Variety

Variety refers to the number of alternative products and variants of each product produced in a manufacturing system. Let us
consider a watch manufacturer such as Titan Industries Limited. Titan offers more than 40,000 varieties of watches. These
varieties stem not only from alternative product lines but also from variants in each prcx:luct line. Similarly, consider a car
manufacturer such as Tata Motors. The Tata lndica is available in several models. Basically, there are the petrol and diesel
versions. However, within the petrol and the diesel versions, there are variations such as the GLS, GLX, VX, VXi, AX, and so
on. While one version will have power steering. the second will have power steering and power windows. the third may have
automatic transmission, and so on. A choice of colours adds another dimension of variety to passenger car manufacturing.
An increase in the variety of product offerings is likely to introduce variety in manufacturing processes. More varieties
may mean alternative production resources. materials, skill of workers, and an increase in the number of n.1ges. of pro•
duct io n. It may call for better operations management practices. Planning and scheduling may become more complex on
account of these added choices in the manufacturing system.
One sees a similar phenomenon in service systems too. Assume that a travel agency was earlier engaged only in selling
tickets for bus journeys from Delhi to Chandigarh. In the course of time, if the agency added booking of bus tickets to mu!•
tiplc destinations. rail rickets, air tickets for domestic travel, and air tickets for international travel, one can imagine how
many ahemative choices of processes, skill sets and resources are required by the travel agency. Operations management
in the case of additional services is far more involved and complex.

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 Ahcrna1iw: methods could he used for computing the fotcd order quantity. Om: method is to estimate lhl• L'Ctmnmic
orderqua111ity for the item on the basis of set-op/ordering cosu and carrying cos1.' ln the use of component.s manufactured
"in-house·. then: an: pn:fnn:d run lengths or L'ConomK'. run lrnglhs. Similarly. for items bought from outside, minimum
order quanlity reslrictions imposed by the suppliers. other considerations such as truck load capacit y. anJ 1hc prevailing
quantity discounts structure will influence the choice of orderquantily.
FOQ pro\ides an alternative perspective to the ·carrying cost-ordering cost" trade-off. When the unit value oft he item
is low and there is a continuou s and more or lessstable demand fort he item, it is appropriate to use this rule. hems that are
at the lower ends of a product struct ure sha re a grea1erdegn:c of commonality among numerous end-product variations.
Thereforc, thl·demandlslikclytobecontinuou s,justifyingthe choiceofFOQrulc.Morrover, thl,Yll'Od toha\'Calowunlt cost.
Hence. the cost of carrying any leftover inven1ory from o ne period to the nex t Is Hkelyto be very low. In reality.depending on
the net requirements, the order placed will be in integral numbers ofFOQ (i.e., k x FOQ, where k is an inleger).
t Longest procr~ing lime (LPT): This rule is the reverse of the SM' rule. The job with 1he longest processing time is scheduled
ahead of other competing jobs. For our example, 1he order in which the four jobs are scheduled is exactly in reverse
Oob 3--Job I - Job 4-Job 2).
t Earliest due dau(EDD): It is possible to establish priorities on the basis oft ht• due date for the jobs. The logic here is that
a job that is due 1omorrow needs to be scheduled ahead of ano1 her 1hat is due 1he day af1er even 1hough the second
job may require lesser processing lime compared IO the first. Therefore, jobs can be rank-ordered on the basis of due
dates. If the chronological order of the due dates of the four jobs is Job 4-Job 3--Job 2-/ob I, then EDD rule will rank
thejobsinthatordcr.
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 The mos! significant factor that drives globalization is the ongoing economic and regulatory
The removal of reforms in several developing countries. Beginning from 1991. we embarked on a set of regula-
enuybarnersand tory changes that made India much more attractive in terms oflocating a ma nufacturing facility.
reduct10n1nthec05l Two c-vents have been broadly responsible for this. First is the reduction in customs and excise
ofmamifactunngdue tariffs and a move towards the single-point value-added tax (VA1) regime. The other is the deli-
toianffredlJCIIOrn ccncing of several sec Iors of industry and the progressive removal of the cap on foreign direct
willmakelndaaan investment (FOi). Further. there has b<.-en a progressive simplification of the procedural aspects
anractivedest,natJOnto of setting up operations here and running them on a day-10-day basis.
wh1chmanufactunng
These changes havc several im plications for 1he location choices of multinational firms. The
basesca n beshifted.
removal of entry barriers and reduction in 1he cost of manufacturing due to tariff reductions

Fadliti~ l oc;atiQn 129

FIGURE 6.1 Impact of globalization o n location decisions of organizations

will make India an auractive destination to which manufacturing bases can be shifted. In the case of multinational firms
wit h manufacturing facilities already located in India. these facilities will be attractive candidates for fur1herdevelopment
and )!rowth.