OPERATIONS MANAGEMENT

GROUP 10
MARUTI SUZUKI: INVENTORY MANAGEMENT

TEACHING NOTE:

MARUTI SUZUKI: Inventory Management, Quality Control

Group 10 wrote this teaching note as an aid to instructors in the classroom use of the case Maruti Suzuki.
This teaching note should not be used in any way that would prejudice the future use of the case.

SYNOPSIS

Maruti Suzuki's production system is known for its efficiency and quality, with robots used extensively
and quality control. It is flexible and uses a just-in-time inventory system, but the disruption in the supply
chain has led to a shortage of semiconductors, affecting the production of automobiles worldwide. In
India, Maruti Suzuki was forced to temporarily halt production due to the shortage, leading to a decline in
sales and revenue.

LEARNING OBJECTIVES
● Inventory Management
● Quality Control
● Jidoka

POSITION IN COURSE
● This case can be used in MBA courses at the First year level

RELEVANT READINGS

● Edward A. Silver, “Title: Operations Research in Inventory Management: A Review and

Critique” accessed MARCH, 13, 2022,
https://pubsonline.informs.org/doi/abs/10.1287/opre.29.4.628
● David Hoyle, Title: Quality management essentials
● Pär Åhlström, “Title: Jidoka”, accessed MARCH, 13, 2022, Jidoka - Åhlström - Major Reference
Works - Wiley Online Library

ASSIGNMENT QUESTIONS
● How does the company manage its supply chain? What are the advantages and disadvantages of
the current supply chain strategy? What changes would you recommend to improve the supply
chain performance?
● What role does technology play in the company's operations? What technologies are currently
used by the company? How do these technologies support the company's operational goals?
● How does the company manage quality control and assurance? What are the key steps in the
quality control process? How does the company ensure that its products or services meet or
exceed customer expectations?
● What were the main operational challenges faced by the company in the case? How did the
company was successful in addressing these challenges?

TEACHING PLAN
The case requires a session of 75 - 80 minutes to cover all the topics
 Discussion Point Time (Minutes)

Introduction 5

Assignment Question 1 20

Assignment Question 2 10

Assignment Question 3 20

Assignment Question 4 20

Conclusion 5

ANALYSIS
1. Fishbone diagram
2. Facility Layout
3. Run and control

Fishbone diagram:

A fishbone diagram, is a visual tool used to identify and organize the possible causes of a problem or an
effect. It was developed by Japanese quality control expert, Kaoru Ishikawa, in the 1960s.

The diagram resembles a fishbone, with the problem or effect being identified at the head of the fish and
the potential causes represented as bones branching out from the spine. Each bone represents a category
of possible causes, such as equipment, people, process, materials, or environment.

The fishbone diagram helps to visually identify all the possible causes of a problem or effect and organize
them into categories for analysis. It is often used as part of a root cause analysis process to identify the
underlying factors contributing to a problem, which can then be addressed to prevent the problem from
recurring.
The fishbone diagram is a useful tool for problem-solving and quality improvement in various fields,
including manufacturing, healthcare, and service industries.

Jidoka:

Jidoka is a Japanese term that is commonly used in the context of Lean manufacturing and is one of the
key principles of the Toyota Production System (TPS). It is often translated as "automation with a human
touch" or "autonomation".

Jidoka is a quality control process that focuses on building quality into the manufacturing process itself,
rathis than relying on inspection and rework. The goal of Jidoka is to prevent defects from occurring in
the first place, by stopping the production process as soon as a problem is detected.

This is achieved through the use of sensors and othis automated devices that monitor the production
process and detect any abnormalities. When an abnormality is detected, the machine automatically stops,
and an alert is sent to the operator. The operator then investigates the problem, corrects it, and restarts the
machine.

Jidoka not only helps to prevent defects but also allows for continuous improvement of the production
process by identifying and addressing the root causes of problems. By empowering operators to stop the
production process and take corrective action, Jidoka promotes a culture of problem-solving and
continuous improvement.
In summary, Jidoka is a quality control process that focuses on building quality into the manufacturing
process, by using automated devices to detect and stop production when abnormalities occur, empowering
operators to investigate and correct problems, and promoting continuous improvement.

Run Chart:

A run chart is a type of graph used to display data over time, with the goal of identifying patterns or
trends in a process. The chart typically consists of a horizontal axis representing time and a vertical axis
representing the variable being measured.

Run charts are often used in quality improvement initiatives to track performance data such as
productivity, customer satisfaction, or defect rates. By plotting the data points over time, run charts can
help identify patterns such as trends, cycles, or shifts in the process.

For example, a manufacturing company might use a run chart to track the number of defects in their
production process over time. By plotting the number of defects on the vertical axis and the date on the
horizontal axis, they can observe whethis the number of defects is increasing, decreasing, or remaining
stable over time. This can help identify potential issues in the manufacturing process that need to be
addressed.

In addition to identifying patterns and trends, run charts can also be used to facilitate data-driven decision
making. By examining the data points and patterns, teams can identify potential root causes of problems
and develop targeted improvement strategies.

Overall, run charts are a useful tool for visualizing and analyzing data over time to help identify trends
and patterns in a process, and to facilitate data-driven decision making.

Assignment Question 1
How does the company manage its supply chain? What are the advantages and disadvantages of the
current supply chain strategy? What changes would you recommend to improve the supply chain
performance?

The company manages its supply chain by partnering with local suppliers, maintaining safety stock
levels, and using a just-in-time (JIT) inventory system. The advantages of this strategy include reduced
transportation costs, improved delivery times, and increased flexibility. However, the disadvantages
include highis inventory holding costs and increased risk of stockouts. To improve supply chain
performance, we would recommend implementing a vendor-managed inventory (VMI) system to reduce
inventory holding costs and improve supply chain visibility.

Assignment Question 2
What role does technology play in the company's operations? What technologies are currently used by the
company? How do these technologies support the company's operational goals?

A- Technology plays a critical role in the company's operations by enabling process automation, data
analytics, and supply chain optimization. The company currently uses several technologies, including a
warehouse management system (WMS), an enterprise resource planning (ERP) system, and a
transportation management system (TMS). These technologies support the company's operational goals
by improving inventory accuracy, reducing order fulfillment time, and optimizing transportation routes.

Assignment Question 3
How does the company manage quality control and assurance? What are the key steps in the quality
control process? How does the company ensure that its products or services meet or exceed customer
expectations?

The company manages quality control and assurance by implementing strict quality standards, providing
training to employees, and using advanced testing equipment. The key steps in the quality control process
include inspection, testing, and verification. To ensure that its products or services meet or exceed
customer expectations, the company conducts customer surveys and actively seeks feedback from
customers to identify areas for improvement.

Assignment Question 4
What were the main operational challenges faced by the company in the case? How did the company was
successful in addressing these challenges?

The main operational challenges faced by the company in the case included inefficient supply chain
management, quality control issues, and workforce management problems. To address these challenges,
the company implemented a new supply chain strategy that involved partnering with local suppliers to
reduce transportation costs and improve delivery times. The company also invested in quality control
training and equipment to ensure that all products met customer expectations. In terms of workforce
management, the company introduced new performance metrics and incentive programs to motivate
employees and improve productivity.