Case Study

CASE STUDY
INVENTORY MANAGEMENT
QUALITY ASSURANCE
STRATEGY MANAGEMENT
SELF MANAGED TEAM CONCEPT
NAME
REGISTRATION NUMBER
: ASHWANI MALHOTRA
: 200742588
SYMBIOSIS CENTRE FOR DISTANCE LEARNING

ACADEMIC YEAR : 2007
TELESYS VENTURES INC.

Objective:
The Case Study helps to understand the requirement of inventory management

The various constraints encountered during inventory management
The different approaches utilized to overcome the above said constraints
Evaluation of different proposed changes
Optimization and implementation of Solution
Measurement of Effectiveness of the changes.
Telesys Inc. is a leading manufacturer of Laptops & desktop in India. It imports
Monitors from China. Earlier the company was performing very well but now the situation
has changed. There is a reduction in the gross profit. There are various reasons like
changing suppliers, complicated customs procedures, entry of new competitors, the
resurfacing of high sea piracy and economic slowdown. On the other hand most of the
company cash is blocked in inventory. This has led to a situation of the cash crunch and
Management is seeking for a mean to overcome from this problem.
Lead time also fluctuates at around an average of 21 working days. To facilitate a desired
service level of 95% and avoiding lockout condition / late delivery penalty, company
spends Rs 150000 per year in administering a perpetual review system (Fixed Quantity
interval system).
To avoid the high monitoring costs for the perpetual system, Rohit, a young Industrial
Engineer, has proposed to change to a Periodic Review system (Fixed order Interval
system). Without any additional investment, Rohit found that administrative costs would
drop by 75% approximately. But management was in a dilemma whether to implement the
proposed solution or not. The review period for the system was one month.
A local supplier promises to deliver any order within 7 working days. It reduces the Order
cost to Rs 25000 per order, but the unit price increases by 2%.
Submitted By: Ashwani Malhotra
Page |2
The Information provided by purchase department is written below.

1. Per unit price for monitor is Rs.4200
2. Ordering & Shipping cost is Rs. 65000 per shipment.
3. Inventory holding costs are 20% p.a. of average inventory
4. Forecasted Daily demand is normally distributed and averages 100 units
5. The minimum Lot size ordered is 15,00
6. The maximum lot size per shipment is 40,00
7. As per company policy five days demand to be kept for safety stock
The questions before management are:
Deciding appropriate amount of order for the monitors
To procure from local vendor or kept outsourcing through China
Solution:
Rohit checked for scientific inventory control method. The excess inventory is already
eating up the company liquidity. The expenses are in the form of raw material cost ,in
process work ,finished goods ready to sale .It also include the expenses incurring to meet
storage, transportation, approximation for losses arising out of pilferage , insurance and
damages. He wanted to minimise this cost (holding cost or carrying cost)
On the other hand, if he thoughts for opting very less or no inventory then company face
lockout situation. In that case with addition to late delivery Penalty Company may suffer
from the important order /customer losing and the company reputation is also on the stack
in the market.
He analyses the requirement of inventory based on below written parameters:
Priority to customer
Effective Capital utilisation
Economy in buying
The different methodology adopted is
(a) Fixed Order Quantity system.
(b) Fixed Order Interval System.
Page |3
In each methodology again evaluation is done for both Local supplier and manufacturer
(from china) for the feasibility. The results are tabulated below after the calculations.
(A) FIXED ORDER QUANTITY SYSTEM WHEN SUPPLY IS FROM CHINA
D (Daily Demand) = 100 unit
S (Ordering & shipment cost IN Rs.) = 65000
C (Unit Cost in Rs.) = 4200
I (Average inventory holding cost) = 20% of average inventory investment
P (Annual consumption in units) =Daily demand x No. Of days in year
= 100 x 365
= 36500
Q (Economic Order Quantity in units) =Sqrt ((2 x S x P)/(C x I))
2 x 36500 x 65000
4200 x 0.2
= 2377
Annual Total Cost: = Basic cost + Procurement cost + Carrying cost
Basic cost (Rs.)= Unit cost x Annual consumption

= 4200 x 3650 = 153300000
Procurement Cost(Rs.) = (Ordering cost per order x Annual consumption)
Ordered quantity
= (65000 x 36500)
2377
= 998223
Carrying Cost(Rs.) = (Inventory carrying cost in decimal x Unit cost x Order quantity)
2
=
(0.2 x 4200 x 2377)

2
= 998223
Annual Total Cost (Rs.) =153300000 +998223 + 998223 =155296447
Page |4
'm (minimum stock in units) = 5 day demand

= 5 x 100 = 500
L (Lead time in days) = 21
C (Daily consumption in units) = 100
Re-Order Level (Units) = m + LC
= 500+21 x 100
=2700
M (Maximum stock in Units) = minimum stock + economic order quantity
= 500+ 2377
= 2877
(A) FIXED ORDER QUANTITY SYSTEM WHEN SUPPLY IS FROM LOCAL
SUPPLIER
D (Daily Demand in Units) = 100
S (Ordering & shipment cost in Rs.) = 250000
C (Unit Cost in Rs.) = 4200 x 1.02 = 4284
I (Average inventory holding cost) = 20% of average inventory investment
P (Annual consumption in Units) =Daily demand x No. Of days in year
= 100 x 365
= 36500
Q (Economic Order Quantity in Units) =Sqrt ((2 x S x P)/(C x I))
2 x 36500 x 250000
4284 x 0.2
= 1459
Basic cost (Rs.)= Unit cost x Annual consumption

= 4284 x 36500 = 156366000
Procurement Cost(Rs.) = (Ordering cost per order x Annual consumption)

Ordered quantity
= (250000 x 365000)
14595
= 625232
Page |5
Carrying Cost (Rs.) =(Inventory carrying cost in decimal x Unit cost x Order quantity)
2
= (0.2 x 4284 x 14595)
2
= 625232
Annual Total Cost (Rs.) =156366000+ 625232+625232
=157616464
'm (minimum stock in units) = 5 day demand

