MB 0044 - PRODUCTION AND OPERATION

1 Write about value engineering(VE)Definition Example/s

Where is it used?Why is it used?
a) VE affect economies by investigating every opportunity &discovering new
materials & methods .It originated in 1947 in GE Corporation (GEC) when a
substitute for asbestos for flooring was found.
b)e.g, in Bharat Heavy Plates &Vessels ,team implemented various value
promoting rules & lowered cycle times of some of their critical business
process(BP). MRF & Mahindra & Mahindra s CE personally visit their dealers
and listen to them.
c)It can used for i) simplifying Product ii)making Better and less costly item
iii) Improving design iv) making high efficiency BP v) Economy in all activities
d)It is used to get zmax or zmin by seeing constraints in linear programming
problem . Here workers are made to realize to reduce cost as we saw in case of GEC.
Here we develop a culture where to see Mudas (7 types of wastages) & Poka yoka(less
mistake) in operation.To ensure reliable supplies, we ve to see certified
supplier. Use QA measures.
Q2Why did SABMiller revamp its supply chain(SC)? Describe the domain
application used for SCM integration?
Ans:-It revamped its sCM system to reduce stock-outs .As its customers ran out of
stocks of popular its brands during peak periods in 2007 & 2008. The shortfall on some
brands was as high as 22%.Its average stock availability target of 98%. "But for some
premium brands the target is 100%.It has excess stocks of some products.
Analyse key & minor issues for revamping
Key issue for revamping is to reduce stock-outs . It has average stock availability 98%
but shortfall on some brands was as high as 22% in during peak periods in 2
consecutive years. It has excess stocks of some products .So there is mismatch
between cost of understocking & cost of overstocking.As per given information, it is
testing the new system in South Africa .But to test all nations.McKinsey suggested to
use SAP& it has to improve stock-outs with correct demand, see ethnicity &
demography of diverse South African market which is fast-changing. It suggested to
change & upgrade tastes & also see new product development & new routes to market.
Major issue is its brands are the same as any other rivals brand but if buyer does find
product, he switches to substitute rivals brand. That's dangerous. There is lack of
planned promotions, a reason for raising cost.
Description of the SAP system, why it was used & benefits from using it.
SAP maintains records ,sees gaps that creeps into O.
Use it alongwith ERP software to store, sort&see

data & make them available to staff across the globe. SAP will forecast sales
for about 2,600 SKU depots for
brewing division & 3,100 for the soft drinks divisionetc.It will integrate data 12 factories
(7 breweries &5 soft drink plants).With it ,it will have planned conversion of input into
output, procurement &production scheduling.With SAP ,it can use Infor's demand
forecasting.It will see cost-effective location, given the local demand, manufacturing,
transport and inventory costs.
3 Write on: Ingredients of a business process(BP) Acceptance sampling
Work Breakdown Structure(WBS)
Ingredients in BP may be as:
i) Data which accomplishes objective.
ii)Persons, teams, &firms units which helps to perform &get tasks.iii)VE.We
ve to see behavioral aspects of the BP where humans are involved. Failures
of BP are due to:
i)biases in perception & fallacies in reasoning
ii) tendency to act on Hypothesis(H), even when data are available easily
for verification
iii) tendency to bring out of memory the facts that reinforce H & biased
evaluation
iv) tendency to accept evidence or fact as absolute which support H . So
avoid them .
b) Acceptance sampling is also known as end of line inspection &categorising
pd based on sample(sm) based inspection. Here Q-control, supplier & cus
agree upon
accepting a lot, by inspecting a small number taken randomly from the bulk
supply. Out of sm, if a small number as agreed upon by parties or as
validated by sm scheme, is determined as defective, the lot is accepted. If
the number of defectives is > agreed size, entire lot is rejected. Here risks for
mfrr & buyer exist. As sm size increases and the number of acceptable
defectives
decreases, risk for the buyer decreases &v/v. That is the reason these
numbers cannot be fixed as they rely on cus s need. Sometimes parties go
for a doubling sm plan. Here a range of defectives is fixed. If defectives are
less, lot is accepted. If it is > higher number, the lot is rejected. If number

falls between the above 2 numbers, another sm of a higher size is taken for
inspection &if the total number of defectives is < another determined
number, the lot is accepted. AS is not Q improvement or correction, but only
a way of ensuring that defect is within a certain permitted number.
c) As entire BP has many sub processes in different stage called WBS.See
recruitment as

.
WBS is technique to see content of work & cost by breaking it down into its
component parts. Project key stages form the highest level of WBS, which is
then used to show the details at the lower levels . Each key stage comprises
many tasks identified at the start of planning and later this list will have to
be validated.WBS is produced by identifying the key elements, breaking each
element .
Q4 CaseStudy:Description of main issue(forecasting process needed to change),
forecasting Challenges in Brooks Sports.

