Ops world 3.0

psworldA pan IIM Operations Magazine

Volume III: 2012-13

Indian Institute of Management-Raipur

IN THIS EDITION

>Supply Chain Management in Healthcare>Supply Chain Challenges in IOL & Gas Industry - Indian Context >Towards better Maintenance The experiment with Defects >Site Identification for new AIIMS-like Institutions based on Network

Analysis of similar existing facilities >Bargain AirFares >ERP in operations management > Cost Effectiveness: JIT vs EOQ >Microgrid optimization as an OR problem >Operational Excellence at Erection Site: Simhadri Stage 1, NTPC Limited >Recent perspectives on electric power quality

Director’s Message

Dir

ecto

r’s

Mes

sage

It is my great pleasure to present thethird edition of the pan-IIMOperations magazine, OpsWorld. Thisissue puts forward fresh perspectivesregarding the challenges and opportu-nities felt by industry and academiaabout an increasingly operations driv-en future. I wish Omega, theOperations Interest Group of IIMKozhikode, great success in theirendeavour to create awareness aboutrelevance of the operations vertical forfuture growth.

Prof. DebashisChatterjeeDirector, IIM Kozhikode

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Editorial

Ed

itor

ial

With competition rising fiercely,organisations are finding it diffi-cult to increase their share of the

pie. Focus is shifting to cost reduction fromrevenue increase. In today’s world wheretime is money, Operations Managers areconstantly ideating to improve their efficien-cy. Companies are investing in technologies,implementing new systems and employingvarious integration strategies believing thatoperations will provide the competitiveedge.

The third edition of OpsWorld, the pan IIMOperations Magazine, throws light on howcompanies are operating to achieve excel-lence, an inside into NTPC’s ProjectManagement System, Operations Researchmethodologies in Microgrid, Supply ChainManagement in Healthcare industry andmany more....

On behalf of the editorial team, I would liketo express my gratitude to Prof. P.N. RamKumar who accepted our request to judgethe entries from students and for his valu-able insights. I would also like to thank allstudents, professors and industry expertswho had sent their articles for publication.We are grateful to the Operations InterestGroups of all the IIMs for their constantsupport to make OpsWorld a bigger success.Happy reading!

Editor-in-Chief

Contents

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Contents

The teamEditors

Karthik V (IIM-K), Niranjan Sunderasan (IIM-K), Pranay Meshram (IIM-K),Soumyarup Dasgupta (IIM-K), Vinay Ashwin (IIM-K)

Supply Chain Management in Healthcare 04

Supply Chain Challenges in IOL & Gas Industry - Indian Context 11

Towards better Maintenance The experiment with Defects 15

Site Identification for new AIIMS-like Institutions based on Network Analysis of similar existing facilities 18

Bargain AirFares 26

ERP in operations management 28

Cost Effectiveness: JIT vs EOQ 30

Microgrid optimization as an OR problem 34

Operational Excellence at Erection Site:Simhadri Stage 1, NTPC Limited 36

Recent perspectives on electric power quality 39

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Executive Summary The primary focus of the healthcare industry has been to

provide patients with the best quality of care while reducing thecosts. Recently, the increasing cost of supplies and severe com-petition among healthcare providers has significantly increasedthe pressure on material managers to operate more cost-effi-ciently without compromising high patient care standards.While other sectors have experienced success through thedeployment of supply chain management practices, the health-care sector has not seen major improvements in this area. Thispaper provides an assessment of supply chain management inthe healthcare sector. The integration of three different stake-holders of the healthcare supply chain namely producers, pur-chasers and providers facilitates the delivery of products in atimely manner in order to serve the customers.A significant por-tion of the costs associated with supply chains in the healthcare sector can be reduced by implementing effective supplychains. To be fully effective, it must be an integrated link in thechain of clinical and non-clinical operations. A fully integratedsupply chain in healthcare is characterized by the integrationand co-ordination of operational processes, information flows,planning processes, intra- and inter-organizational processesand market development. These processes refer not only tophysical products like pharmaceuticals, medical devices &health aids but also to the processes associated with the flowof patients. Information technology has gained a lot of impor-

