Course: Operations Management

SOLUTIONS OF INTERNAL ASSIGNMENT

(APRIL 2024 EXAMINATION)

1. Founded by Radhakishan Damani in 2002, Avenue Supermarts Limited aka DMart is a

popular retail firm that operates a chain of supermarkets in India. DMart Ready, an e-
commerce venture launched in Dec. 2016, is an online platform for grocery shopping
offered by DMart. Unlike traditional DMart stores, DMart Ready allows its customers to
shop groceries and other essentials online from the convenience of their homes and get
their orders delivered at their doorsteps.

It differs from traditional DMart physical stores by providing customers with the
convenience of ordering groceries online and having them delivered to their doorstep. This
online service allows customers to browse a wide range of products, place orders, and
schedule deliveries at their convenience. This service differs significantly from the
traditional DMart physical stores in several ways, primarily in terms of inventory
management techniques and customer experience.
Various inventory management techniques prevalent in the retail industry include:
a) Just-in-Time (JIT): DMart stores often employs JIT inventory management
technique which is involves ordering and receiving inventory only when it is needed,
thereby minimizing excess inventory in the stores, which reduces storage costs and
waste.
b) ABC Analysis: This technique classifies inventory into different categories based
on their value for the ease to manage them accordingly. Very high-value items are
categorised as “A-class-items” which may require a tighter control. Medium-value
items are categorised as “B-class” and low-value as “C-class.” DMart uses this
analysis to prioritize which inventory needs more management and allocate
resources accordingly.
c) Vendor Managed Inventory (VMI): In many stores, DMart has collaboration with
suppliers who manage the inventory levels at the customer's location directly,
allowing for better coordination and seamless replenishment based on demand
signals.
d) Inventory Turnover Ratio: DMart tracks the rate at which inventory is sold and
replenished at its stores. This helps in achieving high inventory ratio which helps in
optimizing sales and minimizing inventory holding costs.
e) Bulk Shipments: DMart often used this inventory management technique for
ordering large quantities of inventory to benefit from economies of scale and lower
unit costs.
Key Components and Strategies of DMart Ready's Inventory Management System
DMart Ready employs several key components and strategies in its inventory management
system to ensure efficient operations and customer satisfaction. Some of the prominent
strategies are elucidated below:

 Robust Online Platform: DMart Ready ready provides a user-friendly online

interface for customers to browse products, place orders, and schedule deliveries
at their own convenience.

 Real-time Inventory Tracking: DMart Ready is utilizing technology for real time
tracking of inventory levels to monitor stock levels accurately across multiple
warehouses and fulfilment centres. With this strategy, DMart manages inventory on
real time basis and its customers get update on product availability in real time.

 Optimization of Fulfilment Centres: DMart Ready strategically locates its

fulfilment centres to ensure efficient order processing and timely delivery to
customers, thereby optimizing the picking, packing, and delivery processes to
ensure timely and accurate order fulfilment.

 Demand Forecasting: DMart Ready employs data analytics tools to predict

customer demand and adjust inventory levels across its warehouses and fulfilment
centres accordingly. Advanced algorithms analyse the historical sales data,
seasonals trends, and customer preferences to forecast demand accurately.

 Collaboration with Suppliers: DMart ready has established strong relationships

with suppliers to ensure timely replenishment and maintain optimal inventory levels.

 Cross-docking: Unlike traditional stores which maintain inventory on shelves,

DMart Ready oftem employs cross-docking in which goods are shipped to
customers as soon as goods are received from suppliers, eliminating the need of
storage space.

Key Differences and advantages:

 Unparallel Convenience: In traditional retails stores, customers need to visit to

select product and carry them home. But, DMart Ready offers unparalleled
convenience to its customers by allowing them to shop online anytime, anywhere
without visiting the store physically and products get delivered at their customers’
doorsteps.