= 5 x 100
= 500
L (Lead time in days) = 7
C (Daily consumption in units) = 100
R (Review time Days) = 30
Re-Order Level (Units) = m + LC
= 500+7 x 100
=1200
M (Maximum stock in Units) = minimum stock (Units) + economic order quantity
= 500+ 1459
= 1959
(B) FIXED ORDER INTERVAL SYSTEM WHEN SUPPLY IS FROM CHINA
Review Period (Days) = 30
Lead Time (Days) = 21
Average monthly consumption (Units) = 30 x 100 = 3000
(m) Minimum Stock =Safety Stock (Units) = 5 days demand

=5 x 100 = 500
(M) Maximum Stock = minimum stock +review time stock + Lead time stock
(R) Review Stock (Units) = 30 x 100 = 3000
(L) Lead Time Stock (Units) = 21 x 100 = 2100
(P) Stock at the time of review (Units) = 500
M=m+R+L
Page |6
M = 500 +3000+2100 = 5600

Re Order quantity (Units) = Maximum stock Stock held at the time of review
= 5600-500 = 5100
Average Inventory (Units) =0.5 x (minimum stock + maximum stock)
= 0.5 x (500+5600) = 3050
Annual Inventory cost (Rs.) =0.2 x 3050 x 4200 = 2562000
Annual Ordering Cost (Rs.) = 150000
Annual Procurement cost (Rs.) = (0.25 x 65000 x 365)/30
= 197708
Annual Basic cost (Rs.) = Unit cost x Annual consumption

= Rs.4200 x 36500 = 15330000
Procurement Cost per review (Rs.) = 25 % of procurement cost

=0.25 x 650000 = 16250
Annual procurement cost = (Procurement cost per review x No. of days in Year)
Review period
= (16250 x365)/30 =197708
Annual Ordering Cost (Rs.) = 150000
Total Annual Ordering & Procurement cost (Rs.) = 197708 + 150000 = 347708
Carrying Cost (Rs.) = Inventory carrying cost in decimal x Unit cost x Avg. Inventory
=
(0.2 x 4200 x 3050) = 2562000
Annual Total Cost (Rs.) =153300000 +347708 + 25 62000=156209708
Page |7
(B) FIXED ORDER INTERVAL SYSTEM WHEN SUPPLY IS FROM LOCAL

SUPPLIER
Review Period (Days) = 30
Lead Time (Days) = 7
Average monthly consumption (Units) = 30 x 100 = 3000
Minimum Stock =Safety Stock (Units) = 5 days demand

=5 x 100 = 500
Maximum Stock = minimum stock +review time stock + Lead time stock
M=m+R+L
(R) Review Stock (Units) = 30 x 100 = 3000
(L) Lead Time Stock (Units) = 7 x 100 = 700
(P) Stock at the time of first review (Units) = 500
M = 500 +3000+700 = 4200
Re Order quantity (Units) = Maximum stock Stock held at the time of interview
= 4200-500 = 3700
Average Inventory (Units) =0.5 x (minimum stock + maximum stock)
= 0.5 x (500+4200) = 2350
Administrative Cost per review (Rs.) = 25 % of initial cost
=0.25 x 25000 = 6250
Annual Administrative cost (Rs.) = (6250 x 365)/30 = 76042
Additional Monitoring cost (Rs.) = 150000
Annual Total Cost (Rs.) = Basic cost + Procurement cost + Carrying cost
Basic cost(Rs.) = Unit cost x Annual consumption
=.4284 x 36500 = 157616464
Annual Total ordering & Procurement Cost (Rs.) = 150000 + 76042 =226042
Carrying Cost (Rs.) = Inventory carrying cost in decimal x Unit cost x Avg. Inventory
= (0.2 x 4284 x 2350) =
2013480
Annual Total Cost =156366000+226042+2013480=158605522

Page |8
FIXED ORDER QUANTITY SYSTEM
DESCRIPTION
Unit cost (Rs.)
CHINA
LOCAL
SUPPLIER
SUPPLIER
4200
4284
100
100
36500
36500
65000
25000
21
Lead time stock (Units)
2100
700
Minimum stock (Days)
Minimum stock (Units)
500
500
2377
1459
153300000
156366000
Annual Procurement cost (Rs.)
998223
625232
Annual carrying cost (Rs.)
998223
625232
155296447
157616464
500
500
Lead stock (Units)
2100
700
Reorder level (units)
2600
1200
Maximum Stock (Units)
2877
1959
Daily Demand (Units)

Annual Consumption (Units)
Ordering cost & Procurement cost per order
(Rs.)
Lead Time ( Days)
Economic Order Quantity (Units)

Annual Basic cost (Rs.)
Annual total cost (Rs)

Minimum stock (Rs)
Page |9
FIXED ORDER INTERVAL SYSTEM

LOCAL
DESCRIPTION
CHINA SUPPLIER SUPPLIER
500
500
Review stock (Units)
3000
3000
Lead stock (Units)
2100
700
Stock at review (Units)
500
500
5600
4200
Average Inventory (Units)
3050
2350
Reorder Quantity (Units)
5100
3700
Additional Monitoring cost (Rs.)
150000
150000
Procurement cost per review (Rs.)
16250
6250
Annual procurement cost (Rs.)
197708
76042
Total ordering & procurement cost (Rs.)
347708
226042
153300000
156366000
carrying cost (Rs.)
2562000
2013480
Other cost (Rs.)
2909708
2239522
156209708
158605522
Annual basic cost (Rs.)
Annual total cost (Rs.)
On comparison of the Total annual cost Rohit present the procurement

