44 Set 2 Prod Ops Final

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Master of Business Administration - MBA Semester 2

MB0044 Production & Operations Management

Assignment Set- 2

Q1. Explain Logical Process Modelling and Physical Process Modelling. What are the

ingredients of business process?

Logical Process Modelling

Logical Process Modeling is the representation of putting together all the activities of business process in details and making a representation of them. The initial data collected need to be arrange in a logical manner so that, links are made between nodes for making for the

workflow smooth. The steps to be followed to make the work smoother are given below:

1. Capture relevant data in detail to be acted upon.2. Establish controls and limit access to the data during processes execution

3. Determine which task in the process is to be done and also the subsequent task inthat process.

4. Make sure that all the relevant data is available for all the tasks.5. Make the relevant and appropriate data available for that task.

6. Establish a mechanism to indicate acceptance of the results after every task or process.This is to have an assurance that flow is going ahead with accomplishments in the desired path.

Some of these activities may occur in a sequential order whereas, some of them run parallel.There may even be circular paths, like re-work loops. Complexities arise when the processes

activities are not connected together.

Logical processes model consists of only the business activities and shows the connectivityamong them. The process model is a representation of the business activities different from the

technology dependent ones. Thus, we have a model that is singularly structured only for businessactivities. Computer programmes are also present in the total system. This allows the business

oriented executives to be in control of the inputs, processes and outputs. The logical processmodel

1. Capture relevant data in detail to be acted upon.

2. Establish controls and limit access to the data during processes execution3. Determine which task in the process is to be done and also the subsequent task in that

process.4. Make sure that all the relevant data is available for all the tasks.

5. Make the relevant and appropriate data available for that task.6. Establish a mechanism to indicate acceptance of the results after every task or process.

This is to have an assurance that flow is going ahead with accomplishments in the desired path.

Some of these activities may occur in a sequential order whereas, some of them run parallel.There may even be circular paths, like re-work loops. Complexities arise when the processes

activities are not connected together.

Logical processes model consists of only the business activities and shows the connectivityamong them. The process model is a representation of the business activities different from the

technology dependent ones. Thus, we have a model that is singularly structured only for businessactivities. Computer programmes are also present in the total system. This allows the business





Assignment Set- 2

oriented executives to be in control of the inputs, processes and outputs. The logical process

model

PHYSICAL PROCESS MODELLING

Physical process modeling is concerned with the actual design of data base meeting the

requirement of the business. Physical modeling deals with the conversion of the logical modelinto a relation model. Object gets defined at the schema level. The objects here are tables createdon the basis of entities and attributes. A database is defined for the business. All the information

is put together to make the database software specific. This means that the objects during physical modeling vary on the database software being used. The outcomes are server model

diagrams showing tables and relationships with a database.

BELOW ARE THE INGREDIENTS OF BUSINESS PROCESS.

The ingredients that might be used in a business process can be briefly outlined as shown below.

y The data which accomplishes the desired business objective.

y Acquisition, storage, distribution, and control of data which undertakes the process across

y tasks.

y Persons, teams, and organizational units which helps to perform and achieve the tasks.

y Decision which enhances the value of data during the process.

Q.2 Explain Project Management Knowledge Areas. With an example explain work

breakdown structure.

Ans. The knowledge areas of project management are the following:

y Project integration management, cost management, communications management.

y Project scope management, quality management, risk management.

y Project time management, human management, procurement management.y F

or a project to be successful, it is necessary to understand its relationship with other management disciplines. Other management supporting disciplines are business legal

issues, strategic planning, logistics, human resource management, and domainknowledge.





Assignment Set- 2

WORK BREAK DOWN STRUCTURE.

The entire process of a project may be considered to be made up on number of sub process placed in different stage called the work breakdown structure (WBS). WBS is the technique to

analysis the content of work and cost by breaking it down into its component parts. Projects key

stages from the highest level of the WBS, which is then used to show the details at the lower levels of the project. Each key stage comprises many tasks identified at the start of planning andlater this list will have to be validated. WBS is produced by indentifying the key elements,

breaking each element down into component parts and continuing to breakdown untilmanageable work packages have indentified. These can then be allocated to the appropriate

person. The WBS does not shown dependencies other than a grouping under the key stages. It isnot time based- there is no timescale on the drawing. Chart showing the example of work break

down structure. A Work Breakdown Structure is a results-oriented family tree that captures all the work

of a project in an organized way. It is often portrayed graphically as a hierarchical tree, however, it can

also be a tabular list of "element" categories and tasks or the indented task list that appears in your Gantt

chart schedule. As a very simple example, Figure 1 shows a WBS for a hypothetical banquet.

