OM-II SECTION 'A' 2007 TERM ASSIGNMENT

Notes:
Some of the “topics” in Parts A and B will have 1-2 groups working on them independently.
Situation/ topic allocation to groups will be done randomly by the faculty and announced separately
on the course site. No duplication is permitted beyond the specified extent.
Change of allocations will be permitted only in special circumstances; if permitted, it will generally
be limited to pair-wise exchanges within one week of the allocation announcement, with prior consent
of the faculty and agreement of both groups involved.

Please meet the faculty to clarify the scope of different parts of the assignment if needed.

Part A Situation Based [30 marks]

This part of the assignment requires you to study an Index 2007 situation from an Operations
Management perspective. An indicative list is as follows:

 Index Research Projects [1 group max. per assigned project(s)]

 Index Computer/ Systems Operations – Setup Activities [1 group max.]
 Index Computer/ Systems Operations – Process Activities [1 group max.]
 Index Food Operations [2 groups max.]
 Index Transport Operations [2 groups max.]
 Index Site Management Operations [2 groups max.]
 Index Entertainment/ Recreation Operations [2 groups max.]

The exact choice/allocation of the situations among groups will be announced later based on
the list of Index sponsored research projects available on a convenient cut-off date. For the situation
assigned, you are required to:

 Provide an introduction to the situation and its environmental background, so that it can be
visualized and the context of decisions can be understood.

 Document the operations and describe how specific and pertinent OM sub-functions/
activities/ decision-making are/ were performed in the situation. Include exhibits, figures,
tables etc. as appropriate.

 Identify/ select key problem areas, describe the problem(s) as you understand them, and
suggest tentative solutions with brief justifications. Separate out low-cost incremental
improvements from bold initiatives that might require major efforts/ expenditures.

 A copy of your work might be given to the concerned Index team and its advisor/ sponsor, so
follow professional standards in report preparation, and avoid making open-ended statements.

Be sure to go about your study in structured fashion, i.e., don't just list activities, incidents,
topics or thoughts randomly. You will need to make first-hand observations and discussions: as far as
possible, try to observe the planning and execution processes while they are going on. Indicate the
period over which you did your study, and include names of the people you interacted with (PGP-I/II
students, IIML faculty/ staff, contractors/ vendors, and any other agencies who were involved with the
specific situations).

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Part B Document Based

Operations Management Highlights [8 marks]

In this part of the assignment, you will explore one of the areas of Operations Management
listed below, as written about in common business literature. Note that the term “Services” is used
generically to refer to all sectors other than Manufacturing of goods.

 Product Design (Manufacturing)

 Process Design (Manufacturing)
 Product & Process Design (Services)
 Capacity Management (Manufacturing)
 Production Planning (Manufacturing)
 Production Scheduling (Manufacturing)
 Capacity Management & Scheduling (Services)
 Facility Location (Manufacturing)
 Facility Location (Services)
 Facility Layout (Manufacturing)
 Facility Layout (Services)
 Job Design, Work Methods & Work Measurement
 Maintenance Management
 Quality Management & Statistical Quality Control (Manufacturing)
 Quality Management (Services)
 Just In Time Systems (Manufacturing)
 Just In Time Systems (Services)
 Project Management
 Supply Chain Management (Manufacturing)
 Supply Chain Management (Services)

For the area assigned, you need to find and describe some Vignettes, Highlights,
Breakthroughs etc. that give a fair idea of Operations Management practice and OM-related initiatives
in India and abroad. Though several such applications will be multi-disciplinary or cross-area in
nature, the concerned area of Operations Management should be a reasonably dominant theme in your
selections. For the area assigned, at least two (and preferably three) descriptions are required from the
following:

a) Indian application stories (as recent as possible, preferably after 2002 and certainly after
1997)
b) International application stories (preferably after 1/1/2004, and certainly after 2001)

You must include at least one from each (a) and (b); also preferably at least one should be
about an an IT-based application and at least one about a non-IT-based application. Each description
should be 300-400 words in length (penalty for violating guideline); you may include pictures,
drawings etc. beyond the limit if needed and value-adding. This is supposed to be your write-up: do
not simply "lift" it verbatim. Read the opening paragraphs and the "Breakthrough" boxes in the Chase
textbook chapters to get an idea of the coverage and nature of write-ups. Evaluation will be based on
the relevance, significance, and quality of the write-ups.

You may look for such stories in the Business Press, IT Press, any other professional
periodical, or even the Internet. If relevant, one of the descriptions can be based on first-hand
experience of real significance. It is essential to include the source of the story with full access details
(e.g., Periodical title/ Issue date/ Page nos./ access location etc., or the exact URL in case taken from
the Internet). No credit will be given without identified and accessible sources.