 Personalized Products: Traditional retail stores lack in offering personalized

products to their customers. But, DMart Ready leverage customer data and
analytics to offer personalized product suggestion and promotions which enhances
customer shopping experience.
  Wider Selection of products: Traditional retail stores generally do not offer wider
variety of products to the customers due to physical space limitations. But with the
online platform, DMart can offer wider range of products as compared to physical
retail stores thus catering to diverse customer preferences.

 Reduced overhead costs: Traditional retail stores require huge space to store
products on shelves. But in case of DMart Ready, which operating online, the need
of large physical retail spaces is eliminated. As a result, the cost of operations gets
reduced potentially leading to cost savings for both the retailer and customers.
In conclusion, DMart Ready has revolutionized the retail experience by leveraging
advanced technology for inventory management and offer wider range of products online
to meet diverse customer needs and preferences. This has brought cost savings both for
customers as well as for the DMart. With leveraging techniques illustrated above, DMart
Ready aims to maintain a seamless online shopping experience, minimize stockouts, and
meet customer expectations for timely deliveries and product availability.

-----------------------------------------------end of solution of question no. 1--------------------------------------

2. Today’s manufacturing firms have become advanced and sophisticated in terms of

technology and complex processes deployed in their shop floors. The manufacturing of
any product involves various equipment and linked processes which work in harmony to
manufacture the product in desired quantity and quality. This type of manufacturing is
referred to as Synchronous manufacturing which focuses on the total system
performance rather than on localized measures such as labour or machine utilization. The
throughput of the manufacturing process is determined by that activity of manufacturing
which limits the production ability. In management parlance, limiting factor is referred to as
constraint which is anything that prevents the system from achieving its goal.

Theory of Constraint (TOC) is one such management philosophy which focuses on

identifying and improving the most important limiting factor (constraint) that impedes in
achieving a goal. In manufacturing, the constraint is often referred to as bottleneck. TOC
takes a scientific approach to improvement and hypothesizes that every complex system,
including manufacturing processes, consists of multiple linked activities, one of which acts
as constraint upon the entire system. This hypothesis is based on the premise that the rate
of goal achievement is limited by at least one constraint.

Significance of TOC in manufacturing processes: The goal of any business

organization is to make profit. The goal of manufacturing organizations is to optimize its
production of goods to match the supply with the demand in the market. Since, the
manufacturing activities are interlinked, there are always constraints in the system.
Identifying that constraint is of prime importance for the manufacturing firm as it will impact
its production capabilities. Therefore, total process throughput improves only when the
constraint is improved. Optimizing non-constraints and spending time and money on them
provides minimal benefits.

There are five focusing stems in TOC name: identifying, exploiting, subordinating,
elevating the constraint and repeating the process.

Let us understand the concept of TOC and its application to synchronous manufacturing
with an example scenario:

Scenario: An automobile manufactures using an assembly line to produce cars from

various components such as engine chassis, body, electrical accessories etc. using
assembly processes such as welding, assembling, painting etc. The paint shop is identified
as a constraint in this scenario which limits the production capability in terms of reduced
number of cars assembled per day.

Application of TOC principles:

f) Identifying the Constraint: It involves identifying the bottleneck (machine,

resource, process step etc.) that limits the system’s throughput. Here the constraint
or bottleneck is paint shop.
g) Exploit the Constraint: Once constraint is identified efforts are directed towards
maximizing the its utilization to optimize overall system performance. He the car
manufacturer must ensure that the paint shop operates continuously.
h) Subordinate Everything Else: Other processes and resources are aligned to
support the constraint to ensure that the entire system operates in sync with the
constraints capacity. Here in the assumed scenario, car manufacturer needs to align
the upstream processes (assembly, welding etc.) to match the paint shop’s pace.
i) Elevate the Constraint: It involves investing in improving the bottleneck
(technology, training etc.). Here the car manufacturer needs to invest in faster drying
technology or installation of additional paint booths.
j) Repeat the process: Once initial constraint is addressed, the process is repeated
to identify and address the next constraint. Here, once the paint shop constraint is
resolved, the manufacturer needs to find the next critical bottleneck which could be
final assembly shop or anything else.

