Final Exam-2021

on
Fundamentals of Industrial Management
ITM4100

Student Name: - K M Shakhaouad Hossain

Student Number: - 251154
 Answer to the Question 1

a) A business idea is that need in the market, we wish to satisfy and in what way. It’s a first
steps of entrepreneurship. A good business idea should describe how innovative, unique,
problem solving, profitable, and understandable product or service they are offering to
the market.
A good business idea not only facilitates entrepreneurs focus on the specific steps
necessary for them to make business ideas succeed, but it also helps them to achieve
short-term and long-term objectives. If idea can't turn a profit, then either need to pick
another idea or find out why it won't be profitable and take steps to make money it.

b) Profit is the difference between income and expenses. It is an absolute number

determined by the amount of income or revenue above and beyond the costs or expenses
a company earns.
Profitability has to do with how profitable operations have been like how the capital
invested in the company has been rewarded or “returned”. It is the metric used to
determine the scope of a company's profit in relation to the size of the business.
Profitability is a measurement of efficiency and ultimately its success or failure.

One can find profit by looking business income statement where profitably will
determine the business is a success or failure.

c) A strategy is something that will contribute to the objectives met or achieved. Most
often, the strategy relies on an assessment of where we are today, where we want to be,
and how the conditions to achieve it looks. There are often several different strategies to
choose from for how to achieve something. For resource reasons, most companies
choose one strategy that they think is best suited to their circumstances. The actual
strategy is the description of how to meet the goals, which is later described in an action
plan.
Some key conditions which should be mapped in both externally and internally to
identify the situation where we are like-
• Access situation – refine focus
• Develop alternative – agree to alternative
• Evaluate and decide among alternatives
• Describe and agree on strategy
There are many different methods to analyze a company's current situation in both external –
internal which are like as below:
• PESTEL
• Porter’s Five Forces Model (competitive rivalry)
• Porters generic strategies External
• BCG modeling (Boston Consulting Group)
• Porters value chain
• Ansoffs matrix
• McKinsey’s 7-S framework
 • Scenarios
• VRIO / Resources Internal
• SWOT
• Marketing mix
2 methods for analyzing external conditions:
PESTEL analysis: It can be summarized within 6 categories as like below-
• Political – government support, political stability
• Economic- economic growth, exchange rate
• Social- age distribution, population growth rate
• Technological- level of innovation, technological incentives, automation
• Environmental- weather, climate, climate change
• Legal- employment laws, consumer protection laws, health, and safety laws
Porter’s Five Forces Model: Porter's Five Forces is a framework for analyzing a company's
competitive environment

(lecture-ppt)
2 methods for analyzing internal conditions:
VIRO: VRIO is an short form from the initials of the names of the dimensions: Value,
Rareness, Imitability, Organization. Its an analytical technique, which for each type of resource
considers several evaluation dimensions for the organization as well as for its competitors. It’s a
resource based view to analyze competitive advantages.
SWOT: SWOT Analysis is a technique for understanding your Strengths and Weaknesses, and
for identifying both the Opportunities open to you and the Threats you face.
SWOT analysis has 2 origin, internal origin analyze – strengths and weakness and external
origin analyze – opportunities and threats.

d) "17 Sustainability Development Goals" and “CSR” similarities and differences:

CSR can be difficult to distinguish from both sponsorship and charity. In short, we can say that
charity is something you do without expecting to get something back. Charity can for example
be an event, a collection, or a transaction from the giver. Sponsorship is about expecting
something back through visualization, association, and PR effect. Social responsibility is to take
care of the entire value chain and think long term.
While SDG set tangible well defined targets to measure the outcome of activities. The
Sustainable Development Goals are the plan to get a better and more sustainable future for all.
They focus on the global challenges we realize, including poverty, inequality, climate change,
environmental degradation, peace and justice.