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Part C Computer Based

C.1 Swoosh Inc. Line Design using Simulation [10 marks]

Swoosh Inc. has a 3-stage production line for its brand of sneakers. The first machine cuts the
material, the second forms it into shape, and the third machine performs the sewing and gluing
operations. There is a storage "buffer" between the stages to "uncouple" the processes. Each storage
buffer has the capacity to store 4 sneakers.

Stage 1 has an average Processing Time of 2 minutes (standard deviation 0.5 minutes), during
which it produces material for 4 sneakers. Stage 2 operates on one unit at -a-time, requiring 25.5
seconds per unit. After each hour of use, stage 2 must be stopped and cleaned, which requires 10
minutes. Stage 3 has a cycle time that averages 28.5 seconds with almost no variation, but 10% of the
units must be scrapped.

(a) How many sneakers per hour may be produced, on average?

(b) What happens if storage capacities are increased to 8 sneakers each? To 16?
(c) What happens if stage 2's cleaning is reduced or eliminated by an automatic cleaning device?
(d) What happens if stage 3 is improved so that scrap could be reduced or eliminated?
(e) What happens if variability at stage 1 could be reduced or eliminated?
(f) What happens if production at stage 1 could be done in batches of 2 sneakers or even 1, while
maintaining the same average time per unit and the same Coefficient of Variation?

Use the spreadsheet simulation model provided to study the behaviour of the production line
and answer the above questions. You have to change relevant problem parameters appropriately for
the experimentation. For each of the above questions (b)-(f), begin each analysis with the model from
part (a), changing only one thing at a time, and explain the reasons for the bahaviour changes in
various cases. Finally, give your assessments and explanations for the price the system is paying for
its various imperfections, and possible improvement priorities considering likely costs/ benefits.

Copy the original CELLSIM.XLS file (~700K) from the specified location into your own user
area, and start CellSim by opening the file. This file contains Macros that carry out the simulation, so
Excel may warn you that they might contain dangerous stuff (like a virus). Enable the macros and let
the program load. The first page of CELLSIM.XLS is a brief set of Directions, while the actual
simulation is carried out on the "Model" sheet. Click on its tab at the bottom - the top 2 rows and the
left-most 2 columns have information about the program, buttons to run the simulation and input cells
to control it. The area below and to the right of cell C3 is where the model is constructed and
displayed. The base model of this factory (shown in the figure) is available in the CELLSIM
worksheet basecase.xls, with all times converted to minutes.

To retrieve a Model from a File, click the button labeled "Open a Model" (the model and the
output from the last run are stored together). If necessary, navigate to the folder in which the files are
contained and Double-click on the filename. The screen now shows the model that was stored in that
file. The colors indicate the state of the model when the previous run was finished. The color codes
are shown on the left side of the screen. The name "Proc1" is the Process that was active, and the
number in the StorageArea is the inventory that was present at the end of that run. To see the names of
the model elements, click "Show Model". This changes the labels to "Mac1","Mac2" etc. (the default
names of the Machines) and "Inv1", "Inv2" etc. (the default names of the StorageAreas).

To see the data collected for a model from its most recent simulation run, use the Excel menu
"Window" and select the model's xls file. The tabs at the bottom of the page show the different data
sheets. The Machines sheet gives an overall summary of all Machines. In addition, there is a separate
sheet for each Machine, summarizing all of its Processes. Inventory gives an overall summary of all
StorageAreas. In addition, there is a separate sheet for each StorageArea, summarizing its Items. The
last two sheets, MachineList and StorageList, are used by CellSim to restart the model, and give the
descriptions of the Machines and StorageAreas in the model. Close the window to return to the model.

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 Use your group members' names as prefixes to the machine/storage names (no offence
meant!). Also, change the Random Number Seed to the 5-digit roll number of one of your group
members. Choose sufficient run-in time (at least 480'), run length (at least 960'), and number of
repetitions (at least 5) to get reasonably representative and stable results. Check Animation to watch
the simulation on-screen (it takes a little longer), and Uncheck it if you wish to speed up the
simulation and are prepared to sacrifice watching the action "live". Save and submit relevant
sheets/displays/graphs etc. for major experiments. When making changes and runs, keep your own
modified/ run files distinct from the original files. A mass of data is generated in the runs: be selective
in picking what is pertinent, and devise additional spreadsheet(s) as needed to extract and tabulate
relavant information from the software-generated data.

The properties (including names) of any element in the model can be viewed/ changed by
double-clicking or right-clicking on it, making the necessary changes, and clicking OK until the
dialog is finished. Specifically,

 To change storage capacity, open the buffer element as above and enter the desired capacity level.
 To change cleaning time, open the machine element as above and change the Failure/ Repair
times.
 To change scrap rate, open the machine element as above, select Process Proc1, click "Edit
Process", and enter desired "Unit Percent Scrap". (Do not use the "Batch Percent Scrap".)
 To change variability, go to "Edit Process" as above and change the standard deviation.
 To change batch size, go to "Edit Process" as above and make the necessary changes.