by Fixed Order Quantity System from the china Supplier and
Management approved the same.
CLOSE
P a g e | 10
QUALITY ASSURANCE
Objective:
Application of check sheet, brainstorming and flow chart usage in problem
solving.
A reputed FMCG company of India was very much upset
regarding the rejection of material at customer end within the guarantee period. The
company manufacturing operation is done by vendors spearheaded in North India in
Delhi & Himachal Pradesh. The Design, marketing & servicing is taken care by company
itself. The above said product, water heater, is a volumetric and major profit shared part
of particular strategic business unit.
The company Vice President called the Chief Manager QC Mumbai for the business
review meeting. In the meeting Regional sales manager, South raised the issue of
rejection and complained that he has lost a number of customers and large money is also
blocked in the payment due to the same reason. Next day, Mr. Mahesh instructed his
Engineer (Mr. Vineet Dhiman) to do the method study.
Mr. Vineet made the check sheet to gather the information regarding various elements of
the defective material returned from all over the branches in terms of branch, model,
under guarantee, problem. The compiled data is as follow.
Sr. No.
Problem
Quantity
Commutative Quantity
Leakage form welding
146
146
71.5%
Leakage from Apparatus plate
37
183
18.1%
Not operating
11
194
5.4%
Body Damage
200
2.94%
Others
204
1.96%
204
100%
Total
Table I: Defective Return data in FY 2005-06
P a g e | 11
QUALITY ASSURANCE
The Process of making Tank for water heater starts from drawing the two identical half
tanks from Copper sheet circle, trunking the hole in one doom in flat portion, fitting the
Cast iron ring in cut-out part. Then two halves are put over each other and brazing with
Oxy-acetylenes torch.
The tank is immediately put in the water for cooling. Then tank is fitted with apparatus
plate and checked for leakage by filling the water at pressure 6 kg/cm2.The tank which
are passed in leakage test assembled with other subassembly to make finish product.
Start
PROCESS 1
Copper Sheet circle
Draw of half Tank
PROCESS 2
PROCESS 3
PROCESS 4
Cutting of hole in one half
Fitting of Cast Iron ring
Brazing of two half
PROCESS 5
PROCESS 6
PROCESS 7
Cooling in water tub
Fitting of Apparatus Plate

Open the Apparatus
plate
PROCESS 8
Leakage Testing
PROCESS 9
NO
Is Test Passed
YES
PROCESS 10
Complete Assy.
END
P a g e | 12
QUALITY ASSURANCE
CAST TRON RING
Brazing
Brazing
Tank
Figure 1: Tank Interlocking (Before Improvement)
After compiling the result from check sheet the major problem found was leakage from
brazing. Its Share is 71.5%.
Mr. Vineet, at the vendor place conducted brainstorming meeting. In the session
major cause come up and then listed down for future reference.
1. Brazing rod is of poor Quality or not suitable for particular application
2. The process of Brazing is not appropriate
3. The vendor is interested in fast production and hence fast operation cast a thin
layer of brazing.
Mr. Vineet checked for each cause to determine the potential effect one by one.
The first cause state that brazing rod is of poor quality. The currently using
material has 6 % phosphorous content. The suggested material is brazing rod with
2% silver composition. It is 30 % costlier than earlier used one.
P a g e | 13
QUALITY ASSURANCE
Ten water heaters were manufactured using the silver brazing rod
and installed in coastal area for testing. The result was collected after one month.
It was found that three of the heaters started leaking from the brazing.
For the second cause, the close monitoring of process revealed that before
brazing no oil/dirt/grease was removed from the surface.
Practically before brazing there should be no any oil/grease over the surface as
this would create the problem in adhesion of two metals. In manufacturing
process before brazing fifty tanks were thoroughly cleaned then brazed using old
Phosphorous rod, with aceton to remove the oil/dirt.
The cooling of joined halves carried out in normal air rather than cooling in the
water (as it was done previously practiced) because immediate cooling affects the
brazing strength. During the pressure testing there was improvement in the
outcome. As earlier, in a lot of fifty there used to be five to seven rejections during
leakage testing. But implementation of the before said two processes (Precleaning
and cooling in air) reduced the rejection to half of the previous rejection.
For the third cause, time and motion study of brazing process was done to find
the discrepancy in observed time and standard time. The comparison of this
report with earlier report showed no abnormal variation.
In actual practice after usage of water heater in coastal areas the leakage starts at
brazing. This is mainly due to the high salt concentration in the water. This salt
after evaporation of water comes in directly contact with brazing material and
start deteriorating it. A new interlocking mechanism was developed so as to
minimize the water contact with brazing material. Again, ten samples were made
with new interlocking system and installed in coastal areas. The Tank interlocking
is given in Figure 2 & figure 4.
After one month of continues operation no leakage was observed in any of the
samples.
P a g e | 14
QUALITY ASSURANCE
The recommended solution suggested to the management is as follow.

1. Incorporation of new interlocking Technique.
2. Precleaning of copper halves before brazing with acetone.
3. Cooling of Brazed tank in Air
The revised process of manufacturing is also presented. The Highlighted process are
added as part of the improvement and to provide Quality assurance rather than
Quality control
Cast Iron Ring
Brazing
Brazing
Figure 4: New Tank interlocking
P a g e | 15
QUALITY ASSURANCE
START
PROCESS 1
Copper Sheet circle
PROCESS 2
Draw of half Tank
Cutting of hole in one half
PROCESS 3
PROCESS 4
PROCESS 5
Fitting of Cast Iron ring
Pre-cleaning
Brazing of two half
PROCESS 6
PROCESS 7
Cooling in Air
Fitting of Apparatus Plate
PROCESS 8
PROCESS 9
Leakage Testing
PROCESS 10
PROCESS 11
Open the
apparatus plate
Is Test
Passed
Complete Assembly
END
P a g e | 16
STRATEGY MANAGEMENT
DELTACOM GmBH
Objective: The case study helps to understand the perception & application of
strategy formulation.
The company is established in Germany and it is into the business of IT solution provider
to various customers all over the globe. Recently in Chine, the company has participated in
the International Bidding and awarded the contract. The company has made huge effort to
get the order as it was very competitive, financially as well as from Technical specification
point of view.
The project duration is within the range of 7 to 10 years and it also outlay larger chunk of
money. So after winning the contract, management called for Executive level meeting in
Berlin for overall framework. The agenda of the meeting distributed to them was to decide
upon the formulation & evaluation of various strategies to be adopted for the project.
The major participants of projects are enlisted below.
(1) Exclusive Partner
(2) Integrated Partner
(3) Project Solution seeker
(4) Body Shopper
(A) PARTNERS SEGMENTATION