e) Activity based costing has emerged as a reaction to the criticism of the traditional costing
allocations. The main criticism is that those allocation methods treat too many cost as
indirect costs. Indirect costs are assigned to the cost centers often departments and then
allocated to the cost unit like in products. In most industrial companies, the bases for
overhead charges are almost always related to production volume. This means that all
indirect costs, in the allocation calculation are treated as if they vary with production
volume. Examples are costs related to plan facilities, machines, and managerial
activities.
Activity based costing (ABC) is based on a company’s activities. In ABC, one can look a
what is concealed behind the indirect costs. The activities are mapped as well as the
reason for their amount at each cost center.
 (ppt and industrial management book)

f) Innovation is not necessarily related to business development, but it has a big impact. As
per question picture, there are 4 zoned innovation area which are:

Incremental innovations involve modest adjustments to existing products and services.

These are developments that keep a business competitive, such as new product features
and service improvements. For example, Gillette constantly upgrades its razors, adding
new features, like extra blades, heated razors, and a pivoting head. Its market impact low
and technology progress also low and that’s why its an incremental innovation.

Breakthrough innovation refers to large technological advances that propel an existing

product or service ahead of competitors. This is often the result of research and
development labs, who are striving for the next patentable formula, device and
technology. Airbnb is best example for this innovation as it moved technologically
higher area keeping same market impacts like anywhere people can access Airbnb.
 Disruptive innovation is a term coined by Clayton Christensen. In his best-selling book
The Innovator’s Dilemma he shows that disruptive innovations result is worse product
performance, at least in the near-term. bring to a market a very different value
proposition than had been available previously. Apple is the perfect example for this
innovation as with the few technological advancement feature it bringing new product
where it has higher market impact.
Game-changing innovation transform markets and even society. These innovations
have a radical impact on how humans act, think and feel in some way. RFID could be the
one of the best game-changing innovation examples in supply chain as through RFID we
can track the product movement anywhere in the world.

Answer to the Question 2

a) Marketing mix is a set of actions that a company uses to promotes a product or services
aligning with the targeted market. It offers wide strategies for placing the right products
in the right place, at the right time and price. Mainly marketing mix used to find the right
combination of product, price, promotion, and distribution so that a company can gain
and maintain lead over competitors.

Differences between B2B and B2C:

Product pricing and complexity
Driving factors
Number of decision makers
Duration for decision making
Primary motivation for purchase
Typical branding methodologies
More complex and costlier
Relationships/product
features/customer support
Multiple
Longer
Strategic advantages or generate
value
Website, whitepaper, research,
professional network.
Pricing aligns with individual capacity
and less complex
Product features/brand appeal
One
Shorter
Status related, personal gratification,
economical attachment
Broadcast commercials, celebrity
endorsement.

A company can target both way B2B and B2C for its higher growth. But it has to be clear and
set idea where and when B2B and B2C will be applied after marketing mix. For marketing mix,
a company should do research and market analysis how big their buyer group will be, how
professional purchasing it will be, involvement on buying procedure, demand, personal selling,
and supplier – customer relationship. Research and analysis on these B2B and B2C
characteristic will lead a proper marketing mix.

b) Resource dependency theory: Resource dependency theory is established on the

principle that an organization or business firm must participate in transactions with other
actors and organizations in its environment to acquire resources.
Basis of the theory: (ppt)
➢ No Business is an Island
➢ No companies are self-supported regards to resources
➢ 40-70% of the value is based on purchased input factors

Consequences for companies:

➢ The success of creating value for one company depends on other companies
➢ One company has not total control of all the critical resources
➢ The dependence makes the operations risky and vulnerable
➢ Improving the control by establishing long business relationship
➢ Find other alternatives to reduce the risk

Answer to the Question 3

1. Triple Constraint: The triple constraint of project management describes the
interdependency between the three cornerstones of a project:

• Scope: all the work we must do to create the clearly specified product
• Schedule: the time we need to create that product
• Budget: the total amount of money we need to create that product.

Applying common sense, it seems obvious that changing one of the three cornerstones
implies a change of the other two. The challenge of every project is to make it work and be
successful within the Triple Constraint; the Triple Constraint being quality-scope, cost-
resources or budget and schedule-time. The triple constraint offers a company sense of the
variables involved in a structure of project and how they can be changed throughout the
lifetime of a project. When projects are running over time then the project manager might
have to change the scope or the budget.

