Case Study RM

Case 1 ET March5, 2012, Mumbai Edition. http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source= Page&Skin=ETNEW&BaseHref=ETM/2012/03/05&PageLabel=15&EntityId=Ar01502&V iewMode=HTML

Panel to Look Into Rising Volatility and Divergence Between IIP, HSBCs PMI
SHRUTI CHOUDHURY NEW DELHI

Inconsistent and volatile monthly industrial growth numbers have finally stirred up the government to sit up and take notice. An expert panel will now look into the reasons behind the large fluctuations and growing divergence between government industrial numbers measured by the Index of Industrial Production (IIP) and that of other credible private agencies. The Department of Industrial Policy and Promotion (DIPP) has set up a committee under planning commission member Saumitra Chaudhuri that will primarily investigate the increasing divergence between the IIP and HSBCs Purchasing Managers Index a monthly survey based index that tracks manufacturing growth. Though the difference between the two indicators can be explained by a variety of reasons, we have decided to revisit the index given that IIP numbers influence business sentiments. The economy cannot afford too much volatility in the markets right now, a senior official at the DIPP told ET. The weights under IIP might be tweaked, he added. The need for a re-look into the index has risen less than a year after the government upgraded the index with a new product basket, reconstituted the weights and revised the base year to from 1999-2000 to 2004-05. The government has cast doubts over its own index because the IIP numbers have shown a declining trend in the past 6 months while the PMI has shown considerable expansion during the corresponding period. Looking at how dynamic the economy is, it is a good idea to re-look at underlying weights of popular indices every few years, explained DK Joshi, Chief economist CRISIL. IIP numbers define growth on a year on year terms for industrial production without measuring the quantitative nature of the production itself. Analysts say that due to this the declining trend shown by the index may not necessarily reflect a downturn. IIP for December stood at 1.8% against 5.9% for the November. Government however blamed a high base effect for the dismal IIP numbers. Manufacturing sector has the highest weight (75.5%) in IIP index followed by mining (14.2%) and electricity (10.3%). Variations between IIP and other data indices are alarming. Most importantly, the government needs to follow a standard method for data compilation and ensure data sources are reliable,

said Subhada Rao, President & Chief Economist at Yes Bank. PMI is seasonally adjusted and shows month-on-month variations thereby indicating sequential growth. PMI is a survey-based measure of the top 500 companies. It has been growing since November and rose to 57.5 in January, the highest in the past eight months before declining to 56.6 in February.

Give the salient features of the above report. What are the basic sampling techniques for IIP and PMI? Is there any point in this report that you disagree? What is the most important point in this report? Apply your learnings in QT and RM and give your insight into the above theme. Use relevant resources including IIP and PMI websites.

Case 2
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ET NEW&BaseHref=ETM/2012/03/05&PageLabel=17&EntityId=Ar01701&ViewMode=HTML

Rich Write the Consumption Book

Growth will turn India into a dynamic consumer economy and may increase discretionary spends by the poor With domestic consumption being a key driver of Indias growth, numerous attempts have been made to decipher the India Consumption Story and provide explanations to some of the perplexing questions that have been raised. Continuing the endeavour to provide meaningful insight into the mind of the Indian consumer, this article is an attempt to provide a profile of richest 10% Indians and answer some

pertinent questions such as: who are they? Where are they located? What do they consume? The top 10% of Indian households, roughly estimated to be 125 million consumers, account for 36% of total income (calculation based on How India Earns, Spends and Saves), a figure that is slightly higher than one often compared to China, where the same is about 31% (World Bank database, 2005). Furthermore, and this is extremely crucial to note that, by the end of this decade, based on current growth, the projected income share of rich Indian households is expected to reach 45%, which is close to Brazil (48% in 2005). It is equally important to note that the income ratio of the richest 10% Indians to that of the poorest (10%) is about 15 (authors calculation), and that does provide an idea of disparity in purchasing power and well being. Similar estimates for the UK, US and China are estimated to be 13.8, 15.9 and 21.6, respectively (Human Development Report, 2009). Where do rich consumers live? The sheer size of this country, coupled with its staggering heterogeneity, makes identifying the area of residence of this target segment an extremely tortuous exercise. Our analysis shows that almost 57% of the top 10% rich consumers reside in urban India whereas about 93% of the bottom-segment households reside in rural India. Of the total top 10% rich consumers (125 million), roughly 15% reside in Maharashtra, followed by Tamil Nadu (10%), UP (9%), Gujarat (7%), Karnataka (6%), Delhi (5%) and Punjab (4.5%). A state-wise analysis of the intensity of rich consumers, with population impact removed, leads to a changing of positions with Chandigarh, taking the lead, followed closely by Delhi, Kerala, Punjab, Himachal Pradesh and Maharashtra (NSS CES, 2009-10). How do rich consumers earn? With respect to their occupational profile, it is interesting to note that 21% of the top decile consumers (as per the NCO 2004 classification) are legislators, senior officials and managers, while professionals and associate professionals account for 19% and 10%, respectively. On the other hand, those at the bottom of consumption pyramid are majorly engaged in elementary occupations (60%) and skilled agricultural and fishery-related occupations (23%). What do they consume? The 10% rich Indian consumers absorb about onefourth of total household consumption expenditure, making it an extremely integral part of the India growth story. On the basis of the NSS consumption expenditure surveys, we explore the spending patterns of the top decile and juxtapose it with the bottom 10%. Observing data from past NSS rounds, we find that although expenditure on food still accounts for a significant share (28%) of the total expenditure basket, it is showing a downward trend. This is compensated by an increase in expenditure allocated towards transportation, health, electricity and fuels, education and household services. While there is no denying the issue of under-reporting/underestimation of NSS consumption expenditure data, particularly of the rich segment, nonetheless, the data does offer a meaningful insights into understanding the historical trends and distributional characteristics of Indias consumption story. The accompanying table sheds light on not only the purchasing power of the top, but also reveals the disparity in purchasing power across the distribution. For every item, the all-India average expenditure has been equated to 100 and then the average expenditure of the top and the bottom is calculated with respect to 100. This then shows the distance between the end points of distribution and their purchasing power with respect to the average Indian. A significant difference is observed in the

