation? What are the financial issues related to price and margin? What orders that are placed, but remains undelivered? Installation of ERP Inventory systems is complex and not a simple job. However, deploying web based Inventory management ERP is simple and consumes less time for installation. Failure of ERP Inventory installation Many times, when installation of ERP software fails, ERP software vendors are held responsible. However installation failure can occur due to the following factors: Operating strategy did not suit organisation design and operation.

 The implementation and completion took longer than anticipated. Pre-implementation actions were not well planned. People were not well ready to learn and operate the new ERP system. Cost related issues leads to difficulties in implementing and using ERP Inventory systems. Q5. Explain the three types of CRM. Briefly explain the functionalities of CRM sub modules. Ans. Customer relationship management (CRM) is a widely-implemented strategy for managing a companys interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processesprincipally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments. Types The three types in which CRM support the relationship between a business and its customers are to:

Acquire: CRM can help a business acquire new customers through contact management, selling, and fulfillment. Enhance: web-enabled CRM combined with customer service tools offers customers service from a team of sales and service specialists, which offers customers the convenience of onestop shopping. Retain: CRM software and databases enable a business to identify and reward its loyal customers and further develop its targeted marketing and relationship marketing initiatives.

Functionalities of CRM sub modules:Customer Relationship Management or CRM software supports a broad set of activities for acquiring, enhancing or retaining customers. The functionality of CRM software varies from vendor to vendor. There're a few modules common to most of packaged CRM software. Direct Marketing Module Direct marketing is a set of promotional activities in which direct contact is made with the target customer. Direct marketing software allows companies to identify target customers for particular promotional criteria, generate direct mails, analyze response from target customers. Common techniques include direct mail, telemarketing, and etc. Direct marketing module can automate and streamline many of those marketing efforts. CRM Sales Module Revenues from sales are live blood for commercial organizations. Sales module implements functions of pre-sales support, order placement, order scheduling, shipping and invoicing. Sales module is closely integrated with organizations' ecommerce websites. Many sales modules from CRM vendors offer online storefront as part of CRM system. Call Center Module A call center is a sophisticated voice operations center that provides a full range of high-volume, inbound or outbound call-handling services, typically including customer support, operator services and directory assistance. It generally refers to reservations centers, help desks, information lines or customer service centers. A call center consists of a complex telecommunication infrastructures,

sophisticated computer systems and skilled service representatives organized to effectively manage the incoming and outgoing telephone calls. CRM call center module captures the vast amount of data in call center operation, prioritize call center service, and direct incoming calls to the appropriate service representatives. Help desk Module Help desk software can improve customer satisfaction and productivity by automating customer support processes. Basic features of help desk software includes requests submission, email notification, searching Knowledge Base and administration interfaces. Web-based helpdesk software allows users to search support knowledge base so that users can either find the answer online without calling a support representative or ask more specific questions when they do need to talk to a live person for support.

Q6. Describe how you would go about the different phases of the ERP implementation lifecycle, if it were being done in your company. Ans. The process of ERP implementation is referred as d as "ERP Implementation Life Cycle". The following are the steps involved in completing the lifecycle. Shortlist on the basis of observation Selecting an ERP package for the company can nevertheless be compared with the process of "Selecting the right Person for the Right Job". This exercise will involve choosing few applications suitable for the company from the whole many. Assessing the chosen packages A team of Experts with specialized knowledge in their respective field will be asked to make the study on the basis of various parameters. Each expert will not only test and certify if the package is apt for the range of application in their field but also confirm the level of coordination that the software will help to achieve in working with other departments. In simple terms they will verify if the synergy of the various departments due to the advent of ERP will lead to an increased output. A choice is to be made from ERP implementation models. Preparing for the venture This stage is aimed at defining the implementation of ERP in all measures. It will lay down the stipulations and criterias to be met. A team of officers will take care of this, who will report to the person of the highest hierarchy in the organization. Gap Analysis This stage helps the company to identify the gaps that has to be bridged, so that the companys practice becomes akin to ERP environment. This has been reported as an expensive procedure but it is inevitable. The conglomerate will decide to restructure the business or make any other alterations as suggested by GAP analysis inorder to make ERP user friendly. Click here for a detailed study on GAP analysis. A choice is to be made from ERP implementation models. Business process reengineering Changes in employee rolls, business process and technical details find place in this phase of restructuring most popularly refered as business process engineering. For more details on BPR click here.

Designing the System This step requires lot of meticulous planning and deliberate action. This step helps to decide and conclude the areas where restructing have to be carried on. A choice is to be made from ERP implementation models. In-house Guidance This is regarded as a very important step in ERP implementation. The employees in the company are trained to face crisis and make minor corrections as well because the company can neither be at liberty nor afford the bounty to avail the services of an ERP vendor at all times. For more details on ERP training click here. Checking This stage observes and tests the authenticity of the use. The system is subjected to the wildest tests possible so that it ensures proper usage and justifies the costs incurred. This is seen as a test for ERP implementation. The real test At this stage the replacement takes place viz the new mechanism of operation and administration takes over the older one. preparing the employees to use ERP The employees in the organization will be taught to make use of the system in the day to day and regular basis so as to make sure that it becomes a part of the system in the organization. Post Implementation The process of implementation will find meaning only when there is regular follow up and proper instruction flow thereafter and through the lifetime of ERP. This will include all efforts and steps taken to update and attain better benefits once the system is implemented. Hence an organization has to perform ERP implementation safely and correctly.

Master of Business Administration - MBA Semester III OM0011 Enterprise Resource Planning - 4 Credits (Book ID: B1233) Assignment - Set- 2 (60 Marks)

1. Explain the ERP selection process. List out the ERP tools and their respective vendors available in the market.
Ans. ERP Selections Process:

The ERP selection process is an important step for the future growth of any manufacturing or distribution organisation. ERP selection process has helped numerous manufacturers and distributors to find the software provider and solution that best meets their organisations unique business software requirements. The actual process of evaluating and selecting an ERP System is never the same for any two companies. However some common steps and exercises that a company and its evaluation team should take to evaluate the companys requirements are: 1. Selecting and empowering a cross-functional Evaluation Team that includes the best and the brightest individuals from each functional area of the company. They need to understand the importance of information sharing and integration, and champion positive change. The individual representing a functional unit can fairly and accurately represent and communicate the needs of his functional unit regarding the need of a new enterprise system. 2. The members of the team need to learn the business reasons and conditions that exist within the company. Additionally, each member of the team needs to educate other members about the functional area of the company he/she represents. 3. The companys resources need to be identified and assessed. In addition to those areas that may be unique to business, the following also need to be assessed: - Personnel determining how the company presently uses its personnel; define the organisations strengths and key areas that need improvement. - Technology understanding the businesss current information management infrastructure. - Workflow analysing the critical processes and workflow issues within the company. Consideration to be given to not only how these processes actually work today, but also how they should work as the company grows. - Performance Measurements defining a business model for success needs along with the metrics that are used to measure business performance. 4. The elements required to meet the companys goals, and in turn the companys success, have to be defined. These requirements are then used as the guideline for selecting an ERP solutions provider. The steps involved in this process include: - Identifying the limitations with the current business approach - Identifying the organisations core competencies factors that give the organisation a competitive edge over competitors. - Identifying the requirements for a solutions partner regarding implementation, features, functionality, service, tools, ongoing customer care and support.

5. Identifying the most important system functionality when selecting the right enterprise solution for the organisation. 6. Some of the additional questions that need to be pondered over when evaluating potential ERP solutions are: - Is the vendors product scaleable to accommodate rapid or unexpected growth? - Are the solutions that are under consideration configurable to meet existing specific needs and business processes as well as new ones that may arise in future? - Is the solution flexible enough to operate on a variety of IT platforms? - Are the product functions and features available now? If not, when will they be available and how important is it to have that function? Following and executing these steps of the ERP selection process provides the organisation the necessary information to make a well-informed, quantitative ERP software selection. 4.4.1 Features and functionalities of ERP solution The ERP evaluation team must also check on the following features and functionalities of the ERP system before selecting an ERP solution: Customisation Since different organisations need different software based on specific needs, customisations should not cause difficulties in updating to future releases. Implementation Different ERPs have different implementation requirements. Thus, it is important to choose an ERP that serves the organisation best and easy to implement. Maintenance The software should support multi-company, multi-division, and multi-currency environments. Real-Time Changes The modules should work in real time with online and batch-processing capabilities. So that no errors would occur because of the system being not up-to-date and information available to a department would not be different from the information available to other departments. Flexibility As the business requirements of the organisation are dynamic, the ERP system should be flexible to modifications. User-Friendliness Most of the time, the end-users of an ERP system are not computer experts. Hence, the product should not be too complex. Cost Cost is an important issue since the implementing organisation may be a small or medium sized enterprise that may not be financially comfortable as a large, multi-national organisation. Systems Requirements It is important to choose an ERP that is independent of hardware, operating system, and database systems. After-Sales Support and Training As ERPs are fairly complex applications for learning by oneself, the vendor should provide the training as well as the after-sales support. Back-up System The back-up unit of the system should be more than reliable. Besides, the back-up unit should also offer a solution for restoring the system within the shortest possible time. Reporting and Analysis Features Besides standard reports, management team should be able to implement their own reporting and analysis tools and dump them into the system for after use.

 Vendor Credentials Vendors market share, reputation, number of consultants, number of installations performed, support infrastructure, and demonstration of previous implementations are some of the critical factors showing the commitment of the vendor. Integration with other Software/Applications The modules should integrate and provide seamless data flow among the other modules. Internet Integration The software should support e-business, e-commerce, and EDI transactions either as built-in module or as an add-on module. You have now identified the unique needs of the organisation and the critical functional requirements necessary in a new enterprise solution. The next step is to define the process to be followed in evaluating and finally selecting the right ERP software package for the company. By defining the path to follow, you can avoid extended and potentially costly delays in the evaluation process. These steps should include: 1. Reviewing potential ERP software products that suite your organisation 2. Eliminating packages that do not meet the specific needs and requirements 3. Creating a manageable list of vendors for final review typically three to five 4. Scheduling detailed product demonstrations 5. Checking your vendors references 6. Visiting a like customer site of the final short-listed vendors ERP Tools There are several ERP software manufacturers. Prominent manufacturers of ERP software are SAP, Oracle Corporation, PeopleSoft, JD Edwards, Lawson, etc. SAP has the major share in the ERP market and next comes the Oracle Corporation. Oracle has acquired JD Edwards, People Soft, and more recently Siebel and competes with SAP in the ERP market. Table 4.2 lists the popular ERP Tools and their respective vendors. Table 4.2: ERP Tools and respective vendors

2. On what basis manufacturing operations are classified. Explain the different categories.
Ans.

Manufacturing Operations The manufacturing operations can be classified based on the amount of processing the product requires, after the company receives an order from customer. They are broadly classified as: Make-to-Order (MTO) and Make-to-Stock (MTS) Assemble-to-Order (ATO) Engineer-to-Order (ETO) Configure-to-Order (CTO) 6.8.1 Make-to-Order (MTO) and Make-to-Stock (MTS) At one end of the processing spectrum is the make-to-order (MTO) company. This company does not begin processing the material for the component or product until it has received an order from the customer. In some cases, the company may not even procure the material and components until after it receives the order. This type of manufacturing operations is followed when the company competes on the basis of product customisation and serves its customer base by providing unique and highly specialised items. The MTO companys production planning is based also on firm customer orders. At the other end of the spectrum is the Make-to-Stock (MTS) company, which manufactures products and places them in inventory before it receives customers orders. Either the customer purchases the products directly from the inventory at a retail outlet, or the company ships the product off-the-shelf from the finished goods inventory at the factory or at a distribution centre. MTS companies depend heavily on market analysis and demand forecasting in planning the production of their products with respect to the product mix and volume. Figure 6.2 shows the relation between the output variety (degree of customisation) and the type of manufacturing operation. As it is evident from the graph, that the output variety is highest when the company is operating in the make-to-order mode, since the companies can serve each and every individual customer in the way he/she wants. But the cycle time will be more and the cost of the product will also be more. But in the case of a MTS company, the products are already made and kept in the inventory for the customer to pick up. Here, the customer wont get any individual attention or customisation; he can buy what is available with the company. The MTS company will be making products in lots and the cost of the products will be less as the economies of scale will be at work and there will not be any waiting period for the customer after placing the order. 6.8.2 Assemble-to-Order (ATO) Assemble-to-Order (ATO) company is another variation of the manufacturing operations. The ATO company manufactures standardised, option modules according to the forecasts it has made and then assembles a specific combination, or package of modules, after receiving the customers order. The classic example is the automobile manufacturer. After receiving orders from a host of dealers, the manufacturer specifies the exact production schedule for the automobiles. The schedule is based on the options order by the customers, like automatic transmission or manual transmission, air-conditioning, standard or digital control panel, leather, cloth or vinyl seating, and so on. Many components for assembling the automobiles would have be ordered or started into production before

receiving the customers order based upon demand forecasts. Thus, the major processing that remains when the orders come in is assembly. This approach shortens the time between placement of the order and delivery of the product cycle time. 6.8.3 Engineer-to-Order (ETO) Yet another variant in the manufacturing operations is the Engineer-to-Order (ETO) company. The ETO Company is the ultimate in product variety, product customisation and flexibility. In this mode of operation, as per customer order the company manufactures any thing, but at a higher price. The expensive clothing of the bold and beautiful is an example of this kind of production. Products are made for each customer and even the minute details, for example, the feel of the cloth and the texture, the colour of the threads, the size of the collar and so on will differ from one customer to another, depending upon the customers preferences. So the manufacturer cannot keep anything in inventory, he will have to order only once the customer has given his/her specifications. Obviously, the cost of production will be highest in this mode of production. 6.8.4 Configure-to-Order (CTO) MTO manufacturers traditionally had to choose between ATO and ETO. ATO suppliers face the need to extend product lines, add features, and increase flexibility to meet customer demands. ETO manufacturers feel a pressure to standardise at least some of their product lines to reduce costs and remain competitive. Today, the environment of CTO has emerged in response to customers demands for individualised products with shortened lead-times, improved quality and competitive prices. Virtually any manufacturer that uses options, features, or variable dimensions is a candidate for entering the CTO environment. The key component of a configuration is the blueprint of valid combinations of features and options. Figure.6.2 shows the relation between the output variety (degree of customisation) and the type of manufacturing operation. As you can see from the graph, the output variety is highest when the company is operation in the make-to-order mode as the companies can serve each and every individual customer in the way he/she wants. However, since the cycle time will be more the cost of the product also will increase. In the case of an MTS company, the products are already made and kept in the inventory for the customer to pick up. Here the customer will not get any individual attention or customisation. He can buy what is available with the company. This model, make use of traditional bill of material model with parent and component relationships. Rules and calculations then ensure that the final configuration can be built by defining the way to build it and also establish a selling price. The flexibility of establishing this CTO model is clearly an important aspect of selecting the best configuration software for your business. Few functional areas are free from the impact of transitioning to a new way of entering sales orders. They automatically generate new part numbers, bills and routings; for building and shipping products; and record the financial results of doing business.

Figure 6.2: Relation between output variety and the type of manufacturing process Input from sales and marketing, manufacturing, product data management, and finance is required to develop a CTO model that supports the integrated environment. It is important to understand how the configuration generates the "appropriate" bill of material and routing because they are at the core of the planning process. Typically, a CTO model represents a translation of product engineering rules that define relationships among product options, materials and manufacturing processes. Multiple models CTO differentiate different sets of valid relationships and required processes. The CTO model provides valid options within a model, and applies rules or calculations based on selections. For example, a CTO model of a Personal Computer (PC) would have a set of component options such as case styles, CPUs (66 or 100 MHz), hard drives (520MB or 1.2GB), and monitors (VGA or SVGA). Structured under the options would be the real item part numbers. This is very use full for identification and verification process during manufacturing and quality control. Key considerations for production and material planners are the modularity of the real bills of material that will be combined in the configured end item, and the level at which sales analysis records will be stored. Many times, the structure (if bills and routings exist at all) needs to be re-examined in light of how it will support the CTO model. The ability of the configuration to automatically create new part numbers, generate bills and routings, and assign prices has greatly reduced the process of product introduction. However, unless the manufacturing bills have been reviewed and contoured to a CTO model, the result is often inaccurate/inadequate information, faster! With the architecture of the CTO, and the ability to capture sales analysis information at the option level, planners have a tool to improve their planning models. The ability to capture sales analysis records on the options provides the ability to accrue data for use in forecasting software. For example, within the option accessories, each occurrence of a mouse, modem NIC, sound card and CD-ROM selection is captured as a sales analysis record. This information is available for summarisation at a month or year end. The data, can be reviewed and massaged, then input to the forecasting algorithms. Automatically information is monitored and maintained at the detail level, instead of forecasting it at the accessory level with the use of percentage Bills of Material (BOM),. The configuration software also provides features to quickly develop accurate part, bill, and routing information. In addition to maintaining sales analysis information at the configured item level, detail information by option is also available. This provides a powerful database for the dissection of market data. It also becomes the foundation for improving forecasting and planning capabilities.

3. List out the various support technology for ERP systems designed by various companies and their application in various sectors
Ans.

Current Enterprise Resource Planning Systems (ERP) are used to track companies finances, human resources, and logistics. Upcoming market-driven requirements focus on outside connectivity and up-todate information supply, including business-to-business support, e-commerce, and virtual enterprises. How can these requirements be met by applying emerging information technologies? This paper focuses on future development of ERP systems emphasizing on technical aspects of information technology application as enabler. It briefly discusses existing research approaches and potential research and development issues. Keywords: ERP, technology application, workflow, component ware, agents, multimedia, XML Enterprise Resource Planning Systems integrate company's information concerning supply chains, customers, human resources, finance, and accounting. Functional capabilities of ERP systems are based on information technology and architectural options available during system implementation (Chan, 1999). Concepts for business solutions and information technology depend mutually on each other: Business concepts have to develop further applying options offered by new technologies. The upcoming internet applications for the e-commerce market evinces an impressing example for IT-driven business. Business requirements lead on the other hand to the development of new technologies. The development of database management systems for instance were driven by an ERP application, the bill of material processors. XML is an newer example for application-driven development. So ERP is both, IT-driven and IT-driving. The following paragraphs discuss some ERP-related IT developments, namely middleware technologies and the technology application for interorganizational integration, vertical integration and ERP implementation.

Middleware The middleware sections discuss the technology application of component ware, agents, workflow management, browsers, multimedia, and virtual reality. Component Ware After developing large-scale, non-open, proprietary information systems in the past, the definition of interfaces like the Business Application Programming Interface (BAPI) of the R/3-system is an up to date way to overcome the border of heterogeneous application systems. Because of the necessity to combine best in class modules from different vendors (e.g. BAAN production module and the SAP R/3 finance module), the concept of predefined reusable components has been developed. Component and framework technology can be applied for combining vendors' software with individually programmed software (Braun et al., 1999; Mustafa and Mejabi, 1999; Sprott, 2000). Prototypal implementations have shown that components also enable a better support of interorganizational production planning systems (Braun and Mhle, 1998; Bohrer et al., 1998). The extensible markup language (XML) is a basic enabler for ERP systems based on component ware. Object request broker architectures with interface definition languages are more powerful technologies to build application systems by combining components. The Enterprise JavaBeans technology supports an efficient intercompany communication (Fellner and Turowski, 1999). Agent Technology The technology of mobile agents has been developed for some years. Agents choose particular destination nodes dynamically, based on embedded mobility metadata to perform the required work. So they can provide a way for executable code, program state information, and other data to be transferred to the required host to carry out the necessary actions. An important feature of agents is the ability to negotiate autonomously to obtain an assigned target. First research prototypes of agent applications in ERP environments are implemented, e.g. decentralized capacity management to control supply and demand of individual capacity units with agents (Mertens et al., 1994; Jain et al., 1999; Kirn, 1999;

Schnitzer et al., 1999; Zelewski and Siedentopf, 1999). Java has several features that directly support the implementation of mobile agents. For example, agent mobility requires facilities that convert complex agent structures into a flat binary stream which is suitable for network transmission. The remote system on the receiving side must be able to reconstruct the agent. With Java's object serialization this conversion and reconstruction can be implemented transparently (Wong et al., 1999). User Interface System users accustoming to browser interfaces enforces the transition of existing business information systems, including ERP applications, into web applications. These systems present a HTML (Hypertext Markup Language) based interface for user transactions running the presentation tier and parts of the application tier within a web browser with a intuitive handling. A unified interface offers easy means for users to communicate with ERP applications and other applications inside and outside the enterprise. The borders between Intranet, Extranet and Internet, using all the same technologies, starting to get transparent for the user. By applying internet technologies in-house, companies realize a better internal communication and an easier access to information (Dunn and Varano, 1999). Formatted data stored in ERP databases can be linked by XML to heterogeneous kinds of information from various sources to enable an efficient knowledge management, e.g. material master data can be combined with documents referring information concerning that particular material master (Singh 1999). Multimedia is a more enriched kind of information. Currently Multimedia technologies are common in the private consumer field for games. First serious and sophisticated multimedia applications are used in medical and engineering domains. In business applications multimedia is already used in sales domain to illustrate and advertise products to customers. In e-commerce solutions multimedia information facilitates the access to virtual marketplaces for different participants. Only multimedia integration to ERP databases allows the implementation of efficient business process: e.g. electronic product catalogues should be generated from ERP databases and multimedia information data sources by using internet technologies (Gaede and Schneeberger, 1998). Due to high interactive and efficient communication qualities multimedia can also be gainfully applied within the industrial production. Photos or design drawings can be stored as a part of the materials master data and work schedules master data to enable figurative presentations of materials and production processes outside the CAD environment. Supervising the production process is another example for using multimedia in production. Production data collection can be enhanced with voice information, pictures, and videos. The documentation of the production processes with more than numerical and alphanumerical data is useful e.g. for quality assurance purposes and error analysis (Kurbel, 1994). The concept of virtual reality is the most sophisticated user interface currently available. Virtual reality technology is scarcely applied in ERP systems up to now. First implementations support product development, sales promotion, and business process modeling (Leinenbach et al., 1999). By combining the Virtual Reality Modeling Language (VRML) with Java, 3D scenarios can be modeled and accessed across enterprise borders via networks. The well specified, openly available and portable languages can serve as building blocks of cyberspace (Brutzman, 1998). Workflow Management At present workflow management systems are mainly used for administrative tasks in office environments. They are only sporadically applied for supporting production processes, i.e. in sales order processing, product development, and quality inspection. More extensive approaches integrate workflow technology as a core mechanism to control process flow in information systems (Rosemann et al., 1999). Especially in ERP systems the workflow integration is beneficial: Work schedules are fundamental ERP data describing the manufacturing activities to produce the industrial output. Production control is based on this information. Work schedules are prestructured process descriptions with specifications of operations and assigned capacity units. Despite of their purpose of material-oriented output, work schedules have similar components as workflow definitions. Therefore it is expedient to treat both kinds of processes by same means. Production control on one side and workflow management of administrative tasks on the other side should be handled with the same system. Synergies can be obtain by combining the advantages of both domains. Workflow technology can benefit for instance from long practical and theoretical experiences of production management, e.g. implementing an organization for process descriptions like the work scheduling department. Integrating workflow technologies in ERP systems overcomes department boundaries between production control in the manufacturing areas and order processes in administrative areas of an enterprise (Loos, 1998). Applying interorganizational workflow technologies with mechanisms like capacity sharing, chained execution, subcontracting, case transfer and loosely coupled workflow offers means even to overcome enterprise boundaries, which is essential for supply chain management and process handling in virtual enterprises (van der Aalst, 2000). Interorganizational Integration

