Symbiosis Institute of Operations Management

Operations Excellence Program (OpExP)- Wabtec Corp.

Module: Manufacturing Operations Management

Question 1: (5 Marks)
List down the competitive dimensions of Operations Management. Explain the importance of each with
reference to Locomotive Industry.

Answer:
Competitive dimensions are very important to developing operations as a competitive advantage.

There are Five competitive dimensions of Operation Management:

1. Cost
2. Quality
3. Flexibility
4. Delivery performance
5. Innovativeness

1. Cost: Make the product or deliver the service at low cost.

Price is the amount a customer must pay for the product or service. If two products are comparable in quality and
differ in price, customers will buy the product or service that has a lower price. The price of the product or service
is the most effective competitive weapon used in the marketplace. The cost is an important variable that can allow
lower prices that may still be profitable for the firms.

Production management decisions regarding location, product design, equipment utilization, and replacement,
labor productivity, inventory control, process technology, and tolls all contribute to the reduction of costs.

As a joint venture company, both Indian Railways and Wabtec Corp. the estimated cost of 1000 locomotives will
be around ₹14,000 crore.

2. Quality: Make a great product or deliver a great service.

Quality is a competitive weapon in the marketplace. Quality refers to the ability of the product or service to meet
the requirements of the customer and achieve customer satisfaction for the firm selling the goods and services.
generally, quality relates to the customer’s perceptions of how well the product or services will serve its purpose.

Generally, customers are often willing to pay more for or wait for delivery if products of superior quality.

Wabtec locomotives quality is far better in comparison of DLW and CLW IR locomotives

Page | 1 Vishwajeet Kumar

Procurement Specialist
MARHOWRAH
3. Flexibility: Capability to manage volume and product mix changes.

Flexibility refers to the ability of a firm to respond to changes demanded by the customer and to offer a wide
variety of products to its customers. An important element of this ability to offer different products is the time
required for a company to develop a new product and to convert its processes to offer the new product.

A firm having higher flexibility can have a competitive advantage over other firms.

Flexibility can comprise up to four aspects:

 The ability to change the volume of production.
 The ability to change the time taken to produce.
 The ability to change the mix of different products or services produced.
 The ability to innovate and introduce new products and services.

The ability to be flexible depends a great deal on the design of the productive system and the process technology
employed by the firm.

Wabtec Marhowrah plant has capability to manufacture 100-120 locomotives per year.

4. Delivery Performance: Reliable and quick delivery of goods and services.

Delivery of the required function means ensuring that the right product (meeting the requirements of quality,
reliability and maintainability) is delivered in the right quantity, at the right time, in the right place, from the right
source (a vendor who is reliable and will meet commitments in a timely fashion), with the right service (both
before and after sale), and, finally, at the right price.

This is a competitive advantage over other firms because customers are interested in satisfying their needs and
wants the right quantity at the right time.

Delivery capability is a time issue where it reflects the following concepts: the number of aspects of a firm’s
operations; how quickly a product or service is delivered to a customer; how reliably the products or services are
developed and brought to the market; and the rate at which improvements in products and processes are made.

Wabtec Marhowrah has 100% OTD till date. Till date we have delivered 300+ locomotives in last three years.

5. Innovativeness: Implementation of new improve process and developing new products.

Innovativeness means finding new ways to improve internal processes and developing new products to providing
better customer service, or anything else a business may offer.

There are many examples that proves, the most innovative companies are the most successful in the long run,
because they can remain one or two steps ahead of the competition in the market. Even when other similar
products are in market, those companies may still come out on top because of your reputation as an innovator in
the industry.

Wabtec Marhowrah locomotives have proven technology and will therefore provide a strong workhorse to Indian
Railways for long haul freight operations and help with better revenue realization through increased availability
and reliability.

Page | 2 Vishwajeet Kumar

Procurement Specialist
MARHOWRAH
Question 2: (5 Marks)
What is capacity balance? Why is it hard to achieve? What methods are used to deal with capacity imbalances?
Describe with an example.

Answer:
Capacity balance is a production strategy that involves balancing manpower and machine time to match the
production rate to the Takt time. The arrangement of different workstations of operation in such a way that the
output of one workstation is the input for the next workstation in line. The benefits capacity balanced mode is:

 Reduce waiting waste

 Reduce production costs and increase profits

In a perfectly balanced plant. the output of Stage 1 provides the exact input requirement for Stage 2, the output
of Stage 2 provides the exact input requirement for Stage 3, and so on. This continues throughout the entire
operation. This condition is very difficult to achieve because the best operating levels for each stage generally
differ. There are many factors that makes hard to achieve capacity balance:

 Variability in production demand

 Variability in production processes
 Variability in Processing time for an activity
 Shortages of parts (Inventories)

There are various methods to deal with capacity imbalances:

2. Adding Extra Capacity - By adding capacity at the bottlenecks. This can be achieved by temporary
measures such as overtime, leasing equipment, or subcontracting.