2. Scope creep: Scope creep can be a project manager’s worst nightmare, causing
exceeding budgets, delays, and even project failure.
The definition of scope creep is when a project’s scope changes, the project work starts
to extend, or “creep”, beyond what was originally agreed. With just about any project,
change is inevitable, but it’s the uncontrolled changes that delay projects and cause scope
creep. Requested changes that are documented and implemented as part of the updated
scope of a project are controlled. The problem comes with any unauthorized changes
which can affect productivity, deliverables not being achieved, budgets being exceeded.
The completed project can potentially look very different from what was originally
envisioned.
How to avoid scope creep:
- An effective change control process with change request documentation that
defines the cause and scope.
- Regularly update the project’s scope statement when change requests get
approved. Keep all relevant project parties aware and up-to-date.
- Efficiently process, document, and communicate any scope changes, as well as
timelines.
- Collaborate with project and team leaders, sponsors, clients, stakeholders, and
end users.

3. WBS- Simply WBS is a hierarchical depiction of all tasks (work packages) that must be
done to complete a project. It independently put together scope, cost and schedule
baselines ensuring that project plans are in alignment. The Project Management Institute
(PMI) Project Management Book of Knowledge (PMBOK) defines the Work
Breakdown Structure as a “deliverable oriented hierarchical decomposition of the work
to be executed by the project team.”
 Project managers can plan his project work more efficiently. A project is distinguished
by time-limited activities and is assigned fixed time frames and costs. WBS helps project
manager by-

• Creating considerable and Separate tasks

• Assigning costs to each task
• Track progress in a schedule
• Define the scope of the project
• Ful allocation of responsibility for the tasks to fill meant purposes
• Moreover, it can be used to recognize possible scope of risks if it has a part that is not
well defined.

4. Project Success characterize – as of project manager, if a project is done within set time
frame and cost ensuring quality then it’s a successful project. Every project manager
wants to be successful, yet there are many definitions of “success.” There are many
things a project manager can do now including: second guessing; decreasing overtime;
seeing the big picture; getting buy-in; knowing that you do not know everything;
building an informal network; and asking questions to make a project tactically
successful. But for overall project success, it depends on how tactical performance and
strategic performance reflecting from the project. A tactically successful project can be a
failure if it does not put positive community effect even vice versa.

Three most common reasons of project failure and solution to avoid failure:

1) Lack of a clearly designated project leader: There is nothing more important to project
success than the project leader. The project leader must clearly articulate the project’s
goals, facilitate the development of the project plan with clearly designated tasks,
milestones, and accountabilities.
To overcome this situation and for project success – group can change their project
leader and assign new project leader.
2) Lack of Clear Expectations and Goals: Project progress was largely at a standstill until
the project objectives and metrics were clarified.
Great team building along with project clarification with aim and goal should be clearly
communicated.
 3) Communication Challenges: It is vital to communicate, communicate, and communicate
clearly among project team and leader.
A common flatform and effective media is necessary to ensure quick and correct
communication.

(https://www.projecttimes.com/articles/top-three-causes-of-project-failure/)

Answer to the Question 4

a) A cause-effect diagram known as fishbone or Ishikawa diagram is a visual tool used to
logically organize possible causes for a specific problems or effects by realistically
displaying them in increasing detail, suggesting causal relationships among theories.
It shows the causes of an event and is often used in production and product development
to outline the different steps in a process, explain where quality control issues might
arise, and determine which resources are required at specific times.
For example, if we eat too much food and do not exercise, we increase by weight. Here
eating food without physical exercise is the “cause;” weight gaining is the “effect.”