Discussing interorganizational integration of ERP systems, technology applications for supply chain management, e-commerce, business-to-business, and virtual enterprise systems are focused. From Data Interchange to Communication Traditional electronic data interchange (EDI) based on protocols like EDIFACT requires dedicated software to translate and integrate business data. The view is usually focused on replacing paper based transfer by electronic data transfer. The data transfer is mostly made in a bilateral way or provided by expensive Value Added Network (VAN) services. Web information systems enable new forms of business and commerce. Web-based business will not adapt existing business models and organizations any longer, but will invent fundamental new ones only realizable with a almost ubiquitous communication technology like the internet (Becker et al., 1998; Salam et al., 1999). Compared with the restrictions of EDIFACT protocols, internet communication based on XML standards is more flexible and offers a better way to adjust technology support to business processes (Pawar and Driva, 2000). The predominating developing environment Java enables distributed applications in which two or more components are cooperatively operating over process boundaries. The simplest form of Java distributed computing are two Java applications passing data over a TCP/IP network connection. The more complex form is the exchange of Java objects (Morgenthal, 1998). Technology Driven Business Models Supply chain management requires the integration of vendors, distributors, resellers, and customers. Internet technology allows the participants in a supply web to publish information about their products, prices, and availability on the net. By replacing complex, expensive, and proprietary EDIFACT based solutions with simple, inexpensive, and open ones, the internet will be a marketplace for all participants (Tenenbaum, 1998). New kinds of web-based services can be offered and the web is used to conduct business online instead of only selling products on the web. Extranets link the resources of a company to its customers, suppliers, and business partners. Web publishing is an important electronic communication tool and the web browser has become the universal interface for accessing business information. Distributed product development is another example for web technology deployment (Hameri and Nihtila, 1997). Internet-based procurement is an attractive area of ecommerce in the business-to-business (B2B) sector. An example is the SAP B2B procurement component. It supports the procurement of indirect goods and services such as office supplies and travel services. Suppliers list their products in electronic catalogues. Beside the advantage of a quick and reliable conducting based on current information, this component offers additional information, e.g. availability inspection, and multimedial presentation. Such applications should facilitate the communication of business objects based on XML standards (Glushko, 1999; Klber, 1999). XML increases flexibility and expandability because of its separation of syntax and content. As a result the integration of new business partners is easier than with a bilateral VAN based EDI solution (Segev et al., 1998; Senn 1998). Thus information technology has direct impact on operational business decisions (Weber 1999). There are several architectures for electronic product catalogues in the procurement and sales area such as catalogues for every internet user, supplier catalogues for special users, mall provider offering market places, and inhouse catalogues using an intranet (Renner, 1999; Lincke and Schmid 1998). A new concept in the environment of e-commerce are virtual communities as a new distribution channel to contact the customers. Potential business partners can get information over a central web site using portal technology. Portals expand the product offer to more than one single supplier. Thereby integration of product catalogues and efficient search strategies are required (Glezer and Yadav, 1999). Vertical integration Vertical integration of ERP systems needs technologies that can consolidate data from operational applications and combines the information with external data sources. Data warehouse and data mining are applications for extracting information from databases of current ERP systems. As an example in the field of supply chain management, data warehousing allows customers to understand their supplier relationships by consolidating and classifying their purchasing data. To meet the requirements of extracting remote data like purchasing data from more than one source, warehousing over the web is a new form of analyzing this information (Scott, 1998; Weir, 2000). The term Total Information Solutions (TIS) expresses the necessity of integration of external data and internal data. These systems will enable businesses to monitor and collect data about external business conditions and extract business intelligence (Li, 1999). Extracting information about competitors and their changes in the suppliers' structure is an example for the importance of integrating external and internal information sources (Mertens, 1999). Implementation

Implementing an ERP system needs to be prospectively managed because of the far-reaching changes ERP brings to companies (Bingi et al., 1999). Software vendors offer technical consulting services and implementation techniques to its customers, since installation and support of ERP systems requires a lot of experience and knowledge. To share the knowledge acquired from different consulting projects, case-based reasoning systems are applied. These systems use case bases to store problem specifications and their solutions, and query the case bases by using a similarity search algorithm (Luttermann and Pfeifer, 2000). To improve the automation of complex business processes, cooperative relations between intelligent agents and end users are implemented. Configuration tools are developed in research projects to support the setup of various user centric business scenarios. (Schinzer et al., 1999).

4. What is Preventive Maintenance? Explain major subsystems of a Plant Maintenance module.

Ans.

Preventive Maintenance Control Preventive Maintenance Control (PMC) provides planning, scheduling, and control of facilities and equipment. Equipment lubrication, component replacement and safety inspection can be planned, scheduled, and monitored. Maintenance tasks can be tracked for each piece of equipment or machine, by two user-defined modes, as well as calendar day frequency. These modes include tracking by hours of operation, units of production produced, gallons of fuel consumed, or the number of days in operation since the last service interval. Preventive Maintenance Control enables organisations to lower repair costs by avoiding downtime, machine breakage, and process variability. Companies achieve higher machine utilisation and improved machine reliability and tolerance control, along with higher production yields.

Major subsystems of a Plant Maintenance module

The achievement of outstanding performance demands delivery of quality products expeditiously and economically. Organisations simply cannot achieve excellence with unreliable equipment. The approach towards maintenance management has changed as a result of quick response manufacturing. Just-in-Time (JIT) reduction of work in process inventory and the elimination of wasteful manufacturing practices. Before breakdown in machine and idle time for repair was once an accepted practice. Times have changed. Today, when there is a break down in a machine, it can shut down the production line and the customers entire plant. The Preventive Maintenance (PM) module provides an integrated solution for supporting the operational needs of an enterprise-wide system. The Plant Maintenance module includes an entire family of product; covering all aspects of plant/equipment maintenance. It becomes vital to the achievement of process improvement. The major subsystems of a Plant Maintenance module are: Preventive Maintenance Control Equipment Tracking Component Tracking Plant Maintenance Calibration Tracking Plant Maintenance Warranty Claims Tracking

Preventive Maintenance Control Preventive Maintenance Control (PMC) provides planning, scheduling, and control of facilities and equipment. Equipment lubrication, component replacement and safety inspection can be planned, scheduled, and monitored. Maintenance tasks can be tracked for each piece of equipment or machine, by two user-defined modes, as well as calendar day frequency. These modes include tracking by hours of operation, units of production produced, gallons of fuel consumed, or the number of days in operation since the last service interval. Preventive Maintenance Control enables organisations to lower repair costs by avoiding downtime, machine breakage, and process variability. Companies achieve higher machine utilisation and improved machine reliability and tolerance control, along with higher production yields. Equipment Tracking Equipments are an asset that needs to be protected and monitored. In many situations, costs of equipment maintenance constitute the single largest controllable expenditure of an organisation. All facets of plant location history and utilisation history are described and tracked. This history includes acquisition of disposition information and associations between different pieces of equipment to pinpoint operational dependencies. Running totals for operation units to date (miles, hours, days, units of production, and so on.) are also provided. Each piece of equipment is defined by, a serial number and model. User-defined data sheets are developed, which allow for the grouping of user data into formats that can be linked to equipment records. All of this information can be used to create equipment stipulation, which provide detailed information for technical specialists working in equipment operations, maintenance, and transportation control. Component Tracking Components are subsets of larger equipment and deserve the same amount of cost controlling scrutiny. Component Tracking helps equipment managers to; identify components with chronic repair problems. They can determine if either repair or replacement must be covered by warranty. Planning component replacements, rather than waiting for component failures to occur, reduces unscheduled equipment downtime. Component tracking includes repair/exchange history and component service life. Plant Maintenance Calibration Tracking Plant Maintenance Calibration Tracking (PMCT) allows organisations to leverage their investment in the Plant Maintenance module by, providing for the tracking of equipment calibration in support of ISO 9000 requirements. Plant Maintenance Warranty Claims Tracking Plant Maintenance Warranty Claims Tracking (PMWCT) is an administrative system designed to, provide control of all items covered by manufacturer and vendor warranties. It helps plant management to recover all of the warranty; reimbursements to which they are entitled but have not been able to recover in the past. Features include the ability to establish the length and type of warranty. For example, elapsed day, months, operating units, or mileage stipulation. A complete history review is performed for each item covered by the warranty and complete information regarding the warranty service provider is generated.

5. Write short notes on seven major ERP vendorsSAPAG, Baan, PeopleSoft, JD Edwards, Oracle, QAD and SSA.

Ans.

SAP AG Systems, Applications and Products in Data Processing popularly known as SAP or Systemanalyse und Programmentwicklung was founded in the year 1972, in Germany. It is the leading global provider of solutions for client/server business application. SAP has installations in over 107 countries. SAPs ERP package is available in two versions - the mainframe version (SAP R/2) and client/server version (SAP R/3). Most prominent among SAPs product range is the enterprise application suite R/3 for open client/server systems. With SAP Systems, customers can opt to install the core system and one or more of the functional components. You can even purchase the software as a complete package. SAP customers have chosen to install SAPs client/server suite in more than 19,750 sites worldwide. The System Software is accepted as the standard in key industries such as oil, chemicals, consumer products, and high technology and electronics. SAP has work force strength of over 19,300 and has offices located in more than 50 countries across the world. SAP is the most successful vendor of software on standard business applications. It is also ranked as the fourth largest independent software supplier in the world. During the fiscal year, ending December 31, 1998, SAP AG reported revenues of DM 847 billion, a 41% increase over 1997s revenues. In the same period, sales of R/3 rose by 31%. Baan Company Baan Company is one of the leading providers of enterprise business software in the global market. Baan was founded in the Netherlands in 1978 by brothers Jan and Paul Baan. Baan Company offers a widespread collection of best-in-class, component-based applications for front office, corporate office and back office automation. These applications are in use at over 7,000 customer sites worldwide. Baan Company products reduce complexity and cost, improve core business processes. They are faster to implement and use, are more flexible in adapting to business changes. They also optimise the management of information throughout the entire value chain. Baan Companys product family offers on-going delivery of open components for enterprise applications. It consists of a comprehensive and flexible suite of year 2000-compliant software solutions and best-in-class business modelling tools. These tools are based on a flexible, multi-level architecture which can scale to meet the needs of small, medium, and large enterprises. Baan Company makes this possible with its open architecture. This enables customers to migrate to new technologies and product releases at their own pace. Referred to within Baan Company as Dynamic Enterprise Modelling Strategy Execution (BaanDEMSE), this unique approach puts business requirements at the heart of the implementation process. Baan Company and its partners work closely with customers to insure the success of every installation. They also enable customers to achieve the highest level of self-reliance desired. The companys most important customer base includes industry leaders such as Boeing, Philips, Mercedes Benz, Nortel, Fujitsu Network Communications and Motorola. Baan Company aims to ensure that every interaction its customers have is in line with its "Three I philosophies: Integrity: In its interactions with its customers, colleagues, partners, and shareholders. Innovation: In what it builds and how it delivers. Initiative: In the speed and focus it brings to all aspects of its market opportunity. 13.4.1 Products and Technology Over the past 14 years, Baan Company has evolved from revolutionising the Enterprise Resource Planning (ERP) software market to now offering the most complete set of single-vendor enterprise business applications. The foundation for Baans products is differentiated through their open component

architecture and through the use of BaanDEM. BaanDEM via a graphical process/model-based view provides a business view of the enterprise. It is modified or templated to the specific needs of industry groups or individual customers. BaanDEM delivers the capability to rapidly configure and re-install Baan. Companys applications from a single view, helping to ensure that the Baan Company enterprise application accurately reflects a companys most current organisational structure, business practices, and operational procedures. Baans product line features multi-layer architecture for maximum scalability and flexible configuration. Applications are isolated from the systems environment. This enables the support of new hardware, operating systems, databases, networks and user interfaces without any modification to the application code. Baan Company supports popular UNIX platforms as well as Microsoft NT. Baan has the distinction of being the first solution provider in its class to earn the Designed for Microsoft BackOffice logo certification. Products also support major relational database systems (Oracle, Informix, DB2, Sybase, and Microsoft SQL Server). Built on a commitment to reduce the complexity of IT solutions, the Baan product collection assembles bestof-class components. They keep them "evergreen" through on-going release cycles. This enables enterprises to update their information infrastructure in manageable and incremental initiatives. Three advantages distinguish each component element within the BaanSeries-based family of products including. They are: 1. Best-in-class components 2. Evergreen delivery; 3. Version independent integration. The BaanSeries-based product family includes: Baan Enterprise Resource Planning (BaanERP) BaanFrontOffice BaanCorporateOffice Solutions BaanSupply Chain Solutions.Baan offers specific vertical industry solutions for aerospace and defence companies engaging in multi-level projects and contracts. Baans A&D offering includes BaanProject to enable the effective management of key functional business process areas. Baan also offers specific vertical industry solutions for automotive companies. Many of the worlds leading automotive companies use Baans business applications to support worldwide manufacturing, distribution, and financial operations. Baans product suite offers automotive companies next-generation information technology across manufacturing, supply chain and front office operations. 13.4.2 Baan ERP Modules BaanERP, the successor to Baan IV, is a proven enterprise resource planning software application. It is fully integrated and provides exceptional functionality across the enterprise. BaanERP consists of a number of interdependent components that can be deployed to meet business needs. The flexibility within BaanERP allows customers to maximise the benefits of both best-in-class solutions and a fully integrated, highperformance system. BaanERP includes the following components - manufacturing, finance, project and distribution. Manufacturing Module: It includes Bills of Material, Cost Price Calculation, Engineering Change Control, Engineering Data Management, Hours Accounting, Product Classification, Product Configuration, Production Control, Production Planning, Project Budgeting, Project Control, Repetitive Manufacturing, Routings, Shop

Floor Control, Tool Requirements, Planning and Control, Capacity Requirements Planning, Master Production Scheduling, and Material Requirements Planning. Finance Module: It includes Accounts Payable, Accounts Receivable, Financial Budgets System, Cash Management, Financial Reporting System, Fixed Assets, General Ledger, Cost Accounting, and Sales Invoicing. Project Module: It includes Project Budget, Project Definition, Project Estimating, Project Invoicing, Project Monitoring, Project Planning, Project Progress, and Project Requirements Planning) Distribution Module: It includes Sales Management, Purchase Management, and Warehouse Management. 13.4.3 Global Support, Education, and Consulting Support: Baan Global Support is a companys best source for fast, consistent problem resolution, as well as preventive technical advice. Baan Global Support offers a broad range of support services. It includes telephone support, Critical Incident Support, an Interactive Support Website, and an Ongoing Subscription to Innovation. Baan has closely linked Implementation Solution Centres around the world. They support internal and third party implementation consultants as well as customers. Baan also assists customers in establishing on-site competence centres to manage all aspects of the implementation and ongoing systems use. Products are available in over 59 countries through both direct and indirect channels, and are translated into more than 20 languages. Baan Education: As a partner in lifetime learning, Baan Education helps maximise the return on investment in people and technology. Baan Education addresses the education needs of everyone in an organisation. It includes newly hired employees to seasoned professionals who are maturing with technology. Baan Education offers new Internet-based learning called Virtual Campus. With Baan Education, a partner can realise the companys goals of profitability, productivity, and competitive advantage. Baan Educations process-based course, addresses not only specific Baan Companys enterprise applications. It also provides an in-depth understanding of the business processes that its applications automate. Thus, Baan Company extends education beyond simple functionality. It takes into account the various conditions within which its applications are used in their manufacturing, sales, financial, and technical environments of a company. This lifetime learning approach means that a companys workforce is always side by side with the latest technology and business developments. Baan Consulting: Baan Consulting is dedicated to implement Baan Companys enterprise applications around the globe, along with the thousands of customers served by its consulting partners. Baan Consulting has a successful track record with well over 1,000 customers worldwide, in almost every business environment. Baan Consulting provides a wide range of services, such as Project Management, Business Consulting, Application Consulting, and Technical Consulting. Consultation support is provided throughout the implementation process, and after a company goes live with the project. Baan Consulting works with its client through Internet-based Baan Cyber Consult offering. Oracle Corporation Oracle Corporation (founded in 1977) is the worlds second largest software company. It is also the leading supplier of software for Enterprise Information Management (EIM). With annual revenues exceeding $ 8.0 billion, the company offers its tools, database, and applications products, along with related consulting, education and support services. Oracle employs more than 41,000 people in more than 145 countries around the world. Oracle has its headquarters in Redwood Shores, California. It is the first software company to implement the Internet computing model for developing and deploying enterprise software across its entire product. They are application development, databases and relational servers, and decision support tools, and enterprise business applications. 13.5.1 Product and Technology Oracle software runs on personal digital assistants, set-top devices, network computers, PCs, workstations, minicomputers, mainframes, and massively parallel computers. Oracle8i, the latest version of Oracle industrys leading database, is the database for Internet Computing. Oracles family of database,

networking, and gateway products enable corporations to access any data, on any server, over any network, from any client device. Oracles Warehouse Technology Initiative (WTI), one of the fastest growing and most comprehensive alliance programs in the data warehousing industry. It provides customers with a complete solution on data warehousing. This is based on the industry-leading Oracle database, and more than 60 complimentary thirdparty software products and services. WTI is designed to increase the quantity and quality of Oracle-based data warehousing solutions. This provides customers with greater choice, specialised tools, Oracle-optimised products, and streamlined support as they build their data warehouse system. Oracles integrated Business Intelligence Solutions deliver powerful capabilities to users anywhere in the enterprise, at any time. End users benefit from sensitive tools that provide easy access to business data and fast answers to any question. Oracles Business Intelligence family of products including integrated releases of Oracle Reports, Oracles enterprise reporting tool, Oracle Discoverer, Oracles award-winning ad-hoc query and analysis tool, Oracle Express, and Oracles industry-leading enterprise online analytical processing (OLAP) engine. Oracle also offers pre-built OLAP applications like Oracle Financial Analyser and Oracle Sales Analyser which help to further reduce implementation time and costs. 13.5.2 Oracle Application It is a leading provider of packaged and integrated front office and ERP solutions for the enterprise. It is also a division of Oracle Corporation, the worlds second-largest software company and the largest supplier of software for information management. Oracle Applications strategy is to offer all the enterprise solution components like proven applications, advanced technologies, business expertise and partnerships required to enable customers to execute strategies quickly. It also assists in managing the risk of change, and lead their respective industries in right direction. Oracle Applications is the only collection of enterprise business applications from a major Enterprise Resource Planning (ERP) vendor that follows the Internet Computing (IC) model. Each of the over 45 modules for human resources, financials, manufacturing, supply chain, and front office automation is web-enabled. It also allows the modules to be deployed on corporate intranets with no software, other than a browser, required on users desktops. This architecture allows organisations to shift the complexity of application management, maintenance, and upgrading from users desktops onto centralised, professionally managed servers. Hence, it significantly reduces the cost of deploying and administrating the software. By minimising network traffic, this approach also makes it economical to deploy the applications over Wide Area Networks (WANs) to hundreds or thousands of users. This system has enabled the company to distribute critical business information much more broadly which is only possible in the client/server model. Oracle Applications further exploit the low-cost and universal access in the Internet Computing model. By providing a set of applications specifically designed for secure, self-service business transactions across the Internet and corporate intranets this is achieved. These applications are integrated with Oracle Workflow to completely automate business processes. Oracle Applications comprise of 45-plus software modules, which are divided into the following categories: Oracle Financials Oracle Human Resources Oracle Projects Oracle Manufacturing Oracle Supply Chain Oracle Front Office More than 6,000 customers in over 76 countries use Oracle Applications. Available in more than 29 languages, Oracle Applications lets companies operate in multiple currencies and languages, support local business practices, and legal requirements. It also handles business-critical operations across borders.

A brief overview of the Oracle Application categories is given below: Financials: Oracle Financial Applications can transform a finance organisation into a strategic force. In todays fast-moving corporate field, organisations require access to critical financial management functions. With Oracle Financial Applications, companies will be able to work globally, lower their administrative costs, close their books faster, and improve cash management. At the same time they provide the strategic information required for making timely and accurate decisions. Projects: Oracle Projects Applications improve operational efficiency by providing an integrated project management environment. This supports the full lifecycle of every project in your enterprise, increasing topline revenue growth and bottom-line profitability. It acts as the bridge between operations systems and corporate finance. Oracle Projects Applications provide a central storeroom of certified cost, revenue, billing, and performance data associated with your business activities or projects. Human Resources: Well-managed human resources directly improve the bottom line and contribute to competitive advantage. The ability to hire, motivates, and retains the most capable workforce; engage employees and line managers directly in managing their skills and careers. It also provides comprehensive and up-to-date workforce information for management on a global basis. These are a few of the characteristics important for success of this software. The Oracle Human Resource Management System (HRMS) provides comprehensive facilities for organisations to achieve such goals. Manufacturing: Oracle Manufacturing Applications are the industry-leading mixed mode manufacturing solution. It enables companies to achieve market leadership by becoming more customer-responsive and efficient. This product family supports companies from small, single-facility environments to multi-plant, global manufacturers with complex requirements. Oracle Manufacturing Applications help companies increase revenue, profitability, and customer loyalty. It is achieved by universally capturing demand, planning the extended enterprise in one rapid step. Along with these it ensures that the most efficient manufacturing process is used to produce each product in the respective company using it. Supply Chain: Oracle Supply Chain Management Applications simplify supply-chain processes by providing a single, integrated environment for managing the extended enterprise. Oracle enables effective trading partner collaboration and supply-chain optimisation capabilities that are essential to gain and sustain competitive advantage. Oracle Supply Chain Management Applications help in increasing market share while improving customer service. It also helps the company in minimising the costs across the networked supply chain system. Front Office: Oracle Front Office Applications provide a true customer-centric approach. Allowing you to better understand your customer relationships, their value and profitability. Oracle Front Office Applications increase revenues, decrease sales and service costs, and maintain customer retention and satisfaction. The sales, marketing, and service solutions provide deep integration with the entire enterprise collection of applications. Hence, enabling you to attract and retain profitable customers through a unified set of channels, including Web, mobile, and call centre. People Soft PeopleSoft Inc. was established in the year 1987 to provide innovative software solutions that meet the changing business demands of enterprises worldwide. It employs more than 7,000 people worldwide. The annual revenue for the year 1998 was $ 1.3 billion. PeopleSofts objective is to provide innovative software solutions that meet the changing business demands of organisations worldwide. PeopleSoft develops software that supports enterprise wide solutions to handle core business functions. This includes human resources management, accounting and control, project management, treasury management, performance measurement, and supply chain management. It provides enterprise solutions which is industry-specific to customers in select markets. Like healthcare, manufacturing, communications, financial services, higher education, public sector, services, retail, transportation, US federal government, and utilities. PeopleSoft Select offered by the company is a complete packaged solution including software, hardware, and services to address the needs of medium sized organisations.

