OPERATIONS

1. What do you understand by Supply Chain Management?

SCM is the management of a network of all business processes and activities involving the
procurement of raw materials, manufacturing and distribution management of Finished Goods.
SCM is also called the art of management of providing the Right Product, at the Right Time, at
Right Place and the Right Cost to the Customer.
The organisations that make up the supply chain are “linked” together through physical flows
(transformation, movement, and storage of goods and materials) and information flows.

2. What is Operations Management?

It is concerned with converting materials and labour into goods and services as efficiently as
possible to maximise the profit of an organisation. Operations management teams attempt to
balance costs with revenue to achieve the highest net operating profit possible. Operations
management involves utilising resources from staff, materials, equipment and technology.
Operations managers acquire, develop and deliver goods to clients based on client wants and
the abilities of the company.

3. What are PERT and CPM?

CPM (Critical Path Method) is used to assist the project manager in scheduling the activities
(i.e., when should each activity start). It assumes that activity durations are known with
certainty.
PERT (Program Evaluation and Review Technique) is used to assist in project scheduling
similar to CPM. However, PERT assumes that activity durations are random variables (i.e.,
probabilistic).
CPM is used for projects that assume deterministic activity times; the times at which each
activity can be carried out are known (e.g. a construction project). PERT, on the other hand,
allows for stochastic activity times; the times at which each activity will be carried out are
uncertain or varied (e.g. an R&D project). Three estimates for completion times are taken– the
most likely, the most optimistic and the most pessimistic. Due to this core difference, CPM and
PERT are used in different contexts.
Example of CPM method:
 Task Description Duration (Working
Days) Predecessor/s
A Requirement 5
Analysis
B Systems Design 15 A
C Programming 25 B
D telecoms 15 B
E Hardware Installation 30 B
F Integra on 10 C, D
G System Testing 10 E, F
H Training/Support 5 G
I Handover and Go- 5 H
Live

Determine the critical path of the project

Calculate the planned duration of the project in weeks
Identify any non-critical tasks and the float (free slack) on each

The network path with the maximum duration is the critical path.
The critical path runs through Tasks, A, B, C, F, G, H and I.
The sum of the critical task durations gives the planned duration of the project as 75 days.
Task D is non-critical with 10 days float
Task E is non-critical with 5 days float
4. Is there any difference between Logistics and Supply chain? If yes, please elaborate.
Logistics is the connection from one node or point to another; supply chain is a series of
sequential nodes or points connected to one another. Logistics focuses on transporting goods
while supply chain focuses on finished product and/or customers.
Logistics is a segment under the heading of Supply Chain Management. It specifically refers to
the planning, implementing and controlling the efficient and effective flow of goods and
services. Supply Chain Management relates to the complete management of the flow of products
and services.

5. Impact of GST on the supply chain.

Post the implementation of GST, the benefits accrued by entities in the supply chain
management mechanism include:
Customization of the supply chain – Under GST, manufacturers can shift towards tailored
supply chain models as per customer requirements. The removal of stock transfer benefits can
help in increasing the share of direct dispatches for medium and large-sized dealerships.
Superior inventory management – After the elimination of multiple state-level taxes instead
of a uniform GST rate, the stock points have been optimised and channel inventories reduced.
There will be fewer transit stays after GST, which will help in advancing lead times while also
reducing inventory levels at stocking points. With more potential for consolidation, warehouse
management can also become more efficient.
A tangential decrease in incoming logistics costs – An impact of GST on supply chain will
also be seen in the form of tangential benefits for direct out-of-state procurements and logistics
costs. This can help manufacturers to expand their vendor base outside state boundaries and
alter the sourcing models profitably.
Cash flow management for export businesses – Due to GST, tax exclusion benefits will
continue with minimum effect on the bottom line, and a streamlined tax system will help in
promoting more exports.
Modified after-sales distribution models- Implementation of GST can significantly affect the
spares market due to an increased need for storage and retail penetration. Forward-looking
businesses can develop their distribution footprint to retreat from consignment stocking, and
enable customised supply chain models while also offering high-quality service at lower costs.
6. What do you understand by KANBAN, KAIZEN?
The word "Kan-ban" is of Japanese origin and translates to "signal card," referring to the reorder
slip used to procure more supplies. Kan-ban is a PULL system. It pulls inventory as it is needed.
ERP/MRP is a PUSH system. It pushes inventory into a warehouse for
“Safety Stock” to deal with fluctuations in demand from changing forecasts.
Kaizen” refers to a Japanese word which means “improvement” or “change for the better”.
Kaizen is defined as a continuous effort by every employee (from the CEO to field staff) to
ensure the improvement of all processes and systems of a particular organisation.

7. What is JIT?
Just-in-time (JIT) is an inventory strategy companies employ to increase efficiency and decrease
waste by receiving goods only as they are needed in the production process, thereby reducing
inventory costs. This method requires producers to forecast demand accurately. A good example
would be a car manufacturer that operates with very low inventory levels, relying on its supply
chain to deliver the parts it needs to build cars. The components required to manufacture the
cars do not arrive before or after they are needed; instead, they reach just as they are required.

8. Explain the flow of a supply chain? What is Pull and Push strategy?

In the above picture, DC refers to the Distribution center, and RDC refers to Regional Distribution
Centre. The Flow of Good takes place from supplier to consumer whereas Flow of Information and
Money takes place in the opposite direction, i.e. from consumer to supplier. There is another
prevalent term which is Reverse Supply Chain. In the case of Product returns (mainly due to
defective products), the reverse supply chain is followed.

9. What do you mean by Industry 4.0?

Industry 4.0 is a name for the current trend of automation and data exchange in manufacturing
technologies. It includes cyber-physical systems, the Internet of things, cloud computing and
cognitive computing. Industry 4.0 creates what has been called a "Smart Factory".
A smart factory is a flexible system that by means of using real-time data can self-optimise
performance across a broader network, self-adapt to and learn from new conditions in real or
near-real time, and autonomously run entire production processes.
Companies like Siemens, GE have already adopted this concept of Smart Factory.
10. Explain Throughput Time, Throughput rate and Cycle Time.
Throughput Time: Manufacturing Throughput Time is the amount of time required for a
product to pass through a manufacturing process, thereby being converted from raw materials
into finished goods.
TT= (Work in progress/ Throughput Rate)
Throughput Rate refers to the average output of a production process per unit time. Defined
as Production per unit time.
Cycle Time: The average Inter-departure time between two jobs leaving a routing.

11. What is Lean Manufacturing? What are its limitations?

“Lean” refers to a systematic approach to enhancing values in the working of organisation’s
inventory by identifying and eliminating wastage of the materials, efforts and time by
continuous improvement of the supply chain in pursuit of perfection. The credit for the
Lean management movement went way back in 1920 when Henry Ford first used the concept
of “continuous flow” in the assembly-line process. In the past few years, the concept has evolved
and is being applied to nearly all industries. Benefits of adopting Lean manufacturing are:
Increased use of
Reduced Stock Reduction in
Reduced Standard in Improved
Keeping Unit Cost of Good
Inventory pile Process and Collaboration
(SKU) Sold
Material

12. What is your understanding on six sigma?

Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in a
lean manufacturing process. It is supposed to be the toughest of all the principles and the most
crucial one. It states to become perfect in your field, and it can be attained by refining the
inventory management process to improve quality, efficiency, cycle time and cost.