Drum-Buffer-Rope (DBR) in Manufacturing:

DBR is a scheduling and control mechanism derived from TOC. This methodology is based
on the fact that the overall output of the system can only be the same as the output at the
constraint of the system. This method is named for its three components which involves:
  Drum: The constraint sets the pace of production, acting as the "drum" that controls
the flow of materials through the system. The rest of the system follows the beat of
the drum. Schedule at the drum decides what the system will produce, in what
sequence and in how much quantity.
In the illustrated example scenario, drum is the final assembly station which sets the
pace.
 Buffer: Buffers are strategically placed to protect the constraint from disruptions,
ensuring continuous operation. Buffers in DBR provide the additional lead time
beyond the required setup and process times, for materials in the product flow.
In the illustrated example scenario, buffer is the partially assembled cars maintained
for continuous flow.

 Rope: It is the material release mechanism for the system and it connects the
upstream processes to the drum. It signals when to start production to maintain the
constraint’s pace. The rope ensures that work-in-progress (WIP) is released only
when the constraint is ready. The release of materials into the system is controlled
by the constraint, ensuring that non-bottleneck processes do not flood the system
with excess inventory.
In the illustrated example scenario, rope is the upstream processes such as welding,
painting etc. which release components based on the final assembly’s pace.

Benefits of DBR:

 Reduced Lead Times: By scheduling production with the constraint, DBR

minimizes waiting times. Workflows become smoother, and products more through
the system smoothly.
 Increased Throughput: Focusing attention on the constraint allows the system to
maximise the output. When the constraint operates optimally, overall throughput
improves. DBR ensures that efforts are directed where they matter most.
 Improved Overall System Performance: Efficient scheduling, buffer
management, Smooth flow, less work-in-process (WIP), lead to better resource
utilization. Less WIP reduces wastage in the system. The entire system becomes
more responsive and agile.

From above example scenario of synchronous manufacturing, it is evident that by applying

TOC principles such as illustrated in the example scenario the manufacturing organization
can identify and improve the constraints in the system. This will help the manufacturing
firm to align its production with demand by minimizing inventory, WIP and lead times in
assembly processes which will help it to maximize overall throughput. In summary, by
focusing on the constraint and applying the principles of TOC and DBR can provide a
systematic approach to optimize manufacturing processes, enhance production
scheduling, and achieve better overall performance in any industry.
 -----------------------------------------end of solution of question no. 2--------------------------------------------

3(a) Quality management is one of the vital elements for the realization of organizational goals
of any business. While quality management has direct implication on any manufacturing
firm’s product quality and sales, it is also equally important for service industries which
provide customer service which can only be experienced. Quality management ensures
that the organization’s product or service remains consistent and sensitive to the
requirement of customers. Healthcare services is one of those service industries where
quality management plays an important role in shaping the patients’ perception and
experience.
Quality management emphasizes monitoring and controlling of quality standards of
healthcare services to meet the exceed patients’ expectations. The Operations Manager
plays a vital role in ensuring effective implementation and monitoring of quality control
measures in a hospital. Below are some of the prominent roles performed by Operations
Managers with respect to quality control in a hospital:
a) Developing Quality Standards and Procedures: Operations manager collaborates
with various stakeholders (patients, regulatory bodies, hospital staff, medical
equipment & service providers etc.) to devise quality standards, specifications, and
procedures to manage patient care and other various operations of the hospital. These
aspects not only cover patient care but also encompass various health and safety
aspects of patients and hospital staff.
b) Catering to Patient Requirements: The Operations Manager ensures that the
requirement of patients is catered to as per the established quality standards of the
hospital. This involves assessment of the patients’ needs and expectations and
delivering value to them in terms of quality, satisfaction and affordable health care
service.

