Issue 22 June 2012

Sigma An Initiative of Lean Operations and Systems Club-Oasys

W CHAN KIM

World-renowned expert on innovation and business strategy—creating

all-new market space. Go to Page 1

Stay Updated

Page 9

Half a Billion Litres' Of Petrol Could Be Saved Globally

Could Water be a More Efficient Lubricant?

Bridgestone Hope New Airless Tyre Doesn't Fall Flat

Vol 3

Christ University Institute of Management

Should all Companies go for ISO 9000?

We live in the Era of Quality, Quality as a whole

is a broad term put in fine shell for the organiza-

tion to keep the values that drive the profitability

and growth of the firm. Micro, small and medi-

um-sized enterprises (SMEs) are socially and

economically important, they represent 99 % of

all enterprises in the country and provide around

65 million jobs. Besides that, they are an essen-

tial for entrepreneurial spirit and innovation.

Page 5

JUNE 2012

ISSUE 22

Sigma

Page 10

Inside this issue:

Computerized

Maintenance

Management

System

3

News 8 Know Your

Indian

Comapnay

6

IIP 2

Impact of Depreciating Rupee on Indian Manufacturing Industry

An initiative of Lean Operations and Systems Club- Oasys

CROSS

W

R

D

W. Chan Kim is one of the world’s leading authorities on business strat-

egy, innovation and managing the multinational corporation in the

knowledge economy. Chan Kim is Co-Founder and Co-Director of the

INSEAD Blue Ocean Strategy Institute and The BCG Chair Professor

of Strategy and International Management at INSEAD, France.

Chan’s book, Blue Ocean Strategy: How to Create Uncontested Market

Space and Make the Competition Irrelevant (Renee Mauborgne, co-

author), is an international bestseller. Blue Ocean Strategy sold over

one million copies in its first year and is currently being published in 41

languages, breaking Harvard Business Press’s historical record of most

foreign language translations ever achieved.

In his words regarding the Blue Ocean Strategy, “Competing in over-

crowded industries is no way to sustain high performance. The real op-

portunity is to create a blue ocean of uncontested market space”.

What is a “blue ocean strategy”?

A systematic approach to breaking out of head-to-head competition

Blue Ocean Strategy argues that tomorrow’s leading companies will

succeed not by battling competitors, but by creating "blue oceans" of

uncontested market space ripe for growth. Such strategic moves—

termed "value innovation"—create powerful leaps in value for the firm

and its buyers, rendering rivals obsolete and unleashing new demand.

Some of his credentials include::

Selected as among the top ten most influential business thinkers in

the world

Author of five worldwide best-selling Harvard Business Re-

view articles, two of which were selected as among the best classic

articles ever published by HBR

Winner of the Eldridge Haynes Prize for best original paper in inter-

national business

Recognized as one of the world’s most influential academics in

global strategy by The Journal of International Management

of the Month Bhanu Prakash Sriram, 4 MBA M

1

W. CHAN KIM

2

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of April

2012 stand at 124.4, 176.2 and 152.7 respectively, with the corresponding growth rates of (-)3.1%,0.1% and

4.6% as compared to April 2011. The cumulative growth in the three sectors during April-March, 2011-12 over

the corresponding period of 2010-11 has been (-)1.9%, 3.0% and 8.2% respectively, which moved the overall

growth in the General Index to 2.8%.

Index of Industrial Production Nikhil Skariah, 4MBAJ

Sector April'11 April'12

Mining 9.2 1.6

Manufacturing 14.4 5.7

Electricity 6.5 6.5

General 13.1 5.3

Sector April'11 April'12

Basic Goods 6.7 7.1

Capital Goods 35.5 6.6

Intermediaries 11.9 3.9

Consumer

Durables 23.3 1.6

3

Computerized Maintenance Management System

I n the world of plant operations, CMMS normally stands for ‘Computerized Maintenance Management Soft-

ware’. Those letters, however, could also be the acronym for ‘Cutting More Maintenance Spending’ because

CMMS does, in fact, reduce maintenance costs. The connection between lowering maintenance costs and enhanc-

ing profitability could not be simpler:

Reducing downtime = Increasing uptime Increasing uptime = Greater productivity

Greater productivity = Increased profits

There are five basic benefits that an organization can gain using CMMS:

1. Preventing Equipment Failures: By using CMMS one can identify, in advance, the equipment that needs

parts replaced more frequently, and setting up a preventive maintenance schedule, repairs can be made before

the machine malfunctions.