(B) BUSINESS DIMENSION FOR DIFFERENT CUSTOMER
(C)
VALUE PROPOSITION FOR DIFFERENT CUSTOMERS
(D)
BUNDLE OF COMPETENCES ANALYSIS
(E)
MISSION OF
BUSINESS
(F) STRATEGIC TEST

(G) SCOPE OF TRANSFORMATION
(H)
STRATEGIC AGENDA
P a g e | 17
STRATEGY MANAGEMENT
PROCESS OF FORMULATION OF STRATEGY
SLI
TCS
BP
CUSTOMER SEGMENTATION & VALUE PROPOSITION
THE BUNDLE OF COMPETENCES
MISSION OF BUSINESS
THE STRATEGIC AGENDA
OPERATIONAL EXCELLENCE
INNOVATION
CUSTOMER TARGETING
AGGREGATE/GRANULAR METRICS
EXPERIMENTATION AND FEEDBACK
FINANCIAL EVALUATION & MATCHING

STRATEGY
P a g e | 18
STRATEGY MANAGEMENT
LEGENDS :->
TCS ---- TOTAL CUSTOMER SOLUTION
BP BEST PRODUCT
SLI SYSTEM LOCK IN
(A) Partner Segmentation
Tier 1: Exclusive Partner
Japan based organisations provides outsourcing of IBM mainframe applications
Opportunity for customer lock-in
Joint Venture with IBM, the main source of Mainframe developer
Existing customers: GE Japan, JBCC, and AIG
Tier 2: Strategic/Integrated Partner
Long term symbiotic partnership with high value added
Existing customers: GE China, GE US, Kawasaki and Unisys.
Tier 3: Project Solution Seekers
Full project ownership and solution delivery responsibility without established (but
potential) for long-term client relationship
Existing customer: Toyota, Honda, US prospects, Dept. of Transportation China
Tier 4: Body Shoppers
Transactional relationship to provide supplemental staff without much end client
relationship
Existing customers: IBM
DELTACOM GmBH has to choose the partner for project operation in Chins. Every
business Partner has some strength & weakness in terms of their competency in
different field. So the Company made the business dimension & value proposition
analysis for each partners. So the cost comparison, Timely delivery as well as Quality
of operation can be judged on the same platform.
P a g e | 19
STRATEGY MANAGEMENT
(B) Business Dimension for Tier 1 -Exclusive Partner

Products
Critical partner to client providing highly integrated, customer

specific, high-value added turnkey solutions for legacy
mainframe applications in Japanese market
Services
24x7 Maintenance of mission-critical mainframe legacy

.Application extension through analysis, design and development
of new, integrated modules.
Customer
Japanese Corporations in Financial Services, Insurance, etc.

industries.
Channels
Direct, Referrals from highly satisfied existing clients
End Users
Japanese Corporations, Japanese Government organizations.
Complementors
IBM (as an h/2 and s/2 partner), existing clients, Accenture.
Unique Competencies
1. Combination of deep knowledge of mainframe applications.

2. High level of Quality combined with all the other cost
advantage available to Chinese companies.
(B) Business Dimension for Tier 2 -Strategic /Integrated Partner

Customer Dimension
Description
Products
Long-term relationship with client to provide customized and

integrated solutions across multiple business units
T&M and Fixed price application development across multiphase projects
Services
Joint application development enabled through deep

understanding of client culture and methodology
Dedicated retained teams as extension of clients IT
organization
Customer
GE US, GE China, Kawasaki, Unisys
Channels
Direct
End Users
N/A
Complementors
Other GE partners, IBM, other software partners, Accenture
Unique Competencies
1. One of 12 exclusive outsourcing vendors or GE

2. Six-Sigma quality combined with Chinas cost advantage
P a g e | 20
STRATEGY MANAGEMENT
(B) Business Dimension for Tier 3 -Project Solution seeker

Customer Dimension
Description
Products
Individual project solutions without committed long-term

relationship
Services
Customer
T&M and Fixed price application development of discrete

projects
Toyota, Honda, Department of Transportation China, US
prospects
Channels
Direct
Consulting partners such as IBM
Strategic partners such as GE
End Users
N/A
Complementors
Other GE partners, IBM, other software partners, Accenture

1. One of 12 exclusive outsourcing vendors or GE
Unique Competencies
2. Six-Sigma/CMM level-5 quality combined with Chinas cost

advantage
(B) Business Dimension for Tier 4-Body Shoppers

Customer Dimension
Products
Services
Customer
Channels
End Users
Complementors
Unique Competencies
Description
Individual resources to supplement existing project teams and
fill skills gaps(transactional)
T&M and retained resources for fixed time durations
Provide specific technology development skills on projects
IBM Japan, NEC
Direct
Consulting partners such as IBM
Corporation
N/A
1. Consulting partnerships
2. Technology skill differentiation
P a g e | 21
STRATEGY MANAGEMENT
(C) Value Proposition for Tier 1 -Exclusive Partner

Value Proposition
Description
Element
Experiences
Seamless extension of Client team with integrated culture, skilled

technologists with deep understanding of clients business.
Value Delivery
Dedicated client-focused team immersed in all aspects of clients
Systems
culture Network integration to seamlessly extend client

environment
Open communication of all relevant information on both sides
Executive sponsor, CEO oversight, an full corporate reach
CMM and Six-Sigma delivery methodologies for delivery
Value added reselling of hardware and software for one-stopshopping
Value
Value gained by customer: Superior ROI, improved time-to-
Appropriation
market, Security, Resource stability