Solutions of PeopleSoft run on a variety of leading hardware and database platforms. Like IBM, Sun Microsystems, Compaq, Hewlett-Packard, Informix, Microsoft SQL Server, Sybase, DB2, and others. PeopleSoft delivers Web-enabled applications, workflow, OnLine Analytical Processing (OLAP), and so on. 13.6.1 Business Management Solutions PeopleSoft solutions extend across the globe. The applications help in managing a broad set of business processes, from human resources and finance to supply chain management. One can implement a single application, or a complete enterprise wide solution. The flexible design lets you modify the applications to your specific needs. The PeopleSofts business management solutions are in the areas given below: Human Resources Management Accounting and Control Treasury Management Performance Measurement Project Management Sales and Logistics Materials Management Supply Chain Planning Service Revenue Management Procurement 13.6.2 Commercial Solutions Supply Chain Management: PeopleSoft has the industrys only complete enterprise resource planning solution that is built around supply chain optimisation. A Demand Planning module enables sophisticated forecasting, using both real-time and historical information. PeopleSofts complete suite of Supply Chain Management products provides comprehensive support for any organisation that produces or markets a physical product. Service Industry Solutions: PeopleSoft also provides a complete commercial support solution for service industries. The Service Revenue Management suite features modules supporting the tracking of time and labour, payroll processing, project management, billing, and expense and receivables processing. A suite of Procurement modules is also available supporting purchasing, inventory management, payables and expense processing, and asset management. 13.6.3 Industry Solutions PeopleSoft supports industry-specific market initiatives in many business sectors. The initiatives include industry specific products, customisation of existing applications, and sales and marketing support through direct channels and business alliances. PeopleSoft has 11 distinct business units, which provide software solutions specific to a broad range of public and private sector industries. These Industry partners help in making the solutions widespread and spanning the enterprise from the back office to the front lines. From service and manufacturing to education and government, PeopleSoft solutions are global, enterprise-wide, and modified to unique industry requirements. The different business units are: Communications Federal Government

 Financial Services Healthcare Higher Education Manufacturing Public Sector Retail Service Industries Transportation Utilities 13.6.4 Applications PeopleTools is an integrated set of client/server business application development and customisation tools from PeopleSoft. These tools enable customers to implement, modify, and maintain PeopleSoft applications as well as to extract, analyse and manipulate data. PeopleTools includes several tools for reporting, customisation and workflow. PeopleSoft continually adds and refines technology to optimise their customers information systems. They help customers take advantage of new and emerging technologies, giving them more choices and freedom to develop their own innovative business processes. Some of them are given below: Self-Service Applications: Helps to improve productivity throughout the organisation. PeopleSoft focuses on providing the occasional user with easy access to information and functionality specific to their role. They have developed a set of self-service applications to help companies quickly and cost-effectively distribute functionality throughout the enterprise over the Internet, and intranets. Built with a spontaneous interface based on a standard Web browser such as Netscape Navigator or Microsoft Explorer. These Java-based, crossplatform applications enable employees, customers, suppliers, and other occasional users to perform selfservice administrative tasks easily. Self-service applications are linked to PeopleSoft core product lines. Such as PeopleSoft Accounting and Control, Human Resources Management, and Materials Management. Web Client: Self-service applications use the PeopleSoft Web Client. The Web Client is downloadable on demand and runs on a Web browser across multiple platforms. Its affordability, open architecture and simplicity provide an ideal framework for delivering enterprise solutions to a large number of people. Applications dont need to be installed at every desktop; they are accessed easily through a browser. In addition to supporting self-service applications, the PeopleSoft Web Client has a Work list and Query interface. This improves the flow of the companys business processes and improves access to information for occasional users. Furthermore, all data transmitted between the Web Client and the application server is coded for added security. Because the Web Client takes advantage of PeopleTools, self-service applications can be deployed across the Internet or existing corporate intranets with common business rules workflow logic and security features. Multi-layer Transaction Processing: The ability to support large numbers of parallel users, while maintaining reliable, and superior performance, is critical to enterprise-wide data processing. PeopleSoft works in a variety of settings over Local Area Networks (LANs) and Wide Area Network (WANs), throughout organisations. In the latter, the application logic runs on an application server instead of the client. The application server is designed to relieve the client from processing intense SQL transactions, thereby reducing LAN traffic and improving performance across WANs. Three layered architecture also provides increased scalability to accommodate high volumes of parallel users while maintaining a consistent and reliable performance level. PeopleSoft continues to support its traditional two layered architecture as well. OnLine Analytical Processing (OLAP): Companies must be able to quickly extract and analyse the information they require for effective decision-making. OLAP, or online analytical processing, is a powerful

method for interactively analysing data online. PeopleSoft integrates popular OLAP tools including Cognos PowerPlay and Arbor Essbase that enable users to easily share multidimensional data stored in various locations. With the Cube Manager application, users can define the data they want to extract into an OLAP cube. It enables them to quickly view information from all different angles to test conclusions, conduct what-if scenarios and compare alternative strategies. With multidimensional information presented in quickread formats, managers can make better decisions, react faster to competitive threats and identify inefficiencies. Workflow: An essential part of the solution, PeopleSoft workflow capabilities help communications companies achieve enterprise-wide integration of information, applications, and people. Workflow enables a company to automate many time-consuming clerical tasks, while putting useful data into the hands of users. With workflow, the companys PeopleSoft applications do more of the work. For example, if managerial approval is needed for a work order, the system automatically forwards the request. Workflow can also help the company track projects, by initiating a workflow message to the appropriate person when a project exceeds a predetermined cost. The company can even bring non-PeopleSoft users into the workflow process, using e-mail systems and the Internet for collecting, and distributing data. JD Edwards World Solutions Company 1977 Denver, Colorado, three men left the accounting world to form a software company that would specialise in midrange computing solutions. Each of the three founders Jack Thompson, Dan Gregory and Ed McVaney lent a small portion of his name for the company name. On March 17, JD Edwards was formed. In the early years, JD Edwards designed software for several small and medium-sized computers. They eventually started focusing on the IBM System/38 in the early 1980s. It was in this effort that JD Edwards pioneered the Computer-Aided Systems Engineering (CASE) software development and design tool. This lend for consistency across the broad range of JD Edwards integrated applications. As JD Edwards business continued to grow, it became obvious that servicing a large number of customers was creating challenges. The company could either remain small or serve customers on an individual basis or, with a breakthrough in technology; it could become an industry leader in enterprise software. When McVaney and Thompson began to design and implement Worldsoftware, they provided the pathway to success. By the mid-1980s, JD Edwards was being recognised as an industry-leading supplier of applications software for the highly successful IBM AS/400 computer, a direct successor of the System/38. With the June 1996 introduction of OneWorld, the company once again achieved a technological breakthrough. Building on the CASE technology pioneered in the 1980s, OneWorld combines a full range of platform independent applications with an integrated toolset. OneWorld gives organisations the power to configure their systems and applications as their needs change. Today, JD Edwards is a publicly traded company that has more than 4,700 customers with sites in over 100 countries and more than 4,200 employees. The company attributes much of its success to a corporate culture that emphasises quality at all levels. JD Edwards commitment to its product quality, its corporate culture and a customer centric approach enable the company to deliver and support leading enterprise software solutions that solve business problems. 13.7.1 Product and Technology JD Edwards offers its solutions primarily for the AS/400 platform. JD Edwardss has two application suites, OneWorld and WorldSoftware. WorldVision, provide comprehensive supply chain management functionality across the wide range of technology. Both can run parallel on the same the AS/400 platform, share data and interact with each other as a unified solution. 13.7.1.1 OneWorld JD Edwards OneWorld is flexible enough to support an extended solution by integrating with existing, bestof-breed and other company products. This can be achieved without sacrificing the security, integrity, or consistency of the existing systems or data. OneWorlds own Application Programming Interfaces (APIs) , as well as such industry standards as CORBA, ODBC and other packaged integration solutions ensure that you wont be locked into limited functionality, and any of the future opportunities.

OneWorld embraces change with its modular architectural foundation. The information processing is segmented into five functional elements. They are database, data warehouse, business objects, reporting, and GUI. The users can link these elements in a variety of configurations from one level, with every element running on a stand-alone PC, to five levels or more. One can also distribute the elements geographically, departmentally, or administratively. You also can configure and reconfigure in the field, as requirements change. There are provisions to add new servers, even Web servers, without having to rewrite applications for the new machine. OneWorld has the tools and technologies that will quickly bring archived data to light. And you can extend and supplement those technologies with solutions offered by leading industry data warehousing and decision support specialists. The customer has the option to choose the data warehousing solution that he wants. OneWorld provides alternatives, so that you can choose the most appropriate solution based upon your own requirements. With OneWorld, you can distribute your enterprise applications to employees, business partners, and customers using web-based technology, without rewriting your applications. OneWorld software version supports client/server and Internet modes. This results in an extended enterprise that works together to support the same business tasks. No matter how well your applications fit, they probably need a little modification to fit precisely to the needs of your organisation. With OneWorld, you get a powerful set of tools to make those alterations. OneWorlds toolset uses business logic, not symbols and syntax, to drive the modification process. Change your business specifications, and the toolset automatically regenerates the appropriate object code. You can modify applications, balance processing loads run reports, and build graphical user interfaces without writing codes. Add hardware and databases without bringing your business to a halt. Since modifications are made with the same toolset used to build OneWorld, its all integrated. When a new release arrives, your changes will automatically be incorporated you wont have to make them again. The interface is consistent whether you are partitioning applications or replicating data. This will save a lot of time and effort in reprogramming and retraining. OneWorld allows you to build highly flexible workflow solutions and execute, predefined, and unplanned processes in your organisation. With OneWorld, your ability to learn, implement, and maintain workflow at all levels of your organisation is simplified. 13.7.1.2 WorldSoftware and WorldVision In the age of technology change, the popularity of many enterprise software solutions is fleeting. The resulting obsolescence is frustrating and costly. It is better to have a system that has the necessary functionality with built-in longevity. More than 4,000 customers have found this staying power in JD Edwards WorldSoftware. On its strength and the reliability of its host-centric. IBM AS/400 foundation, WorldSoftwares global popularity has endured in the ERP marketplace for over a decade. Inherently flexible and easy to use, WorldSoftware readily adapts to your situation, letting you: Selectively mix, match and integrate software applications from among its diverse industry product suites. Easily modify it to ongoing business, local and organisation-specific requirements. Add WorldVision, its advanced graphical user interface, to gain client/server benefits. Optionally run it alongside OneWorld, JD Edwards network-centric solution, to gradually incorporate other computing platforms into your network. JD Edwards WorldVision provides the Graphical User Interface (GUI) with a look and feel common to the PC. At the same time it protects your investment in WorldSoftware and the AS/400. WorldVision also allows you to: Maximise productivity by shrinking the amount of training users need. Make a safe move to client/server by leveraging your existing host-centric WorldSoftware applications.

And like WorldSoftware, another bread of software WorldVision is developed and continually enhanced for the future. For example, you can have WorldVision as a Windows 95/NT style GUI for a PC and as a Javabased interface for use across the Internet, or intranets. 13.7.2 Modules The different product modules available from JD Edwards are: Foundation Suite: Consists of Back Office, CASE Foundation, Environment/ Toolkit, Financial Analysis Spreadsheet Tool and Report Writer, WorldVision GUI, Electronic Burst & Bind. Financial Suite: Consists of General Accounting, Accounts Payable, Accounts Receivable, Fixed Assets, Financial Modelling and Budgeting, Multi-Currency Processing, Cash Basis Accounting, Time Accounting) Logistics/Distribution Suite: Consists of Forecasting, Requirements Planning, Enterprise Facilities Planning, Sales Order Management, Advanced Pricing, Procurement, Work Order Management, Inventory Management, Bulk Stock Management, Quality Management, and Advanced Warehouse. Management: Consists of Equipment Management, Transportation Management, Job Cost and Service Billing Services Suite: Contract Billing, Subcontract Management, Change Management, and Property Management. Manufacturing Suite: Consists of Configuration Management, Cost Management, Product Data Management, Capacity Planning, Shop Floor Management, and Advanced Maintenance Management) Architecture, Engineering, Construction, Mining and Real Estate Suite: Consists of Procurement, Inventory Management, Equipment Management, Job Cost, Work Order Management, Subcontract Management, Change Management, Contract Management, Contract Billing, Service Billing, Homebuilder Management, and Property Management. Energy and Chemical Suite: Consists of Agreement Management, Advanced Stock Valuation, Sales Order Management, Bulk Stock Management, and Load and Delivery Management. Government, Education, and Not-for-Profit Solutions: Consist of Financial Administration and Reporting, Budget Administration, Fund and Encumbrance Accounting, Grant and Endowment Management, Purchasing and Material Management, Warehousing and Central Stores Management, Human Resources Management, Service and Work Order Management, Capital Project and Construction Management, Contract Management, Plant, Equipment, and Fleet Maintenance. Utility and Energy Solutions: Consists of Customer Information System, Human Resources Management, Work Management, Regulatory Reporting, Supply Chain Management, Project Management, Enterprise Maintenance Management. JD Edwards offers customers the means of achieving greater ongoing control of their businesses. It is enabled by their ability to define and redefine the way they do business as markets, customers and competitive conditions change. Behind this customer commitment is a twenty-two year history of listening to customers, understanding what they ask of business technology. At the same time learning the problems and requirements of their industry and developing solutions accordingly. By emphasising solutions, relationships, and value, JD Edwards maintains its focus on what truly matters to its customers. Systems Software Associates Inc. (SSA) System Software Associates (SSA), Inc. is one of the leading providers of software for industrial businesses in the world. The company was founded in 1981 by Roger E. Covey. Covey at age 26 was already experienced in selling software manufacturing systems. He had worked previously for Chicago, Illinois-based Professional Computer Resources, Inc before starting his own company.

The reason for the companys early growth was its unique distribution system. Covey had determined that selling through retail channels made it difficult to find customers, while selling though a direct sales force and providing extensive servicing made it difficult to turn a profit. Therefore, SSA instead developed a network of local affiliates, trained by SSA, that would sell, install, and service the products for a commission. This enabled the company to expand at an impressive rate while keeping its overhead costs low. Covey and his employees decided to focus on improving the companys specialty, integrated software packages for industry. Instead of searching for the ways to diversify the product line the company had. In 1984, SSAs sales reached $3.9 million. This growth continued rapidly through the mid 1980s with the services they offered to medium-sized companies. Since these companies often needed to expand their computer system capacities and software capabilities. However, they wanted to achieve this without hiring programming personnel as a part of their work force. Since hiring program developers was not only costly but also required resources to support it. SSA was able to make use of this opportunity and establish its market is these medium sized companies. SSA by 1989 had a workforce of 400 employees with over 4,000 customers in 30 countries. The company was producing software in eight languages, including French, German, Italian, Chinese, and Japanese. They were offering twenty-six integrated software products for their customers. At a price rang varying from $50,000 to $500,000, depending on the size of the computer on which the applications were to run. Network of associates working for SSAs had grown to 52 by the middle of 1989, penetrating nearly every major market in the world. The competition became tough when IBMs improved integrated software package was released to the market. However, the market for integrated software for medium-sized companies remained somewhat under-penetrated, and SSA was able to sustain its rapid growth rate through the year. The companys sales increased to $95 million, with net income reaching $11.1 million in 1989. SSA had made its presence felt in the ERP market. After Coveys resignation, his place was filled by Larry J. Ford. Larry J. Ford was the vice-president of IBM, in charge of marketing the AS/400. Ford, who had been with IBM for 28 years, had occupied the posts of president, chairman, and chief executive of SSA. Under leadership of Ford, SSA continued to prosper. Increasing stress was placed on the companys CASE products, which assist clients in adapting software for their own purposes as business conditions change. SSA had over 4,000 customers, more than half of them were overseas customers. The companys net income finally began to stabilise during that year, although sales continued to climb, reaching $146 million. SSA concentrated its attention on a new strategy for supporting open-system client server computing environments. Using its CASE technology, it began offering more flexible software than compared to previously available. The companys new version of its most important BPCS series was called Business Planning and Control System/Advanced Solution (BPCS/AS). BPCS/AS consists of over 40 applications integrated in it. These applications can be easily modified to keep up with rapid changes taking place in the hardware on which they are run and the business climates in which they are used. The company announced that its new client/server application products can run on systems based on UNIX as well as on the AS/400. Now SSA is the single largest supplier of software for IBM manufactured AS/400 line of minicomputers. The flexibility of SSAs software products are so flexible that they can be reconfigured to meet specific customer and business demands in any industry. The company through offices and business support system in 67 countries maintains its global presence. It also provides support for clients with the help of a network of over 5,000 professionals working round the clock. 13.8.1 Product and Technology Business Planning and Control System (BPCS) is the main product line of SSAs. This is an integrated group of software products for industry that includes applications for manufacturing, distribution, and financial operations. The company is also a major force in Computer-Aided Systems Engineering (CASE) technology. Its AS/SET line uses CASE technology to allow clients to construct their own applications. Electronic Data Interchange (EDI) enables businesses to communicate electronically with trading partners, is another area in which SSA has developed advanced products. The companys new software line the Main/Tracker automates, maintenance, performs safety inspection, and warranty tracking. Therefore it is one of the leading maintenance management system software in the world. Some of the most popular products of SSA are: Business Planning Control System (BPCS): BPCS consists of processes that monitor various functions of distribution and manufacturing.

 Business Performance Management: Business performance management (BPM) consists of a set of management and analytic processes, supported by technology, that enable businesses to define strategic goals and then measure and manage performance against those goals. Customer Relationship Management (CMR): CMR consists of the processes a company uses to monitor and organise its contacts with its current and future customers. CRM software is used to support processes. Also information about customers and their interactions can be entered, stored, and accessed by employees in different company departments. Typical CRM objective is to improve services provided to customers, and to use customer contact information for targeted marketing. Financial Management (FM): FM is the sub-division of finance that concerns itself with the managerial significance of finance techniques. It is focused on assessment rather than technique. It is an interdepartmental approach that borrows from both managerial accounting and corporate finance Human Capital Management (HRM): HRM is the strategic and rational approach to the management of an organisations most valued assets the people working there who individually and collectively contribute to the achievement of the objectives of the business. Product Lifecycle Management (PLM): PLM is the process of managing properly the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal. PLM integrates data, processes, people, and business systems and provides a product information backbone for companies and their extended enterprise. Supply Chain Management (SCM): SCM is the management of a network of businesses that are interconnected, involved in the ultimate provision of product and service packages required by end customers. It monitors the movement and storage of raw materials stock, inventory, work-in-process, and finished goods from point of origin to point of consumption. Supplier Relationship Management (SRM): SRM is a discipline of working in cooperation with the suppliers that are vital to the success of your organisation, to maximise the potential value of the relationships of the supplier. Lets us study about SSAs highly popular product the BPCS. Business Planning Control System (BPCS) was developed by System Software Associates (SSA), which later became SSA Global Technologies. This software is used to control the operations of manufacturing companys processes. BPCS consists of MRP logic for manufacturing operations, provided there are high standards of data validity such as engineering specifications and inventory accuracy. It runs on several systems, which includes the IBM System also known as IBM AS/400 or IBM eServer iSeries. It is written in SQL, As/Set, RPG, and other IBM languages somewhat unique to the System. The main strength of BPCS that helps it to compete with other ERP vendor is its manufacturing and planning applications. 13.8.2 BPCS Applications BPCS Applications dependent very much on the BPCS software version of SSA. Since, SSA enters into partnerships with various specialty suppliers of applications such as Data Mining, Bar Coding, and so on, and suppliers that integrated with a particular version. Most planning in BPCS Application suite functions are used in both Distribution and Manufacturing. The BPCS Application suite includes: Financial: It consists of Costing (CST), Accounts Payable (ACP), Accounts Receivable (ACR), Billing BIL, General Ledger GLD, Cash Management (CSH), Multiple Currencies (MLT), Currency Translation (CTR), Financial Assistant (FIN), Fixed Assets (FXA), Payroll (PAY), Business Modeling, and Data Mining. Planning: It consists of Forecasting (FOR), Master Scheduling (MPS), Material Requirements Planning (MRP), Capacity Planning (CAP), Distribution Resource Planning (inter facility) (DRP), Planners Assistant (PLN), and Simulations.