2. Streamlining Repair Communications: With CMMS, automating the repair process can replace the hand-

written notes that are easily misplaced/difficult to read, the avalanche of redundant e-mails that have to be re-

typed into CMMS, or the constant interruptions managers get from radio calls or hallway encounters with

staffers checking on the status of repairs.

3. Stretching Assets’ Life: CMMS gives managers an edge when they need to make strategic decisions about

capital expenditures and equipment replacement. This technology makes it easier to assess key performance

indicators and develop a more robust, multidimensional view of equipment costs. CMMS makes it possible to

shift through asset maintenance history and grade machines to better inform budget and operational decisions,

helping to intelligently stretch the life of the assets.

4. Regulatory Compliance: Managers use CMMS to automate the process of defining, scheduling, and imple-

menting preventive maintenance and work order tasks and schedules to comply with safety and environmental

regulations as well as equipment insurance policies. The automated PM system of a CMMS system can accu-

rately and easily search historical work orders and related data of an asset and generate a report that will satis-

fy regulatory agencies.

5. Just-In-Time Parts Inventory: CMMS allows manufacturing plants to keep lower stocks of spare parts by

giving an accurate count and setting “just-in-time” reorder points to match up with maintenance demands.

This is especially helpful with expensive parts (and those with long-lead times) that need to be stocked at eve-

ry facility within a company.

CMMS does far more than make sure broken machines get fixed. It increases capacity for an organization, as if

the company was adding new equipment. Essentially by reducing downtime, it can shift the view of upper man-

agement that maintenance is a profit center—not a cost center.

SIDDHARTHA J, 4MBA I

‘Tough Economic Time’ is what we are experiencing today. There is a call for the need to reduce ‘Maintenance

Resources’. This includes people, planning and technology. A strategic approach to cutting down costs is re-

quired if it is the maintenance area that needs to be managed.

4

Debapriya Dey, 4MBA I

Impact of Depreciating Rupee on Indian Manufacturing Industry

D epreciating rupee is a major cause of worry for the Indian

economy. Rupee hit a record low when it plummeted to 56.52

against the dollar. Its impact has been felt in all industries but

more so the Indian manufacturing industry.

The impact of depreciating rupee has been three fold for the

manufacturing industry with

1. Higher import costs of components and parts for the Indian

manufacturing industry

2. Higher inflation causing rise in prices of crude oil, coal and

other industrial raw materials

3. Rise in the cost of borrowing from foreign markets is deter-

ring the players from raising capital from abroad.

It is evident that these factors have hit the manufacturing industry hard. Auto companies like General Motors

India and Toyota Kirloskar Motors are revising their prices according to the fluctuating rupee to meet their

cost as a lot of their parts and components are imported. The Indian mobile handset industry is also reeling

under the impact with major players like Samsung, Blackberry increasing their handset prices especially the

high end models. With most of their imports from China and the Chinese currency strengthening the increase

in prices was necessary to sustain. Nokia on the other hand is by far cushioned from the impact as it has a

substantial local manufacturing capacity which gives it the advantage to cut down on its imports. Companies

like JK Tyres are also mulling an increase in price because of high import costs of rubber. Other major indus-

tries affected by the rupee depreciation include the fertilizer industry which imports more than 50% of its

raw materials, the power industry which is reeling under the impact of rising coal and petroleum prices and

ferrous metal and allied industry hit substantially by the rise in coking coal and iron ore prices.

But is the story all negative, well mostly but some industries still stand to gain from depreciating rupee. The

major gainers being the pharmaceutical and textile industry. These industries are net exporters and stand to

gain significantly from the current situation. Pharmaceutical industry’s higher export realisation has been en-

hanced by the depreciating rupee. With the easing of cotton and cotton yarn prices and their huge export po-

tential the textile industry is all set to grow. Another industry set to gain is the Indian gems and jewellery

which is a major exporter around the world.

In short it can be said that all the industries that are importing are facing the heat and those exporting are rid-

ing the wave. It may also be noted that local manufacturing has a definite edge in this situation and compa-

nies need to be more self sufficient in order to survive.

What the future holds is not definite but the present picture is definitely a bleak one and if major upheavals

and policy changes are not made soon by the government the damage can be long lasting.

5

Shrinidhi Joshi, 4MBA I

Should all Companies go for ISO 9000: QMS Certification?

ISO stands for International organization for standardization. Standardization of business management

practices through international management system standards has accelerated tremendously in the last

decade. This boom was largely created by the publication of standards in different areas of a company’s

operations, including quality, environment, safety, information security, supply chain security and social

responsibility.