To Save a Factory Model for later use, with any changes you may make, the easiest way is to
run a simulation, since the factory model is saved with the output. Click "New Runs" and Respond to
the prompt, giving your model a unique file name of your choice in your folder (about 100-150K). Do
not save it as basecase.xls, nor should you save changes to CELLSIM.XLS.

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C.2 Production Planning Game [8 marks]

In this problem you will play the Aggregate Planning (AP)/ Master Production Scheduling
(MPS) phases of a computerized Manufacturing Game, aimed at the planning and execution decisions
in Production & Materials Management. The game can in fact even be run manually in class, but is
being given as an assignment so that you can plan out appropriate strategies and develop any other
spreadsheets/ models you want for evaluating/ determining your plans.

The game involves production and selling of a product line with 3 models (A, B, C) over a 1
year horizon. Each model requires two parts (from Blue, Pink, Green or Yellow) as per the Bill of
Material, and Labour in different combinations. The problem parameters are defined in the Aggregate
Parameters and MPS Parameters sheets (hardcopy enclosed). The full game involves completing the
planning process up to Material Requirements Planning, and implementation/ adjustment of the plans
with random demands. However, in this assignment you don't need to complete the material
requirement plans (that is actually taught later, in the Materials Management course in Term III).

The initial planning is at the aggregate product level over 4 quarters (1 year), and then
detailed out model-wise and period-wise (6 periods per quarter). The aggregate demand and its
variability can be calculated by building up from the model-wise period-wise demand in the MPS
Parameters sheet. (Note: Coefficient of Variation = Standard Deviation/ Mean)

You are first expected to develop a quarterly Aggregate Plan that will produce no less than
the year's forecast demand and satisfy quarterly demands, based on an "average" product model. You
need to specify opening inventory (max. 150 units), and regular time capacity (this will be taken as
the maximum of regular capacity decided for any period), regular production, and overtime
production (limited to < 50% of regular capacity in the quarter). The base regular labour capacity
decided here cannot be changed in later stages of the game. End of year calculations include some
credit for ending inventory - you need to end with at least as much as you started with. Products are
valued at initial acquisition cost. Creation of the AP involves balancing the trade-offs between various
costs associated with it.

The base AP (with opening inventories and regular time labour) must be submitted on a single
hardcopy sheet by the date specified in "Administrivia" - you will have to continue with these values
for the rest of the assignment. Submit a copy of the same sheet with your main submission too.

After freezing the Aggregate Plan, you move into the Master Production Schedule phase
which indicates how much of each model is produced in each period. Each quarter now consists of 6
periods (of 2 weeks each). Parameters include variations among models in material, labour, inventory
costs, selling price, and demand pattern. These parameters are consistent with the "average" model
used in the AP. A Disaggregate Plan for producing the 3 models is generated based on the AP - it
simply provides a production and inventory mix equal to the demand mix. This plan is only a
guideline in developing your own MPS.

You are expected to develop the MPS for the first 2 quarters (12 fortnights). Remember that
you cannot change Regular labour capacity and Total Opening Inventory, established in the AP, in
this phase. The MPS is expected to meet average demand per period for each model. It can contain
any mix of opening inventory (within total from AP). Regular labor time is levelled through the
quarter (i.e., 1/6th of the regular time for the whole quarter is available each fortnight) and charged for
full capacity even if not used. Overtime as usual cannot exceed 50% of regular time in each period.
Each time that there is a change from one model to another, a changeover cost is incurred. Now these
changeover costs also need to be balanced with the other costs. Since demand may actually be a little
random, some level of safety stock may help at the execution stages of the game to cover uncertainty
since lost sales could be expensive.

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 The base model is in the MS-Excel spreadsheet GAMEPLAN.XLS. Relevant problem
parameters (demand patterns, costs, etc.) are already entered as shown in the Aggregate Parameters
and MPS Parameters sheets. DO NOT change the problem parameters - you have to change only the
relevant planning decision variables for your experimentation and solution. Copy the original file
(278K) from the specified location into your own user area. Macros have to be enabled to run the
software. The brief rules and all parameters are available on-line. When making changes/
experiments, keep your own modified files distinct from the original file.

Use the Screen Fit button to size the display on the screen - this sizing is maintained if you
use the Proceed button to move to subsequent sheets in the game. At each planning stage, the Evaluate
button checks for feasibility, and determines the costs and other implications of the plan. After
clearing Evaluate, you Proceed to the next phase: this freezes the decisions for further planning.
Proceed also clears/ resets all subsequent sheets in accordance with your latest decisions.