Value gained by Deltacom: Exclusive long-term relationship,
higher margins, predictable revenue
Value shared by both: Shared IP, shared learning, shared risk
C) Value Proposition for Tier 2 -Strategic /Integrated Partner

Value Proposition Element
Description
Experiences
Integrated teams of skilled technologists

with deep understanding of clients business
Value Delivery Systems
Dedicated client-focused teams fully

trained in clients methodologies
Joint development plans
Cross-training and periodic two-way
knowledge transfer
Business Relationship Manager, CEO
oversight and full corporate reach
P a g e | 22
STRATEGY MANAGEMENT
Value Appropriation
Value gained by customer: Superior ROI,

improved time-to-market, Security,
Resource stability, Shared risk, Continuous
improvement
Value gained by DMK: Access to client
network as sales channel, credibility,
learning
Value shared by both: Co-development of
shared standards and processes
(C) Value Proposition for Tier 3 -Project Solution seeker

Description
Experiences
End-end-end delivery of a project with high

quality and competitive price
Structured processes and teams with high

quality of performance Ability to quickly
ramp-up on clients business and culture
Process for seamless transition at end of
project
Dedicated project team manager with
executive oversight
Value Appropriation
Value gained by customer:

Experimentation , learning, flexibility,
reduced time-to-market, high quality, ROI
Value gained by DMK: Opportunity for longterm relationship, ROI, learning
Value shared by both: Shared learning in
business domain and new technology
P a g e | 23
STRATEGY MANAGEMENT
(C) Value Proposition for Tier 4 -Body Shoppers

Description

Experiences
Supplement team with individual resources

and fill gaps with skill expertise
Strong bench that can be tapped on demand

Mix of skills and expertise
Value gained by customer: Resources of
demand and skills on demand
Value gained by DMK: Opportunity to upsell, learning, improved bonding
Value shared by both: Exchange of skills
Value Appropriation
(D) Bundle of competencies analysis
Systems Lock-In
Dominant Exchange
Exclusive Channel
Customer Integration
Total customer solution
Low Cost
Horizontal Breadth
Differentiation
Redefining Experience
P a g e | 24
STRATEGY MANAGEMENT
Sr. No. Description
Current Situation
Desired Situation
System Lock In
No Specific competency that

create industry standard by
the company.
Company has to set

competency skills for
capturing the future market.
2.
Low Cost
Wage differential with

reference to US, Europe,
Japan & India.
Chinese wages are very low.
Availability of Large pool of

skill in that Area.
Experience Leveraging
workloads & resource
profitability.
A large pool of computer

science graduate for long term
Expertise in managing in
sudden change in demand and
supply profitability
3.
Dominant
Exchange
No Specific competency
that create strong bondage
creation
Company should develop

strong coordination expertise
with Tier 1 specialist in
China.
Exclusive
Channel
One of few firms with low

cost mainframe expertise.
It is required to barrier the

entry of new competitors
High Switching cost for

fully integrated clients.
It acts as barrier to the exit of

customer as highly tacit
knowledge acquired about
customer process through
long interaction also
Dedicated Team, Experience

in Outsourcing
It also allow the expertise

transferable to other function
Joint venture with IBM
Due to this Company is able

to integrate some of
technologies of IBM with
their own application
Mainframe & new language

expertise. Multiple industry
verticals
It strengthens the financial &

insurance segment but slow
development in other areas.
System development, testing

& maintenance
Architecture & consulting

expertise is a new challenge
5.
6.
Customer
Integration
Horizontal
Breath
P a g e | 25
STRATEGY MANAGEMENT
Sr. No. Description
Current Situation
Desired Situation
7.
Redefining
Experience
Processes & expertise at end

to end projects
Its provides very cost

controlled atmosphere for
operation
8.
Differentiations
Japanese speaking personnel,

IBM mainframe expertise
The firm has to recruit local

person that can speak & are
familiar with the social &
business manner of China.
CMM5 Level of operation,

Six sigma approach for all
functions
It is necessary to maintain the

quality level of project & to
eliminate chance of any
redraft.
(E) Mission
Become the #1 provider of Business Process Outsourcing and IT Services in

China:
Analyzing, designing, developing, deploying, and maintaining software systems

and solutions.
Delivering the highest quality of service and unparalleled value
Integrating seamlessly with complementary local service providers
Servicing large and mid-sized corporations, government departments and nonprofit organizations
Through experienced, passionate and hard-working associates driven to provide
outstanding service
Focusing first on China, Japan and US and expanding next into Europe and
Latin American markets.
P a g e | 26
STRATEGY MANAGEMENT
(F) TRANSFORMATION REQUIRED

Sr.
No.
Scope
Now
Future
1.
Customer
Scope
Primarily large corporations,

Government departments of
China
2.
End-User Scope
3.
Channel Scope
4.
Complementor
Scope
5.
Geographical
Scope
Japan and China with limited

presence in the U.S.
Expand to include Service

providers at the high-end of the
software services value chain.
Expand to include mid-sized
corporations, State and Federal
government departments, nonprofit organization
Exclusive offshore service delivery
partner-ships that allow white
labelling of Deltacom services
Business Consulting, IT
Strategy/Architecture consulting
firms
U.S. and U.K. expand into
countries where language of
business is non-English and where
cost of IT services is higher than
China. (Indian firms do not have
language advantage while Chinabased firms have significant cost
advantage.)
6.
Service Scope
7.
Product Scope
Lower end of software

services value chain:
Application development,
system integration, system
conversation ,maintenance &
support
Technology base such as
J2EE framework,
Microsoft.NET framework,
etc. for rapid code
development
8.
Unique
Competencies
Large Corporations,
Government departments in
China
Direct, Joint Venture
Hardware and software

product companies
1. High maturity in
Software development
process
2. Six-Sigma certified
project and operations
managers
3. Low cost of Chinabased delivery
Integrated service that captures the

entire value chain through strong
collaboration with complementors
at the high-end of the software
service value chain
1. Horizontal Application
frameworks such as Portal toolkits,
Content Management toolkits, etc.
2. Solutions frameworks such as
wealth management solutions for
financial services, employee
portals as HR solutions, etc. that
leverage competencies/expertise of
strategic and exclusive
1. Ability to build teams that

can integrate to other service
organizations
2. Develop professional
relationships with other culture.
3. Develop technical
knowledge of specific domain
P a g e | 27
STRATEGY MANAGEMENT
(G) Strategic Agenda: Quality Tests