ISO 9000: Quality Managemernt System (QMS) is one of the certification which most of the companies are

going forward to imbibe a sense of Quality culture in the organization be it the large organization or Small

and Medium Scaled Enterprise(SME’s) every company wants itself certified, The reasons being many and

the benefits perceived also if implemented appropriately.

We live in the Era of Quality, Quality as a whole is a broad term put in fine shell for the organization to keep

the values that drive the profitability and growth of the firm. Micro, small and medium-sized enterprises

(SMEs) are socially and economically important, they represent 99 % of all enterprises in the country and

provide around 65 million jobs. Besides that, they are an essential for entrepreneurial spirit and innovation.

Due to immense pressure from customers and the competitors SME are most of the times forced to imple-

ment such standards just to sustain themselves in this competitive market. The purpose of certification should

not only be a promotional tool but also as way of looking it from the continual improvement in the produc-

tion and systemization of the process.

Most of the times in the small and medium enterprises there are no fixed rules and regulations set for the em-

ployees to follow. There are no benchmarking standards with which the level of product could be compared

hence certain ground rules have to be laid out so that they are followed extensively not only in the firm or in

the domestic market but also accepted globally.

The implementation procedure of ISO has its benefits in the form of

Standardization of operations

Increasing Customer Satisfaction

As a promotional Tool

Increased Sales

Reduction in costs and many more.

The challenges are many but when weighed with the benefits obtained by the implementation of Quality

management system it overshadows and gives a totally different dimension on how operations can be

handled effectively and efficiently for better results.

6

L L R Sai Kiran, 4MBA J

Know Your Indian Comapnay : Dr. Reddy’s Laboratories Ltd.

D r. Reddy's Laboratories Ltd is an integrated pharmaceutical company focused on providing medicines

through its three business segments: Global Generics segment, Pharmaceutical Services and Active Ingredients

(PSAI) segment and Proprietary Products segment. The company was founded by Dr. Anji Reddy, who had pre-

viously worked in the publicly owned Indian Drugs and Pharmaceuticals Limited, of Hyderabad, India. Dr. Red-

dy's manufactures and markets a wide range of pharmaceuticals in India and overseas. The company has over

190 medications, 60 active pharmaceutical ingredients (APIs) for drug manufacture, diagnostic kits, critical care,

and biotechnology products.

Dr. Reddy's began as a supplier to Indian drug manufacturers, but it soon started exporting to other less-

regulated markets that had the advantage of not having to spend time and money on a manufacturing plant that

would gain approval from a drug licensing body such as the U.S. Food and Drug Administration (FDA). By

the early 1990s, the expanded scale and profitability from these unregulated markets enabled the company to

begin focusing on getting approval from drug regulators for their formulations and bulk drug manufacturing

plants in more-developed economies. This allowed their movement into regulated markets such as

the US and Europe.

By 2007, Dr, Reddy’s had six FDA plants producing active pharmaceutical ingredients in India and seven FDA-

inspected and ISO 9001 (quality) and ISO 14001 (environmental management) certified plants making patient-

ready medications – five of them in India and two in the UK.

Technology Used at Dr.Reddy’s Laboratories:

The Power Management System (PMS) is a Supervisory Control and Data Acquisition System (SCADA) based

live monitoring system. This system employs the supervisory control techniques to control the equipment and

the power flow to the feeder lines.

The power supply to the load centre can be controlled with the help of a computer that runs on application

SCADA software. It is connected through Ethernet switch which is connected and controlled through MOD bus

controller. Here all the switchgear is operated on automatic mode during load shedding. Also the power supply

on the grid can be completely shifted onto the stand-by power supply. The software is designed in such a way

that parameters like active power, frequency, load voltage and power factor are set at the appropriate values and

7

these values can be varied as per requirement just by resetting the desired values in the computer itself.

The processes like Synchronization of generators, Indication of faults in the power system, Load sharing, Load

shedding are the additional features which this SCADA software provides. PMS is highly reliable and efficient as

is tested and successfully employed in many reputed industries especially pharmaceutical industries and pro-

cessing industries as effective power management is necessary for their economic upliftment in the world market.

PMS provides full-fledged live monitoring of load power from the control room which is a unique feature of this

system and it is being tested in Dr.Reddy’s laboratories successfully and this proves to be a highly reliable system.

Benefits of Power Management System:

I. The basic live monitored parameters Active Power (KW/KVAR), Frequency, Voltage, Power factor are updat-

ed every second. There are around 4 DG’s (Diesel Generators) in the plant and all the 4 system parameters can

be monitored by single personnel. This reduces the number of personnel who were employed for regular moni-

toring of the system parameters.