 Distribution: It consists of Inventory (INV), Purchasing (PUR), Customer Order Processing (ORD), Billing (BIL), Sales Analysis (SAL), Promotions and Deals (PRO), and Performance Measurement (PRF),(such as supplier quality and on-time, your company performance in supplying to the customers, our internal quality control, Multiple Environments, Companies, Divisions, Facilities, Warehouses, and Locations). Manufacturing: It consists of Bill of Material (BOM), Inventory (INV), Shop Floor Control (SFC), Master Scheduling (MPS), Material Requirements Planning (MRP), Capacity planning (CAP), Laboratory Management (LMS), Just In Time (JIT), Quality Control (QMS), Repetitive Manufacturing, CIMPath (Barcoding and Data collection) (CIM), Advanced Process (chemical) Industries (API), and Performance Measurement (factory production) (PRF). Systems Applications: It consists of ASAP Information Retrieval, Misc Reports & Retrievals, System Parameters or Business Rules, Transaction Effects, Documentation, Data Base X-Reference, Interest Area Menus, Sliding Y2K Window, and Data Base upgrade. QAD QAD was founded in 1979 and now has a presence in 21 countries and employs more than 1100 people. The companys products include MFG/PRO, On/Q, Service/Support Management, Decision Support, and Qwizard. The companys flagship product is its ERP solution MFG/PRO. It is available in 26 languages and has more than 4,000 installed sites in over 80 countries. The company got the ISO certification in 1995. QAD offers a variety of supply chain and Enterprise Resource Planning (ERP) software products to manufacturing industries within the automotive, consumer products, electronics, food and beverage, industrial products and medical sectors. QAD software optimises your enterprise by increasing the speed of internal processes and by synchronising distributed operations. QADs flagship product, MFG/PRO software, provides multinational organisations with an integrated Global Supply Chain Management solution. It includes financial, manufacturing, distribution, and service/support management applications within an open system environment. Internet-Enabled MFG/PRO allows you to share information and conduct commercial transactions over the Internet. QADs On/Q Extended Supply Chain Applications manage the complex demand and fulfilment transactions of large multinational corporations with dynamic, collaborative relationships spanning multiple enterprises. Service/ Support Management are designed for companies who not only manufacture and sell their products but also offer after-sales service and support. QADs Decision Support is a tool designed to provide manufacturers with access to information necessary for informed decision-making. Qwizard, QADs interactive mentor for users of MFG/PRO software, is a value-added tool that provides easy-to-use business modelling, implementation, and interactive learning tools. QAD has currently developed a number of business arrangements with Product Alliance Partners to enhance the effective functionality of QADs products. 13.9.1 Application MFG/PRO software is one of the successful client/server ERP applications as it dramatically increases the internal efficiencies of distributed operations within months of purchase. The software is complete, open, flexible, scalable, interactive, and designed to address the operations requirements of todays manufacturers. It is available in 26 languages, is year-2000 compliant, and supports multiple currencies including the Euro. MFG/PRO includes a large set of solution components for manufacturing, distribution, financial, supply chain, and service /support management. Configurable and interoperable, it is open to best-of-breed components, uses either Oracle or Progress databases, and runs in UNIX, Windows and Windows NT environments. MFG/PRO can be implemented at multiple locations and it easily scales to meet the changing business requirements. MFG/PROs user interface is an ultra-thin Java browser. MFG/PRO is also available with a Windows Character User Interface (CUI).or Graphical User Interface (GUI). Manufacturers need a solid strategy for achieving and maintaining competitive advantage. MFG/PRO software quickly synchronises distributed operations within your enterprise, enabling you to balance supply

and demand across multiple sites. MFG/PROs supply chain functions include centralised order processing, centralised purchasing, enterprise operations planning, distribution requirements planning, and enterprise materials transfer. By using MFG/PROs enterprise-level supply chain functions, you can manage supplies within your enterprise far more effectively, no matter how widely distributed your sites are. This means you will be able to respond to customer needs much more rapidly. 13.9.2 Modules MFG/PRO of QAD is a fully integrated software package available on a module by module basis. MFG/PRO addresses the entire manufacturing band from repetitive to configure-to-order. It is appropriate for batch process like make-to-stock, configure-to-order, and repetitive manufacturing environments. With world class supply chain management tools, it is particularly useful for multinational companies. The various modules of MFG/PRO are: Distribution: The Distribution Modules (DM) of MFG/PRO are used to monitor inventory balances and manage purchasing and sales order entry activities. Manufacturing: The Manufacturing Modules (MM) are used to regulate all manufacturing activity within the various types of production environments. Financials: The Financial Modules (FM) interface with the Distribution, Planning and Manufacturing modules to report the financial implications of the companys activities. Service/Support: Service/Support Modules (SM) are designed for companies which not only manufacture and sell their products, but also offer after-sales service and support. Supply Chain: Supply Chain Management (SCM) is the control of goods and information from supplier to customer. Master Files: Master Files (MFs) functions provide access to a series of foundation modules that are used by the rest of the MFG/PRO applications. These master files include: Inventory Control Settings, Items/Sites, Addresses/Taxes, Physical Inventory, Multiple Database configurations, and Manager Functions.

6. What is BAPI? Why BIAP is considered as commanding tool in the SAP consultants toolkit?
Ans.

Business Application Programming Interface (BAPI) BAPI (Business Application Programming Interface) is a set of interfaces to object-oriented programming methods that enable a programmer to integrate third-party software into the proprietary R/3 product from SAP. For specific business tasks such as uploading transactional data, BAPIs are implemented and stored in the R/3 system as remote function call (RFC) modules. BAPI is the most dominant tool in the SAP consultants toolkit. It is one of a set of tools for interfacing with an SAP R/3 system. The priority of BAPI is calling data in and out of SAP. For the SAP consultant, BAPIs are the small, powerful ships that keep these barges of data moving. SAPs R/3 system is now open by releasing the specifications for some 170 business application programming interfaces (BAPIs). This helped third-party applications interact with R/3 directly. BAPIs can be called as sets of methods that allow external applications to collaborate with specific R/3 business objects such as customers, accounts, or employees. As R/3 data is addressable through callable methods, BAPIs gives flexibility to the third party application vendors to build supporting applications for the R/3 system.

Authorized Learning Centre

Poddar Institute of Information and Technology

Internal Assignment Feb 2012

Name: ____ AMBROSE RAI___________________ Registration No. :__521011937______________ Course: ___MBA___ Sem: ___3rd____________ Subject Name : ____ Supply Chain Management _____ Subject Code : ___ OM0012_____________________ LC Code : _____1531_________________________ LC Center: Poddar Institute of Information & Technology Module No.:_________________________________ Date of Submission: _ 10th January 2012 ________ Marks Awarded:_____________________________

___________ Signature of Student

____________ Signature of Center

____________ Signature of Examiner

Master of Business Administration - MBA Semester III OM0012 Supply Chain Management - 4 Credits (Book ID: B1234) Assignment - Set- 1 (60 Marks) 1. Tabulate the events of Supply Chain Management evolution according to chronological dates starting from Ancient times to 2000 AD.

Ans.

Evolution of Supply Chain Management

The concept of Supply Chain is as old as that of trade and can be traced back to 5000 years BC in India. All across the world, there are several indications of the concept of Supply Chain having existed for thousands of years. However, the chronicled record of the practice of certain basic concepts ofSupply Chain Management can be traced back to the industrial revolution in eighteenth century.

On the other hand, the above period is characterised by individual companys attempts to maximise the efficiency of their own businesses, at which many companies excelled. Therefore, the relationships between different organisations that were interfacing with each other as supplier customer were very hostile, and genuine to what every organisation sought for turned out to be a WIN-LOSE situation, i.e. a customer would benefit at the cost of his supplier, or the supplier would gain at the cost of the customer. The Toyota Production System, which is hailed as the second industrial revolution, started changing the situation, as the new attempts and practices in manufacturing were based on co-operation and collaboration between companies. With the advent of Manufacturing Resource Planning (MRP) and Enterprise Resource Planning (ERP) systems organisations began evolving as an integrated and cohesive unit and the concept of Internal. Supply Chain gained ground. Consequently, thereafter the interface in the markets was those of tightly integrated units dealing with other tightly integrated companies. The concept of Supply Chain Management was born and this evolved further. Thus, while the concept of Supply Chain is very old, the concept of Supply Chain Management is quite recent.

Six major movements can be observed in the evolution of supply chainmanagement studies: Creation, Integration, and Globalization (Lavassani et al., 2008 a),Specialization Phases One and Two, and SCM 2.0. 1. Creation Era The term supply chain management was first coined by a U.S. industry consultant in theearly 1980s. However, the concept of a supply chain in management was of greatimportance long before, in the early 20th century, especially with the creation of theassembly line. The characteristics of this era of supply chain management include theneed for large-

scale changes, re-engineering, downsizing driven by cost reductionprograms, and widespread attention to the Japanese practice of management. 2. Integration Era This era of supply chain management studies was highlighted with the development of Electronic Data Interchange (EDI) systems in the 1960s and developed through the1990s by the introduction of Enterprise Resource Planning (ERP) systems. This era hascontinued to develop into the 21st century with the expansion of internet-basedcollaborative systems. This era of supply chain evolution is characterized by bothincreasing value-adding and cost reductions through integration. 3. Globalization Era The third movement of supply chain management development, the globalization era,can be characterized by the attention given to global systems of supplier relationshipsand the expansion of supply chains over national boundaries and into other continents.Although the use of global sources in the supply chain of organizations can be tracedback several decades (e.g., in the oil industry), it was not until the late 1980s that aconsiderable number of organizations started to integrate global sources into their corebusiness. This era is characterized by the globalization of supply chain management inorganizations with the goal of increasing their competitive advantage, value-adding, andreducing costs through global sourcing. 4. Specialization EraPhase One: Outsourced Manufacturing and Distribution In the 1990s industries began to focus on core competencies and adopted aspecialization mode l. Companies abandoned vertical integration, sold off non coreoperations, and outsourced those functions to other companies. This changed management requirements by extending the supply chain well beyond company wallsand distributing management across specialized supply chain partnerships.This transition also refocused the fundamental perspectives of each respectiveorganization. OEMs became brand owners that needed deep visibility into their supplybase. They had to control the entire supply chain from above instead of from within.Contract manufacturers had to manage bills of material with different part numberingschemes from multiple OEMs and support customer requests for work -in-processvisibility and vendor-managed inventory (VMI).The specialization model creates manufacturing and distribution networks composed of multiple, individual supply chains specific to products, suppliers, and customers whowork together to design, manufacture, distribute, market, sell, and service a product.The set of partners may change according to a given market, region, or channel,resulting in a proliferation of trading partner environments, each with its own uniquecharacteristics and demands.

5. Specialization EraPhase Two: Supply Chain Management as a Service Specialization within the supply chain began in the 1980s with the inception of transportation brokerages, warehouse management, and non-asset-based carriers andhas matured beyond transportation and logistics into aspects of supply planning,collaboration , execution and performance management.At any given moment, market forces could demand changes from suppliers, logisticsproviders, locations and customers, and from any number of these specializedparticipant s as components of supply chain networks. This variability has significanteffects on the supply chain infrastructure, from the foundation layers of establishing andmanaging the electronic

communication between the trading partners to more complexrequirements including the configuration of the processes and work flows that areessential to the management of the network itself.Supply chain specialization enables companies to improve their overall competencies inthe same way that outsourced manufacturing and distribution has done; it allows themto focus on their core competencies and assemble networks of specific, best-inclasspartners to contribute to the overall value chain itself, thereby increasing overallperformanc e and efficiency. The ability to quickly obtain and deploy this domainspecificsupply chain expertise without developing and maintaining an entirely unique andcomple x competency in house is the leading reason why supply chain specialization isgaining popularity.Outsourced technology hosting for supply chain solutions debuted in the late 1990s andhas taken root primarily in transportation and collaboration categories. This hasprogressed from the Application Service Provider (ASP) model from approximately 1998through 2003 to the On-Demand model from approximately 2003-2006 to the Softwareas a Service (SaaS) model currently in focus today. 6. Supply Chain Management 2.0 (SCM 2.0) Building on globalization and specialization, the term SCM 2.0 has been coined todescribe both the changes within the supply chain itself as well as the evolution of theprocesses, methods and tools that manage it in this new "era".Web 2.0 is defined as a trend in the use of the World Wide Web that is meant toincrease creativity, information sharing, and collaboration among users. At its core, thecommon attribute that Web 2.0 brings is to help navigate the vast amount of informationavailable on the Web in order to find what is being sought. It is the notion of a usablepathway. SCM 2.0 follows this notion into supply chain operations. It is the pathway toSCM results, a combination of the processes, methodologies, tools and delivery optionsto guide companies to their results quickly as the complexity and speed of the supplychain increase due to the effects of global competition, rapid price fluctuations, surgingoil prices, short product life cycles, expanded specialization, near-/far- and off-shoring,and talent scarcity.

2. The utility of forecasts can be enhanced through collaborative forecasting among supply chain partners. Explain?

Ans. Collaborative Supply Chain Management: Enabling Visibility The participation of the entire supply chain community leads to improved i n v e n t o r y planning and optimization.If youve tried working with suppliers in multiple locations and different time zones, youknow that email is an improvement over voice and fax, but it still falls short of what youneed.Demand Solutions Collaboration provides a collaborative framework to create a supplynetwork that includes credible demand and replenishment signals; shared

businessp r o c e s s e s w i t h c u s t o m e r s a n d s u p p l i e r s ; e x c e p t i o n b a s e d m a n a g e m e n t o f k e y performance indicators; coordinated workflow and activity among all trading partners ; and a common view of business performance via a secure Internet-based solution. Afourth generation collaborative planning solution, Collaboration works seamlesslyacross disparate applications and organizations. Enhanced forecast management and inventory planning through collaboration Item forecast numbers are based on empirical data. A flexible and hierarchical statisticalforecasting engine is essential, but a true collaborative forecast will take into accountfactors outside the four walls of your company. Accurate and collaborative forecastsimprove customer service, enhance inventory planning and optimization and ultimatelyi n c r e a s e n e t s a l e s . D e m a n d S o l u t i o n s C o l l a b o r a t i o n e x t e n d s b e y o n d t h e c o r e forecasting activity to include your external trading partners and internal departments -in real time with a Web-based solution. With Collaboration, you get a more accurateforecast. Your trading partners and customers have visibility into their account plans inyour system and are able to enhance the plan. With collaborative plans, everyone can focus on value-added analysis versus data collection. Collaboration process Whether you follow CPFR , have your own internal collaboration methodology or donthave one established yet, Collaboration is flexible and dynamic to tailor the process to support your business. Using Demand Solutions Collaboration tools, you can improve sales and order forecast accuracy, employ automatic exception management and alertn o t i f i c a t i o n s , s i m p l i f y p r o m o t i o n p l a n n i n g a n d e a s i l y a n a l yz e b u s i ness trends. T h e results: Increased supply chain visibility Optimized inventories Reduced stock outs Lower costs Satisfied customers Increased revenue Demand Solutions Collaboration provides a powerful collaborative platform Using the flexibility of Collabo ration, manufacturers can now share their planned order f o r e c a s t s w i t h k e y s u p p l i e r s . B u s i n e s s a l e r t s , p r i o r i t i z e d l i s t s o f c r i t i c a l e v e n t s a n d automatic resolutions help focus valuable resources on urgent issues. Trading partnerscan work together to address exception conditions proactively.Customer demand is synchronized with supplier capabilities for optimized inventory andproduction. Dynamic views support flexible aggregation and disaggregation of items atv a r i o u s l e v e l s o f d e t a i l , m a k i n g c o l l a b o r a t i o n m u c h e a s i e r . C o m p a n i e s t h a t collaboratively manage their supply chain gain a real competitive advantage. Dashboards for better response Demand Solutions Dashboards provide a way to visually present cr i t i c a l d a t a i n summary form. The Dashboard functionality can be

customized by job function soplanners can see the views they need and e v e r yo n e c a n m a k e q u i c k d e c i s i o n s a n d r e s p o n d t o m a n a g e m e n t s e v e r y c h a n g i n g d e s i r e t o s e e f o r e c a s t i n g i n f o r m a t i o n i n multiple formats. Additional features Quickly delivers business value and ROI through inventory optimization andimproved forecasting accuracy Includes collaborative calendar capabilities to display inter-companypromotions Integrates easily with existing supply chain,CRM and ERP systems Simplifies complex planning processes with closed-loop demand forecastingcapabilities AcceleratesSales & Operations Planning (S&OP), improves communications and generates alerts for key exceptions Browser based, which means zero client deployment Supports XML and EDI for easy exchange of data with trading partners Provides visibility into the entire supply chain Exception management (configurable by trading partner) Ability to define work flows View data as information to help optimize inventory and maximize profits withDemand Solutions Dashboards

3. Explain the Steps in implementing CPFR and the roles and responsibilities of various management levels in implementing the model.

Ans.
Steps in implementing CPFR There are nine steps in CPRF implementation. They are: 1. Develop front-end agreement: The parties involved establish the procedures and rules for the collaborative relationship. 2. Create joint business plan: The parties involved create a business plan that takes into account their individual corporate strategies and defined category roles, objectives, and tactics. 3. Create sales forecast: One party to create an initial sales forecast uses retailer Point of Sales data, causal information, and information on planned events. This forecast is then communicated to the other party and it is used as a baseline for the creation of an order forecast. 4. Identify exceptions for sales forecast: Products that fall outside the sales forecast constraints, set the front-end agreement are identified. 5. Resolve/Collaborate on exception items: The parties discuss and produce an adjusted forecast.

6. Create order forecast: Causal information and inventory strategies are combined to generate a specific order forecast that supports the shared sales forecasts and joint business plan. 7. Identify exceptions for order forecast: Products that fall outside the order forecast constraints, set jointly by the parties involved are identified. 8. Resolve/Collaborate on exception items: The parties negotiate again (if necessary) to produce an adjusted order forecast. 9. Order generation: One of the parties involved will get a firm order from the order forecast. Following Table shows the roles and responsibilities of various management levels in implementing CPFR model. Table 1.1 Roles and responsibilities of various management levels in implementing CPFR model

4. What is Customer value? How can differential advantage be achieved through Supply Chain Management?

Ans.
Customer Value By now, you must be familiar with Collaborative Planning and Replenishment in Supply Chains. This helps large scale projects such as the Efficient Consumer Response (ECR) in the fast moving consumer goods sector, for example, or Vendor Managed Inventory (VMI) and Collaborative

Planning, Forecasting and Replenishment (CPFR) initiatives. This generally provides a rich continuum of strategies for collaborating amongst supply chain partners. The value in ones product or service is almost always defined on customers terms and is regarded as a matter of insight. If the product is perceived by the customer as having value, then that view results in purchase. Customer value also arises from using the product consistently with satisfactory results. Customer value is just the difference between the benefit received from a product and the cost associated with that product. Todays customers are much more educated and informed because of the power of the internet. So, they tend to purchase products, which they feel are worth the cost required to obtain such product. Usually, customers will know exactly what they want to purchase and will not waste time with unsuitable products. So, it is required to have something unique. This makes the perception of the product as very profitable. A higher price will thus be advantageous. In their pursuit to communicate information about products and services, sales professionals often oversell and overlook the customers requirements. This might lead to an unsuitable situation. The value of the product wears out if the price gets reduced too often. The customer value can be maintained by avoiding volatile price changes and by embracing the cost. Demonstrating the benefits of the products outweighs the costs associated with the product which works wonders in winning the customers. One of the concepts responsible for the growth of the companys market value is the customer value concept. There is an increasing dynamics of the technological changes and explosions in innovations. This results in the surprising growth of ways and forms which helps to meet the customers needs. This leads to deepened diversification of the needs and preferences along with shortening of product lifecycle. The competition intensity is further deepened by the development of automation, ongoing implementation of electronic devices, and information technologies. As a result, destabilisation and variability have become a common place. Industrial enterprises are forced to be more and more flexible and active in the fight for a customer. The companies which cannot realise these modern trends and adapt to them, will not be able to sustain in the long-term perspective. Quality management should be based on the principal idea of Total Quality Management (TQM). It is to secure permanent improvement of the companys management by accepting and suitably implementing new concepts and methods. One of the potential trends being the ability to contribute towards the permanent improvement of the companys operations and its economic results which is a concept of differentiated customer relationship management based on their value. The belief of this approach is based on the idea that a company should differentially manage the value to customers based on their value to the company which affects the management of marketing activities. It is important to turn away from the standard execution of business processes and to rebuild them completely or to change the organisation of their course. This is done to provide the value to customer which corresponds to the customer value of the company. As a last option, it may be necessary to execute reengineering of the company processes provided, so that the new process structure can be subordinate to both the customers and the value that can be brought to the company. The idea of managing the whole value-creating process of a company is to effectively support the differentiated customer relationship management. This has not been explored in the literature and therefore does not provide any concrete instructions on how to apply it in the day-to-day life of the company.