transportation segment in the car, motorcycle and scooter category and also in the electric goods and jewellery category. This discretionary spending, which has risen significantly over the past decade, is increasingly becoming a major part of total household budget of the top 10%. With respect to expenditure on healthcare, education and the telephone category, there exist significant differences between the top decile and the bottom. The historical pattern in India is similar to the one observed in other developing economies. Growth leads to a decrease in the share allocated to basic necessities and an increase in discretionary spending. As growth percolates to those at the bottom of the pyramid, it is quite conceivable that a similar shift in their consumption basket will be observed, although the magnitude will vary. As India continues its upward trajectory, the aggregate purchasing power will lead to the creation of better and more dynamic consumer economy. However, we should remember the concluding remarks made by psychologist Daniel Gilbert, Money helps in improving happiness if it is to provide the most basics of physical needs such as food, shelter and health. Beyond that, money has little effect on happiness. (The author is an independent consumer economy expert)

RAJESH SHUKLA

Give the salient features of the above report. Is there any point in this report that you disagree? What is the most important point in this report? Apply your learnings in QT and RM and give your insight into the above theme. Use relevant resources including NSSO, CSO and MOSPI websites. Give a brief overview of NSSO, its function and utility.

Case 3

http://www.sunnewsonline.com/webpages/features/marketingmatters/2012/feb/29/market-matters29-02-2012-02.html Lean Six Sigma, science of breakthrough improvements By Neta Nwosu Wednesday February 29, 2012

A top Nigerian trainer and Business management expert, Mr. Hubert Eke has urged corporate Organisations in Nigeria and medium scale companies to embrace Lean Six Sigma Management system if they truly desire to achieve sustainable and measurable improvements in their operations. Eke was speaking at an introductory seminar organised recently by QPine Resources Ltd and Process Consulting Ltd at Protea Hotel, IkoyiLagos to introduce Lean Six Sigma Management tools to selected corporate organisations in Lagos. Present at the introductory seminar were representatives of companies in the manufacturing, telecoms, banking, advertising and other sectors.

Mr. Hubert Eke, a management expert, illustrating the uses of the Six Sigma System to participants during the seminar at Protea Hotel in Lagos
Photo: Sun News Publishing

More Stories on This Section Mr. Eke explained that since companies are consistently under pressure to improve operational efficiency and profitability, turning to Lean Six Sigma, which he describes as the science of breakthrough improvements, could bring near magical results that would reflect from changes made throughout the value chain, including internal pressures, supplies and most importantly customers relationship.

The Lean programme, according to Hubert Eke is basically a system that seeks to improve process efficiency and quality by increasing speed and eliminating waste. It was first used as a term in quality improvement system when it was applied to the Toyota Production System (TPS) in the 1980s. Presently it is used by at least 25 percent of Fortune 500 companies in America. When it was first used by GE in1997, over $400million was gained in the companys operating income. Mr. Eke emphasised that Leans attention to eliminating waste evaluates all areas of value provision. In his words, think about the cost of returned or reworked account opening forms, the cost of resolving thousands of telecommunication customers complaints which should never