c) Setting benchmark for Quality: Aiming to achieve excellence in healthcare services,

it is the responsibility of the Operations Manager to set benchmarks for various hospital
operations. These benchmarks are performance metrics which set performance
standards of various operations to align them with the national and internationals
standards. The Operations Manager also reviews existing healthcare policies,
identifies areas of improvement to enhance quality and efficiency in the operations.
The Operations Managers also explores various ways to minimize waste and
redundant processes in the hospital operations with the view to enhance overall quality
and efficiency of the healthcare services.

d) Collaborating with Operating Staff: The Operations Manager works closely with the
operating staff (doctors, nurses, laboratory staff, housekeeping staff etc.) to define and
implement quality standards and procedures to deliver quality healthcare facility to the
patients. The operating staff are important drivers of quality in healthcare industry
because of their close interaction with the patients. The collaborations ensures that
 quality measures are effectively integrated in the day-to-day operations of the hospital.
The training and support required to the staff goes a long way in achieving the quality
standards of the healthcare organization.

e) Monitoring performance and assessing effectiveness of changes: To improve the

quality of service, it is important for the Operations Manager to monitor the
performance of the existing system of operations. He/she assesses the entire
operations and identifies potential improvement areas where change can be
implemented. Adjustments are then made to maintain high-quality standards. This
cycle of monitoring performance followed by assessing the effectiveness helps in
improving the quality standards of healthcare organization.

Thus, Quality Management is an important aspect of healthcare service industry to meet

and exceed patient expectations. It focuses on setting quality standards and procedures,
measuring and monitoring performance, and taking corrective actions wherever required.
Therefore, the success of the healthcare organization lies with the Operations Manager
who plays a crucial role in overseeing quality control in the healthcare organization.
-------------------------------------------end of solution of question no. 3(a)--------------------------------------

3(b) Quality in healthcare is multifaceted and encompasses various dimensions that collectively
contribute to patient care and satisfaction. It is crucial for delivering safe, effective, and
patient-centric healthcare services. We explore various dimension of quality in the
healthcare sector and their impact on the overall patient care and experience. According
to The Institute of Medicine (IOM) there are six primary dimensions of healthcare quality
which are as follows:
a) Safety: Ensuring safety of patient is of paramount importance for the healthcare
provider. It involves preventing harm to the patients from medical errors and injuries,
infections, and adverse events. Quality practices such as proper medical administration,
infection control, emergency preparedness contribute to the safety of patients. Patients
feel secure when their well-being is given priority.
b) Effectiveness: It refers to providing evidence-based medical care that has history of
achieving desired outcomes. It involves using the appropriate medical interventions,
accuracy of diagnosis, and treatments which are effective for improving the patient
outcome and satisfaction.
c) Patient-centeredness: It refers to offering care that is respectful and responsive to
individual patient needs, preferences, and values. It involves active communication,
respect for patient autonomy and shared decision-making. When patients feel heard
and engaged in their care, their overall well-being and experience improves.
d) Timeliness: It encompasses aspects such as waiting times for appointments, tests, and
treatments and staff responsiveness. Delays in the care can lead to dissatisfaction and
 worsen the condition of patients. Streamlined process and efficient scheduling of
healthcare services can enhance patient satisfaction, experience and patronage.
e) Efficiency: It is related to the maximum utilization of resources and avoiding wastage
of equipment, supplies, ideas etc. so as to reduce costs, waiting times and redundant
processes. Patients benefit from the timely and effective care delivery.
f) Equity: It ensures fair access to healthcare services which does not vary in quality
because of gender, socioeconomic status, ethnicity, and geographical locations.
Addressing disparities in healthcare enhances the trust and experience of the patients.
In summary each of the dimensions elucidated above plays a vital role in delivery of high-
quality healthcare to the patients and collectively contribute to improve the overall
healthcare delivery system. By focusing on these dimensions, healthcare provider can
ensure a holistic approach to patient care that not only treats the medical conditions but
also enhances the overall patient experience and satisfaction.

-------------------------------------------end of solution of question no. 3(b)--------------------------------------