To meet the principle objective of customer value, the partial goals have to be specified, some of which are to: Define the substance of Customer Value and to specify the principle terms related to Customer Value. State the fundamentals of differentiated customer relationship management based on customer value. State the fundamentals of differentiated customer relationship management based on the customer value. State the value-creating process as a tool to provide the value to the customer. State the consequences of the value-creating process management with respect to the customer value in the economy of the business area. The concept of value is based on the relationship between the satisfaction of many differing needs and the resources used in doing so. The lesser the resources used or greater the satisfaction of needs, greater is the value. The aim of value management is to reconcile these differences and to allow an organisation to achieve the progress towards its stated goals with the use of minimum resources. Usually, the objective of quantification is the value the customer gains. This is referred to as a value to customer and measured as a proportion of the benefit and the total costs. The customers value always has two basic elements, like quality and price. The term value given to the customer is used with the same meaning and measured as benefits against the total costs to retain a product. The value is reliant on benefits and losses. It is difficult to measure the satisfaction gained by the customer. In B-to-B markets, it is possible to use the suppliers influence on the profitability of the customer in order to estimate the value given to the customer. If the revenue increases and/or the total cost decreases owing to the supplier, the value to customer is formed. The value the customer gains can be measured as the difference of both items. The value given to the customer is the difference between the sensed benefits and the total costs. Hence, the other side of the Customer Value can be reflected. A company provides the value to the company through the gain flow within the time. The measurement methodology of Customer Value to the company should be based on the idea that the customers present a long-term asset to the company that may and should be valuated in the same way as other similar assets. Like the other items of assets, various customers may naturally be of various values to the company based on the net present value. Customer Lifetime Value (CLV) is defined as the present value of all present and future gains generated by the customer within the period of their cooperation with the company. Life Time Value (LTV) can be defined as a present value of the flow of anticipated future financial contributions by the customer. Customer Life Time Value (CLTV) can be defined as a net present profit value for the entire lifetime period of cooperation with the customer. Certain differences exist among the definitions of the customer value. CLV works on the present value whereas LTV and CLTV are based on the net present value. CLV will include both the present and future flows while calculations of LTV and CLTV will be based on the future flows only. The

differences are caused by modification of the methodology for the solution of concrete tasks. This includes acquisition estimation, current customers evaluation and assessment of profitability of additional sources. It also involves allocating it to the present customers, and for calculating the substance which can be identical. The customer value is determined using the approximation approach. In this approach, it indicates that most of the companys customer value is 1 to 4.5 multiple of his/her annual margin depending on the companys discount and retention rates. The determination of the benefits from the customer and then its value estimation is dependent on the aims of assessment. If the customer value had to be employed for the value segmentation of the present customers, then the actual customer value estimation has to be done. Actual value means the customers value which is an asset to the enterprise considering what is currently known or predicted about the customers future behaviour. This can be achieved only by assuming that there are no major changes in the competitive environment. It corresponds to the customer value as a financial asset related to the customer. This means that it is a value taking into account only the inertia in relation with the customer. So, here we consider only what is commonly known or the estimation about the customers future purchasing behaviour on present conditions. The concept of customer value is used to assess the efficiency of various marketing strategies and subsequent differential allocation of the corporate sources to estimate the so called Strategic Value. It is an added advantage that the company may enjoy if the company may apply pro-active strategy and, as a result, the customer may change their behaviour. The estimation of this value is used to evaluate the economic efficiency of marketing investments which is planned to be spent for individual customers or markets and also to choose the most profitable scenario of the marketing strategy. Actual Customer Value is the strategic Customer Value estimated assuming that a maintenance strategy was chosen. According to marketing strategy, it is necessary to estimate the potential of individual customers in terms of their increasing value that is their Potential Value. The Potential Value corresponds to the value which the customer can have if the company applies a reliable strategy to increase the value by changing the behaviour towards the customer based on the customer needs. It is thus the maximum value which the customer can present to the company. The concept of Unrealised Potential Value can be used to determine the amount by which the company can increase the value of a certain customer if a suitable strategy is applied and spend the sources to secure it. There are three options available on how to increase the Actual Customer Value. This means there are three aspects of Unrealised Value available. They are: Gaining of business which the customers usually do with the competitors. Pointing the changes in the customers behaviour by increasing their loyalty and decreasing the corporate expenses. Aiming at the customers growth support which should be realised for more business with the customers. The starting point for Customer Lifetime Value estimation is the customers present profitability which depends on two reasons:

 The benefits the customers get in the years of their lifetime cycle can be assessed based on the revenues obtained from the customers and also the related expenses. These can be further adjusted by non-financial contributions. An important pre-requisite for assessing the future profitability and the calculation of the customer lifetime value is done by analysing the present customers profitability. The present profitability along with the customers potential will have to be considered while choosing a suitable treatment strategy towards individual customer groups. The company chooses a different strategy towards customers of low profitability and low potential of its growth in the future, for example, it has to work towards those with present low profitability yet with high potential growth. Differential Advantage The customer value can be created as an objective of Supply Chain Management and also as a means to other ends. A primary objective which can be achieved by creating customer value is Differential Advantage. Differential Advantage is supposed to enhance customer satisfaction and also lead the profitability and long-term success of the firm. The terms competitive advantage, comparative advantage, and differential advantage used in Differential Advantage can be quite confusing. The terms comparative advantage and competitive advantage have been used interchangeably with distinctive competence or distinctive capability which means relative superiority in delivering value or achieving lower cost in the market place. If the customer understands the value created by the competitors product or offering, differential advantage can be achieved in the market place.

Achieving Differential Advantage through Supply Chain Management To achieve superior competitive position several approaches have been identified which are as follows: First is the competitive-forces approach which gives more importance to the intensity of competition in the industry and the ability to achieve and to defend a position of low cost or differentiation in an attractive market segment. Strategies are focused on making pre-emptive moves that keep competitors off balance and also allow the firm to maintain a favourable balance of power. Second is the capabilities approach which is aimed on developing and maintaining distinctive skills and resources that allow the firm to deliver superior customer value or deliver value more cost effectively. Supply Chain Management uses the capabilities approach to achieve Differential Advantage through the creation and delivery of Customer Value. Tests on distinctiveness can include the following: Will it make disproportionate contribution in providing superior customer value or in delivering value most cost-effectively? Can the rivals readily match it? That is, is it difficult to imitate? Is it sturdy enough to be used in different ways to readily adapt to environmental change? Distinctive capabilities

The distinctive capabilities are as follows: Capabilities deployed inside out are the activities with an internal emphasis that are activated in response to external forces. Outside-in capabilities are targeted at anticipating market requirements, monitoring competitors and also creating long-term relationships with customers, channel members, and suppliers. Spanning capabilities are necessary to integrate the inside-out and outside-in capabilities. The focus of SCM is on creating value for ultimate consumer and differential advantage for the supply chain. The ability of the firms in the supply chain is to collectively use market sensing and customer linking capabilities to serve the end consumer more efficiently and effectively. This is important to achieve competitive advantage for the supply chain to compete based on the superior delivery value to consumers.

5. With reference to procurement management, illustrate your own ideas of internal suppliers and external suppliers by taking example of any commodities like soaps or perfumes.

Ans.
Supplier/Seller: The Supplier/Seller is the most important component/link In Supply Chain Management. It is more exclusive so in Procurement Management. This is because it is the Supplier/Seller who answers the who/what element in what/which is the source of supply? Every procurement decision involves a detailed analysis and rating of the supplier. We will discuss more on this at a later stage. It is enough for us to know that supplier is a very important component in Procurement Management process. Supplier definition: The Supplier is one who provides the need satisfying product/service in the Procurement Management process. Like internal and external customers, there are internal and external suppliers. External Supplier: External Supplier is generally the provider of goods/services required by the procurer/purchaser. The important characteristics of transactions with an external supplier are as given below: There is invariably a monetary component involved in the transaction with the external supplier. There is also a transfer of ownership/title to goods and/or services, in all transactions with an external supplier. Besides, generally all transactions with an external supplier is contractual Let us understand the above highlighted points in detail

As seen, in all procurement processes with an external supplier there is an exchange of goods and/or services for money. The external supplier puts in the efforts to produce the goods for the procurer because of his/her need for money (from profit). This is the basis of all activities connected with procurement. There is an element of personal gain or selfish interest of the external supplier. This is one of the most important influencing factors in all supply processes/activities. Once the exchange of goods/services takes place for money, the ownership of the goods vested[3] with the supplier gets transferred to the procurer. The buyer can dispose off the goods as (s) he pleases and this is subject to the laws of the land as applicable. From the above statement, it is understood that the entire transaction to procure and supply is/can be seen as a contract. A contract means agreement between two interested or mutually consenting parties for a specific activity. As an extension of the above, the relationship between the procurers will last only till the end of the contract. This was the general practise until the concept of Supply Chain Management took over. In the present context, the procurer and the supplier are seen as partners with interconnected interests for mutual benefit Internal Supplier: This is a very crucial input component in the Procurement Management process. This is because the performance of the internal supplier is very critical to an organisation in providing its external customers a customer delight. Only when this happens, the organisation can survive and grow. Otherwise the organisation is doomed to fail. Almost every employee who has an interaction/requirement from another employee is an internal supplier. The one who has the requirement is the internal customer. For example: Scenario 1: The accounts department, which has to make the cheque for goods/services provided against a purchase order, is an internal supplier to the purchase department. The purchase department is the internal customer. Scenario 2: The production division that manufactures goods against an order for say, 1000 cases of toilet soaps is the internal supplier. In this case, the internal customer is the marketing department. Scenario 3: The office attendant who makes photocopy of the purchase order in example 2 above is the internal supplier to the executive handling the concerned external customer account. It is clearly understood from the above statement that there are innumerable instances of internal customers and internal suppliers. The distinguishing characteristics between the internal and external supplier are: 1. In case of the external suppliers, there is a component of exchange of money involved. It is not so in the case of internal suppliers. 2. The relationship with the external supplier is contractual while it is one of support in the case of internal supplier. 3. There is a transfer of right to ownership/title in the case of external supplier. This does not happen with internal suppliers.

This is because the internal suppliers and the customers are a part of the same team having common goals similar to the goals of the organisation they are working for.

6. Write short notes on the following w.r.t Supply Chain Management. a) Bar Code b) Radio Frequency Identification c) Electronic Data Interchange d) Artificial Intelligence or Expert System Ans.

A)Bar code:A barcode is an optical machine-readable representation of data,which shows certain data on certain products. Originally, barcodes represented data in the widths (lines) and the spacings of parallel lines, and may be referred to as linear or 1D (1 dimensional) barcodes or symbologies. They also come in patterns of squares, dots, hexagons and other geometric patterns within images termed 2D (2 dimensional)matrix codes or symbologies. Although 2D systems use symbols other than bars, they are generally referred to as barcodes as well. Barcodes can be read byoptical scanners calledbarcode readers, or scanned from an image by special software.The first use of barcodes was to label railroad cars, but they were not commerciallysuccessful until they were used to automatesupermarket checkoutsystems, a task inwhich they have become almost universal. Their use has spread to many other roles asw e l l , t a s k s t h a t a r e g e n e r i c a l l y r e f e r r e d t o a s A u t o I D D a t a C a p t u r e (AIDC). Other s y s t e m s a r e a t t e m p t i n g t o m a k e i n r o a d s i n t h e A I D C m a r k e t , b u t t h e s i m p l i c i t y , universality and low cost of barcodes has limited t he r o l e o f t h e s e o t h e r s ys t e m s . I t costs 0.5 (U.S.) to implement a barcode, while passiveRFIDstill costs about 7 to 30per tag. B)Radio Frequency Identification:- Radio-frequency identification (RFID) i s a technologyt h a t u s e s c o m m u n i c a t i o n v i a e l e c t r o m a g n e t i c w a v e s t o e x c h a n g e d a t a between a terminal and an object such as a product, animal, or person for the purposeof identification and tracking. Some tags can be read from several meters away andbeyond the line of sight of the reader. Radio-frequency identification involves interrogators (also known as readers), and tags(also known as labels).Most RFID tags contain at least two parts. One is anintegrated circuitfor storing andprocessing information,modulatinganddemodulatingaradio-frequency(RF) signal,and other specialized functions. The other is anantennafor receiving and transmittingthe signal.There are three types of RFID tags: passive RFID tags, which have no power

sourceand require an external electromagnetic field to initiate a signal transmission, activeRFID tags, which contain abatteryand can transmit signals once an external source('Interrogator') has been successfully iden tified, and battery assisted passive (BAP) RFID tags, which require an external source to wake up but have s i g n i f i c a n t h i g h e r forward link capability providing greater range.T h e r e a r e a v a r i e t y of groups defining standards and regulating the use of R F I D , including:I n t e r n a t i o n a l O r g a n i z a t i o n f o r S t a n d a r d i z a t i o n (ISO),Inter national Electrotechnical Commission(IEC) C)Electronic Data Interchange:E l e c t r o n i c d a t a i n t e r c h a n g e ( E D I ) i s t h e structured transmission of data between organizations by electronic means. It is used totransfer electronic documents or business data from one computer system to another computer system, i.e. from one trading partner to another trading partner without humanintervention.It is more than meree-mail; for instance, organizations might replacebills of ladingandevenchequeswith appropriate EDI messages. It also refers specifically to a family of standards, e.g. UN/EDIFACT, ANSI X12.T h e N a t i o n a l I n s t i t u t e o f S t a n d a r d s a n d T e c h n o l o g y i n a 1 9 9 6 p u b l i c a t ion defineselectronic data interchange as "the computer-toc o m p u t e r i n t e r c h a n g e o f s t r i c t l y formatted messages that represent documents other than monetary instruments. EDIimplies a sequence of messages between two parties, either of whom may serve aso r i g i n a t o r o r r e c i p i e n t . T h e f o r m a t t e d d a t a r e p r e s e n t i n g t h e d o c u m e n t s m a y b e transmitted from originator to recipient via telecommunications or physically transportedo n e l e c t r o n i c s t o r a g e m e d i a . " . I t g o e s o n f u r t h e r t o s a y t h a t " I n E D I , t h e u s u a l processing of received messages is by computer onl y . H u m a n i n t e r v e n t i o n i n t h e p r o c e s s i n g o f a r e c e i v e d m e s s a g e i s t yp i c a l l y i n t e n d e d o n l y f o r e r r o r c o n d i t i o n s , f o r quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data are treated as one or mored a t a e l e m e n t s o f a n E D I m e s s a g e a n d a r e n o t n o r m a l l y i n t e n d e d f o r h u m a n interpretation as part of online data processing." EDI can be formally defined as 'The transfer of structured data, by agreed messagestandards, from one computer system to another without human intervention'. Mostother definitions used are variations on this theme. Even in this era of technologies suchasXML web services,theInterneta n d t h e World Wide Web, E D I m a y b e t h e d a t a format used by the vast majority of electronic commercetransactions in the world. D)Artificial Intelligence or Expert System:- Artificial intelligence (AI) i s t h e intelligenceof machines and the branch of computer sciencethat aims to create it. AIt e x t b o o k s d e f i n e t h e f i e l d a s " t h e s t u d y a n d d e s i g n o f intelligent agents" w h e r e a n i n t e l l i g e n t a g e n t i s a s ys t e m t h a t p e r c e i v e s i t s e n v i r o n m e n t a n d t a k e s a c t i o n s t h a t m a x i m i z e i t s c h a n c e s o f s u c c e s s . John McCarthy, w h o c o i n e d t h e t e r m i n 1 9 5 6 , defines it as "the science and engineering of making intelligent machines."The field was founded on the claim that a central property of humans, intelligencethesapienceof Homo sapienscan be so precisely described that it can

be simulated by amachine. This raises philosophical issues about the nature of themindand the limits of scientificinquiry, i s s u e s w h i c h h a v e b e e n a d d r e s s e d b y myth,fictionandphilosophy s i n c e a n t i q u i t y A r t i f i c i a l i n t e l l i g e n c e h a s b e e n t h e s u b j e c t o f o p t i m i s m , b u t h a s a l s o suffered setbacks and, today, has become an essential part of the technology industry,providing the heavy lifting for many of the most difficult problems in computer science.AI research is highly technical and specialized, deeply divided into subfields that oftenf a i l t o c o m m u n i c a t e w i t h e a c h o t h e r . S u b f i e l d s h a v e g r o w n u p a r o u n d p a r t i c u l a r institutions, the work of individual researchers, the so l u t i o n o f s p e c i f i c p r o b l e m s , longstanding differences of opinion about how AI should be done and the application of w i d e l y d i f f e r i n g t o o l s . T h e c e n t r a l p r o b l e m s o f A I i n c l u d e s u c h t r a i t s a s r e a s o n i n g , knowledge, planning, learning, communication, perception and the ability to move andmanipulate objects. General intelligence (or "strong AI") is still among the field's longterm goals.

Master of Business Administration - MBA Semester III OM0012 Supply Chain Management - 4 Credits (Book ID: B1234) Assignment - Set- 2 (60 Marks) 1. Logistics Management typically includes different types of activities. Explain each of these activities briefly with an example Ans.
Logistics Management Logistics Management is that part of the supply chain that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption to meet customers requirements. A professional working in the field of Logistics Management is called as a Logistician. Logistics Management typically includes different types of activities. Some of them are: Inbound and outbound transportation management Fleet management Warehousing Materials handling Order fulfilment Logistics network design Inventory management Supply/demand planning

 Management of third party Logistics services providers

Logistics is much more and much wider than mere physical handling of goods. Logistics involves several other functions such as purchasing, plant location, plant layout, the disposal of wastes and so on. Raw material and finished products needs to be moved, though on a small scale. Things began changing with the advance in transportation. Population began moving from rural to urban areas and to business centres. No longer did people live near production centres, nor did production take place near residence centres. The geographical distance between the production point and consumption point increased. Since the early 1990s, the business outlook has changed. The globalisation, the free market and the competition has required that the customer get the right material at the right time, at the right point and in the right condition at the lowest cost. This is "globalisation". Some of the Logistics functions that allowed globalisation to happen are: Purchasing: Raw materials, assembled products, finished products from all over the world. Where can you get the quality you want at the best price? Manufacturing operations: How should the machines be organised, how many workers do you need, where do you stock your materials and finished products, how many products do you manufacture on each production run, etc. Transportation: Domestic and international, from raw materials to finished products that move. What and when and for what price? Warehousing: Product is either moving (transported) or not (stored). This is becoming a very sophisticated area and a key to shorten the time to market for products. Inventory control: How mu ch product is on hand, on order, in transit, and where is it? Inventory drives Logistics. Import/Export: International regulations and documentation can be complex. It takes a specialist to understand the best way to get product across borders. Information systems: Globalisation on todays scale is possible because there is technology that transfers the needed information. Logistics covers astonishingly varied professional disciplines. They are: Facility location Planning Forecasting and order management Transportation Inventory management Warehousing

 Protective packaging Logistics functions are unavoidable costs to a company but today they are recognised as crucial to a companys competitiveness and profitability.

2. Consider that you are the owner of small firm. You need a transport vendor. How will you build partnership and trust with a transport vendor using the strategy partnership and trust concept?

Ans. Considering me, as an owner of a firm and as I need a transport vendor, below are some steps with explanations, to achieve the same.
Partnering in Supply Chain Strategic partnership, trust, and co-operation are the essentials parts to build a Supply Chain partnership. We will now learn how to build them. Building strategic partnership and trust within a Supply Chain In Supply Chain partnering there are two stages. These two stages have trust-based relationship i.e., when there exists dependability of the two stages, the ability of each stage to make a leap of faith should also exist. Trust means a belief that each stage is interested in the welfare of the other stage. Trust would not take any actions without considering their impact on the other stage. Co-operation and trust within a Supply Chain can help improve Supply Chain performance for the following reasons: Supply Chain stages having mutual trust are more likely to keep in mind the other partys objectives when taking decisions i.e. a better alignment of incentives and objectives is achieved. Parties that trust each other share information without any problem i.e. it would be easier to implement action-oriented levers to achieve co-ordination. In addition, improvements in operations can be easily implemented and pricing strategies can be designed easily when both parties focus on common goals. Productivity of Supply Chain would increase due to elimination of duplication of efforts or by allocation of effort to the appropriate stage. A greater share of detailed sales and production information results. This sharing allows the Supply Chain to co-ordinate production and distribution decisions. As a result, the Supply Chain is better able to match supply and demand resulting in better co-ordination. Traditionally, Supply Chain relationships have been based either on power or on mutual trust. In a power-based relationship, the stronger participant dictates its view to others. Exploiting power

may seem to be beneficial in the short-term but has negative consequences in the long-term. The reasons are: When power is exploited by one stage of the Supply Chain, it usually uses power to minimise its profits at the expense of other stages resulting in decreased total Supply Chain profits. When one firm in the Supply Chain extracts unfair concessions from the other firm. This may prove drawback to the firm once the balance of power changes. When a firm exploits its power advantage, other stages in the Supply Chain may resist the same. For example, if retailers try to exploit their power by seeking more concessions from manufacturers, then manufactures may ignore the retailers and directly access the customer to sell their products (selling through internet or setting up company showrooms). This results in a reduction in Supply Chain profits because different stages compete with each other rather than co-operating. Building co-operation and trust in Supply Chain Management These qualities are difficult to initiate and sustain. Two views regarding how co-operation and trust can be built into any Supply Chain relationship are: View based on deterrence: In this view, the parties involved use a variety of formal contracts to ensure co-operation. In such cases, parties honour the contract and behave in a trusting manner for their own interest. View based on process: In this view, trust and co-operation are built over a period due to a series of interactions between the parties involved. The belief in the co-operation of the other party is to strengthen by positive interactions between the parties. In practice, neither view can hold completely because: It is impossible to design a contract which will take every contingency into account that may arise in the future. Parties that trust each other and have a long relationship still rely on legal contracts. Therefore, in most effective Supply Chain partnerships a combination of the two approaches is used. In the initial period of Supply Chain relationships, both parties rely more on anticipationbased view and over a period the relationship may evolve toward a greater reliance on processbased view. Co - Identification in which each party considers the other partys objective as its own. This is the ideal goal from the perspective of Supply Chain. Co-identification ensures maximisation of total Supply Chain profits while making decisions.

3. Elaborate the concept of Supply Chain Management and its integration with the 'quality consciousness movement'.

Ans.

T h e w h o l e c o n c e p t o f ' S u p p l y C h a i n M a n a g e m e n t ' h a s u n d e r g o n e a recen t metamorphosis. Over the years, it has become highly integratedwith the 'quality consciousness movement' starting with quality controlin 1960s, quality assurance in 1970s, quality systems in 1980s, and total quality management during the 1990s. The impact of Supply ChainManagement is found in such processes as Just In Time (JIT), ProductChain Partnership, and benchmarking. The Internet and subsequentgrowth of ecommerce over the last couple of years have revolutionisedour daily life personally and business wise. The Internet has refurbishedthe existing business practises and it continues to evolve the new ones.CPFR is the most comprehensive and extensive model of Supply ChainManagement. It integrates the entire process rather than targetings p e c i f i c a r e a s . I t also ensures a higher achievement of customersatisfaction by brid g i n g t h e g a p b e t w e e n t h e s u p p l y a n d d e m a n d processes throughout the organisation. This reduces the cycle time andincreases customer satisfaction.Steps in implementing CPFR There are nine steps in CPRF implementation. They are:1. Develop frontend agreement: The parties involved establish theprocedures and rules for the collaborative relationship.2. Create joint business plan: The parties involved create a business planthat takes into account their individual corporate strategies and definedcategory roles, objectives, and tactics.3. Create sales forecast: One party to create an initial sales forecastuses retailer Point of Sales data, causal information, and information onplanned events. This forecast is then communicated to the other partyand it is used as a baseline for the creation of an order forecast.4. Identify exceptions for sales forecast: Products that fall outside the sales forecast constraints, set the front-end agreement are identified.5. Resolve/Collaborate on exception items: The parties discuss andproduce an adjusted forecast.6. Create order forecast: Causal information and inventory strategies arecombined to generate a specific order forecast that supports the sharedsales forecasts and joint business plan.7. Identify exceptions for order forecast: Products that fall outside theo r d e r f o r e c a s t c o n s t r a i n t s , s e t j o i n t l y b y t h e p a r t i e s i n v o l v e d a r e identified.8. Resolve/Collaborate on exception items: The parties negotiate again(if necessary) to produce an adjusted order forecast.9. Order generation: One of the parties involved will get a firm orderfrom the order forecast.

4. Taking an example of any product, explain the 12 steps involved in procurement process. Ans.
Broadly, the procurement process has the following steps: 1. Purchase requisition or purchase Indent. 2. Floating the purchase enquiry/tender. 3. Receiving quotations. 4. Opening the quotation, tabulating and analysing.