have occurred with a process designed for lean or six sigma performance. During presentations at the introductory seminar, it was emphasized that Six Sigma is not a one-time project or improvement effort. Rather it is a process of establishing a new culture that pervades the organisation before becoming part of its DNA. Capturing the full image of the programme, Hubert Eke describes it as a methodology focused on creating breakthrough improvements by managing variations and reducing defects in all processes across the enterprise. Companies using other management systems were advised at the introductory seminar to pick tools peculiar to Six Sigma to make their operations faster and more efficient. Areas that respective industries can reduce cost, eliminate misuse and get rid of waste were identified during the training. For the telecoms industry they include download speed, availability of refill cards, input errors, and poor customer services. The ones identified in the manufacturing sector include bagging waste, under fill, impurity levels, under weight, bottle colour, active ingredients and many others. In banking such areas include ATM uptime, ATM errors, new account openings and customer services. According to Eke Six Sigma succeeds through significant process improvement that require defining process goals in terms of critical parameters on the basis of customer requirements, measuring current process performances in context of goals, analyzing current scenarios in terms of variations and defects, improving the process by systematically reducing variations and defects besides controlling future performances of all processes. http://www.virtual-strategy.com/2012/02/27/american-woodmark-corporation-selectsinfinityqs%E2%80%99-spc-platform-advance-six-sigma-initiati

American Woodmark Corporation Selects InfinityQS SPC Platform to Advance Six Sigma Initiatives
Business Wire Share | Monday, February 27th 2012

Real-time alerts, statistical process controls and drill-down analysis to provide visibility into input/output correlation and process inefficiencies InfinityQS International, Inc., the leading provider of real-time quality control software solutions, announces that American Woodmark Corporation, a leading supplier of cabinetry to the remodeling and new construction industries, has selected its ProFicient real-time SPC (statistical process control) software to increase process efficiency and reduce scrap. American Woodmark will further its corporate quality mission by integrating the ProFicient platform into its already-established lean manufacturing and Six Sigma initiatives, to improve visibility into input/output correlation and process inefficiencies.

Shannon Walton, Six Sigma Master Black Belt, American Woodmark, said, In order to achieve our corporate vision to be the undisputed leader in total quality for our customers, contractors and do-it-yourself service centers by 2013, it is vital that American Woodmark lives and breathes quality. We selected InfinityQS ProFicient because it not only enables us to identify and correct inefficiencies now, but is also a scalable system that will grow as our needs evolve. ProFicient has been so well received at each of our plants that the biggest challenge is tempering the excitement for continued, strategic deployment. American Woodmark utilizes natural materials in its manufacturing processes, which creates a wide range of quality characteristics to consider, such as natural abnormalities in the wood or humidity and temperature in the plantsall of which can affect the quality of the final product. By implementing ProFicient to automatically alert appropriate operators and quality managers as nonconformities occur, the company can optimize its manufacturing processes resulting in time and cost savings, as well as higher quality production and enhanced brand confidence. Michael Lyle, president and CEO, InfinityQS, said, American Woodmark continues to thrive, even as its competition struggles, because it understands the real market value of manufacturing to specification the first time, every time. The InfinityQS platform provides its quality teams with real-time visibility and allows them to optimize processes specific to conditions on the plant floor. True to the principles of Six Sigma, data analysis guides American Woodmarks decisionmaking and allows the company to overcome challenges related to natural variation in its raw material. The result will be a higher quality product, increased demand from customers, and dramatic reductions in operational costs. Headquartered in Winchester, Va., American Woodmark operates 11 manufacturing facilities and nine service centers across the country. Its products are sold on a national basis directly to home centers, major builders and through a network of independent distributors. InfinityQS ProFicient is a proven, powerful and intelligent real-time SPC software solution. Many of the worlds leading manufacturers have standardized on ProFicient to monitor quality benchmarks, provide full traceability across the supply chain, and meet regulatory compliance and customer reporting requirements. While closely monitoring production and testing processes in real time, it enables supply chain-wide visibility through flexible deployment options and a centralized global quality database. For more information about InfinityQS real-time SPC software solutions, visit www.InfinityQS.com. About InfinityQS International, Inc. InfinityQS International, Inc. is the leading provider of real-time SPC software and services to a broad array of companies, from multi-national giants to smaller, more specialized manufacturers. InfinityQS develops software solutions to help manufacturers to monitor, control and improve the quality of their manufacturing operations across a site, an enterprise or an entire supply chain, continuing to provide significant returns on their initial investment and increase productivity. The companys goal is always to improve clients internal quality standards and ensure their continued success in the global marketplace.

What is six sigma? Explain in brief. What is its significance in todays corporate world? Give a brief outline of six sigma implementation. Give appropriate case examples.

Case 4

See the attached report from AC Nielsen India. Give a brief account of AC Nielsen India including broad area of activity. What are the main important points in the report? Has the reports findings corroborate the global economic scenario in the subsequent 9 months?

All presentations should be of at least 15 minutes duration but not exceeding 20 minutes. Computer aided presentation will be desirable.