Ans:-It designs running footwear, apparel &accessories &sells in 80 N. In 2001, its

target was serious runners.Its challenges :
Inconsistent style growth: new line had growth rates from 0 to 50 % annually.
average lead time for a style is 6 months ,must be made 18 months before a style is
launched. It had to set demand plan for a style prior to ever getting customer order.
Rising at-once orders for immediate shipment is< 20% of total sales. Since 2001,
however, at once orders have risen to nearly 50% of total sales.
No exposure to retail sell-through: Footwears are sold primarily through specialty
stores who can share sales data with vendors.
Evaluation of collaborative forecasting(DF)
In Collaborative DF ,team set up 3 steps:
i):It makes monthly DF of SKU by seeing level, trend, seasonality. It has software
Forecast Pro to do so. It has Ability : to create accurate DF to choose DF models or
let software automatically select models to model events (key for predicting spikes in
D with new product launches)
to produce consistent DF at all aggregation to override facility to enable
collaborative forecasting
Implementing Forecast Pro is simple &it also addresses challenge of DF on regular
basisas races. It forecasts a product hierarchy & generates detailed DF at the SKU
level for demand planning.
Step 2: On a quarterly basis, it does DF of sales for a 12-month horizon. We get input
via the Web .
Step 3: It compares statistical & judgmental DF & adjusts to create final monthly
DF.90% of the final DF are the same as statistical DFchanges are most commonly
made to the forecasts for new styles. These final DF are then automatically fed into its
ERP system. We now can systematically track changes, &understanding of our DF
performance.
Conclusion on if solution can be improved or not
By using Forecast Pro ,DF accuracy has improved on average by 40 %, unfulfilled
demand has been lowered from approximately 20 % to < 5 % & closeouts have been
reduced by > 60%.It
smoothens production & lowers costs
5 Write about Risk assessment Risk control Risk prioritizing Risk
mitigation
Ans:- Risk assessment identifies the possible risks & assesses the
consequences by means of checklists of possible risks,surveys, meetings and
brainstorming, and reviews of plans, processes and products. We can also
use the process database to get information about risks and risk
management on similar projects.
2. Risk control : Identify the actions needed to minimise the risk
consequences. Develop plan. Focus on the highest prioritised risks. Here use

quantitative assessment of risk probability and the risk consequences. For

each risk, see rate of its occurrence and indicate if risk is low, medium or of
high category. If necessary, assign probability values in the ranges & assign a
weight on scale of 1 to 10.
3. Risk prioritising: Rank risks based on the probability .e.g, high probability,
high impact item will have higher rank than a risk item with a medium
probability and high impact.
4. Risk mitigation: Select the top few risk items for mitigation and
tracking.Refer to a list of commonly used risk mitigation steps for various
risks from the previous risk logs maintained by firm & select suitable .
Execute steps by incorporating them into project schedule.Besides,see
progress of the planned risk mitigation steps, periodically revisit the risk
perception .
6 Why redesign of layouts may be necessary? List the differences between
product and process
Layout
Ans:- In factory,we need to arrange machines & also space to store
materials, tools, & also provide support services like dining, parking &
space to interact with buyers.Such arrangement is called layout means
floor plan etc.It is physical arrangement of work centers.A floor plan means
length &breadth for different functional need but layout is 3 dimensional
need as it also looks for utilization of volumetric space.L raise productivity
via i)Reducing work-in-process ii) Shortening manufacturing time iii)
supervising better iv) adjusting as per changing conditions v)minimizing
material handling costs vi) raising throughput etc
b) Types of L may be 4 as i) Process L or functional L ii) Product L or
line L iii) Group technology L iv) Fixed position L
i) Process L or functional L i) Process L or functional L:It deals with grouping
of machines, process, or services as per their function. This grouping of
machines by function is
characteristic of job shops & batch type production facilities.Here we group
general purpose machines that can be changed over rapidly to new O for
different product designs.e.g, car service and repair centre may have many
departments or functional areas which are arranged based on space and
technical need as number of persons working, machines installed,

number of vehicles coming on an average, and other needs. Each car

entering into the service centre will follow below steps:
i)Arrival at office ii) Customer informs about the type of problem iii) Front
office guides the customer to drive the car to required departments iv) Car
is given the necessary service v) Customer returns to front office & makes
payment vi) Car exits from the service centre.
ii) Product L or line L, focuses on sequence of production or assembly
operations required for manufacturing or assembling a part or a product.
These are used in mass or continuous
production. E.g,automobile assembly, cement manufacturing, oil refining.
These are not flexible as they are specifically designed for making or
assembling one product. These layouts typically use special machines that
are set up once to perform a specific O for
a long period of time on one product.