5. Short listing promising vendors/suppliers. 6. Technical evaluation. 7. Commercial negotiation. 8. Purchase order release. 9. Pre-delivery inspection. 10. Check deliveries, installation testing and commissioning. 11. Certification of supplies. 12. Payment for supplies. 7.3.1 Study of Procurement Process steps 1. Purchase Requisition (PR)/Purchase Indent (PI): This is the initiating document for all purchase activities in an organisation. No purchase should take place without the purchase requisition. The purchase requisition comes from the indenting department to the procurement department. The indenting department is the one having the need for the requisitioned product. For example, Machine x which has to work continuously on all the three shifts is having a problem. The operator complains of an unhealthy sound while the machine is running. The maintenance department after checking the machine locates the fault to a worn out bearing. This needs replacement. A request for replacement bearing is made to the stores. The store supplies the bearing and finds that the stock of that bearing has reached the minimum order level. The time has come to refill the stock. This is the starting point for generation of PR. Felt need is the root cause of all purchases. The stores department makes the PR (in multiple copies) and forwards it to purchase department and other concerned departments as per the practise of the company. Once the procurement department receives the PR, the purchase activity is set in motion. The PR requests for a number of details that needs to be filled in by the indenter. They will be in a printed form with necessary blanks to be filled in. Generally the details required are: Indenting/Requisitioning department Product required with description & specifications Quantity and when is required Indenters name, department & signature Approval by the appropriate authority Date of requisition Other details as per organisation practises Depending on the organisational practises and the item, the department in need of the product/service can raise the PR.

2. Floating the purchase enquiry/tender: This is the next step in the process. It must be clarified here that the accuracy and correctness of the PR/PI is the responsibility of the indenting department. However, the procurer/procurement department has to check the PR as it is expected to get all necessary clarifications before proceeding further with the process. Once the PR/PI is found acceptable, the procurement department sends its enquiries to potential suppliers. The procurement department has the responsibility to source the product/service. Therefore, the onus is on them to locate the suppliers/vendors. The procurement department equipped with the information of the sources of supply then floats its enquiry to a list of vendors who are rated. Generally, the enquiry floated is of two kinds. They are: Limited Enquiry or Limited Tender Open Enquiry or Open Tender. Limited Enquiry/Limited Tender: As the name suggests, the enquiry is sent to a limited/restricted number of suppliers/vendors. This is a practise in cases where the product is technical in nature and/or the vendor has proved his capabilities to the procurer by getting his manufacturing/technical/ supplying ability assessed by the competent team of the procurer. Some of the products would be spares for aircrafts, engine parts for automobiles, branded computers, castings, forgings and so on. Besides, it could be because of the urgency of need, like in the case of bearing procurement in our example earlier. This process can also be used when there is an annual maintenance contract. Some of the government departments in Bangladesh and Pakistan have floated limited tenders to suppliers of computer hardware, software, peripherals. This is because there are mainly distributors of Dell, HP and IBM. All of them are internationally acclaimed brands and the distributors have good service support and capability to source necessary software and peripherals. The main advantage of limited enquiry is that it will reduce the paper work associated with the procurement process and shorten the cycle time of procurement. Open Enquiry/Open Tender: This is the common process of floating the enquiry. Here the enquiry is floated to all possible vendors of the product as per the list available with the purchase department. It could also be an advertisement in the national dailies. Government department and large corporate use this process to source products. This is used for all kinds of products. For example, a 5 star hotel enlisting vendors for supply of fresh vegetables and fruits, dairy and poultry and meat products. The procurement department issues an advertisement in the national and local newspapers. The consequence is a wide coverage of the need/requirement. The responses could be from all parts of the state/country. The choice of vendors becomes wider. Due to expected high response, the vendors could quote a very competitive price and offer better terms. Besides, there will be new supply sources being added to the database list. All enquiries/tenders will have the following details. This list covers some of the major points of an enquiry/tender and is not exhaustive. They are: Tender Number Tender opening date & time

 Item(s) to be quoted for Specifications, if any Closing date and time for receipt of tender Cost of tender form Tender deposit/Ernest money, if any Details of after sales service support, if required Mode of payment to the winning bidder Rights of the agent Responsibility of supplier if tender is won Conditions of tender Guidelines to agent Contractual needs if any Format of agreement to be entered into by the supplier. These and other points, if any, can be covered in the enquiry itself or as additional attached information with the tender form. The general practise is to have the enquiry proposed. The tender documents that are a paid product will contain all details including instruction to agent. The quotations are expected to be in a sealed envelope. The envelope is superscripted by the agent with all the details of tender for identification purposes. 3. Receiving quotations: The normal procedure is to receive the sealed tenders in a box kept exclusively for this purpose. The box will carry a legend on it giving title of tender, closing date, and tender opening date. The box is kept under lock and key until the last date for receipt of tender. At the end of the scheduled time, the box will be taken to the specified place of opening the tender. 4. Opening the quotation/tender, tabulating and analysing: The quotations are to be opened on the tender opening day at the appointed place in the presence of the agents/representative. The tenders are superficially scrutinised for required enclosures including earnest deposit. The first round of elimination of agents takes place at this stage. Any agent not providing all the required data can be eliminated at this stage. The rate quoted by each agent is announced from the offers made. The records are made of the quotations when being read out at the time of opening the tender/quotation. This is the first stage of the tender/quotation process. 5. Short listing promising vendors/suppliers: We have the list made above. This contains the details of all the vendors who quoted against the tender. The list is tabulated and is rearranged in the descending order of price.

6. Technical Evaluation: The technical committee evaluates the quotations on the technical capabilities and lists them. Both the technical evaluation list and the price evaluation list are now combined to make a final shortlist of all the agents. Based on this, generally the lowest priced agent is chosen. Generally, this shortlist will have the lowest three tenders. 7. Commercial negotiations: There are times when procurer calls the short listed potential suppliers for negotiations. The negotiations could cover topics of price, extended warranty, and offer of additional quantities of spares and consumables. When the negotiations are completed, one of the short listed agents emerges the winner. This supplier/vendor gets the order for supply of goods/services. The negotiation generally takes place between the procurement committee and the management team of the vendor. The agreement arrived at, is recorded and is signed for reference for both the parties. 8. Purchase Order (PO) release: The negotiations with each of the short listed agents would finally lead to one of them who will best match the requirements of the purchase committee both technically and commercially. This person will be the chosen supplier. The purchase committee will place all the deliberations on record and will be signed by both the vendor and the procurer. This is the final stage of the purchase process. This will be made available to the purchase department, who will release the purchase order on the vendor decided upon by the purchase committee. The purchase order will contain the following details: Name and address of supplier Date & place of the purchase order Reference number Item(s) to be supplied, quantity Specifications Pre installation inspection details as necessary Date of delivery Place(s) of delivery Installation details Commissioning requirements Guarantees, warranties Other terms of business Payment terms and mode of payment

The purchase order is sent in duplicate to the vendor requiring that the vendor sign the duplicate copy as token of his acceptance of the order and the terms. Once the vendor signs and returns the PO, it becomes a contract that will be binding on both the parties. A PO copy is issued to stores to facilitate acceptance of goods. Similarly, a copy is forwarded to accounts for facilitating payments to vendor as per PO terms. This is not the end of the procurement process. There are a few more steps to be completed before the process is complete. 9. Pre-delivery inspection: This is generally done for all products and more specifically for technical products. This is invariably a part of the PO or contract. The clause provides opportunity to the procurer to select at a few items randomly from the lot received for testing. This sample is tested at the supplier end for adherence to specifications. Only when the samples meet the specifications, the vendor is allowed to deliver the complete lot of material. This provides an opportunity for the procurer to avoid clutter of space in his warehouse and prevents poor quality products from being supplied. This is a protection against non-standard supplies made by the vendor. 10. Check deliveries, installation testing and commissioning: Once the pre delivery inspection is successfully complete and the samples tested are found OK then the supplier/vendor gets the clearance from the procurer. It is now the responsibility of the vendor to complete the supplies as per the terms of the PO. There are instances where the supplies has to be delivered, installed and commissioned at different locations. These need to be checked for performance at the normal working environment of the product. After delivery and commissioning the vendor will have to get the certification from the procurer/representative for proper installation, commissioning and working of the goods. These will have to be enclosed along with the invoice for claiming of payment for supplies. 11. Certification of supplies: Once the supplier successfully completes the pre-inspection, it is the responsibility of the supplier to complete the delivery of goods as per the contract. The quality, quantity and other requirements are to be met and other terms like the peripherals, accessories, spares requirements are to be provided. The installation and commissioning has to be effected and necessary acknowledgements and certificates from all the delivery points are to be collected by the vendor. These certificates in original are attached to the invoice and the invoice is presented for payment. Only when all these formalities are complete the vendor would have legally completed the contract. It is prudent to keep a photocopy of these documents as a precautionary measure. 12. Payment to the vendor: Once all this is done, the vendor has to wait for the payment to be received. The payment is made as per the agreed terms. It would be in the long-term interest of the procurer to see that the vendor is paid on time. Although it is the right of the vendor to take action against supplier for any delay in payment, this is not resorted to in the Indian business context. In most of the tenders, it is a general practise to withhold a small percentage of payment as caution deposit towards after sales services as needed. Thus, the vendor generally gets only 95% of the invoice value. Balance 5% will be made only after the expiry of warranty period and depending upon whether the vendor provides satisfactory service during warranty.

5. Explain the different types of product returns. Briefly explain the impact of Reverse Supply Chain Management on profitability Ans.
Analysis of Product Returns As we has gained an insight of the classification of returns in Reverse Supply Chain Management, let us go in depth and analyse the different types of product returns Return of products can be divided into the following types: Returns due to product performance Returns due to customer dislike of the product Product recall by manufacturer Return of products for repairs Exchange of old for new products The above information, in detail will help us in assessing the above topics. 13.5.1 Returns Due to Product Performance This is one of the major reasons for new product returns. The customers return the products back to the manufacturers and vendors when they find that there could be some hitch in the product supplied or if the product does not perform as per expectations. 13.5.2 Returns Due to Customer Dislike of the Product This also is a major factor influencing the return of goods from the customer. The manufacturers and vendors allow their customers to return products if, it does not meet their demands within a limited period of time. Consumers willing to try new products have been given a choice to use the product and return it back if, they are not satisfied with the same. This is permitted within a limited time frame and the customers receive their money back on returning the unsatisfied product For example, some of the cosmetic companies advertise their beauty products by offering the customer to try their product for a specific period of time. They guarantee complete transfer of money if the customer is not satisfied with the product. . The standard practice for most of the direct sales channels is money back guarantees. 13.5.3 Product Recall by Manufacturer

This is another factor influencing the return of new products. This is common in the case of consumer durables, pharmaceutical products, chemicals and so on. This is termed as product recall. Let us take the case of a pharmaceutical formulation. This has to meet the Indian Pharmacopoeias (IP) specifications. Due to some error in judgement at Quality management end, some batches that do not meet the IP specifications get sent to the market. Well known Pharmacy companies do a recheck of the sample kept at quality control department. This recheck could reveal that, the quality is not up to the standard. In such cases the company will have to recall the goods. This can also happen in the case of chemicals. The organisation has the option to reprocess the goods and send it as a fresh batch or, if reprocess is not possible, reject the entire lot. Then the entire lot will have to be destroyed. This will be a total loss. A recent instance of call back of a product was Tata Indica car. This had, at the time of launch, problems with suspension system and transmission. Some of the cars had a problem in terms of performance. Tata Automobiles Limited recalled such cars and repaired it free of charge thereby, winning a lot of market goodwill. 13.5.4 Return of Products for Repairs This is one of the most common ways by which goods get returned to the manufacturer or producer from the consumer. All technological or engineering products having a reasonable life will need repair and service. Manufacturers as a part of marketing support also provide service and repair facilities to their customers. Thus, repair of goods is a normal practice in a large number of societies. However, it is not easily available in developed countries. Even if available, it is difficult to afford. The receiving or collection centres will be the nodal points referred to before. This product is assessed by the professionals at the collection centre and the customer is provided with an estimate for repair of the product. It is estimated that in 10% to 15% of these cases, the customers feel that the cost of repair is far higher compared to the cost of a new product. So the customer may not even bother to collect the old product. The collection centre is left with such products. In the remaining cases, the repaired product is collected by the customer. Thus it is a source of revenue and value addition to the manufacturer. The revenue comes from two streams. They are: From the spares provided. From the service and repair charges. These contribute to the additional revenues and thus can become independent profit centres when these collection centres are managed effectively.

13.5.5 Exchange of Old for New Products This has been a recent phenomenon where in the old used products, preferably the manufacturers brand is exchanged for a new product. A value is assessed for the old product and is reduced from the new product cost. This product is evaluated and properly classified by the professional at evaluation centre. The product then takes the defined path in each of the processing unit to which it is assigned. The important factor in these offers is its influence in increasing the sales. It is difficult for the buyer to find a customer for the old product. Besides, the price recoverable is low. The exchange offers simplify the job for the customer. Thus it is necessary for the manufacturer to quickly assess the expected financial gains on refurbishing, repairing or replacing a returned product. It can now be seen that the manufacturer has to, before the introduction of the product, thoroughly understand and forecast accurately the product failure rate, and the rate of repairs. Otherwise, there is bound to be serious problems with the goods return. It could even kill the organisation. A clear and accurate failure analysis and forecast, enables the manufacturer to make a realistic forecast of the spare part requirement and cost of inventory for repairs and maintenance. This is a part of the managerial function in Supply Chain Management. This is, at a later stage supported by data from Reverse Supply Chain Management and customer care records available with the organisation. This analysis is helpful in arriving at the forecasts.

Impact of Reverse Supply Chain Management on Profitability The intention of every organisation in implementing Reverse Supply Chain Management in its business process is mainly to increase the profits and also to build the companies goodwill in the eyes of its customers. This again would help in increasing the profits of the company. Effective Reverse Supply Chain Management yields direct benefits that include improved customer satisfaction, decreased inventory levels, and decrease in the distribution and storage costs. Experts in this field have noted that, a well administered Reverse Supply Management System would result in savings in transportation, inventory carriage and waste disposal cost and also improves customer satisfaction. It can also be said that an effective Reverse Supply Chain Management improves customer relationship, improves environmental regulatory obedience that increases profitability of the organisations. A well planned Reverse Supply Chain Management brings profits by utilising technology to evaluate at the point of customer returns. Realising the critical nature of the returns process and treating returns as perishable assets and by establishing the returns process as a high priority. In order to earn maximum profits from the implementation of Reverse Supply Chain Management organisations must first analyse as to how this will contribute to profits. This is an activity that involves executive management. Initiatives that do not go hand in hand with executive management either have little ability to support organisations profitability or will end up in the closure of the firm.

6. List out six major computer based information systems and explain each of them briefly with examples. Ans.
Computer Based Information Systems Computer based information systems comprises use of computer hardware and software for storage, processing, and disseminating information. Six major types of these systems are: Management Information Systems (MIS): These information systems serve the functions of planning, decision making and controlling. This is done by providing the needed information and exception reports for managers. Executive Support Systems (ESS): These are the information systems used at the top management level of an organisation. They are designed to facilitate unstructured decision making, through graphics and communication. Decision Support Systems (DSS): These are the information systems that unite data and sophisticated analytical models. It supports managers to make semi-structured and unstructured decisions. Knowledge Work Stations (KWS): These are the information systems that aid knowledge workers in creating and integrating new knowledge, in the organisation. Office Automation Systems (OAS): These are computer based systems such as word processing, e-mail, and scheduling systems. These are designed to increase the productivity of data workers in the office. Transaction Processing Systems (TPS): these are systems that perform and record the daily routine transactions, which are necessary to conduct the day-to-day business. It is useful at the operational level that is, junior management level of an organisation. Computer Models Computer models are developed to get answers to a variety of What-if kind of questions faced by Supply Chain Managers. These models help managers to minimise risk while making decisions. They help managers to anticipate the impact of various external environmental conditions on the systems, manufacturing, process, time, costs, and profits. Models will also help to minimise risk and identify opportunities for improvement. Models help managers to visualise complex situations better. For example, graphical models can be used to depict relationship between supply and demand. Three potential supply/demand models that can be useful to Supply Chain Managers, they are: Strategic. Tactical (sales planning). Operational (scheduling). Manufacturing and distribution firms seek to develop or acquire systems that analyse their corporate databases. These databases are used to identify plans for redesigning their Supply Chains and operating them more efficiently. For this, they need to use Optimisation models[7],

which are the only analytical tools capable of fully evaluating large numerical databases to identify optimal plans. In addition to identifying cost minimising or net revenue maximising plans, Optimisation models can measure the trade-offs among these objectives including cost, service, quality, and time. The application of an Optimisation model requires the construction of an Optimisation Modelling System. A key element in such a system is the Supply Chain decision database which is derived from the companys corporate databases.

Authorized Learning Centre

Poddar Institute of Information and Technology

Internal Assignment Feb 2012

Name: ____ AMBROSE RAI___________________ Registration No. :__521011937______________ Course: ___MBA___ Sem: ___3rd____________ Subject Name : Advanced Production and Operations Management Subject Code : ___OM0013___________________ LC Code : _____1531_________________________ LC Center: Poddar Institute of Information & Technology Module No.:_________________________________ Date of Submission: _ 10th January 2012 ________ Marks Awarded:_____________________________

___________ Signature of Student

____________ Signature of Center

____________ Signature of Examiner

Master of Business Administration - MBA Semester III OM0013 Advanced Production and Operations Management - 4 Credits (Book ID: B1235) Assignment - Set- 1 (60 Marks)

1. Devise a Manufacturing Strategy plan for a startup automobile company, Bharath Car Audio, which specializes in Car Audio Equipment.

Ans.
Manufacturing personnel always find it a challenge to match the companys needs. This is due to an increase in customer expectations and competitor capabilities, and also because of outdated manufacturing methods. Thus, the manufacturing personnel can meet market expectations only by realigning themselves to market trends and making subsequent improvements to the manufacturing process. The manufacturing process is complex in nature. Employees are either skilled or unskilled, and they work on a network of domestic and foreign facilities, where formal and informal systems, good and bad practices, and old and new cultures co-exist. Production comprises of a mix of low volume of highly engineered, customised products; sometimes medium columns of high performance products with short product life cycles, and high volume of high quality, low cost commodities. Companies need a manufacturing strategy or plan to develop a structure or order this complex environment. Manufacturing changes cannot be implemented overnight. It takes a long time to build new facilities, install new equipment, develop new suppliers, change operating procedures, train personnel and close existing facilities, or build new ones. In comparison, customer requirements change fairly quickly. New products appear regularly in the market, new technology is introduced often, economic conditions fluctuate, companies reorganise their business strategies, new competitors emerge, and government regulations take effect. Thus, the Bharath Car Audio must keep a slow manufacturing function aligned with a fast market place. Manufacturing strategy can be considered as a formal pattern, which follows an underlying sequence of decisions made by the manufacturing personnel over a certain period of time. When a formal manufacturing strategy exists, decisions follow a logical pattern. When no strategy exists, the pattern becomes non-uniform and unpredictable. The essence of manufacturing strategy is to formulate explicitly how manufacturing decisions are made so that these decisions help the company achieve a long-term advantage over its competitors. Formulating a manufacturing strategy process Any process for formulating a manufacturing strategy must take into account the following points:

Customer requirements Competitors Manufacturing capabilities Manufacturing output Optimal changes for manufacturing.

Companies use a variety of processes to develop a manufacturing strategy. During the process of formulating manufacturing strategy, three questions need to be addressed:

Where is the manufacturing plant? Which is the ideal location for the manufacturing plant? What is the best way to move the manufacturing plant to the intended location?

There are many possible hypotheses that could be made in order to address the last question. These include benchmarking, quality management, cycle time reduction, agile manufacturing, Kaizen and reengineering soft technologies such as six sigma, concurrent engineering and supply chain management and hard technologies such as Computer Numerically Controlled (CNC) machines and Enterprise Research Planning (ERP) softwares.

2. With examples show how operational strengths can be used effectively as competitive weapons

Ans.
The following examples show how operational strengths can be used effectively as competitive weapons: Product/Process Expertise: 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. Quick Delivery 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. Shorter Product Cycle 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. Production Flexibility 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.

Operations Management 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 minimill production process allowed Nucor to gain a substantial price advantage over competitors by reprocessing scrap steel rather than producing primary steel from iron ore. Convenience and Location Facility location can provide substantial competitive advantage. For example, localcourier 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. Product Variety and Facility Size In some industries, the variety of products offered and the size of operations can provide competitive advantage. Grocery stores and supermarketretailers compete by having larger stores that allow them to display a greater variety of products and to benefit from economies of scale. Standard product design 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 Facility planning designing the Production System 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:

Allocation of resources to strategic alternatives Technology selection and process development Product/service design and development Designing the production system increase 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.

Elements Of Operations Strategy 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 cost control and quality rather than on the flexibility of the system. Consumer durables like coolers, fans,and televisions are examples of standardized products. Production system Theproduction system can

Process-focused systems 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 Produce-to-order policy 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.). Product/Service Design and Development 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, organization stake 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. Finished Goods Inventory Policy 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 Idea Generation Feasibility Studies 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 lifecycle. Its role diminishes as the product moves up in the life cycle and the organization 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 comefrom various sources such as employees, customers, intermediaries, vendors, marketresearch and so on. After a new idea is selected, it is screened to ascertain its feasibilityin implementation. Feasibility studies consider whether the idea generated is feasibleboth technically and economically. Such studies test whether the production of theproduct is technically feasible and profitable to produce and market. If the idea is foundto be both technically and economically feasible, then a prototype of the product isdeveloped. The prototype may not have all the features of the final product, but it has allthe basic characteristics of the product. The prototype is tested under standardconditions and defects are noted. On the basis of the results of testing, the necessarychanges are made in the prototype. Then the prototype is tested again. This process iscarried out until the performance of the prototype reaches a satisfactory level. Once thefinal 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 theproduction design stage. The initial production design is transformed into finalproduction design after performance testing, production trials and testing, economicstudies and test marketing. These steps ensure that the final product performssatisfactorily and can be

produced efficiently in the desired quantities. The productdevelopment process continues even after the launch of the product. The product ismodified or upgraded to adapt to changing market conditions and/or to adopt newtechnology.