Sr. No.
Dimension
Comprehensiveness The agenda extends across all of functions services,

geographies and market segments including
geographies including customers, end users, channels
and Complementors.
Stretch
Performance /measures for each thrust provide
achievable but stretched goals for the organization.
Monitoring and
Milestones established throughout the process allow
control
for continuous monitoring and change in strategy if
and as required.
2.
3.
4.
Motivation
5.
Vulnerability
Description
The mission combined with clear strategic thrust

energizes the organization with a common set of goals
and flexibility to innovate and grow.
No material vulnerabilities have been identified at this
time. Aligning execution with this strategic agenda
time will be critical to the success of Delta Brake
(H) Strategic Agenda

Sr.
No.
Strategic Thrust
Primary
Responsibility
Secondary
responsibility
1.
Invest in people Train &

VP HR
motivate. Hire outstanding talent.
VP Operation
Develop strong design
capabilities.
CEO
2.
Expand delivery & customer

support centre throughout china
CEO
VP Sales , VP HR, VP
Marketing
3.
Work with exclusive partners for

rapid response & operation.
CEO ,VP Marketing VP Sales

VP Operation
4.
Develop engagement program of

Deltacom team for better
understanding of Chinese culture
for easy flow of work
VP HR
5.
Strengthen the relationship with

CEO
the IBM for better understanding
VP Operation
& solution of customer needs.
CFO
VP Operation
CFO
P a g e | 28
SELF MANAGE TEAM CONCEPT
Durga Industries Limited

OBJECTIVE OF CASE STUDY
The major objectives behind taking the project are outlined below.
SCOPE:
The purpose of the project is to study the self managed team concept.
What are the limitations & constraint during its realization
How to measure the effectiveness of model?
Concept of self-managed team

The self-managed team or SMT is a special kind of team. It can be highly effective. It can
be phenomenally productive. And it is an autonomous entity. An entity with the endurance
and power of a machine and the cunning and adaptability of an animal.
A SMT isn't just a group of people working together but a genuine collaboration: A team
in the true sense of the word. And it is a team which is measured by its results, not the
performance of its individual members.
Are more independent than other types of team
Help to flatten organizational structure
Handle intermediate levels of responsibilities.
OBJECTIVES OF TRAINING
1) To impart basic knowledge and skill to the new entrants and enable them to
perform their jobs well.
2) To equip the employees to meet the changing requirements of the job and the
organization.
3) To teach the employees the new techniques and ways of performing the job or
operations.
4) To prepare the employees for higher level tasks and built up a second line of
component managers.
P a g e | 29
CRITERIA FOR MEASURING TRAINING EFFECTIVENESS:

1. Trainees reaction towards the objectives:
A training program can be evaluated in terms of trainees reaction to the objectives,
contents and method of training. In case the trainee consider the program
worthwhile and like it, the training can be considered effective.
2. Extent of learning:
The extent to which the trainees have learned desired knowledge and skills during
the training period is a useful basis for measuring the training effectiveness.
3. Behaviour of trainees:
Improvement in job behaviour of trainees reflects the manner and extent to which
learning has been applied to job.
4. Result of training:
The ultimate result in term of productivity improvement, quality improvement, cost
reduction, accident reduction, and reduction in labour turn over are the best criteria
for evaluating the effectiveness.
NEED FOR EVALUATION:
It is necessary to evaluate the extent to which training program have achieved the aim
for which they were designed. It would provide information effectiveness of training as
well as about the design of future training program. It helps to monitor and modify
such program in future
.1. QUESTIONAIRES: Comprehensive questionnaires are used to obtain options,
reactions and various views of trainees. A training evaluation form is formed and
circulated among all the trainees. The trainees fill in their responses asked in the form. The
responses are then analyzed and an evaluation of the training program is done.
2. TESTS: Standard tests are used to find out whether trainee has learnt practical aspects
of work during and after training or not.
3. INTERVIEWS: Personal interviews of the employees are conducted in order to find
usefulness of the training offered to operatives.
4. STUDIES: Comprehensive studies are carried out eluting the opinions and guidelines of
the trainers superiors and peer groups about the training.
5. FEEDBACK: A feedback report is prepared by evaluation at every stage of training.
P a g e | 30
AREAS OF TRAINING
The areas in which training is offered can be classified into following categories:
KNOWLEDGE
Employee is taught about a set of rules and regulations about

the job and products and services offered by the company
TECHNICAL SKILL
Employee is taught a specific skill (e.g. operating a machine)

so that he can acquire that skill and contribute meaningfully
SOCIAL SKILL
Employee is made to learn him and other develop a right

mental attitude towards the job, colleagues and the company.
ATTITUDE
This involves molding of employees attitude towards

various on the job situations.
QUESTIONNAIRE FOR DATA COLLECTION:

AGE :-
SBU : -
GENDER (M / F):-
1. There is an up gradation in my skills during this training program:

(a)Strongly agree.
(b)Agree
(c) Strongly disagree.
(d) Disagree.
(e) Cant say.

2. I feel confident due to my knowledge enrichment in these 3 months:
(a)Strongly agree.
(b)Agree
(d) Disagree.
(e) Cant say.

3. My attitude has changed during the training:
(a)Strongly agree.
(b)Agree
(d) Disagree.
(e) Cant say.

4. The teachers in the institute were effective in communicating their knowledge.
(a)Strongly agree.
(b)Agree
(d) Disagree.
(e) Cant say.
P a g e | 31
5. The training aids provided during the training period were sufficient & helpful.
(a)Strongly agree.
(b)Agree
(d) Disagree.
(e) Cant say.

