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MGT613 Production / Operations Management Assignment 2 Solution Spring 2013

Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in Pakistan.
Since its beginning, the company has always been contributing towards the advancement
and development of the engineering sector in Pakistan by introducing a range of quality
electrical equipments and home appliances.
For improvement in different divisions of the company, management of PEL electronics
wants to implement the concept of “six sigma” so as to develop the appliances that are
near to perfection and reliable. A team of Marketing and Operations department experts
is formulated and are asked for their suggestions and expert opinion on this decision.
Suppose that you are the part of that team what will be your recommendations on the
basis of your knowledge of “Production and operations management” on the following
domains:
1. What are the factors that will explain that Pak Elektron Limited (PEL) is prepared for the deployment of “six sigma”? Provide suitable details to support your point. (15)

Factors which explains the Pak Elektron Limited are:

Market research

Market research is the key. Without the necessary information, you’re simply flying blind in a storm, headed for a crash landing. Market research does more than confirm your “gut feeling,” it provides critical information and direction. It identifies market needs and wants, product features, pricing, decision makers, distribution channels, motivation to buy. They’re all critical to the decision process. Take the example of a company several years ago that introduced a new product to the electronics manufacturing market. The research identified the pricing, the distribution channels, product features, everything but the product decision maker. Despite the fact that the new product complemented an existing one, performed a complementary function in manufacturing, and was used in close physical proximity to the existing product, the decision makers were different. The sales force couldn’t efficiently call on the new decision makers, and the product failed.

Timing

Are all elements of the process coordinated? Is production on the same time schedule as the promotion? Will the product be ready when you announce it? Set a time frame for the rollout, and stick to it. Many products need to be timed to critical points in the business cycle. Miss it, and invite failure. There are marketing tales galore about companies making new product announcements and then having to re announce when the product lags behind in manufacturing. The result is loss of credibility, loss of sales, and another failure. Capacity If the new product or service is successful, do you have the personnel and manufacturing capacity to cope with the success? Extended lead times for new products can be just as deadly as bad timing.

Testing

Test-market the new product.

Be sure it has the features the customer wants. Be sure the customer will pay the price being asked. Be sure the distributor and sales organization are comfortable selling it. You may need to test your advertising and promotion as well.

Distribution

Who’s going to sell the product? Can you use the same distribution channels you currently use? Can you use the same independent representatives or sales force? Is there sufficient sales potential in the new product to convince a distributor, retailer, or agent to take on the new line? There are significant up-front selling costs involved in introducing new products. Everyone in the channel wants some assurance that the investment of time and money will be recovered.

Training

Your sales organization, inside employees, and distribution channels will need to be trained about the new product. If the product is sufficiently complex, you may need to provide face-to-face training. Or perhaps some type of multimedia program will do the job. If the product is not that complex, literature may work. Again, timing is critical. Train before the product hits the shelves, not after.

Promotion

Finally, you need the promotional program to support the introduction: advertising, trade shows, promotional literature, technical literature, samples, incentives, Web site, seminars, public relations. Time it all with production, inventory, shipments, and training. The new product will simply sit in the warehouse without the right support materials.
2. What possible obstacles that the management of Pak Elektron Limited (PEL) have to face while implementation of “six sigma”. (15)

Obstacles to Implementing Six Sigma ( TQM) includes the lack of:
1. Company-wide definition of quality.
2. Strategic plan for change.
3. Customer focus.
4. Real employee empowerment.
5. Strong motivation.
6. Time to devote to quality initiatives.
7. Leadership.
8. Poor inter-organizational communication.
9. View of quality as a “quick fix”.
10. Emphasis on short-term financial results.
11. Internal political and “turf” wars
.

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