EXAMPLE





Assignment Set- 2

EXAMPLE -2

Q.3 Take an example of any product or project and explain project management life cycle.

A life cycle of a project consists of the following steps.

y Understanding the scope of the project.

y Establishing objectives of the projects

y Formulating and planning various activities.

y Executing the project

y Monitoring and controlling the project resources.

y Closing and post completion analysis

Phases of Project Management Life Cylce.

Project management life cycle has six phases:1. Analysis and evaluation phase.

2. Marketing phase3. Design phase

4. Execution phase5. Control-inspecting, testing, and delivery phase

6. Closure and post completion analysis phase.

1. Analysis And Evaluation Phase: Analysis and evaluation phase is the initial phase of any

project. In this phase, information is collected from the customer pertaining to the project. Fromthe collected information, the requirements of the project are analyzed. According to the





Assignment Set- 2

customer requirement, the entire project is planned in a strategic manner. The project manager

conducts the analysis of the problem and submits a detailed report to the top management.

2. Marketing Phase: A project proposal is prepared by a group of people including the project

manager. This proposal has to contain the strategic adopted to market the product to thecustomer.

3. Design Phase: Design phase involves the study of inputs and outputs of the various projectstages.

a. Inputs received consist of project feasibility study, preliminary project evaluation details,

project proposal, and customer interviews.b. Outputs produced consist of system design specifications, functional specifications of the

project, design specifications of the project and project plan.4. Execution Phase: In execution phase, the project manager and the term members work on

the project objectives as per the plan. At every stage during the execution, reports are prepared.

5. Control- Inspecting Testing and Delivery Phase: During this phase, the project teams works

under the guidance of the project manager. The project manager has to ensure that theteam working under him is implementing the project designs accurately. The project has to be

tracked or monitored through its cost, manpower, and schedule. The project manager has toensure ways of managing the customer and marketing the future work, as well as ways to

perform quality control work

6. Closure and Post Completion Analysis Phase: U pon satisfactory completion and delivery of

the intended product or service the staff performance has to be evaluated. The project manager has to document the lessons from the project. Reports on project feedback are to be prepared and

analyzed. A project execution report is to be prepared.

Let us have a quick recap of what is involved in the above phasesa. Analysis and evaluation phase: The preparation stage involves the preparation and approval

of project outline, project plan, and project budget.b. Assigning task to the team members: The next stage involves selecting and briefing the

project team about the proposals, followed by discussions on the roles and responsibilities of the project member and the organization.

c. Feasibility study: The feasibility or research stage establishes whether the project is feasibleor not and establishes the risk factors likely to be faced during the course of the project execution

and the related key factors to overcome the problem

d. Execution phase: A detailed definition and plan for the project and its execution is prepared

by the team and coordinated by the project manager.e. Implementation stage: The implementation stage involves the execution of the project as per

the plan, this also involves careful monitoring of the project progress and managing the changes,if any, within the scope of the project framework.

7. Closure and post completion analysis phase: The final stage involves satisfactory deliveryof the product/service to the customers.U pon completion, a project review is to be

conducted by the project manager along with team member, sponsors, and customer. A projectreview process involves discussions about the progress, performance, hurdles that were

overcome and problems faced, so that, such instances could be avoided in future projects.





Assignment Set- 2

Example No.1

Example No.2

Example No.3





Assignment Set- 2

Q.4 Explain PMIS. What Is Difference Between Key Success Factor (Ksf) And Knowledge

(K) Factor ? Explain With Examples.

PMIS (Project Management Information System)

An information system is mainly aimed at providing the management at different levels with

information related to the system of the organization. It helps in maintaining discipline in thesystem. An information system dealing with project management tasks is the projectmanagement information system. It helps in decision making in arriving at optimum allocation of

resources. The information system is based on a database of the organization. A projectmanagement information system also holds schedule, scope changes, risk assessment and actual

results. The information is communicated to managers at different levels of the organizationdepending upon the need. Let us find how a project management information system is used by

different stakeholders.





