1. Design used for denim fibre





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MCQ-> Read the  following  discussion/passage  and provide an appropriate answer for the questions that follow. Of the several features of the Toyota Production System that have been widely studied, most important is the mode of governance of the shop - floor at Toyota. Work and inter - relations between workers are highly scripted in extremely detailed ‘operating procedures’ that have to be followed rigidly, without any deviation at Toyota. Despite such rule - bound rigidity, however, Toyota does not become a ‘command - control system’. It is able to retain the character of a learning organizationIn fact, many observers characterize it as a community of scientists carrying out several small experiments simultaneously. The design of the operating procedure is the key. Every principal must find an expression in the operating procedure – that is how it has an effect in the domain of action. Workers on the shop - floor, often in teams, design the ‘operating procedure’ jointly with the supervisor through a series of hypothesis that are proposed and validated or refuted through experiments in action. The rigid and detailed ‘operating procedure’ specification throws up problems of the very minute kind; while its resolution leads to a reframing of the procedure and specifications. This inter - temporal change (or flexibility) of the specification (or operating procedure) is done at the lowest level of the organization; i.e. closest to the site of action. One implication of this arrangement is that system design can no longer be rationally optimal and standardized across the organization. It is quite common to find different work norms in contiguous assembly lines, because each might have faced a different set of problems and devised different counter - measures to tackle it. Design of the coordinating process that essentially imposes the discipline that is required in large - scale complex manufacturing systems is therefore customized to variations in man - machine context of the site of action. It evolves through numerous points of negotiation throughout the organization. It implies then that the higher levels of the hierarchy do not exercise the power of the fiat in setting work rules, for such work rules are no longer a standard set across the whole organization. It might be interesting to go through the basic Toyota philosophy that underlines its system designing practices. The notion of the ideal production system in Toyota embraces the following -‘the ability to deliver just - in - time (or on demand) a customer order in the exact specification demanded, in a batch size of one (and hence an infinite proliferation of variants, models and specifications), defect - free, without wastage of material, labour, energy or motion in a safe and (physically and emotionally) fulfilling production environment’. It did not embrace the concept of a standardized product that can be cheap by giving up variations. Preserving consumption variety was seen, in fact, as one mode of serving society. It is interesting to note that the articulation of the Toyota philosophy was made around roughly the same time that the Fordist system was establishing itself in the US automotive industry. What can be best defended as the asset which Toyota model of production leverages to give the vast range of models in a defect - free fashion?
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MCQ-> Read the passage carefully and answer the questions given at the end of each passage:Turning the business involved more than segmenting and pulling out of retail. It also meant maximizing every strength we had in order to boost our profit margins. In re-examining the direct model, we realized that inventory management was not just core strength; it could be an incredible opportunity for us, and one that had not yet been discovered by any of our competitors. In Version 1.0 the direct model, we eliminated the reseller, thereby eliminating the mark-up and the cost of maintaining a store. In Version 1.1, we went one step further to reduce inventory inefficiencies. Traditionally, a long chain of partners was involved in getting a product to the customer. Let’s say you have a factory building a PC we’ll call model #4000. The system is then sent to the distributor, which sends it to the warehouse, which sends it to the dealer, who eventually pushes it on to the consumer by advertising, “I’ve got model #4000. Come and buy it.” If the consumer says, “But I want model #8000,” the dealer replies, “Sorry, I only have model #4000.” Meanwhile, the factory keeps building model #4000s and pushing the inventory into the channel. The result is a glut of model #4000s that nobody wants. Inevitably, someone ends up with too much inventory, and you see big price corrections. The retailer can’t sell it at the suggested retail price, so the manufacturer loses money on price protection (a practice common in our industry of compensating dealers for reductions in suggested selling price). Companies with long, multi-step distribution systems will often fill their distribution channels with products in an attempt to clear out older targets. This dangerous and inefficient practice is called “channel stuffing”. Worst of all, the customer ends up paying for it by purchasing systems that are already out of date Because we were building directly to fill our customers’ orders, we didn’t have finished goods inventory devaluing on a daily basis. Because we aligned our suppliers to deliver components as we used them, we were able to minimize raw material inventory. Reductions in component costs could be passed on to our customers quickly, which made them happier and improved our competitive advantage. It also allowed us to deliver the latest technology to our customers faster than our competitors. The direct model turns conventional manufacturing inside out. Conventional manufacturing, because your plant can’t keep going. But if you don’t know what you need to build because of dramatic changes in demand, you run the risk of ending up with terrific amounts of excess and obsolete inventory. That is not the goal. The concept behind the direct model has nothing to do with stockpiling and everything to do with information. The quality of your information is inversely proportional to the amount of assets required, in this case excess inventory. With less information about customer needs, you need massive amounts of inventory. So, if you have great information – that is, you know exactly what people want and how much - you need that much less inventory. Less inventory, of course, corresponds to less inventory depreciation. In the computer industry, component prices are always falling as suppliers introduce faster chips, bigger disk drives and modems with ever-greater bandwidth. Let’s say that Dell has six days of inventory. Compare that to an indirect competitor who has twenty-five days of inventory with another thirty in their distribution channel. That’s a difference of forty-nine days, and in forty-nine days, the cost of materials will decline about 6 percent. Then there’s the threat of getting stuck with obsolete inventory if you’re caught in a transition to a next- generation product, as we were with those memory chip in 1989. As the product approaches the end of its life, the manufacturer has to worry about whether it has too much in the channel and whether a competitor will dump products, destroying profit margins for everyone. This is a perpetual problem in the computer industry, but with the direct model, we have virtually eliminated it. We know when our customers are ready to move on technologically, and we can get out of the market before its most precarious time. We don’t have to subsidize our losses by charging higher prices for other products. And ultimately, our customer wins. Optimal inventory management really starts with the design process. You want to design the product so that the entire product supply chain, as well as the manufacturing process, is oriented not just for speed but for what we call velocity. Speed means being fast in the first place. Velocity means squeezing time out of every step in the process. Inventory velocity has become a passion for us. To achieve maximum velocity, you have to design your products in a way that covers the largest part of the market with the fewest number of parts. For example, you don’t need nine different disk drives when you can serve 98 percent of the market with only four. We also learned to take into account the variability of the lost cost and high cost components. Systems were reconfigured to allow for a greater variety of low-cost parts and a limited variety of expensive parts. The goal was to decrease the number of components to manage, which increased the velocity, which decreased the risk of inventory depreciation, which increased the overall health of our business system. We were also able to reduce inventory well below the levels anyone thought possible by constantly challenging and surprising ourselves with the result. We had our internal skeptics when we first started pushing for ever-lower levels of inventory. I remember the head of our procurement group telling me that this was like “flying low to the ground 300 knots.” He was worried that we wouldn’t see the trees.In 1993, we had $2.9 billion in sales and $220 million in inventory. Four years later, we posted $12.3 billion in sales and had inventory of $33 million. We’re now down to six days of inventory and we’re starting to measure it in hours instead of days. Once you reduce your inventory while maintaining your growth rate, a significant amount of risk comes from the transition from one generation of product to the next. Without traditional stockpiles of inventory, it is critical to precisely time the discontinuance of the older product line with the ramp-up in customer demand for the newer one. Since we were introducing new products all the time, it became imperative to avoid the huge drag effect from mistakes made during transitions. E&O; – short for “excess and obsolete” - became taboo at Dell. We would debate about whether our E&O; was 30 or 50 cent per PC. Since anything less than $20 per PC is not bad, when you’re down in the cents range, you’re approaching stellar performance.Find out the TRUE statement:
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