6. The coordination training was enough:
(a)Strongly agree.
(b)Agree
(d) Disagree.
(e) Cant say.

7. The time allotted to every subject was enough:
(a)Strongly agree.
(b)Agree
(d) Disagree.
(e) Cant say.

8. I feel improvements in my communication after the training:
(a)Strongly agree.
(b)Agree
(d) Disagree.
(e) Cant say.

9. There is improvement in my personality during the training program:
(a)Strongly agree.
(b)Agree
(d) Disagree.
(e) Cant
P a g e | 32
1. The perception of SMTs regarding up gradation of their skills.

Strongly
GENDER
Agreed
Female
13
43.33
Male
26.67
21
70.00
Total
Agreed
Grand
%
Total
0.00
13
30.00
17
30.00
30
Strongly
Grand
AGE
Agreed
Agreed
Total
18 Years
13.33
3.33
19 Years
20.00
10.0
20 Years
13.33
6.67
21 Years
20.00
6.67
22 Years
3.33
3.33
Total
21
70.00
30.00
30
Strongly
Grand
SBU
Agreed
Agreed
Total
Meter
11
36.67
13.33
15
T&D
10
33.33
16.67
15
Total
21
70.00
30.00
30
P a g e | 33
2. The perception of SMTs regarding knowledge enrichment in the 3 months :
Strongly
Can't
GENDER
disagreed
Female
3.33
Male
Total
AGE
Strongly
Year
disagreed
18
say
Strongly
Grand
Agreed
Agreed
Total
0.00
10
33.33
6.67
13
0.00
6.67
30.00
20.00
17
3.33
6.67
19
63.33
26.67
30
Can't
%
say
0.00
Grand
Agreed
Agreed
Total
0.00
13.3
3.33
6.67
20.0
3.33
19
0.00
20
0.00
0.00
13.3
6.67
21
0.00
0.00
13.3
13.33
0.00
3.3
0.00
19
63.33
26.67
30
22
3.33
Total
3.33
Strongly
SBU
disagreed
Meter
Strongly
6.67
Can't
%
say
Strongly
Grand
Agreed
Agreed
Total
0.00
30.0
20.0
15
T&D
3.33
6.67
10
33.3
6.6
15
Total
3.33
6.67
19
63.3
26.6
30
P a g e | 34
3. The perception of SMTs about change in their attitude in the 3 months:
Can't
Strongly
GENDER
say
Agreed
Female
6.67%
11
36.67%
Male
6.67%
23.33%
Total
13.33%
18
60.00%
Can't
Agreed
Grand
%
Total
0.00%
13
26.67%
17
26.67%
30
Strongly
Grand
AGE
say
Agreed
Agreed
Total
18 Years
3.33%
10.00%
3.33%
19 Years
0.00%
20.00%
10.00%
20 Years
0.00%
13.33%
6.67%
10.00%
13.33%
3.33%
0.00%
3.33%
3.33%
13.33%
18
60.00%
26.67%
30
21 Years
22 Years
Total
Can't
SBU
Strongly
Grand
say
Agreed
Agreed
Total
meter
6.67%
26.67%
16.67%
15
Transformer
6.67%
10
33.33%
10.00%
15
Total
13.33%
18
60.00%
26.67%
30
Energy
P a g e | 35
4. The perception of SMTs regarding communication improvement:
Strongly
Grand
GENDER
Agreed
Agreed
Total
Female
11
36.67%
6.67%
13
Male
15
50.00%
6.67%
17
Grand Total
26
86.67%
13.33%
30
Strongly
Grand
AGE
Agreed
Agreed
Total
18 Years
13.33
3.33
19 Years
26.6
3.33
20 Years
20.00
0.00
21 Years
20.00
6.67
22 Years
6.67
0.00
Total
26
86.67
13.33
30
Strongly
Grand
SBU
Agreed
Agreed
Total
Meter
13
43.33
6.67
15
T &D
13
43.33
6.67
15
Total
26
86.67
13.33
30
P a g e | 36
5. The perception of SMTs regarding adequacy training aids:
Strongly
Grand
GENDER
Agreed
Agreed
Total
Female
26.67
16.67
13
Male
13
43.33
13.33
17
21
70.00
30.00
30
Grand
Total
Strongly
Grand
AGE
Agreed
Agreed
Total
18 Years
6.67
10.00
19 Years
20.0
10.00
20 Years
13.33
6.67
21 Years
23.33
3.33
22 Years
6.67
0.00
Grand Total
21
70.00
30.00
30
Strongly
SBU
Agreed
Agreed
Grand Total
Meter
11
36.67
13.33
15
T&D
10
33.33
16.67
15
Grand Total
21
70.00
30.00
30
P a g e | 37
6. The perception of SMTs regarding co-ordination :
Strongly
Grand
GENDER
Agreed
Agreed
Total
Female
13.33
30.00
13
Male
20.00
11
36.67
17
Grand Total
10
33.33
20
66.67
30
Strongly
Agreed
18
6.67
10.0
19
6.67
23.3
20
6.67
13.3
21
13.33
13.3
0.00
6.67
33.33
20
66.6
30
22
Grand Total
10
Agreed
Grand
AGE Years
Strongly
Total
Grand
SBU
Agreed
Agreed
Total
Meter
16.67
10
33.33
15
T&D
16.67
10
33.33
15
Grand Total
10
33.33
20
66.67
30
P a g e | 38
7. The perception of SMTs about time allotted to each subject was enough.
Dis-
Can't
Strongly
GENDER
agreed
say
Agreed
Female
6.67
6.67
30.00
Male
3.33
13.33
11
36.67
Total
10.00
20.00
20
66.67
AGE
Dis-
Years
agreed
18
Can't
Grand
Agreed
Total
0.00
13
3.33
17
3.33
30
Strongly
say
Agreed
0.00
3.33
Grand
Agreed
Total
13.33
0.00
19
3.3
3.33
23.33
0.00
20
3.33
3.33
13.33
0.00
21
3.33
3.33
16.67
3.33
0.00
6.67
0.00
10.00
20.00
3.33
30
22
Total
0.00
20
66.67
Can't
Strongly
SBU
Disagreed
say
Agreed
Meter
6.67
6.67
11
36.67
T&D
3.33
13.33
30.00
Total
10.00
20.00
20
66.67
Grand
Agreed
Total
0.00
15
3.33
15
3.33
30
P a g e | 39
8. The perception of SMTs about improvement in their communication.
Can't
Strongly
Grand
GENDER
say
Agreed
Agreed
Total
Female
3.33
23.33
16.67
13
0.00
12
40.00
16.67
17
3.33
19
63.33
10
33.33
30
Male
Total
AGE
Can't
Years
say
Strongly
Grand
Agreed
Agreed
Total
0.00
13.3
3.33
3.3
13.3
13.33
20
0.0
13.3
6.67
21
0.0
16.6
10.0
22
0.0
6.67
0.0
3.33%
19
63.33%
33.33%
30
18
19
Total
Can't
SBU
say
Strongly
Grand
Agreed
Agreed
Total
0.00
11
36.67
13.33
15
3.33
26.67
20.00
15
3.33
19
63.33
10
33.33
30
Meter
T&D
10
Grand
Total
P a g e | 40
9. The perception of SMTs about improvement in their personality.
Strongly
GENDER
Grand
Agreed
Agreed
Total
Female
10
33.4
10.0
13
Male
11
36.6
20.0
17
Grand Total
21
70.0
30.0
30
Strongly
Grand
AGE
Agreed
Agreed
Total
18 Years
13.33
3.33
19 Years
13.33
16.67
20 Years
16.67
3.33
21 Years
20.00
6.67
22 Years
6.67
0.00
21
70.00
30.00
30
Grand
Total
Strongly
Grand
SBU
Agreed
Agreed
Total
Energy meter
11
36.67
13.33
15
Transformer
10
33.33
16.67
15
Grand Total
21
70.00
30.00
30
P a g e | 41
FINDING, INFERENCES AND RECOMMENDATION