Assignment Set- 2

The four majors aspects of a PMIS are:1. Providing information to the major stakeholder.

2. Assisting the team members, stakeholders, managers with necessary information and summaryof the information shared to the higher level managers.

3. Assisting the manager in doing what if analysis about project staffing, proposed staffingchanges and total allocation of resources.

4. Helping organizational learning by helping the members of the organizations lean about project management.

Usually, the team members, and not the systems administrators of the company, develop goodPMIS. Organisations tend to allocate such responsibility by rotation among members with a well

designed and structured data entry and analytical format.





Assignment Set- 2

Different Between Key Success Factors (KSF) And Knowledge (K) Factor

Example of Key success factorAccording to TeachMeFinance.com, a turnkey project is "a project in which a builder/developer contracts to construct a completed facility that includes all items necessary for use and occupancy."

Unfortunately, many turnkey businesses never capture the interest of the buyers. Whether you're building in brick and mortar or building in computer code, there are several factors critical to the

success of your turnkey project.

Know the Business

Several businesses can be set up as turnkey businesses, from food service to copy management totelemarketing and sales. Whichever you decide, it is important to have an intimate knowledge of

the business you are building. One key factor in a successful turnkey business is being able to





Assignment Set- 2

anticipate the needs and desires of the potential owners before they are brought on board. A

salesman, for example, looking to purchase a turnkey sales business will need an office as a baseof operations; but since so much of the sales process is done through phones, computers and

other electronic devices, the turnkey developer may want to include additional power outlets in

the construction of the building, or desks with onboard power strips and surge protectors. Thesesmall additions can make a turnkey project a success.

Know the AreaInternet businesses often have nationwide access to clientele, but brick-and-mortar turnkey

operations sometimes run into trouble in areas poorly suited to the service they offer. For example, an outdoor food service stand opening in Wilkes-Barre, Pennsylvania, will not do as

much business (at least during the winter months) as one opening in an Orlando, Florida, theme park. Knowing the area where you are constructing your turnkey business includes knowing the

weather conditions, the dominant demographic, the current popularity and number of businesseslike the one you are creating and the average income of the public. Planning a turnkey business

that uses these factors to its advantage will make the business more readily sellable.

Make ConnectionsTurnkey businesses are designed to be ready to operate as soon as the buyer takes ownership.

Still, once they are sold, many businesses of this type run into problems when it comes toresupplying, logistics and advertising. Because of this, many buyers are wary of turnkey

operations. One way to quell any "down the road" fears is to have this part of the infrastructureaccounted for. Make contact with businesses which help advertise businesses, ship products,

supply copy paper and any other stock the owner might require. Obtain discounts from as manyas possible

Example of Knowledge (k) factor

ABSTRACT

Most organisations are aware that in today¶s highly competitive environment managingeffectively their knowledge is the only way to achieve a sustainable competitive advantage. One

of the primary areas to which knowledge management can be applied is the field of projectmanagement. An increasing number of business sectors are adopting a project approach to carry

out a range of essential activities where valuable knowledge is gained. Knowledge from projectsis an important resource for further projects, because projects solve innovative and

interdisciplinary tasks. However, the majority of organisations do not manage the informationgained through past projects. Failure to transfer knowledge from past to future projects leads to

wasted activity and unnecessary expenses by µreinventing the wheel¶. Therefore, knowledge

management is a critical success factor for many projects. The purpose of this ManagementReport is to approach knowledge management from the perspective of project management. Themain objective is to define how knowledge management can be enhanced within a project by

analysing suitable tools and relevant theories. The research is based on the high-speed train project XY of the company XXX. This project is an important milestone for XXX to improve its

market position in Spain. The knowledge gained through the XY project will be the key factor for the success of the further high-speed train projects. The main finding of the case study

highlights that there is a lack of formal knowledge management activities at the project. The





Assignment Set- 2

project team focuses mainly on personal interaction for transferring knowledge and information

technology is not used to its full potential. A hybrid approach to knowledge management for project environments is suggested, taking into account technical as well as human-specific

aspects. The main recommendation is to determine a knowledge management strategy, which

preferably focuses on transferring tacit knowledge and gives information technology a supportfunction. Other areas of improvement are creating an open and constructive project culture,including knowledge initiatives in reward systems and fostering documented project review

sessions. Finally, general conclusions are provided to answer the main research question of thismanagement report.

