INDIAN INSTITUTE OF MATERIALS MANAGEMENT
Post Graduate Diploma in Materials Management
PAPER No. 16(New)
Business Strategies and World Class Practices
Date :16.06.2016 Max. Marks :100
Time 2.00 p.m to 5.00 pm Duration 3 Hrs.
Instructions:
1. The question paper is in three parts
2. Part A is compulsory. Each sub question carries one mark. Total marks-32
3. In Part B answer any 3 questions out of 5. Each question carries 16 marks Total marks-48
4. Part C is a case study with sub questions and it is compulsory. Total marks-20

PART A (32 marks)
(compulsory. Each sub-question carry 1 mark)
Q. 1. Fill in the blank.
M BO emphasis on objectives that are both measurable and set by
ii) Vendor delivery performance is indicated by
iii) World class manufacture puts on top.
iv) Process value analysis is the initial building block of .
Juan's Quality Trilogy include quality planning, and
vi) Bench marking is the method of improvement business performance by learning

vii) analysis take stock of current business situation both in terms of enterprise
itself and the business environment it operates.
viii) Deming's considered two deadly sins and running a company on
visible figures only.
Q.2. State True or False
a. Quick response to customer demands is the dominant dimension of global competition.
b. Forecasting is crucial for long range survival, growth and profitability of an organization.
c. EOQ is calculated based upon supplier lead time.
d. SAP cannot provide real time information to the suppliers to act.
e. JIT Purchasing is not essential in world class manufacturing.
f. Value added manufacturing is a philosophy of competitive advantage through the development
of people.
g. Bar codes provide text information encoded which could only read be electronic readers.
h. Flexible manufacturing cannot be thought of without SPMs.
June 2016
Q.3. Expand the following
CIM CAPP CRM ASRS
RFID TMS LPG WTO
Q.4. Match A and B
PART B 48 marks
(Attempt any 3 . Each question carries 16 marks)
Q.5. What are the manufacturing challenges of Information age?
What are the characteristics of world class customers?
Q.6. Discuss Deming's approach and his fourteen points?
Explain Crosby's four absolutes of quality?
Q.7. Explain in detail the use of Barcodes?
What is Kanban Give examples.
Q.8. What is natural resource management?
Briefly describe recycling of minerals?
Q.9. Write short notes on any four
POP system.
M B O
S.NO A B
1 Waste of over
production
a. Prevent defects to eliminate inspection.
2 Waste of waiting b. Controlled usage, stop leakages and recycling.
3 Waste of water c. Study motion for economy and consistency
4 Waste of transportation d. Reduce setup times, and lead times by synchronizing
workflows.
5 Waste of processing
staff
e. Reducing set up time synchronizing quantities and timing
between processes, etc.
6 Waste of stocks f. Synchronizing work flows much as possible, balancing
uneven loads.
7 Waste of making
defective parts
g. Redesigning layouts to make transport handling unnecessary
8 Waste of motion h. Need assessment of product and processes.
AMBITE system.
Balance Score Card.
CYCLE TIME
PART C 20 marks
Q. 10. Case study Compulsory
The decision to outsource a strategic component is one of the most wrenching for any
company. However it is precisely this willingness to lose a battle in order to win the war that separates
Industry Leader from followers. Managers at Cummins were faced with just such a choice in the mid
1980. Confronted with a need to develop much more advanced piston designs to meet emission
legislation, They discovered the need to make enormous investment in order to upgrade capabilities
.The financial payback appeared dubious since Cummins could buy pistons from several suppliers. On
the other hand pistons were the very of an engine, and there was an understandable reluctance
to relinquish control of the component to a supplier.
An emotional debate raged for over three years. Should Cummins strive to rebuild its piston
capability or turn to the best world -wide sources for piston technology? To quell the debate. Senior
management commissioned a team with representatives from engineering, manufacturing and
purchasing to develop and implement an appropriate piston strategy .Engineers first identified the key
technologies and capabilities that would be required to specify, design and manufacture pistons. The
team visited the four leading piston suppliers and benchmarked the internal capabilities relative to
these suppliers.
The team discovered that Cummins's internal design and manufacturing capabilities lagged behind
those of two suppliers who were world class technologists. Moreover, these two companies were
aggressive innovators. Their scale allowed them to invest more than 20 times as much as Cummins
did in product and process research and development. In fact, both suppliers had their own machine
tool divisions and foundries and developed highly specialized machines and metallurgical process.
Cumulative volumes that were many time larger than Cummins's allowed them to ride down the
experience curve much faster.
Thus not only was Cummins's piston design and manufacturing capability low in relation to the
suppliers; but so also its relative rate of learning. In light of this disparity, it was unlikely
That Cummins had any chance of matching the capabilities of these suppliers without substantial
investments that were difficult to justify. The objective fact -finding mission confirmed that the right
decision was for Cummins to outsource pistons.
Questions:
1 What held Cummins management to take decision?
2 Why new piston could not be developed in-house in Cummins
3 why the piston was outsourced by Cummins team, narrate the salient points of complete process.