3. Buffer Inventories - Buffer inventories in front of the bottleneck stage to assure that it always has
something to work on.

4. Duplicating Parallel Workstation - Duplicating the workstation that is the cause of the bottleneck.

5. Processing Cycle Time Study – By studying processing cycle time, we can identify the process that are
taking longer than Takt time. Exceeding takt time means more waiting time to next workstation, results
unhappy customers.

Page | 3 Vishwajeet Kumar

Procurement Specialist
MARHOWRAH
Question 3: (5 Marks)
Construct a house of quality matrix for any of locomotive product/component/part of your choice. Consider
minimum five customer requirements and define minimum five engineering requirements. The comparison can
be done with two competitors. Prepare the matrix in an excel sheet and submit the sheet. Please mention the
details of your problem in the first sheet and construct the house of quality matrix from second sheet onwards.

Answer:
Correlation ship

Positive +
Negative −
No Correlation

Inter-relation ships −
Strong 9 − −
Moderate 3 − −
Weak 1 + − − +
No Relation − − −
+ − − −
Direction of Improvement
+ + + − − −
Maximize ▲
+ − − +
Target ◇
+ − − − −
Minimize ▼
+ + + −

Column # 1 2 3 4 5 6 7 8 9 10 11 Customer Competitive

Direction of Improvement ▼ ▲ ◇ ▲ ▲ ◇ ◇ ◇ ▼ ◇ ▲ Assesment (1-5)
Specifications

Gear Case Bottom Height from Top Rail

Technical

Microprocessor control Air Brake

Coupler Height from Top of Rail

Event Recorder Data Download

Buffer Height from Top of Rail
Maximum Operating Speed

Specific Fuel Consumption

Nominal Axle Load (T)

Wheel diameter (mm)

Cab Amenities
Paint Finish
Customer Benchmark

Indian Railways : WDM2

Importance Rating (1-5)

Our Product : WDG4

Alstom : WDG12
Customer
Requirements
Row #

1 2 3 4 5

1 4 Cost-effective 9 9 3 3 9 3 2 4

2 5 Safety Features 3 1 3 3 9 5 5 2

3 5 Design & Dimension 3 9 9 9 9 3 3 9 1 1 3 5 4 4

4 5 Easy to use 9 1 3 3 3 4 3 2

5 5 Controls 3 1 3 1 3 9 3 5 4 2

6 3 Aesthetic / Apperance 9 3 3 4 2

7 3 Pilot Comfort 1 1 9 3 9 3 2 1

8 5 Services 3 9 3 3 9 3 3 3 4 2 1
Min 1090 mm +15 mm / -12 mm

Min 1090 mm +15 mm / -5 mm

Max Breaking Effort 27.52 T

HVAC/Toilet/TCD/Induction
Max speed 65 Km/h

Good Paint Finish

1092 to 1097 mm

21.34 to 22.66 T
<= 150 g/HP-hr

Min 500MB
>=133 mm

Target

Technical Importance Rating (1-10) 6 8 7 10 9 8 8 9 4 4 10

Absolute Importance Weight 93 60 55 146 98 60 15 258 41 59 132

Relative Importance Weight (%) 9.1% 5.9% 5.4% 14.4% 9.6% 5.9% 1.5% 25.4% 4.0% 5.8% 13.0%

Page | 4 Vishwajeet Kumar

Procurement Specialist
MARHOWRAH
Question 4: (5 Marks)
A locomotive manufacturer is considering a change in assembly line that should save money due to a
education in labor and material cost. The change involves the installation of four new robots that will
automatically involve the windshields. The cost of the four robots, including installation and initial
programming, is $400,000. Current practice is to amortize, the initial cost of robots over two years on a
straight-line basis. The process Engineer estimates that one full time technician will be needed to monitor and
reprogram the robots on the ongoing basis. This person will cost approximately $60,000 per year. Currently,
the company uses four full time employees on the job, and each makes about $52,000 per year. One of these
employees is material handler and this person will still be needed with the new process. To complicate matter,
the process engineer estimates that, the robot will apply the windshield sealing material in a manner that will
result in savings of $0.25 per windshield installed. How many locomotives need to be produced over the next
two years to make the new robots an attractive investment? Due to the relatively short horizon, do not
consider the time value of money.

