Operations management is assuming a renewed focus with globalization, lean thinking, six sigma and increasing call for rapid response. With organizations concentrating on cost reduction, production is standardized and we are witnessing what is termed as ‘mass customization’. Efforts are on to reduce the cash conversion cycle and operations is playing a much more important role than earlier in this changing face of globalization.

A primary component to operations is ordering policy. C K Tripathy and U Mishra in their paper “An EOQ Model for Linear Deteriorating Rates with Shortage and Permissible Delay in Payment” develop a model to optimize the ordering policy of a firm. Assuming that the deteriorating rate is linear, the customer fixes a period to settle the account with the supplier, i.e., delay in payment is permissible and shortages are allowed. Thus, the customer has an interest-free period to make the payment to the supplier, but he can earn interest on his sales proceeds of that period. The authors show that for a firm, the cycle length and the ordering quantity increase with the increase in allowable delay in payment period, and the shortages decrease as payment period increases. This model can be extended to determine the optimal time period that minimizes the total inventory cost.

In response to increasing inflexible customer demands and to maintain competitive advantage, manufacturing organizations must adopt strategies to achieve cost reduction, continual quality improvement, increased customer service and on-time delivery performance. Selection of the most suitable facility location for a new organization or expansion of an existing facility is one of the most important strategic issues to fulfill all these above-mentioned objectives. Rajanikar Kumar, Vijay Manikrao Athawale, and Shankar Chakraborty, in their paper “Facility Location Selection Using the UTA Method”, observe that huge cost associated with land acquisition and facility construction makes the facility location a long-term investment decision. Selecting the proper facility location from a given set of alternatives is a difficult task, as many potential qualitative and quantitative criteria need to be considered. The researchers attempt to solve two real time facility location selection problems using the UTility Additive (UTA) method. The two examples demonstrate the computational procedure of the UTA method.

Transportation has always been a major cost component in manufacturing or service industry. Though roadways is being increasingly accepted as the most acceptable method of inland transport, shipping is the financially viable option for bulk cargo. However, shipping and research on ocean containers and their operations, particularly in the Indian scene is negligible. The paper “Ocean Container Carrier Selection Criteria and Their Perceived Importance in the Indian Environment: A Shipper-Only Study”, by Vanumamalai Kannan, S K Bose, and N G Kannan identify list of criteria Indian shippers use in their carrier selection decisions along with their perceived importance.

Indian shippers use forty eight criteria in their container carrier selection decisions and out of these, low freight is the first ranked criterion and pricing flexibility is the second ranked one. Gifts and compliments is the least important criterion in the list. The study will assist ocean container carriers in devising effective marketing strategies to attract and retain Indian shippers.

We conclude this issue with Hanuv Mann, Uma Kumar, Vinod Kumar and Inder Jit Singh Mann’s paper “Drivers of Sustainable Supply Chain Management”. The researchers identify the drivers that motivate firms to move towards creating sustainable supply chains. The paper suggests an objective-oriented taxonomy to position drivers of Supply Chain Management (SCM) in a sustainable environment.

-- Anupam Ghosh
Consulting Editor