Technology selection and process development Once the design of the product is finalized, managers concentrate on determining howthe product will be produced. This involves thorough analysis and planning of theproduction processes and facilities. Every step in the process of production is plannedin detail. The technology to be used in the production process is selected from a rangeof options. Allocation of resources to strategic alternatives Production companies haveto continuously deal with the problem of scarce resources like capital, machines andmaterials and so on. As these resource inputs are vital to production activities, their shortages can influence production performance significantly. Hence operationsmanagers have to plan the optimal use of resources, both in terms of minimizingwastage, and in terms of their allocation to the best strategic use. Facility planning The location of the production facilities is one of the key decisions and operationmanager has to make since it is critical to the competitiveness of the organization.Setting up production facilities with adequate capacity involves massive initialinvestment. Therefore, strategically right options should be carefully weighed against allavailable alternatives. These decisions also influence the future decisions on probablecapacity expansions plans. Managers have to take into account factors like theavailability of raw materials and access to the market when making their decisions.Operations managers also make layout decisions, i.e. decisions on the internalarrangement of workers and departments within the facility. Developing an Operations Strategy The operations strategy should be in line with the organization strategy, and theorganization strategy should be in line with the corporate vision and mission. If theorganization strategy is not consistent with the corporate vision and mission, theorganization cannot survive in the competitive marketplace.For example, let us assume that the operations strategy of an organization focuses oncost 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 theorganization to achieve its corporate vision and mission. Strategic planning is differentfrom operations planning in the scope of its application. Strategic planning is concernedwith long-term planning and involves selection of target markets and distributionchannels, whereas operational planning is concerned with short term, day-to-dayplanning. Selections of markets are the key to any strategy. After markets are analyzedfor their attractiveness, operations managers develop appropriate processes anddesigns to achieve the organizations objectives. As mentioned earlier, the operationsstrategy is developed in line with organization strategy, which, in turn, is derived fromcorporate objectives. Organization strategies focus on achieving corporate objectives by utilizing a company'scurrent strengths and identifying capability to improve the companys competition. In theface of global competition, many Indian manufacturers suffered declining sales, marketshare, and profitability, during the early 1990s. One of the main reasons for this declinewas the ineffectiveness of the operations strategy. Managers now realize thesignificance 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 firms overall competitiveposition is influenced by both extern al factors like social, political, legal andtechnological factors, and internal factors like employee skills, product range, technicalexpertise, infrastructure, and financial position. So, operations managers should beconversant with both internal and external situations. In the past, managersconcentrated most of their efforts on finance and marketing strategies. However,companies started recognizing the significance of operations strategies. WickhamSkinner, a Harvard Professor opined - A firm lacking proper operations strategy is likean anchored ship. Finance, design, and marketing may set the rudder and expect theship to steam off, but with anchor set, the ship wont move, or moves reluctantly,dragging its burden. Conclusion The value chain, or known as value chain analysis, isa concept from business management that was first described and popularized byMichael Porter. (Porter) Most of business strategy is to achieve a sustainablecompetitive advantage. Cost advantage and differentiation advantage are the two basictypes of competitive. According to the resource-based view, in order to develop a competitive advantage, thefirm

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 differentiationadvantage and that few competitors can acquire easily. Capabilities refer to the firmsability to utilize its resources effectively. The firms resources and capabilities together form its distinctive competencies. All of these activities can be obtained through valuechain analysis. Competitive advantage cannot be understood by looking at a firm as awhole. It stems from the many discrete activities a firm performs. Each of theseactivities can contribute to a firms relative cost position and create a basis for differentiation. It is necessary to have a systematic way of examining all the activities afirm performs to analyze the sources of competitive advantage. Value chain is the basictool for doing so.

3. Explain with appropriate sketches evolution of production systems starting from guild systems to current automation stage.

Ans.
All operation systems are based on the following criteria i. Output of the product - whether they are goods or services ii. Specification of the product - Standard or customized iii. The flow pattern - whether it is job shop or batch production, Assembly or continuous. The evolution of the production systems from guild to automation stage: The goods required by society were produced in small quantities by craftsmen who would know the needs of the community and produced them by their own hands with simple tools. The tools were made by himself with the help of apprentices or by another craftsman, who would make them to meet the requests made. He would be responsible for the design, procurement of the required materials an the processes, he considered fit. Repeated performance would improve them and his customers got the benefit of the improvements of his skills and creativity. As demand increased and more people were involved in the process, apprentices would join these craftsmen and additional supplies made. The sources of power, apart from the humans, were horses and oxen. Water was lifted from the wells using pulleys. Later on windmills were used for irrigation. Transportation was by horses. Wind sails were used for transportation on water. All equipments were made to serve these purposes. The advent of the steam changed much of all this. It needed coal to produce steam an iron parts became necessary to generate and transfer which steam engines could produce. Locomotives changed the way people moved themselves as well the materials. Spinning and power looms changed the way clothes were made. More importantly, the quantities produced could be distributed. The parts and components used to make these machines had to be replaced when they wore. Making parts so that interchangeability was achieved made setting up standards and specifications important for meeting. The craftsmen gave way to engineers, workers, supervisors, and inspectors. Division of labor became necessary to achieve efficiencies and the jobs that became specialized. Invention of the petrol and diesel internal combustion engine led to mass production of components. Frederick Taylor introduced the science of management Observation, documentation; analysis became the backbone of achieving efficiencies. Machines in huge numbers had to be placed to maximize production, to

achieve quality and we see the improvements leading to Special Purpose Machines, Numerically Controlled Machines and Robots. Competition has necessitated improved quality, reduced rates and better service to the customer. These have generated various methodologies of achieving efficiencies in all aspects of business such as procurement, manufacture, distribution, customer care, acquisition utilization of funds. Emphasis on Research and Development improved materials and new processes are brought forth. Advent of computers, information technology has become the biggest player in all aspects of business including operations. The equipments and processes selected depend on the volumes of output.The other important dimensions which are considered are job variety, flexibility of the process and volume. The cost per unit determines the extent of automation required. Automation systems cost huge sums of money and therefore a deep analysis of the various factors has to be done. For services, automation usually means labour saving devices In education, long distance learning technology helps in supplementing class room instruction. The facilitating goods that are used are web site and videos. Automation in the banking sector has resulted in ATMs which save the banks a huge amount of labour and it is found to have given greater customer satisfaction. Automation is ideal when the service provided or the product manufactured is highly standardized. Some extent of automation can be designed even with customization i.e. product or service s meant to produce or deliver low volumes specific to a requirement. The advantage of automation is it has low variability and will be more consistent on a repetitive basis. On the shop floor variability causes loss of quality. There are three kinds of automation - fixed, programmable and flexible. By its very nature, fixed automation is rigid. They are designed for high volume production and their rigidity ensures less variability. They are not amenable to change in product or process. They need minimal human intervention. The machines have sensing and control devices that enable them to operate automatically. The simplest of them called machine attachments replace human effort. They guide, locate, move and achieve relative positions by means of cams, optical sensing, and load sensing mechanisms and activate the controls to remove human intervention. Numerically controlled machines read instructions and convert them to machine operations. Computer/s is used for controlling one machine or a number of them and they have programme written into them for operations. They are Computer Numerically Controlled or, for short, CNC machines. Robots are higher in the order of automation as they perform a variety of tasks. They are designed to move materials by holding them in their arms and make precise movements according to programmers written into the computers that reside in them. They simulate human actions. They can grip and hold tools and with the help of sensors which are sensitive to touch and force to know that the material is to be held with the requisite pressure for the conduct of operations. Vision sensors are used for inspection, identification and guidance. They use optics based instruments to gather data and feed them to the computers for activating the other parts of the robot. With the help of automation, inspection of components can be done 100% which ensures highest quality Identification and movement of materials are helped by bar codes which are read and fed into the system for monitoring quantity, location, movement etc. They help the automated systems to sort information and provide information for effecting any changes necessary. To make effective use of automated machines, we need to have the movement of materials from and to different stations as also stores, automated. Automated Storage and Retrieval Systems ASRS receive orders for materials from anywhere in the production area, collect materials and deliver materials to the workstations. Computers and information systems are used for placing orders for materials, give commands, adjusts inventory records which show the location and quantity of materials available/needed. Continuous updation gives a clear picture for all concerned to enable them initiate action to keep the throughput smooth. Automated Guided Vehicle Systems AGVS are pallet trucks and unit load carriers follow embedded guide wires or paint strips to reach destinations as programmed.

Automated Flow Lines When several automated machines are linked by a transfer system which moves the parts by using handling machines which are also automated, we have an automated flow line. After completing an operation on a machine, the semi-finished parts are moved to the next machine in the sequence determined by the process requirements and a flow line is established. The parts at various stages from raw material to ready for fitment or assembly are processed continuously to attain the required shapes or acquire special properties to enable them to perform desired functions. The materials need to be moved, held, rotated, lifted, positioned etc. for completing different operations. Sometimes, a few of the operations can be done on a single machine with a number of attachments. They are moved further to other machines for performing further operations. Human intervention may be needed to verify that the operations are taking place according to standards. When these can be achieved with the help of automation and the processes are conducted with self regulation, we will have automated flow lines established. One important consideration is to balance times that different machines take to complete the operations assigned to them. It is necessary to design the machines in such a way that the operation times are the same throughout the sequence in the flow of the martial. In fixed automation or hard automation, where one component is manufactured using several operations and machines it is possible to achieve this condition. We assume that product life cycles are sufficiently stable to invest heavily on the automated flow lines to achieve reduced cost per unit. The global trends are favoring flexibility in the manufacturing systems. The costs involved in changing the set up of automated flow lines are high. So, automated flow lines are considered only when the product is required to be made in high volumes over a relatively long period. Designers now incorporate flexibility in the machines which will take care of small changes in dimensions by making adjustments or minor changes in the existing machine or layout. The change in movements needed can be achieved by programming the machines. Provision for extra pallets or tool holders or conveyors is made in the original design to accommodate anticipated changes. The logic to be followed is to find out whether the reduction in cost per piece justifies the costs of designing, manufacturing and setting up automated flow lines. Group Technology, Cellular Manufacturing along with conventional Product and Process Layouts are still resorted to as they allow flexibility for the production system. With methodologies of JIT and Lean Manufacturing finding importance and relevance in the competitive field of manufacturing, many companies have found that well designed flow lines suit their purpose well. Flow lines compel engineers to put in place equipments that balance their production rates. It is not possible to think of inventories (Work In Process) in a flow line. Bottlenecks cannot be permitted. By necessity, every bottleneck gets focused upon and solutions found to ease them. Production managers see every bottleneck as an opportunity to hasten the flow and reduce inventories. However, it is important to note that setting up automated flow lines will not be suitable for many industries Automated Assembly Lines All equipments needed to make a finished product are laid out in such a way as to follow the sequence in which the parts or sub-assemblies are put together and fitted. Usually, a frame, body, base will be the starting point of an assembly. The frame itself consists of a construction made up of several components and would have been assembled or fabricated in a separate bay or plant and brought to the assembly line. All parts or sub-assemblies are fitted to enable the product to be in readiness to perform the function it was designed to. This process is called assembly. Methodologies of achieving the final result may vary, but the basic principle is to fit all parts together and ensure linkages so that their functions are integrated and give out the desired output.

Product Layouts are designed so that the assembly tasks are performed in the sequence they are designed. You will note that the same task gets repeated at each station continuously. The finished item comes out at the end of the line

The material goes from station 1 to 5 sequentially. Operation 2 takes longer time, say twice as long. To see that the flow is kept at the same pace we provide two locations 2a and 2b so that operations 3, 4 an 5 need not wait. At 5, we may provide more personnel to complete operations. The time taken at any of the locations should be the same. Otherwise the flow is interrupted. In automated assembly lines the moving pallets move the materials from station to station and moving arms pick up parts, place them at specified places and fasten them by pressing, riveting, screwing or even welding. Sensors will keep track of these activities and move the assemblies to the next stage. An operator will oversee that the assemblies are happening and there are no stoppages. The main consideration for using automated assembly lines is that the volumes justify the huge expenses involved in setting up the system.

4. Consider that you are a project manager in one of the electrical company. You are responsible for planning the materials required to develop a mechanical charger for mobiles. Identify the dependent and independent demands of your project.

Ans.
Materials Requirements Planning (MRP) systems have been installed almost universally in manufacturing firms, even those considered small. MRP is easy to understand and is a logical way to determine the number of parts, components, and materials needed to produce each end item. MRP also offers a schedule stating when every material parts and components should be ordered or produced. The original MRP was planned only for materials. However, as computer power grew and applications expanded, so did the breadth of MRP. Soon it starting considering resources also as part of materials and was called MRP II, standing for Manufacturing Resource Planning. A complete MRP program included modules controlling the entire system like, form order entry through scheduling, inventory control finance, accounting, and accounts payable. MRP is based on dependent demand. Dependent demand is caused by the demand for a higher level item. Tyres, wheels, and engines are dependent demand items based on the demand for automobiles. Needed quantities of a dependent demand item are simply computed, based on a number needed in each higher level item in which it is used. For example, if an automobile company plans on producing 500 cars per day, then obviously, it will need 2000 wheels, tyres, and spares. The number of wheels and tyres needed is dependent on the production levels and is not derived separately. The demand for cars on the other hand is independent. It comes from many sources external to the automobile firm and is not a part of other products. To determine the quantities of independent items that must be produced, firms usually turn to their sales and market research departments.

Demand Management Demand management links top-level requirements planning that is, Sales and Operations Planning with materials planning that is, Master Production Scheduling and (MPS). Demand management determines the requirements dates and quantities for important assemblies. It also specifies the strategies for planning and producing or procuring finished products. The result of Demand Management is the demand program that separates planned independent requirements from customer independent requirements. The demands can then be transferred to MPS or directly to MRP depending on the type of MRP. There are two types of demand, independent demand and dependent demand. Independent Demand This refers to finished items or saleable items and the demand comes from either Customer Orders or forecast. As per the Mechanical charger for mobile, here we need some planning for to meet the present market demands of the present or focused consumer needs.

Dependent Demand This refers to sub-assemblies or components or raw materials that are part of the Bill of Material (BOM) required for the end items. The demand for these items comes from the finished products demand when, we explode the BOM or it may be independent. For example, in a plant that manufactured bicycles, dependent demand items might include aluminum, tyres, seats, and derailleur. As per the Mechanical charger for mobile, here we need the wires, ICs, plugs and other various raw meterials used in mobile charger manufacturing. In other words, we can broadly classify the demand as external demand and internal demand. Demand based planning helps to reduce the unwanted inventory and improve the number of inventory turns. Material Requirements planning can be is done based on this principle. Material Requirements Planning is basically getting the independent (external) demand. Once this is done for high level items, exploding of bills of material is carried out to calculate the components and then repetition of the process further down the levels till the raw material requirements. Demand Management[2] allows you to take care of customer demand and optimise delivery of available products through the supply chain and ultimately to point of sale. Manage all phases of your order processing, prioritise allocation of your existing inventory, generate pick slip tickets and invoices, control return authorisations, and issue credit memos all within a single application. It also increases your customer satisfaction by, delivering the right product at the right time at the right price.

5. Analyze the difference between Mass Production and Toyota Production System.

Ans.
Mass production was developed at the beginning of the twentieth century as an alternative option. The mass-producer makes use of skilled professionals in the designing of products. The products are actually made by unskilled or semiskilled workers with the help of expensive, single-purpose machines. These machines churn out standardised products in very high volume. Because, the cost of the machinery is high and the mass production system is intolerant of disruption, the massproducer keeps standard designs in production for as long as possible. The result is that the customer gets products for lower costs but at the expense of variety. Workers find their work boring and demoralising as it is simply repetitive and uniform. In contrast, the Toyota production system perfectly blends the benefits of craft and mass production, while overcoming their limitations. This method of production employs teams of multi-skilled workers at all levels of the organisation and uses highly flexible and increasingly automated machines to produce volumes of products of great variety

Comparison between Different Types of Productions

Toyota production is also known as Lean Production because compared to mass production, it consumes fewer resources and hence lean. Toyota production system follows the principle of half the human effort in the factory, half the manufacturing space, half the investment in tools,

half the engineering hours to develop a new product in half the time. Also it needs keeping far less than half the required inventory on site. This paves the way to fewer defects, and produces a greater and ever growing variety of products. Perhaps the most arresting difference between mass production and Toyota production system lies in their ultimate objectives. Mass-producers set a limited goal for themselves. The production methods are translated into an acceptable number of defects, a maximum acceptable level of inventories and a narrow range of standardised products. On the other hand, lean producers focus explicitly on perfection.

6. Describe Computer Aided Manufacturing. What are the three major challenges faced by Computer Integrated Manufacturing?

Ans. Computer Aided Manufacturing or CAM helps firm to manufacture quality products acc. to customer demands in a short time and also to meet the increasing competition level in a short time. By using CAM systems in the manufacturing processes important changes can be brought about in the firms performance measurement systems. The general approach in the performance measurement systems is based on the theoretical frame that,different manufacturing environments need to sort different types of measures to assess organizational performance. Many labour intensive manufacturing environment cannot show sync with CAM. These measure lead to hide the reality about the effectively and productivity of production, to rule out the profits of the investments. This helps in giving the performance measurement systems an opportunity to chase the business in CAM. This also provides the manager and employees the opportunity of value creation. In CAM the non financial performance have an important status today. This is due to the importance given customer satisfaction, competence, innovation and also the labour productivity. CAM is also considered to be a numerical control programming tool, where 2dimensional or 3dimensional models are generated using cAD software which can be used to generate G-code to drive Computer Numerically controlled(CNC)machine tools.CAM does not eliminate the need for skilled professionals such as manufacturing engineers, NC programmers or machinists. It requires the most skilled manufacturing professionals to work ion advanced productivity tools and also build the skills of new professionals through visualization, simulation and optimization of tools. The areas of concern in CAM are: machining at high speed, including streamlining of tool paths multi functional machines multi axis machining identifying and maching feature machining automation process using it with ease The attenuation of CAM is given both by providers of niche solutions and by high endsolutions. This occurs in 3 primary areas: easy usage complications in manufacturing]

PLM integration and enterprise extension

Easy Usage For beginners, using CAM is very easy. CAMs out of box capabilities provide process wizards, templates, liberaries, machine tool kits, automated features. This is based on machining and job function specific customizable user interface which helps in building the users confidence and increase the speed of the learning curve. User confidence can be built on 3D CAD environment that includes error avoiding simulations and optimisations. Manufacturing Complications The manufacturing environment has become increasingly complex. Demand for CAM and PLM tools by manufacturing engineer, NC programmer or machinist is similar to the computer assistance needed by modern aircraft pilots. CAM systems support a full range of machine tools that includes turning, five axis machining and wire electrical discharge machining. The present CAM users, an easily generate streamlined tools paths, optimize tool axis, tilt used for higher feed rates and optimized Z axis depth cuts as well as driving non cutting operations such as the specifications of probing motions. PLM integration and enterprise extension Present compitative and successful companies use PLM to integrate manufacturing with enterprise operations using the concept of field support of the finished product. To enable easy usage of appropriate user objectives, modern CAM solution can be scalable from stand alone CAM systems to fully integrated multi CAD 3D solution sets. These solutions are created to meet all the needs of manufacturing personal including part planning, documentation of shop, management of resource and management and exchange of data. In Computer integrated manufacturing systems(CIM) there are 3 Major challenges faced in the development which are as follows:

Component integration from different suppliers: different machines such as CNC , conveyors and robots used different types of communication protocols. In the case of automated guided vehicles(AGV), the problems are caused becoz of the differing lengths of time used for charging. Integration of DATA: the integrity of the data used to control the machines becomes more critical when the degree of automation becomes higher. While the CIM systems saves on the labour of operating the machines, it uses extra human labour in ensuring that the safeguards used are proper for the data signals, which are used to control the machines. Process of controlling: computers are used to help human operators in the manufacturing facilities. For this there must be a capable engineer on hand to handle the situations which could not be foreseen by the designers of the control softwares.

CIM is an ideal example of the implementation of information and communication technologies(ICTs) in manufacturing. CIM indicates that there are at least 2 PC exchanging information, example, the controller of an arm robot and a microcontroller of a CNC machine.

Master of Business Administration - MBA Semester III OM0013 Advanced Production and Operations Management - 4 Credits (Book ID: B1235) Assignment - Set- 2 (60 Marks)

1. Take an example of any product or service industry and explain the factors considered while taking the decision on plant location.

Ans. Lets take a Soap as a product, then the factors which will affect the decision of a plant location are:
There are four primary types of plants in Theory of Constraints. These specify the general flow of materials in a system and helps in identifying typical problems. The four types of plants are: I Plant In I-Plant, materials usually flow in a sequence like in an assembly line. The preliminary work is done in a straight sequence of events that is on one-to-one basis. The main problem is that the operation is slow. 5.4.2 A-Plant In A-Plant, the materials generally flow on a many-to-one basis that is, in a plant when there are many sub-assemblies then they converge to one final assembly. The main problem in A-plants is synchronising the converging lines so that each sub-assembly supplies the final assembly point at the right time. 5.4.3 V-Plant In V-Plant, the materials generally flow on a one-to-many basis that is taking one raw material and making many final products. Example for a V-Plant is a steel manufacturing plant which produces many steel products by taking one raw material which is steel. The main problem in V-plant is that once the material has been processed for one operation it cannot be processed for another operation without doing some rework. 5.4.4 T-Plant In T-Plant, the general flow is based on the I-Plant which splits into many assemblies that is manyto-many. Manufactured parts use multiple assemblies and all assemblies use multiple parts. The drawback of T-Plant is that it has the disadvantages of both A-Plant, which is non-availability of parts for assembly, and V-Plant which is stealing of parts by one assembly that could have been used by other assembly. The products to be manufactured are affected by the choice of layout for the plant. There are different plant layouts. Figure 5.2 shows different plant layouts which affects the products to be manufactured.

Figure 5.2: Types of Plant Layout Fixed Position Layout: A Fixed Position Layout is used when the items to be manufactured are huge or unique and have to be worked on individually. For example, building a ship is a large project and has to be worked on individually. Functional Layout: A Functional Layout which is for multiple purposes is planned to facilitate many products. For example, Hospital is a multiple purpose layout used for various operations. Product Layout: A Product Layout emphasises on the plant efficiency by using techniques such as mass production. Cellular Layout: A Cellular Layout has the advantages of both functional layout and product layout. The flexibility of a functional layout and the efficiency of the product layout are obtained by grouping machines into autonomous work groups.

