Tuesday, February 5, 2008


Kindly mail your entries to oig@iiml.ac.in

Saturday, February 2, 2008

Breakthrough Process Improvements in Watch Component Industry: A Case Study

Hierarchical model for Breakthrough process Improvement
Breakthrough process improvement projects, which are undertaken to tackle operations management problems, pose significant challenges to development teams. In such settings, existing approaches are limited or inappropriate and objectives are ambiguous. A clear gap in literature still exists between engineering oriented tools (such as TRIZ, QC, Six Sigma) and business process redesign (BPR) oriented models when it comes to marrying process ideas with the enabling technology while ensuring maximum impact for the innovation. The problem gets further compounded for industries where major technological and process development is traditionally carried out by equipment manufactures and hence limited control over the process innovation efforts of equipment suppliers and designers. One such industry is watch component manufacturing which is quite unusual in comparison to traditional manufacturing industries in terms of technology and systems.

Using watch component manufacturing as a case study, authors present a hierarchical model of process innovation in a multi-project environment especially involving third-party led retrospective process improvement initiatives. The model provides a framework for understanding the process of process innovation in watch dial manufacturing, as well as the possible roles of consultants, the equipment / process design suppliers, and the operating companies throughout this evolution. The applicability of this process improvement approach to other manufacturing industries has also been deductively verified although not incorporated in the current paper.

In much the similar way that a complex production planning process is progressed through hierarchies of aggregation and dis-aggregation to exploit the similarities to derive synergy and economies of scale despite high variety, the proposed process innovation/ improvement framework can be traced through plans for synergy realisation from the ideation phase down to execution level. The progression through these multiple phases is marked by changes in the relative levels of process/problem identification, consolidation and innovation planning activity.

Technological innovation traverses through three main phases: uncoordinated, segmental, and systemic. As illustrated by the case of dial manufacturing, companies operating in an industry that has reached the systemic stage will find little or no scope for innovation in the core manufacturing technologies. In such an industry, the fundamentals of the manufacturing process are almost frozen or stagnated. At this stage, the pursuit for productivity improvements focuses on cost reductions from task structuring and specialization, task integration, and automation.

However, irregular shape of components and high variety and small batch meant they were not amenable for automation. Generally, equipment manufacturers play an increasingly important role in refining existing technologies and improving equipment reliability and capabilities. To catalyze any breakthrough improvement at this stage, the suggested framework can deliver more bang for innovation effort that otherwise wouldn’t be worthwhile. Such efforts are facilitated by close cooperation with the innovation (operations) consultant and operating companies, which can contribute process ideas and expertise that the equipment manufacturers might otherwise lack.
Written by Debashish Jena, FPM Student (Operations), IIM Lucknow

Quick response in Apparel Industry

Traditionally, apparel chains work in response to the orders from distributors which are based on the forecasts. In a dynamic industry like apparel industry, it is impossible to accurately forecast the volumes and the product mix. This can result in high costs of stockout and carrying costs. Besides, forecasts in advance to the order of six months may not be able to judge exactly the customer expectations. Another important point is that the individual efficiencies in the systems don’t add up to overall efficiencies of the entire value chain. These considerations across the textile apparel industry gave rise to the concept of Quick Response system.
The adoption of QR requires major changes in the manufacturing planning and control (MPC) systems. Firstly, every player in the chain needs to have an information system. Secondly, computer based systems are to be used in an integrated manner to accelerate planning and to support manufacturing and distribution along the chain. New packages with better forecasting models, frequent re-planning, precise shop floor control and technologies like CAD and CAE, integrating design and manufacturing have to be used to build up better QR systems. The use of FMS (Flexible Manufacturing Systems) is necessary for Quick Response. Modular type production and Unitary production systems are some of the flexible production systems which can be used.