Q.5 Explain the seven principal of supply chain management. Take an example of any

product in the market and explain the scenario of Bullwhip effect.

Seven Principles Of SCM are:

1. Group customer by needs: Effective SCM groups customers by distinct service needs,regardless of industry and then tailors services to those particular segments.

2. Customize the logistics networks: In designing their logistic network, companies need tofocus on the service requirement and profit potential of the customer segments identified.

3. Listen to signals of market demand and plan accordingly: sales and operations plannersmust monitor the entire supply chain to detect early warning signals of changing customers

demand and needs. This demand driven approach leads to more consistent forecast andoptimal resource allocation.

4. Differentiate the product closer to the customer: companies today no longer can afford tostockpile inventory to compensate for possible forecasting errors. Instead, they need to

postpone product differentiation in the manufacturing process closer to actual consumer demand. This strategy allows the supply chain to respond quickly and cost effectively to

changes in customer needs.5. Strategically manage the sources of supply: By working closely with their key suppliers to

reduce the overall costs of owning materials and services, SCM maximizes profit margins both for themselves and their suppliers.

6. Develop a supply chain wide technology strategy: As one of the cornerstones of successfulSCM, information technology must be able to support multiple levels of decisions making.

It also should afford a clear view and ability to measure the flow of products, services andinformation.

7. Adopt channel spanning performance measures: Excellent supply chain performancemeasurement systems do more than just monitor internal functions. They apply performancecriteria to every link in the supply chain-criteria that both service and financial metrics.

BULLWHIP EFFECT IN SCM

An organization will always have up and downs. It is necessary that the managers of theorganization keep track of the market conditions and analyze the changes. They must take

decisions on the resources and make necessary changes within the organization to meet themarket demands. Failing to do so may results in wild swings in the orders. This may adversely

affect the functioning of the organization resulting in lack of coordination and trust amongsupply chain members. The changes may affect the information and may led to demand





Assignment Set- 2

amplification in the supply chain. The Bullwhip effect is the uncertainty caused from distorted

information flowing up and down the supply chain. This has its affect on almost all theindustries, poses a risk to firms that experience large variations in demand, and also those firm

which are dependent on suppliers, distributors and retailers. A bullwhip effect may arise

because of:y Increase in the lead time of the project due to increase in variability of demand

y Increase in the stocks to accommodate the increase demand arising out of complicated

y demand models and forecasting techniques.

y Reduced service levels in the organization.

y Inefficient allocation of resources.

y Increased transportation cost.

How to prevent it ?Bullwhip effect may be avoided by one or more of the following measures:

y Avoid multiple demand forecasting.

y Breaking the single order into number of batches of orders.y Stabilize the prices, avoid the risk involved in overstocking by maintaining a proper stock

y Reduce the variability and uncertainty in point of sale (POS) and sharing information

y Reduce the lead time in the stages of the project

y Always keep analyzing the past figures and track current and future levels of requirement.

y Enhance the operational efficiency and outsourcing logistics to a capable and efficient

y Agency

Example of one product the effect Bullwhip theory.

The beer game was developed at MIT by the Systems Dynamic Group in the 1960s. The game

involves a simple production/distribution system for a single brand of beer. There are three players in the game including a retailer, a wholesaler, and a marketing director at the brewery.Each player's goal is to maximize profit.

A truck driver delivers beer once each week to the retailer. Then the retailer places an order with

the trucker who returns the order to the wholesaler. There's a four week lag between ordering andreceiving the beer. The retailer and wholesaler do not communicate directly. The retailer sells

hundreds of products and the wholesaler distributes many products to a large number of customers. The following represents the results of a typical beer game:-

3.1 The Retailer

Week 1: Lover's Beer is not very popular but the retailer sells four cases per week on average.Because the lead time is four weeks, the retailer attempts to keep twelve cases in the store by

ordering four cases each Monday when the trucker makes a delivery.Week 2: The retailer's sales of Lover's beer doubles to eight cases, so on Monday, he orders 8

cases.Week 3: The retailer sells 8 cases. The trucker delivers four cases. To be safe, the retailer

decides to order 12 cases of Lover's beer.





Assignment Set- 2

Week 4: The retailer learns from some of his younger customers that a music video appearing on

TV shows a group singing "I'll take on last sip of Lover's beer and run into the sun." The retailer assumes that this explains the increased demand for the product. The trucker delivers 5 cases.