Answer:
Rate/Year | Current Setup New Setup
Investment Cost (For 2 Yrs.) (For 2 Yrs.)
E1 $ 52,000/Emp $ 104,000
E2 $ 52,000/Emp $ 104,000
Employee
E3 $ 52,000/Emp $ 104,000
E4 $ 52,000/Emp $ 104,000 $ 104,000
R1 $100,000 $ 100,000
R2 $100,000 $ 100,000
Robot
R3 $100,000 $ 100,000
R4 $100,000 $ 100,000
Technician T1 $ 60,000/Tec $ 120,000
Total $ 416,000 $ 624,000

Savings with New Setup over Current Setup = $ 0.25 / windshield

Assuming, Break Even Point quantity = X

Solving for Break Even Point,

$ 416,000 = $ 624,000 - $ 0.25 X,

-208,000
X = -------------
-0.25

X = 832,000

This indicates that 832,000 units of locomotives needs to produce over the next two years to make
the new robots an attractive investment.

Page | 5 Vishwajeet Kumar

Procurement Specialist
MARHOWRAH
Question 5: (5 Marks)

Write short note on characteristics of Lean manufacturing system at Wabtec with respect to different wastages.
Identify constraints. What are different ways to address the constraints?

Answer:

In lean manufacturing, “waste” is defined as anything that doesn’t add value to a product. “Value” in
manufacturing is defined as anything that a customer would be willing to pay for. The seven wastes of lean
manufacturing are:

1. Transportation
Any unnecessary movement of Work in Progress or raw materials is a form of waste. This may cause damages to
materials and may also increase the cycle time of production and thus is a waste.

Value stream mapping and partial or full changes in factory layout can reduce transportation waste.

Common types of Transportation Waste:

 Poor layouts – large distance between operations

 Long material handling systems
 Poor production planning & poor scheduling
 Multiple storage facilities
 Poorly design production systems

Page | 6 Vishwajeet Kumar

Procurement Specialist
MARHOWRAH
2. Inventory
Purchasing and storing raw materials and stocking Work in progress to wait for future processes is a waste.
Inventory is considered a form of waste because of the related holding costs. This is true of raw materials, WIP
and finished goods. Over purchasing or poor forecasting and planning can lead to inventory waste.

Common causes of Inventory Waste include:

 Inaccurate forecasting systems

 Long changeover times
 Poor inventory planning
 Delays in production or ‘waste of waiting’

3. Motion
Motion costs money. This not only includes raw materials but also people and equipment. It may also include
excess physical motion such as reaching, lifting and bending. All unnecessary motion results in non-value-added
time and increases cost.

Common Motion Waste include:

 Poor workstation layout

 Poor production planning
 Poor process design
 Shared equipment and machines

4. Waiting
Waiting can include people, material equipment (prior runs not finished) or idle equipment (mechanical downtime
or excess changeover time). All waiting costs a company has in terms of direct labor cost and additional overhead
costs can be incurred in terms of overtime, expediting costs and parts.

Common causes of Waiting include:

 Unplanned downtime or Idle equipment

 Idle operators waiting for equipment
 Long or delayed set-up times
 Poor process communication
 Lack of process control

5. Over production
Producing items that are in excess of customer demand. This can be considered the worst of all the wastes because
it leads to other wastes and hides the need for improvement.

Common causes of Overproduction include:

 Unreliable process
 Unstable production schedules
 Inaccurate forecast and demand information
 Customer needs are not clear
 Poor automation

Page | 7 Vishwajeet Kumar

Procurement Specialist
MARHOWRAH
6. Over Processing
Over processing is a sign of a poorly designed process. Over processing waste is putting more work into producing
the product than the customer values. It adds extra cost of manufacturing which is a waste.

Common causes of Over Processing include:

 Not understanding customer needs

 Poor communication
 Human error
 Slow approval process

7. Defects
Defects occurs when the product is not fit for use. This results in either reworking or scrapping the product. Both
results are wasteful as they add additional costs to the operations without delivering any value to the customer.
Defects impact time, money, resources and customer satisfaction.

Common causes of Defect include:

 Poor quality control at the production level

 Excessive variation in production processes
 High inventory levels
 Lack of proper documentation
 Lack of process standards

Page | 8 Vishwajeet Kumar

Procurement Specialist
MARHOWRAH