Operation Management ASSIGNMENT 02

ASSIGNMENT 02
OPERATION MANAGEMENT
Name- Saumya Jaiswal

Course – MBA-IB
Question 1 What is your assessment of the problem that VTL is currently

facing? Will efforts to reduce lead time help VTL improve its competitive
position?
Answer 1. The major problem that VTL is suffering from is the high lead
time and high material movement (transportation between subunits) that
causes delay. This is further compounded by the fact that they need to
produce high quantities of the product owing to greater demand. The higher
lead time increases the work in process inventory which is not a good sign
for the company’s operation. The distances between assembly units can be
reduced so as to bring all the units nearby to the main plant.
The reduction of lead time would definitely help VTL to improve its
competitive position. The reduction of lead time will lead to consequent
reduction in Work-in-progress inventory given the constant cycle time. As
the work- in-progress decreases, the associated working capital can also
be curtailed. Moreover the company can ensure effective floor space
utilization and handling problems would also be resolved. Other imminent
problems that arise as a result of huge WIP such as quality problems,
reduced flexibility etc. can also be done away with. Reducing lead time will
make a significant impact on Vasudhri Tooling Ltd.
Question 2 Based on the data available, list the major causes for long lead
time at VTL
Answer 2. The major causes for the long lead time can be attributed to the
fact that unnecessary time is consumed for the high material movement
and multiple inspection process in the same path along others. Soldering
sub assembly, riveting, cable sub assembly and bonding are the stages
that require greater time for completion of which the Soldering sub
assembly is the bottleneck activity.
Question 3. What should VTL do further in their efforts to reduce lead

time? Identify three major areas that require attention for reduction of lead
time. Do you have any suggestions to provide?
Answer 3. The three areas that need to be improved upon are:
1. Inspection points and Storage activity: The inspection points in the

wiring harness and PCB sub-assemblies of the wiring harness can be
reduced as it involves unnecessary increase in the manufacturing
time. Considering the case of wiring harness, the inspection stage
after linishing process can be retained and the inspection stage and
operation after cable sub-assembly and soldering sub-assembly can
be done away with. Therefore the stores (after) associated with the
inspection processes in these areas will also not be there. This would
help in reduction the non-value added lead times. Reduction in lead
times will reduce the work in process inventory thereby reducing the
working capital and the lead time. Even in the case of PCB sub-
assemblies, the inspection stage and stores associated after riveting
and bonding operations can be removed while retaining the
inspection operation after linishing.
2. Material delivery from other units: The material delivery from other
units in the process of combination switches can also be reduced.
This would require maintaining sufficient work in-process at the stores
for next operation i.e. material preparation, and ensuring timely
supply of material to the stores so as to maintain a constant
inventory. Further parallel lines of material supply can be set up so as
to reduce the time consumed for the materials supplied by other
departments to reach the stores. Elimination of the high material
movement would require the just in time concept to be adopted.
3. Activities clubbed into various different stations: The activities in the

different stages can be clubbed into one station so as to have similar
cycle times, thereby reducing work in process inventory and also
ensuring lower time used in movement of inventory. Multiple people
can also be employed at workstations that would require greater
processing time. Clubbing the stations could also help in reducing the
effort of labor in moving here and there.
Reducing bottleneck activity time and Automation of processes:
One of the main solutions is to device efficient method to reduce bottleneck time.
Automation of the entire process would also be a possible alternative which could
greatly improve the productivity. Another approach can be to reduce the batch
sizes, which will reduce the average Work-in-Process (WIP), which results in lesser
bottle-neck times as compared to the present unreasonable times of more than
24 hours. It would reduce the lead time to a great extent if implemented in to
reduce the lead time.
Revised process flow diagram for final assembly:
30min 4 hours 1 hour 1 hour 10 hours
Stores Material Assembly Assembly Production

Preparation Stores
Manufacturing lead time of 600 combination switches = 33.5 hours
Material from
other units Dispatch Packing Inspection
8 hours 2 hours 4 hours 2 hours
30 minutes 3 hours 11 hours 1 hour 15 minutes
Stores Material Cable Inspection Stores

Preparation sub-assembly
Manufacturing lead time for 600 sets of wiring harness = 47.25 hours
Stores Inspection Linishing Soldering Material

sub-assembly Launch
30 minutes 30 minutes 2 hours 1.5 hours
24 hours
30 minutes 1 hour 15 hours 30 minutes 10 hours
Stores Material Riveting Inspection Bonding

Preparation
Manufacturing lead time for 600 sets of PCB sub-assemblies for wiring harness = 31.25 hours
Stores Inspection Linishing
15minutes 30 minutes 30 minutes

Revised Observed lead time and value/non-value added activity times are:
Non- Value added to

Observed Value-
Activity value Other(delay) lead
Lead Time added
added time(percentage)
Final
33.5 8.50 1.50 23.50 25.37%
Assembly
Wiring
harness 47.25 16.00 7.25 24 33.86
assembly
Wiring
harness sub- 31.25 10.40 15.10 6.00 33.28
assembly
Material
6.00 0.75 4.25 1.00 12.50
movement

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ASSIGNMENT 02

Name- Saumya Jaiswal

Question 1 What is your assessment of the problem that VTL is currently

Question 3. What should VTL do further in their efforts to reduce lead

Answer 3. The three areas that need to be improved upon are:

1. Inspection points and Storage activity: The inspection points in the

3. Activities clubbed into various different stations: The activities in the

Reducing bottleneck activity time and Automation of processes:

30min 4 hours 1 hour 1 hour 10 hours

Stores Material Assembly Assembly Production

Manufacturing lead time of 600 combination switches = 33.5 hours

8 hours 2 hours 4 hours 2 hours

30 minutes 3 hours 11 hours 1 hour 15 minutes

Stores Material Cable Inspection Stores

Stores Inspection Linishing Soldering Material

Stores Material Riveting Inspection Bonding

Stores Inspection Linishing

15minutes 30 minutes 30 minutes

Non- Value added to

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