II. Load shedding report is generated automatically which can be used to document the list of breakdowns over

any time earlier and is even helpful to analyse the root cause of the fault and prevent it.

III. The Power distribution to the entire plant is done in an efficient manner using this system.

NEWS

A company in Canada has manufactured a device that

could solve a problem most people didn't even realise

existed

If you have ever owned a car, the chances are you will

have experienced this: you’ve finished filling your

vehicle with petrol, and pull the nozzle out from your

car to see a few drops of petrol drip off the end and on

the to the garage forecourt. You make sure it doesn’t

land on your shoes; you put the nozzle back in its

holder and don’t give it another thought.

It has been calculated though, that these few drops

across every fill-up in every country in the world

amounts to half a billion litres of fuel being lost into

the atmosphere each year. This is a problem which

Dram International, a company from Ontario, Canada

have managed to solve, but are still awaiting investors

in order to get their device into production.

The nozzle looks like a fairly ordinary metal

contraption but its design allows the pressure and

tension functionality to withhold any droplets not

implemented into the car, rather than them falling out

on to the ground. The 'fuel nozzle drip retainer' could

be innovative on a global scale.

Half A Billion Litres' Of Petrol Could Be Saved Globally

Ch.Narendra Kumar , 4MBA J

8

A team of German researchers may have finally solved

industry's need for an alternative to mineral oil lubricants

with a water-based solution which is more efficient and

poses less harm to workers, equipment and the environ-

ment.

Lubricants are used across many industries throughout

the world, predominantly to cool tools and parts from

overheating and breaking by reducing friction and carry-

ing away debris. Researchers from the Fraunhofer Insti-

tute for Process Engineering and Packaging IVV, in the German town of Freising, have carried out two tests

where lubricating oils were replaced with water.

To enable the water to act as a sufficient lubricant, additives were added to better simulate the performance of

oil. The additive is a biopolymer, a product where everyone can buy wherever they want. The name of the exact

biopolymer employed by the researchers is not known, but what is known is that it acts as a thickening agent.

The standard viscosity of water is 1mPa, but the addition of the agent raises it to 40mPa, similar to that of oil.

The water-based lubricant having a much lower environmental impact, components and machines which use the

lubricant are easier to clean, health and safety concerns are eliminated.

Could Water be a More Efficient Lubricant?

9

After three years of research and development,

Bridgestone has finally designed a workable

concept for an airless tyre capable of being

manufactured on a mass scale.

Bridgestone’s ‘Non-Pneumatic Concept Tyre’ is

structured around a unique central spoke system

made from reusable thermoplastic resin,

surrounded by a rubber tread, also recyclable. By

stretching the spokes along the inside of the tyre,

a vehicles weight can be comfortably supported,

and by removing the need for air, tyres no longer

need to be periodically refilled, helping to reduce

maintenance times. Although heavier than a conventional tyre, the non-pneumatic version wouldn’t be

susceptible to a puncture, or a potentially life-threatening blowout.

A number of final modifications and considerations to be made, such as investing in the manufacturing

infrastructure to enable mass-production, solving how the tyre will resist foreign objects becoming lodged

between the spokes and a greater investigation into how the tyre will function at high-speeds.

Bridgestone Hope New Airless Tyre Doesn't Fall Flat

Canon Looks to Fully-Automate Camera Production

One of the world's largest manufacturers of imaging and optical products, Canon, has announced that it is mov-

ing towards replacing every worker on its digital camera assembly lines with robots. Headquartered in Tokyo,

Japan, Canon Inc. has set itself the ambitious task of making the production of digital camera completely ma-

chine automated by 2015, without resulting in job losses.

Canon’s announcement sums up the changes sweeping Japanese manufacturers currently as they seek to be-

come more efficient and productive in the face of recent challenges, such as the soaring yen, with many moving

production overseas.

Canon believe that fully-automated production processes will help keep domestic manufacturing in Japan, and

are looking to take inspiration from other home-grown companies like Toyota.

Canon plan to start plant upgrades with its sites in Japan, but if successful, the company will no doubt replicate

the process to its three overseas facilities. If Canon manages to achieve its goal, it will become the world’s first

maker of cameras to replace all of its workers in favour of robots.

10

CROSS

W

R

D

Nikhil Skariah, 3MBA J

11

Solution to Cross Word

Answer to

Crossword:

FOR INTERNAL CIRCULATION ONLY

Designing: Piyush Vallecha

Editors:

Ch. Narendra Kumar

Nikhil Skariah

Bhanu Prakash

Siddhartha J

L L R Sai Kiran

Piyush Vallecha

Shrinidhi Joshi

12

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