b) Quality is multi-faceted; its individual elements differ for different operations. Five
principal approaches to defining quality, by prof David Garvin, HBS (ppt-lecture)
1. Transcendental View: Those who hold transcendental view would say, “I can’t
define it, but I know when I see it.” Advertisers are fond of promoting products in these
terms. “Where shopping is a pleasure” (supermarket), “We love to fly and it shows”
(airline), and “It means beautiful eyes” (cosmetics) are example.
2. Product-Based View: Product based definitions are different. Quality is viewed as
quantifiable and measurable characteristics or attributes. For example, durability or
reliability can be measured (e.g. mean time between failure, fit and finish), and the
engineer can design to that benchmark. Quality is determined objectively. Although this
approach has many benefits, it has limitations as well. Where quality is based on
individual taste or preference, the benchmark for measurement may be misleading.
3. User-Based View: User based definitions are based on the idea that quality is an
individual matter, and products that best satisfy their preferences (i.e., perceived quality)
are those with the highest quality. This is a rational approach but leads to two problems.
First, consumer preferences vary widely, and it is difficult to aggregate these preferences
 into products with wide appeal. This leads to the choice between a niche strategy or a
market aggregation approach which tries to identify those product attributes that meet the
needs of the largest number of consumers.
4. Manufacturing-Based View: Manufacturing-based definitions are concerned
primarily with engineering and manufacturing practices and use the universal definition
of “conformance to requirements.” Requirements, or specifications, are established
design, and any deviation implies a reduction in quality. The concept applies to services
as well as products. Excellence in quality is not necessarily in the eye of the beholder but
rather in the standards set by the organization. This approach has serious weaknesses.
The consumer’s perception of quality is equated with conformance and hence is
internally focused. Emphasis on reliability in design and manufacturing tends to address
cost reduction as the objective, and cost reduction is perceived in a limited way–invest in
design and manufacturing improvement until these incremental costs equal the costs of
non-quality such as rework or scrap.
5. Value-Based View: Value-based quality is defined in terms of costs and prices as well
as several other attributes. Thus, the consumer’s purchase decision is based on quality
(however it is defined) at the acceptable price.
(ppt-lecture)

c) Theory of Profound Knowledge: Deming's Theory of Profound Knowledge consists of

four parts to improve the quality of products or services offered by a company.
• Appreciation for a system
• Knowledge about variation
• Theory of knowledge
• Knowledge of psychology

(Ppt-lecture)
Each part of Deming’s Theory of Profound Knowledge relates to several of his 14 points.
What do each of the above four parts consist of and how does each contribute to quality
improvement efforts?
 Answer to the Question 5
a) When a company sets up a procurement strategy for different materials / components
groups, this can be based on the material / component's characteristics viewed from a
business risk or supplier delivery risk perspective. Kraljic portfolio model aims at
developing differentiated purchasing and supplier strategies through classifying
commodities based on two dimensions: delivery risk and business risk ("low" and
"high"). There are four categories in the Kraljic portfolio model: leverage items,
trategic items, noncritical items, and bottleneck items. Quality-oriented classification
system applies the thought of Kraljic Portfolio Matrix.

(ppt-lecture)

1. Leverage : best deal – higher profit impact, low delivery risk. Competitive supply market
with several capable suppliers
2. Noncritical : Efficiency – low profit market and low supply risk. Substitute product
readily available
3. Strategic : Cooperation- high profit impact and high supply risk. Changing source of
supply is difficult or costly .
4. Bottleneck : Supply continuity – low profit impact and high supply risk. Unique
specification and potential storage risk.
 b) Delivery service parameter: Delivery service is an act of providing service to its
customer. There are several delivery service parameters like as –
• Availability- it defines how easy is it to get the goods; product range,
number of shortages, stock / order item, geographic proximity.
Distribution channels, opening hours, product information.
• Lead time: Time from order setting (order) to delivery (physical receipt)
• Supply reliability: Ability to comply with promised delivery time and
quantity
• Supply security
• Delivery information etc.

These are essential part at the time delivery. Without knowing this type of parameter, its
impossible to handle product or service one place to another.

c) Load carrier: Load carriers such as containers, pallets or boxes are of immense
importance as transport and storage resources in production and logistics.
Unit load: Unit load is the material handling term for any alignment of materials that
allow it to be moved by material handling equipment as a single unit.

d)