Facility Planning Process Planning is the most important function of management. It is important especially, whenwe have to deal with lands, buildings, and machineries. Lands, buildings and machineriesare costly and once fixed cannot be moved easily. Planning, therefore, requires a lot of thought, data gathering, and estimates for the future. These considerations are vital for thesuccess of any firm. Now to deeply understand the importance of planning in operationsmanagement, we consider the planning into two parts.1. Planning the location of the plant2. Planning the manufacturing facility layouts Planning the location of the plant You will now study about planning for the location of a plant. You w ill also study thevarious factors that affect the economics of competing locations and helps in choosingthe most optimal location.Factors influencing Plant Location can be broadly divided into two types namely: generalfactors and special factors (See Figure Factors influencing plant location). Figure: Factors influencing plant location Below are the factors influencing plant location:General factors The general factors that influence the plant location are listed below (See Figure 5.2General factors influencing plant location).- 1 -

. Availability of land: Availability of land plays an important role in determining the plant location. Many-atime, our plans, calculations and forecasts suggest a particular area as the best to start an organization. However, availability of land may be in question.In such cases, we will have to choose the second best location. 2. Availability of inputs: While choosing a plant location, it is very important for theorganization to get the labour at the right time and raw materials at good qualities. The plant should be located: Near to the raw material source when there is no loss of weight At the market place when there is a loss of weight in the material Close to the market when universally available, so as to minimize the transportationcost Figure: General factors influencing plant location 3. Closeness to market places: Organisations can choose to locate the plant near to thec u s t o m e r s m a r k e t o r f a r f r o m t h e m , d e p e n d i n g u p o n t h e p r o d u c t t h e y p r o d u c e . I t i s advisable to locate the plant near to the market place, when: The projection life of the product is low The transportation cost is high The products are delicate and susceptible to spoilage After sales services are promptly required very often- 2 -

The advantages of locating the plant near to the market place are: Consistent supply of goods to the customers Reduction of the cost of transportation

4. Communication facilities:

Communication facility is also an important factor whichinfluences the location of a plant. Regions with good communication facilities viz. Postaland Tele communication links should be given priority for the selection of sites. 5. Infrastructure: Infrastructure plays a prominent role in deciding the location. The basic infrastructure needed in any organisation is: a. Power: For example, industries which run day and night require continuous power s u p p l y . S o t h e y s h o u l d b e l o c a t e d n e a r t o t h e p o w e r s t a t i o n s a n d s h o u l d e n s u r e continuous power supply throughout the year. b. Water: For example, process industries such as, paper, chemical, and cement, requirescontinuous water supply in large amount. So, such process industries need to be locatednear to the water. c. Waste disposal: For example, for process industries such as, paper and sugarcane industries facility for disposal of waste is the key factor. 6. Transport: Transport facility is a must for facility location and layout of location of the plant. Timely supply of raw materials to the company and supply of finished goods tothe customers is an important factor. The basic modes of transportation are by Air, Road,Rail, Water, and Pipeline. The choice of location should be made depending on these basic modes. Cost of transportation is also an important criterion for plant location. 7. Government support: The factors that demand additional attention for plant locationa r e t h e p o l i c i e s o f t h e s t a t e g o v e r n m e n t s a n d l o c a l b o d i e s c o n c e r n i n g l a b o u r l a w s , building codes, and safety. 8. Housing and recreation: Housing and recreation factors also influence the plantlocation. Locating a plant with the facilities of good schools, housing and recreation for e m p l o y e e s w i l l h a v e a g r e a t e r i m p a c t o n t h e o r g a n i z a t i o n . T h e s e f a c t o r s e e m s t o b e unimportant, but have a difference as they motivate the employees and hence the locationdecisions. Special factors The special factors that influence the plant location are:1. Economic stability outside investments2. Cultural factors3. Wages4. Joint ventures support of big time players

2. Explain briefly the current trends in Operations Management.

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 intechnology because new technologies can improve efficiency and productivity. Inthis chapter, we discussed how organizations can benefit from automation.Some of the recent technological developments in the field of operationsmanagement, which include computer-aided design (CAD), direct and indirectcomputer-aided manufacturing (CAM), flexible manufacturing system (FMS), andcomputer integrated manufacturing (CIM) were discussed in the chapter.Computer Aided Design (CAD) is used for designing products and processes on acomputer terminal. Computer systems assist in the creation, modification, analysisand optimization of a design. In Computer Aided Manufacturing (CAM), computersare used either directly to control the processing equipment, or indirectly to supportmanufacturing operations. Automated machines usually perform a variety of operations, depending on theinstructions received from the computer with respect to the sequence andoperational specifications of a process. FMS is a form of flexible automation in whichseveral 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-functionalsystem. 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 problemsolving.EDI is a system, wherein standardized forms of electronic documents are transferredbetween two computer systems. Customers and suppliers or departments within thesame organization can share and transmit information electronically in real time using EDI

3. Imagine you are a manager of ABC company manufacturing 4 wheelers. Write a small briefing to management regarding what is benchmarking, why they should benchmark and what can they benchmark.

Ans.
Benchmarking Benchmarking is the process of learning from others and involves comparing ones own performance or methods against other comparable operations. It is a broader issue than setting performance targets and includes investigating other organisations operations practice in order to obtain ideas that could contribute to performance improvement. Its rationale is based on the idea that (a) problems in managing processes are almost surely shared by processes elsewhere, and (b) there is probably another operation somewhere which has developed a better way of doing things. For example, a bank could learn some things from a supermarket about how it could cope with demand fluctuations during the day. Benchmarking is essentially about stimulating creativity in improvement practice.

If we were to benchmark "world conquest", what objective measure would we use tocompare Julius Caesar to Adolph Hitler; Gengis Khan to Napoleon? Which of them wasthe epitome, and why?We do the same thing in business. Who is the best sales organization? The mostresponsive customer service department? The leanest manufacturing operation? Andhow do we quantify that standard? Why Should I Benchmark

If you don't know what the standard is you cannot compare yourself against it. If acustomer asks "What is the MTBF on your widget?" it is not enough to know that yourMean Time Between Failures is 120 hours on your standard widget and 150 for yourdeluxe widget. You also have to know where your competitors stand. If the company against whomyou are competing for this order has a MTBF of 100 hours you are probably okay.However, if their MTBF is 10,000 hours who do you think will get the order? Its SAFE Fleet program has been in place for over 10 years and provides aworldwide standard framework for subsidiary companies to work to based onsix key objectives: Senior management support, to ensure safe driving is part of the work culture in theorganization, through leadership, monitoring and improvement, training and ongoingengagement. Field management support and involvement. Motivation, recognition and awareness for safe driving. Team performance. Local Safe Fleet teams are responsible for implementingmeasures like training new drivers, reducing cases of high-risk driving and hiring fieldsafety coordinators. Driver development including orientation, home study and behind the wheel training. Health and safety.Despite different cultures, languages, barriers and challenges across the world, SAFEFleet has reduced injuries, accidents per million miles (APMM) and percentage of vehicles involved in incidents. The company attributes its success to the many practical actions thatemerged from its objectives and policies, including: Detailed quantification of value of employee road safety in direct and indirect costs of human and asset damage. Development of global standards, policies, procedures and processes. Strong involvement by executive and senior management and tireless work byoperating company Champions. Setting clear targets for road safety performance, supported by standardised globalKPI reporting and monitoring of APMM and other indicators. In the EMEA region atarget has been set to reduce the APMM figure to 6.00 by 2010. Regular communications to help drivers avoid or minimise the impact of riskysituations. A high-risk driver early detection system to identify drivers with the potential to driveunsafely. Sharing its best practices, including collision and incident reporting guidelines anddefinitions, which have been adopted by many other organisations. Leadership of pan-European fleet safety benchmark initiative and involvement in www.fleetsafety.net , to exchange cross-company best practices and experiences. Actively taking a leading role in external initiatives such as the European Road SafetyCharter, WHO / UN fleet safety program and industry conferences. Constantly exploring innovative tools and technologies, including Virtual RiskManager, to identify risks in a proactive way and contribute to further decreases inAPMM. Engaging drivers to take the road safety message home to their families and friends. These initiatives have led to the following quantifiable road safetyimprovements 1997 to 2007: Worldwide APMM reduced from 8.7 to 5.3. EMEA reduced from 12.6 to 6.6. WW % of fleet in an accident reduced from 18.2 to 11.6. EMEA reduced from 27.9 to15.6. EMEA total vehicle related lost work day cases reduced from 19 to 3. Zurich Global Corporate is a leader in motor fleet insurance, which works closely withcustomers to help them understand and manage their risks, thus allowing them tooperate more efficiently. This approach is the result of many years' experiencecombined with products which offer flexibility and a distinctive, innovative, risk-ledphilosophy tailored to anticipate the challenges faced by customers.

Zurich works with customers to better manage the many different aspects of motor fleet risk and has been a key player in the fleet safety benchmarkingproject, including: Attending project meetings. Providing data and insight regarding its own motor fleet. Supporting the publication of the Fleet Safety Benchmarking project report. Encouraging fleet clients to participate in the benchmarking program. Undertaking fleet audits and driver risk assessments to help clients benchmark theirfleet safety both internally and externally. Zurich Risk Engineering global Centre of Excellence developing sophisticated, buteasy to use, fleet risk grading tools for fleet benchmarking
Types of benchmarking The following are the different types of benchmarking: Internal benchmarking: It involves comparing operations or parts of operations within the same total organisation. For example, a large motor vehicle manufacturer with several factories could choose to benchmark each factory against the others. External benchmarking: It involves comparing an operation and other operations that are part of a different organisation. Non-competitive benchmarking: It is involves benchmarking against external organisations that do not compete directly in the same markets. Competitive benchmarking: It involves comparing directly between competitors in the same or similar markets. Performance benchmarking: It involves comparing the levels of achieved performance in different operations. For example, an operation could compare its own performance in terms of some or all of its performance objectives such as quality, speed, dependability, flexibility and cost against other organisations performance in the same dimensions. Practice benchmarking: It involves comparing an organisations operations practices, or way of doing things, and those adopted by another operation. For example, a large retail store could compare its systems and procedures for controlling stock levels with those used by another department store. Benchmarking as an improvement tool Though benchmarking has become popular, some businesses have failed to obtain maximum benefit from it. This is due to the fact that there are some misunderstandings as to what benchmarking actually contains. First, it is not a one-off project and is best practised as a continuous process of comparison. Second, it does not provide solutions but ideas and information that lead to solutions. Third, it does not involve simply copying or imitating other operations as it is a process of learning and adapting in a practical manner. Fourth, it means giving resources to the activity as benchmarking cannot be done without some investment. But, this does not actually mean allocating exclusive responsibility to a set of highly paid managers. In reality, there can be advantages in organising staff at all levels to investigate and collate information from benchmarking targets. Some basic rules about how benchmarking is organised are as follows: A precondition for benchmarking success is to carefully understand the processes. Without this it would be difficult to compare processes against those of other companies.

 Look at the information that is available in the public domain such as: published accounts, journals, conferences and professional associations help in providing information that is useful in the benchmarking purposes. Do not abandon information just because it seems irrelevant. Small pieces of information make sense only in the context of other pieces of information that emerge subsequently. Be aware while asking for information from other companies. Do not ask any questions that we would not like to be questioned ourselves.

4. 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 fabricatea scale model of a part or assembly using three-dimensional computer aided design( C A D ) d a t a . W h a t i s c o m m o n l y c o n s i d e r e d t o b e t h e f i r s t R P t e c h n i q u e , Stereolithography, was developed by 3D Systems of Valencia, CA, USA. The companywas founded in 1986, and since then, a number of different RP techniques have becomeavailable.Rapid Prototyping has also been referred to as solid free-form manufacturing, computerautomated manufacturing, and layered manufacturing. RP has obvious use as a vehiclefor visualization. In addition, RP models can be used for testing, such as when an airfoilshape 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 bethe final part, but typically the RP material is not strong or accurate enough. When the RPmaterial is suitable, highly convoluted shapes (including parts nested within parts) can beproduced because of the nature of RP.There is a multitude of experimental RP methodologies either in development or used bysmall groups of individuals. This section will focus on RP techniques that are currentlycommercially available, includingStereolithography(SLA),Selective Laser Sintering (S LS ),Laminated Object Manufacturing(LOM),Fused Deposition Modeling(FDM),Solid Ground Curing(SGC), andInk Jet printing techniques.Rapid Prototyping improves product development by enabling better communication in aconcurrent engineering environment.The basic methodology for all current rapid prototyping techniques can be summarized asfollows: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 bythe 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 thenfinished and cleaned.Timberland is a cultural icon, a dream brand. The nickname Timbs is name-checked ondozens of hip-hop lyrics, and one of the genres best-selling producers, Timbaland, isnamed after the companys footwear. On the corporate side, Timberlands commitment tosocial responsibility is respected and emulated worldwide.H a n d C r a f t M e e t s D i g i t a l Timberland has made the transition to

its new last production process in just over twoyears by implementing DSSP, a collection of technology components that enables usersto quickly create accurate digital models of complex physical objects.D S S P i s u s e d b y m a n u f a c t u r e r s w o r l d w i d e t o c a p t u r e a p a r t w i t h a 3 - D s c a n n e r , reconstruct the measurement data (point clouds) into highly accurate polygon or NURBSsurfaces, and use the resulting digital model for applications such as product design, tooland mold design and verification, customized manufacturing, recreating legacy parts,enginee ring analysis, digital archiving and computer-aided inspection.Design conceptualization can be done in minutes by making changes to the 3-D model. Incases where a physical prototype is needed, Timberland sends the Geomagic data to a ZCorp. rapid prototyping system, which can produce a realistic physical model for designand engineering review in three or four hours.DSSP is a vehicle for exploring the type of eclectic designs and customization that definesbrands in todays 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 librarymanaged using 3Shape software.

5. What is Business Process? Explain with an example as to why a business process is to be modelled. Ans. A business process or business method is a collection of related, structured activities ortasksthat produce a specific service or product (serve a particular goal) for a particularcustomer or customers. It often can be visualized with a flowcharta s a s e q u e n c e o f activities.There are three types of business processes: 1. Management processes, the processes that govern the operatio n of a system. Typicalmanagement processes include "Corporate Governance" and "Strategic Management". 2. Operational processes,processes that constitute thecore businessa n d c r e a t e t h e primary value stream. Typical operational processes arePurchasing,Manufacturing,AdvertisingandMarketing, andSales. 3. Supporting processes,which support the core processes. Examples includeAccounting,Recruitment,Call center,Technical support.A business process begins with a mission objective and ends with achievement of the business objective. Process-oriented organizations break down the barriers of structuraldepartments and try to avoidfunctional silos.A business process can be decomposed into several sub-processes, which have their ownattributes, but also contribute to achieving the goal of the super-process. The analysis of business processes typically includes the mapping of processes and sub-processes downto activity level.Business Processes are designed to add value for the customer and should not includeunnecessary activities. The outcome of a well designed business process is increasede f f e c t i v e n e s s ( v a l u e f o r t h e c u s t o m e r ) a n d i n c r e a s e d e f f i c i e n c y ( l e s s c o s t s f o r t h e company).Business Processes can be modeled through a large number of methods

and techniques.For instance, theBusiness Process Modeling Notationis aBusiness Process Modeling technique that can be used for drawing business processes in aworkflow. Information why a Business Process is to be modelled. Business processes must include up-to-date and accurate Information reports to ensureeffective action. An example of this is the availability of purchase order status reports forsupplier delivery follow-up as described in the section on effectiveness above. There arenumerous examples of this in every possible business process.Another example from production is the process of analysis of line rejections occurring onthe shop floor. This process should include systematic periodical analysis of rejections byreason, and present the results in a suitable information report that pinpoints the majorreasons, and trends in these reasons, for management to take corrective actions tocontrol rejections and keep them within acceptable limits. Such a process of analysis andsummarisation of line rejection events is clearly superior to a process which merelyinquires into each individual rejection as it occurs.Business process owners and operatives should realise that process improvement oftenoccurs with introduction of appropriate transaction, operational, highlight, exception orM.I.S. reports, provided these are consciously used for day-to-day or periodical decision-making. With this understanding would hopefully come the willingness to invest time andother resources in business process improvement by introduction of useful and relevantreporting systems. Purpose of business process modelling A Business Process Model diagram is a tool - a means to an end, not a performanceoutcome in its own right.The final output is improvement in the way that the business process works.The focus of the improvements is on 'value added' actions that make the customerservice and experience better, and on reducing wasted time and effort.

There are two main different types of Business Process Models: the 'as is' or baseline model (the current situation) and the 'to be' model (the intended new situation)which are used to analyse, test, implement and improve the process.The aim of modelling is to illustrate a complete process, enabling managers, consultantsand staff to improve the flow and streamline the process.The outcomes of a business process modelling project are essentially: value for the customer, and reduced costs for the company, Leading to increased profits. Other secondary consequences arising from successful Business Process Modelling can beincreased competitive advantage, market growth, and better staff morale and retention.There are no absolute rules for the scope or extent of a Business Process Model in termsof departments and activities covered.Before committing lots of resources to Business Process Modelling proper considerationshould be given to the usefulness and focus of the exercise - ask the questions: Does the modelling have the potential to produce gains that will justify the time andeffort? Will the modelling be structured so that people will understand the outputs (not too bigand complex as to be self-defeating)? Do people understand why we are doing it, and "what's in it for them"?As with other management tools, there is no point producing a fantastically complexmodel that no one can understand or use, just as it is a bit daft to spend hundreds of hours analysing anything which is of relatively minor significance.Business Process Modelling is a powerful methodology when directed towards operationsw h i c h c a n b e n e f i t f r o m i m p r o v e m e n t , a n d w h e n p e o p l e i n v o l v e d a r e o n - b o a r d a n d supportive. Example - BPM added value

An example could be the actions involved in processing a customer o rder from an internet-based mail order company. Starting with a customer placing an order (the customer need) send IT-based information to the warehouse stock picking packing and recording S ending the appropriate IT-based information to the distribution hub sending IT-based information to the accounts department generation of an invoice allocation and organisation of shipment for the vehicle drivers delivery of the item and invoicing (the customer need fulfilled).This is a simple 'high-level' example. In practice each part or sub-process (for example,stock-picking) may require a 'low-level' BPM of its own.Please note that: Added value for internal customers, notably staff, does not have to befinancial, as is commonly imagined by many top business executives. ConsiderMaslow,Herzberg,McGregor, a n d Adamsand what these concepts teach about motivation andreward, and attrition. Business Process Modelling has enormous potential to addressmany of the critical demotivators among staff (e.g., poor working relationships, confusedstructure, failure, etc) and also many strong motivators (e.g., the quality of work itself,recognition, advancement, new responsibilities, etc). But it needs thinking about or itwon't happenThink beyond merely adding value for external customers, and optimising efficiency andprofit - make a special effort to look for added value for staff too, and then the BPMmethodology will work on a much more effective level

6. 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: Defects 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 rateswhen we realised that they measured in parts per million and that 1% defects gave afigure of 10,000. Of course, the key point of Japanese quality achievement came with theswitch from Quality Control to Quality Assurance - efforts devoted to getting the processright, rather than inspecting the results. Over-Production A key element of JIT was making only the quantity required of any component orproduct. 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 thusthe need to spread these fixed costs over large batches. Another Japanese guru whocontributed to this change is Shigeo Shingo who led Toyota's move from long set-ups toSingle Minute Exchange of Die (or SMED). Waiting

Time not being used effectively is a waste - we are incurring the cost of wages and all thefixed costs of rent, rates, lighting and heating so we should use every minute of everyday productively. Ohno looked at the reasons for machines or operators being underutilised 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 takttime, the rate at which a component or product moves to the next stage.
Transporting 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 anothercost, which is less visible but more significant. Managing a factory with operations spreada p a r t i s m u c h m o r e d i f f i c u l t t h a n w h e n t h e s u b s e q u e n t s t a g e s a r e a d j a c e n t t o o n e another. This can be seen as the primary driver behind cellular manufacturing (thoughsome would point out that Group Technology is very similar and came from Sweden,rather than from the Orient). Movement On a related note, people spending time moving around the plant is equally wasteful. Thetime a machine operator or fitter wastes walking to the toolroom or the stores for afixture or a component could be far better utilised if our plant layout and housekeepingwere geared around having everything that is required close to hand. Inappropriate Processing The most obvious example of inappropriate processing from my own experience relates tosurface finishes that required components to be moved to grinders for completion, whenin fact such finishes served no purpose. A basic principle of the TPS is doing only what isappropriate. Inventory The element that Western industry immediately focused upon when confronted with JITwas thecost reductionavailable 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 costst h a t O h n o h a d c o n s i d e r e d i n h i s o w n i n t e r p r e t a t i o n . W e n o w k n o w t h a t s t o c k h i d e s 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 SystemsThis article describes the 8 types of Kanban system available and what you need to do tochoose, design, implement, and operate Kanban systems, size buffer stocks (the numbero f K a n b a n s ) , c h o o s e c o n t a i n e r s a n d s i g n a l l i n g m e c h a n i s m s . I t s h o w s t h e n e e d t o 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.(SeeMaterials Management & Stock Control.) Types of Kanban Systems 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), (excluding2 bin & 3 bin systems) and here they are: One card system

One card systems In the above diagram:A signal is sent back from the consuming process to supplying process (or supplier). Thisis 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 any empty container isa signal to fill it. Also occasionally containers have been known to go missing! Usually, forthese reasons, the signal is separated from the container. Input / Output Control Kanban (Two variants) 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 thepreceding section or raw material stores. In this case the supply chain is treated as oneunit 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 inprocess cannot build up. However there are some special considerations required in theoperation of the system, to avoid hidden capacity problems, which are not so clearlyvisible when this method is used.We have used adaptations of this system to manage workflow and capacity rather thanmaterials in a number of environments including job shop & clerical / technical processenvironments. Kanban Accumulator In this method Kanban signals are allowed to accumulate at the supplying work centreuntil 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.

Dual Card System (2 Card System) (Two variants) First used by Toyota, there are in fact now two types of two card system. The firstmethod separates the replenishment (send some) signal, which is produced from theKanban system, from the "produce" signal, which is produced by a scheduling systemsuch as MRP. The purpose of each of the cards is as follows: The scheduling system says which job is next. The Kanban says make it now. (I need some.)The second variant of this method generates the second card (after authorisation) as aresult of one or more replenishment requests in a similar way to Kanban accumulatorsabove.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 bet r y i n g t o r e d u c e b a t c h s i z e s ( S e e P r e v i o u s T e c h n i q u e : T 0 1 9 A v o i d i n g s e t u p s a n d Reducing Changeover Times). In this case the buffer is depleted, and can be exhausted.In addition a longer planning system such asMRP1(See "Levels of Planning & Control") isalso necessary to that the system is durable. Kanban systems operate at level 3 in thismodel. Variable Quantity (fixed frequency) System In some situations it is more convenient to replenish items used, by fixed frequencydeliveries (or collections), rather than respond to fixed quantity replenishment requests.T h i s m e t h o d f o r m s t h e b a s i s o f s u p p l i e r " t o p u p a t p o i n t o f u s e " s y s t e m s , w h e r e a supplier visiting your point of use will top up stocks to a predefined maximum level. Weh a v e a l s o u s e d t h i s m e t h o d a s t h e m e c h a n i s m t o d r i v e " r e p l a c e m e n t s y s t e m s " f o r maintaining stocks of critical spares items or maintaining "van stock" for on-theroadservice engineers