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The IUP Journal of Operations Management
Focus

This issue contains three papers and a case study on varied topics like lean manufacturing, Six Sigma, sourcing and business process management. The first paper, “Scrap Reduction in a Piston Manufacturing Industry: An Analysis Using Six Sigma and DMAIC Methodology”, by Dhiraj Kumar and Deepak Kaushish, presents an empirical application of Six Sigma and DMAIC to reduce product scrap for a piston manufacturing organization. The paper follows the DMAIC methodology to investigate defects and root causes, and provide a solution to reduce/eliminate these defects. The analysis employing Six Sigma and DMAIC indicated that the design of casting spoon and its material influenced the amount of defective piston produced. In particular, the why-why analysis and two sample t-Test were combined to statistically determine the correlation of the casting spoon design and its material with defects as well as to define their optimum values needed to reduce/eliminate the defects. As a result, a reduction of scrap percentage from 9.9% to 5% was achieved, which helped the organization to reduce its Defects Per Million Opportunities (DPMO) from 99,000 to 50,000 and thus improve its Sigma level from 2.86 to 3.2.

The second paper, “Implementation of Lean Manufacturing in a Small-Scale Industry”, by Pardeep Kumar and Sanjay Kajal, uses 5S tool for analysis in the rice mill industry situated in Kurukshetra, Haryana. The researchers calculated 5S weekly appraisal scores using 5S audit sheets.

The third paper, “The Functional Integration of Operations Management in Banks: A Framework for Research”, by Thomas Ilin, presents a general review, discussion and empirical analysis of relevant academic literature on cross-functional integration from the Service Operations Management (SOM) and Service Management (SM) domains, together with a proposed framework for use in further research. Empirical analysis of literature themes by industry, content analysis of key papers exploring their usage of the term ‘function’, and critical analysis of the literature from a new 'functionalist' perspective are given.

The case study, “Apple and Conflict Minerals: Ethical Sourcing for Sustainability”, by Debapratim Purkayastha and Adapa Srinivasa Rao, speaks of sustainability issues of Apple’s sourcing from Asia. Since the Asian manufacturers were not too particular about checking the origins of the minerals they used, Apple had to face accusations by activists that it was using conflict minerals in its products. These conflict minerals led to the abuse of human rights in the strife-torn parts of the world. Extraction and sale of conflict minerals like tin, tungsten, and tantalum from illegal mines in the Democratic Republic of Congo (Congo) and surrounding countries funded armed militia who fought against the government and violated the human rights of people living in the conflict-prone areas. The problem for Apple was compounded by the fact that the supply chain for such minerals was opaque and it was not so easy to determine which refiners and smelters around the world were financially fueling violence in the war-torn regions. There was also the possibility that such minerals could slip into its supply chain through indirect routes. The study deals with various issues before the management that need serious thought.

-- Anupam Ghosh
Consulting Editor

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Automated Teller Machines (ATMs): The Changing Face of Banking in India

Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.

The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario

If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.

Indian Scenario

The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.

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Operations Management