An example of such intelligent systems is a fabric measurement system that measures the genetic fingerprint (tensile, shear hysteresis, bending, thickness, compression and surface properties), tailorability prediction system modeling the interaction of fabric with machinery, intelligent sewing machines capable of making optimal adjustments depending on the fabric being stitched and self learning systems monitoring and controlling quality.
Intelligent sewing machines are an integral part of intelligent textile environment. Traditionally, mechanic uses his judgment to make sure that the thread tension and feeding pressure during stitching are optimum. Intelligent sewing machines use actuating motors driven by fuzzy-neural models. The control model based on fuzzy-neural algorithms can optimize dynamically the mechanical settings of the two most widely used sewing machines.

Levis Strauss is one of the earliest examples of application of Quick Response concepts in the apparel business. The Head Office of the organization is located in San Francisco. All major design and marketing functions are carried out from this office. The country has its sales spread across the globe with Europe contributing around 30% of the total sales. The production plants are spread across Europe and all the regional sales offices are engaged in recording the sales data. In such a widespread situation, the possibility to communicate between the various units was one of the priority requirements in the definition of the information systems. This vital need has made Levi a pioneering company in the area of Electronic Data Interface. The system helped Levi Strauss to be aware of the changes in the apparel business and incorporate changes in fabric and designs as and when required. Studies conducted by ICRIER in 1993 showed that productivity of Indian apparel industry lagged far behind that of developed nations. Analysis of the reasons affecting the productivity found that technology, workforce management, quality standards, labour relations and management involvement were prime reasons.

Quick Response system can thus be seen as an extension of JIT philosophy where the entire value chain is involved for combined efficiency and benefits rather than the benefits for individual players. QR reduces the lead time across the value chain and hence reduces the risks as the decisions can be taken much closer to the actual sales event. The information exchange makes the forecasts better and the risks are shared across the different players in the value chain.
Ronjay Chakraborty is a PGP22 student of IIML, specializing in Marketing & Operations


Survey Results: Findings on Supply Chain and Partner Integration

According to a survey by E2open Inc., (www.e2open.com) at the SaaS (software-as-a-service) Pavilion during the Oracle OpenWorld 2007 event in November 2007, the highest priority supply-chain initiatives are globalization of the supply chain, lean supply-chain management, and trading partner integration.
Of the more than 350 respondents, 66% said globalization of the supply chain is the highest priority initiative to leverage economies of scale and scope across the multinational supply-chain network and operations that have grown by acquisition. E2open says multiple selections were allowed. 60% said extending lean principles across the supply chain to drive shorter and more real-time process cycles was the highest priority initiative.
Additionally, 57% selected trading partner integration in order to synchronize processes and data with suppliers by consolidating supplier portals and business-to-business gateways. While 33% selected process automation—replacing manual with technology-enabled processes to make it faster and easier to interact with suppliers in processes such as vendor-managed inventory, procure-to-pay and international procurement offices as their highest priority initiative for the supply chain.


Market Review: Freight Forwarding Market undergoing Consolidation

The freight forwarding market has been a major beneficiary of an increasingly globalised world economy. The development of extended supply chains, integrating manufacturers, suppliers and retailers on a worldwide basis, has led to significant year-on-year growth in international trade volumes. Freight forwarders revenues - and profits - have surged and this has resulted in structural changes to what for many years was a conservative and stable industry.
These changes have included an unprecedented level of mergers and acquisitions from which a small number of global players has emerged. Many long standing brands like MSAS, AEI, Emery, Danzas, ASG, Wilson, Circle have been subsumed with evolution of mega-carriers such as DHL Global Forwarding, Schenker, UPS Supply Chain Solutions and Kuehne + Nagel.
The levels of profitability in the market, its growth prospects and the asset light nature of freight forwarders' business models have made the sector highly attractive to investors. The industry's attribute of counter-cyclicality - that is, its ability to increase margins in times of economic downturn - gives it an advantage over other segments of the logistics market. Global Freight Forwarding 2007, a report by Research and Markets contains a comprehensive overview of all the major trends and developments affecting the industry. The report looks in detail at the structure of the industry, examining in turn each of its constituent parts.

Visitor Counter by Digits