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Executive shirts company case

Problem Statement: There are two alternative plans in order to introduce customized shirt manufacturing in the factory. In the first plan, we are looking at the option where existing line is used with addition one new machine. In the second plan we will look at the option of introducing a new line dedicated to manufacturing the customized shirts with resources drawn from main line. The main line will work with reduced resources.

Metric Definitions (& associated assumptions): 1. Bottleneck Time (Actual Cycle Time): This is the maximum cycle time in the entire process. 2. Production Capacity: Production capacity is the total manufacturing capacity of the machinery of the plant in the time the labor is normally available. 3. WIP (Work in Progress) Inventory: This includes the entire set of unfinished items on which the workers are working. 4. Manufacturing Lead Time: Time to get all the WIP shirts to a finished state so that a new order can be fully manufactured. 5. Current Running Capacity: The number of shirts that are being manufactured with current machinery and labor. 6. Direct Labor Content: Total time spent on each shirt by all labourers excluding the 4 material handlers. 7. Direct Labor Cost: Total cost of all labor that are directly

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involved in the manufacturing process (we are excluding the material handlers and supervisors).

Direct Labor Utilization: This is the proportion of time that labor available is utilized in the production process. Scenario One: Current State Of Production The bottleneck in current production scenario is the make cuffs process which is 0.5 minute per shirt (from the table 1) Since, the process takes 0.5 0minute per shirt, therefore the production capacity for 8hrs per day = (8*60)/0.5 = 960 shirts per dayBefore the early 1990s, outsourcing was not very popular because of the high costs associated with vendor interaction in terms of coordination, exchange of information and measurement of quality delivery. However, in the later part of the 90’s, the BPO market grew significantly owing to increased automation of processes, improvement in telecom infrastructure and the reduction in communication costs.

Akin to “outsourcing”, a business strategy widely adopted is “Off shoring”. Though often used interchangeably, outsourcing differs from off shoring. Outsourcing is a make-or-buy decision whereby an organization chooses to purchase an item that was earlier made in-house or a service that was earlier performed in-house. In other words, it is a practice whereby the organization transfers its functions to a third party. “Off shoring,” in contrast, represents the transfer of an organizational function to another country, regardless of whether the work stays in the corporation or not.

EXL is a leading end-to-end business process outsourcing solution provider, incorporated in April 1999 in Delaware, US, by a group of experienced professionals including Vikram Talwar and Rohit Kapoor. Vikram was then the CEO and Managing Director of Ernst & Young, and Rohit managed international investments for clients at Deutsche Bank. Overall EXL have 10 operation centres in India and U.S. It offers integrated outsourcing solutions to its clients. Indian operations of EXL commenced from October 2000.

Its head office is in New York while corporate office is in Noida. EXL’s core strengths as a domain and process led, pure-play BPO company include a seasoned management and operations team, a highly demonstrable track record of seamless process migration and consistent service delivery, positions it uniquely in the offshore BPO industry. EXL’s deep industry and process knowledge provides innovative and cost effective solutions enabling clients to achieve greater business efficiencies. EXL has approximately 50 clients and offers integrated outsourcing solutions. EXL has successfully migrated more than 225 processes covering a broad array of products and services to our operations centers.

Main Businesses ExlService Holdings, Inc. (NASDAQ: EXLS) is a recognized business solutions provider. EXL’s offerings provide a competitive edge to its clients by transforming and outsourcing business processes. Transformation services enable continuous improvement of client processes by bringing together EXL’s capabilities in reengineering including Six Sigma process improvement, research & analytics, and risk advisory services. EXL’s outsourcing services include a full spectrum of business process services from offshore delivery centers requiring ongoing process management skills. Headquartered in New York, EXL primarily serves the needs of Global 1000 companies. Offerings of EXL are aligned to sector-focused services and specialized cross sector capabilities. These services include:

Business process outsourcing services are structured around industry-focused solutions – insurance, banking and financial services. They also offer solutions to other sectors with similar needs – like utilities, healthcare and media, by leveraging our operational expertise. Its cross-industry BPO solutions include finance and accounting services, collections, transaction processing, exception processing, and customer service.

Research and Analytics services facilitate effective, data-based strategic and operating decisions by their clients using statistical and quantitative analytical techniques. The recent acquisition of Inductis (a provider of consulting and analytics Services), has brought in synergies by expanding the types and sophistication of their research and analytics services and hence has developed a world-class analytical outsourcing service offering. The service lines include analytical consulting, management consulting and analytical services.

Risk Advisory services provide a spectrum of solutions, which enable companies to independently identify, prioritize and manage business process risks. It provides focused solutions for compliance, internal audit, accounting and financial reporting and information technology risk management. Process Consulting services include on-shore and offshore process consulting for improving / re-engineering processes as well as executing Six Sigma projects towards process improvement and enhancement. EXL has developed MOST, a unique methodology for identifying process optimization and BPO opportunities, migrating those processes and developing appropriate BPO services that we can customize to meet our clients’ requirements.

Areas of specialization The key strength of the company lies in its expertise in the banking and financial segment. Another key strength of the company lies in the extent of its process capabilities. It delivers over 70 processes, which includes back office and transaction processing as well as phone and Web-based customer contact services. Some of the areas of specialization of EXL include tax processing, claims processing, billing services, accounting transactions, general accounting, credit/debit card services, benefits and administration, tax consulting, compliance and other financial activities. In addition, it also provides payroll and other HR services, telesales/telemarketing, customer care, Web sales and marketing.

Sources of advantages Domain Focused BPO Specialist: EXL is a proven and trusted service provider to several focus industry segments including banking, financial services, insurance, utilities, media, and healthcare. They have a distinction of having migrated from single or discrete transaction processes to end-to-end functional solutions across industry segments. Also, their leadership team has extensive experience in the financial services sector, providing unmatched understanding and insights into the business.

People: Their operations centers are currently located throughout India. This enables them to leverage India’s highly skilled, English speaking, professionally qualified talent pool. EXL hires only the best and the brightest professionals. Their investment in employee recruitment, training and retention provides them the ability to rapidly increase the scale of operations to respond to the needs of their clients.

Real and Sustained Process Improvements: Process Excellence is given the greatest importance to ensure true and continuous value to the clients. The Process Excellence program at EXL is driven by Six Sigma methodology for reducing defects in business operations and Kaizen initiatives, which stress continuous incremental improvements in each stage of a business process. ‘No Surprises’ Migrations: Their process migration expertise has enabled EXL to successfully transfer more than 225 processes. It combines industry knowledge, process and project management techniques and a consultative approach to meet the client’s specific needs, Deployment of Design for Six Sigma (DFSS) methodology for minimizing outsourcing risks, ensuring smooth migration of client’s business processes.

Infrastructure: EXL’s facilities spread across India, US and Singapore have been built to provide a superior working environment for attracting and retaining the best talent and providing world-class service to customers. Currently, EXL has 4,871 workstations on a single shift basis across operations centers in India. These centers have been built to international standards with the latest operations and technology infrastructure.

Information Security: EXL’s information security framework addresses compliance requirements and protection of their clients’ and their customers’ information. Their information security policies comply with international standards, including British Standards 7799, for optimal management of various aspects of information security, including personnel, physical, systems and facility security.

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