The retailer is nearly sold out, so he orders 16 cases.

Week 5: The retailer sells the last case, but receives 7 cases. All 7 cases are sold by the end of the week. So again on Monday the retailer orders 16 cases.

Week 6: Customers are looking for Lover's beer. Some put their names on a list to be called

when the beer comes in. The trucker delivers only 6 cases and all are sold by the weekend. Theretailer orders another 16 cases.

Week 7: The trucker delivers 7 cases. The retailer is frustrated, but orders another 16 cases.Week 8: The trucker delivers 5 cases and tells the retailer the beer is backlogged. The retailer is

really getting irritated with the wholesaler, but orders 24 cases.

3.2 The Wholesaler

The wholesaler distributes many brands of beer to a large number of retailers, but he is the onlydistributor of Lover's beer. The wholesaler orders 4 truckloads from the brewery truck driver

each week and receives the beer after a 4 week lag. The wholesaler's policy is to keep 12truckloads in inventory on a continuous basis.

Week 6: By week 6 the wholesaler is out of Lover's beer and responds by ordering 30 truckloadsfrom the brewery.

Week 8: By the 8th week most stores are ordering 3 or 4 times more Lovers' beer than their regular amounts.

Week 9: The wholesaler orders more Lover's beer, but gets only 6 truckloads.

Week 10: Only 8 truckloads are delivered, so the wholesaler orders 40.

Week 11: Only 12 truckloads are received, and there are 77 truckloads in backlog, so thewholesaler orders 40 more truckloads.

Week 12: The wholesaler orders 60 more truckloads of Lover's beer. It appears that the beer is becoming more popular from week to week.

Week 13: There is still a huge backlog.Weeks 14-15: The wholesaler receives larger shipments from the brewery, but orders from

retailers begin to drop off.Week 16: The trucker delivers 55 truckloads from the brewery, but the wholesaler gets zero

orders from retailers. So he stops ordering from the brewery.

Week 17: The wholesaler receives another 60 truckloads. Retailers order zero. The wholesaler

orders zero. The brewery keeps sending beer.

3.3 The Brewery

The brewery is small but has a reputation for producing high quality beer. Lover's beer is onlyone of several products produced at the brewery.Week 6: New orders come in for 40 gross. It takes two weeks to brew the beer.

Week 14: Orders continue to come in and the brewery has not been able to catch up on the backlogged orders. The marketing manager begins to wonder how much bonus he will get for

increasing sales so dramatically.

Week 16: The brewery catches up on the backlog, but orders begin to drop off.

Week 18: By week 18 there are no new orders for Lover's beer.





Assignment Set- 2

Week 19: The brewery has 100 gross of Lover's beer in stock, but no orders. So the brewery

stops producing Lover's beer.Weeks 20-23. No orders.

At this point all the players blame each other for the excess inventory. Conversations with

wholesale and retailer reveal an inventory of 93 cases at the retailer and 220 truckloads at thewholesaler. The marketing manager figures it will take the wholesaler a year to sell the Lover's beer he has in stock. The retailers must be the problem. The retailer explains that demand

increased from 4 cases per week to 8 cases. The wholesaler and marketing manager think demand mushroomed after that, and then fell off, but the retailer explains that didn't happen.

Demand stayed at 8 cases per week. Since he didn't get the beer he ordered, he kept orderingmore in an attempt to keep up with the demand. The marketing manager plans his resignation.

3.4 Lessons from the Beer Game

1. The structure of a system influences behavior. Systems cause their own problems, not externalforces or individual errors.

2. Human systems include the way in which people make decisions.3. People tend to focus on their own decisions and ignore how these decisions affect others.

3.5 Lessons Related to the Learning Disabilities1. People do not understand how their actions affect others.

2. So they tend to blame each other for problems.3. Becoming proactive causes more problems.

4. The problems build gradually, so people don't realize there is a problem until it¶s too late.5. People don't learn from their experience because the effects of their actions occur somewhere

else in the system.

Stock variability amplification in a supply chain due to Bullwhip Effect

Q6. Time taken by three machines on five jobs in a factory is tabulated below in table

below. Find out the optimal sequence to be followed to minimize the idle time taken by the

jobs on the machines.





Assignment Set- 2

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44 Set 2 Prod Ops Final