Symbiosis Centre for Management and Human Resource Development, Pune

CHAIN REACTION
Even if one element of the chain collapses, we have a domino effect everything collapses. Each piece of a
process must fit in flawlessly to ensure that the output is perfect. Chain Reaction is a clarion call to the finest
Operations minds to design the most cost effective and efficient distribution strategy. To place every element
tactically into a lucrative network and survive profitably is an art.
Gear up for some intense planning and plotting and be the one to resolve the puzzle of Chain Reaction.

XYZ BEARINGS (IN NEED FOR A SMOOTH ROLL)

Introduction:
XYZ is a leader in Indian bearings industry. XYZ manufacture and deliver bearings to its customers located within
India and Europe. XYZ commits to its customers zero defect delivery. Zero defect delivery is an initiative by XYZ
to achieve high customer satisfaction. Loyal the customer would be, better are the prospects for XYZ to sustain
as the cost to get a new customer is always higher than to retain an old one.
Bearings are components that reduce friction and enhance motion between objects. Known as anti-friction
components, they are widely used in automobiles, pumps, gear boxes, heavy earth moving equipments and
industries. The growth of the bearing industry is directly correlated with the automotive and industrial sectors.
The domestic sale of bearings produced in India recorded a decline of 1.5% in 2012-2013 over previous year
while the production value fell by 0.5% during the same period. The decline was on account of continued
pressure of inflation, fiscal imbalances and high interest rates. Also, commercial vehicle production one of the
largest consumer of bearings experienced a steep downfall in the same period.
A major portion of bearings market in India is unorganized that caters to the low-end replacement market. A
significant percentage of bearings are imported from countries like Germany, Japan, China, Singapore, Sweden,
France and Italy. The demand for the bearings is derived from two key user segments - the automotive and
industrial sectors. The industrial market is larger than the automobile market in value terms. Total exports of
bearings (ball and roller) declined by both value and volume terms in 2012-2013 compared to previous fiscal
year. The slowdown in exports was on account of the recent crisis in the Euro Zone and global recession along
with all these the Indian bearings market is characterized with challenges like counterfeit/spurious products,
rise in prices of raw materials and growing cost pressure on Indian suppliers.

Challenge:
XYZ is facing severe issues related to its logistics department. Unable to cope up with error free domestic
deliveries, XYZ is facing problems like package damage, missing package, late and wrong delivery and document
data errors.
For your understanding you are provided with gist from delivery report which states:
Delivery errors increased from 5% to 20% from 2013 to 2014. Obtain a thorough understanding of the nature of
product and recommend how client should avoid package damage and missing package issues.
Locate warehouse location to find out the most optimal route for the client saving cost and avoiding late
delivery issues. Required matrix is given in appendix 1.
Warehouse management is the need of the hour, XYZ has advanced handing equipment in its warehouse,
inventory accuracy and stock reconciliation is still a challenge. Suggest ways to tackle the problem and improve
the same.

Appendix 1.
Given the following cijcost matrix, determine the shortest vehicle routes and their lengths to distribute goods
from one warehouse, denoted 0 below, to the seven customers, denoted 1-7 below, when:

All vehicles have a capacity of 80 units.

To

11

10

12

11

12

15

12

1
From

2
3
4
5
6
7

The demand at each customer is as follows:

Customer

Demand (units)

12

Answers:
a) Length or cost = 39