In our research process, the effectiveness of training imparted to the SMTs is measured on
the basis of 10 different parameters. On the basis of data collected on these parameters we
found the following results:
1.) Skill up gradation:
All the SMTs are either agreed or strongly agreed on this statement.
2.) Knowledge enrichment:
91% of people are agreed at this point.
3.) Attitude change:
87% people feel change in their attitude after training.
4.) Communication effectiveness of teachers at institute:
All SMTs are satisfied with the teachers effectiveness.
5.) Content covered:
Only 75% SMTs feel that the whole content was covered during the program.
6.) Good training aids :
All are agreed at this point.
7.) Full co-ordination:
All are agreed to this statement.
8.) Time adjustment:
There were only 73% of people who are easily adjusted with the timing of training
program.
9.) Knowledge gained & expected knowledge:
Only 60% of SMTs feel that knowledge gained by them & expected knowledge is
equal.
10.)
Proper time allocation to each subject:

70% are agreed to this statement.
Conclusion:
The effectiveness of training imparted to SMTs measured from the fact that the SMTs are
very well trained on different aspects. It provide them a good learning opportunity,
improvement in personality & increasing employability skill
For the company it acts as long term investment in the building of talent pool.
P a g e | 42

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CASE STUDY

SYMBIOSIS CENTRE FOR DISTANCE LEARNING

TELESYS VENTURES INC.

The Case Study helps to understand the requirement of inventory management

Submitted By: Ashwani Malhotra

The Information provided by purchase department is written below.

Effective Capital utilisation

Submitted By: Ashwani Malhotra

Basic cost (Rs.)= Unit cost x Annual consumption

(0.2 x 4200 x 2377)

Submitted By: Ashwani Malhotra

'm (minimum stock in units) = 5 day demand

Basic cost (Rs.)= Unit cost x Annual consumption

Procurement Cost(Rs.) = (Ordering cost per order x Annual consumption)

'm (minimum stock in units) = 5 day demand

(m) Minimum Stock =Safety Stock (Units) = 5 days demand

Submitted By: Ashwani Malhotra

M = 500 +3000+2100 = 5600

Annual Basic cost (Rs.) = Unit cost x Annual consumption

Procurement Cost per review (Rs.) = 25 % of procurement cost

(0.2 x 4200 x 3050) = 2562000

Annual Total Cost (Rs.) =153300000 +347708 + 25 62000=156209708

Submitted By: Ashwani Malhotra

(B) FIXED ORDER INTERVAL SYSTEM WHEN SUPPLY IS FROM LOCAL

Minimum Stock =Safety Stock (Units) = 5 days demand

Annual Total Cost =156366000+226042+2013480=158605522

FIXED ORDER QUANTITY SYSTEM

Lead time stock (Units)

Minimum stock (Days)

Minimum stock (Units)

Annual Procurement cost (Rs.)

Annual carrying cost (Rs.)

Lead stock (Units)

Reorder level (units)

Maximum Stock (Units)

Daily Demand (Units)

Economic Order Quantity (Units)

Annual total cost (Rs)

Submitted By: Ashwani Malhotra

FIXED ORDER INTERVAL SYSTEM

CHINA SUPPLIER SUPPLIER

Minimum stock (Units)

Review stock (Units)

Lead stock (Units)

Stock at review (Units)

Minimum stock (Units)

Average Inventory (Units)

Reorder Quantity (Units)

Additional Monitoring cost (Rs.)

Procurement cost per review (Rs.)

Annual procurement cost (Rs.)

Total ordering & procurement cost (Rs.)

carrying cost (Rs.)

Other cost (Rs.)

Annual basic cost (Rs.)

Annual total cost (Rs.)

On comparison of the Total annual cost Rohit present the procurement

Submitted By: Ashwani Malhotra

Leakage form welding