Save/ submit each major plan from the Planning Screens separately. Report your decisions
and results by printing the concerned screen, and summarizing as needed. Use all your group
members' names as the Group Name in the Planning sheets (to be entered first in the Aggregate
Planning sheet). You must explain the analysis that you did and reasoning/ techniques employed in
structuring and solving the problem. In other words, you need to report not only the "What" but also
the "How" and "Why".

The Rest of the Game (not for this assignment):

If you had been playing the full version of the game, you would now freeze the above
decisions and proceed with Material Requirements Planning to complete the planning process. This
would involve consideration of the MPS, Bill of Materials, Inventory Status, Lead Times, Ordering
costs and Inventory cost in determining how much to get/ make and when. The output of this phase
would be the completed MRP tables (you will see how these are done in Term III). The Production
stage of the game would then be played by ordering parts, acquiring labour, producing the item and
making sales while keeping track of finances and inventories, making payments to suppliers and
labour, and so on. A separate Excel worksheet computerizes these tasks, so different options can be
experimented with before freezing decisions. Demands, following the random patterns indicated
above, are announced periodically. Also, teams are informed of sales, inventory, cost and profit
position for each period and cumulatively. Major resource deficiencies due to planning errors can be
made up with stiff expediting penalties. Teams can also track the actual demands to identify patterns,
and attempt to estimate demand using forecasting techniques.

Part D Activity Plan, Execution & Review [4 marks]

Prepare an activity plan for completing this OM-II Term Assignment, complete with
identification of activities, their durations, sequence/ inter-linkages, and resource identification. You
may like to use charting software such as MS-Project or Primavera Suretrak for this. The first part,
due by the date specified in "Administrivia", should contain a 1-page hardcopy plan for the complete
assignment. The second part, to be submitted with the final assignment, should document how things
actually happened, how long they took, and also who did what - with respect to the original plan. How
could performance in doing the assignment have been improved?

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 Administrivia

1. The assignment is to be done in groups of three, and is due as follows:

a) By October 26 (Friday) 5.00 PM, submit 1-page hardcopy of the first phase (Aggregate
Planning) of the Manufacturing Game, and 1-page hardcopy of the activity plan for
completing the entire assignment. This submission will not be returned, so keep a copy.

b) The finished assignment (all parts together) is due by December 12 (Wednesday) 5.00 PM.

2. The complete assignment carries a weightage of 15%. Evaluation will be done out of 60
marks for convenience - marks for individual questions are as shown.

3. Hardcopy is required for all questions, describing your approach to the problems/ situations,
analysis, and solutions; include screenshots where pertinent. Superfluous hardcopy is
discouraged, though, and disorganised/ unwieldy hardcopy may be penalized! However,
typing of the written parts of the report is optional: neatly handwritten work is acceptable too.

4. Software for the assignment (CELLSIM.xls, basecase.xls, GAMEPLAN.xls) and this

assignment file (OMIIAssignment07.doc) will be available on the course site on Claroline.
The MS-Project software should be available on the Hillier OR-CD, and another Project
Management software Primavera Suretrak is available in the Chase text DVD (both these are
trial/ demo versions). The text DVD also has the CellSim Excel file. Check with the CR if
you have any doubts/ difficulties regarding access to the various software/ files. In order to
avoid last-minute anxieties and connectivity problems, copy the files into your own
computers/ work areas As Soon As Possible. Also allow enough time for learning and playing
around with the software.

5. For computer-based problems, in addition to essential hardcopy of sample output, also

include relevant softcopy on Floppy/ CD with the problem data/ code as applicable and
necessary 'operating' instructions if any.

6. It is MANDATORY to use your group members' names as the machine/ group/ problem/ file
names in all the computer problems - PENALTY FOR EXCEPTIONS.

7. If a problem softcopy cannot be read or executed as per instructions, 0 marks will be awarded
for that problem.

8. The softcopy must be ensured to be Virus-free: a group submitting an infected disk/ file will
be awarded 0 marks for the entire assignment.

9. It is assumed that all group members will share the load equitably. In case that is not true,
include a statement signed by all members, with the percentage of work allotted, and actually
done, for each member. Marks awarded to an individual member will be scaled down if less
than equitable share has been done by him/her, and the entire group testifies to it.

10. The final assignment must be accompanied by a pledge as follows, signed by ALL members:

"This assignment has been done jointly by the undersigned. We have neither given
assistance to nor received assistance from any other individual or group – past or present."

Assignments without the specified pledge, or violating it in any part of the assignment, will be
awarded 0 marks in the entire assignment.

Groups are also expected to ensure that their work is stored safely and securely. However,
preliminary discussions regarding the broad approach are acceptable.