Supply Chain Managementin Healthcare

AUTHORAnurag Gupta IIM Lucknow

Anurag Singh IIM Lucknow

E

Supply Chain Management in Healthcare

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tance in healthcare industry esp. in the areas ofprocurement, inventory control and materialsplanning. Elements like organizational culture, theabsence of strong leadership and mandatingauthority, as well as power and interest relation-ships between stakeholders might severely hinderthe integration and co-ordination of processesalong the health care supply chain. Due to theongoing transformation within the health caresector towards greater integration and moreprocess-oriented health care chains, the supplychain orientation within the health care sectorcan be regarded as a complex social changeprocess. Apart from highlighting the areas ofimprovements and identifying the barriers forimplementing the practices, the paper also ana-lyzes the best practices of supply chain manage-ment in healthcare. Improvements have beenmade primarily in the area of education but areassuch as inventory control, procurement processes,and information sharing require more attentionfrom supply chain managers. The supply chainmanagement best practices can greatly helpmaterial managers with their continuousimprovement efforts, while maintaining quality ofcare. Finally, the adoption of new emerging tech-nologies, such as radio frequency identification(RFID) and its benefits to the healthcare industryare also explored to identify innovative alterna-tives to material management in the healthcaresector.

Supply Chain Management in HealthcareIntroduction

The global healthcare industry is one of theworld's largest and fastest growing industries,comprising various sectors: medical equipment

and supplies, pharmaceutical, healthcare services,biotechnology, and alternative medicine sectors.With extreme pricing pressures on today’s health-care providers, delivering high-quality medicalcare while reducing costs is a top strategic priori-ty. To achieve this objective, healthcare serviceproviders’ efforts have been focused primarily oneliminating waste in clinical operations. Whilethese are valid and important ways to reducehealthcare costs, one area that consumes nearlyone-third of all hospital operating budgets oftenremains overlooked - the healthcare supply chain.When it comes to expenses, supplies are secondonly to labor, with millions of products movingalong the supply chain every day through manu-facturers, distributors, Group PurchaseOrganizations (GPOs) and healthcare providers topatients.

While the adoption of SCM practices has beensuccessful in many sectors, the healthcare indus-try has not seen major improvements from thesepractices (McKone-Sweet et al., 2005). Today,healthcare managers and industry experts under-


Figure 1: Breakup of annual operating expense used to support healthcare supply chain costs

Sample size = 204; Source: 2009, Nachtman and Pohl

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stand that the efficient management of materialscan not only reduce operating cost, but increasethe quality of care (Schneller et al., 2006)

Healthcare Supply Chain The healthcare supply chain involves the flow

of many different product types and the participa-tion of various stakeholders. The main purpose ofthe healthcare supply chain is to deliver productsin a timely manner in order to fulfill the needs ofproviders. Based on their functions, stakeholdersin the healthcare supply chain can be divided intothree major groups: producers, purchasers, andproviders.

The role of producers is to manufacture med-ical products such as surgical supplies, medicaldevices and pharmaceuticals. Purchasers includedistributors, wholesalers and Group Purchase

Organizations (GPOs). Distributors and whole-salers hold inventory for producers to facilitatedelivery of products. GPOs sign purchasing con-tracts with producers in order to achieveeconomies of scale by aggregating the volume ofmember providers. Healthcare providers representthose at the end of the supply chain with thefunction to serve patients and include, amongothers, hospitals, integrated delivery networks(IDNs), physicians, clinics, nursing homes andpharmacies (Burns, 2002). In the past, a hospitalthat managed its purchasing costs well couldoperate efficiently. Today, the cost of materialsmanagement can exceed 45% of a hospital’soperating budget, with nearly 30-35% attributa-ble to supply costs alone. Recent studies showthat a significant portion of the costs associatedwith supply chains in the health care sector canbe reduced by implementing effective supplychains. The application of supply chain manage-ment practices in the health care sector not onlyrelates to physical goods like drugs, pharmaceuti-cals, medical devices and health aids but also tothe flow of patients (Beier, 1995).

Integrated Supply Chain inHealthcare

In hospitals, integrated supply chain strategyshould be consistent to maximize patient care.The hospital supply chain enables this strategy byensuring product availability, minimizing storagespace, maximizing patient care space, reducingmaterial handling time and costs for all medical

Producers Purchasers Providers

InsuranceCompanies Government Regulatory

Agencies

CMedical and SurgicalSupplies

CMedical DevicesCPharmaceutical

CHospitalsCIDNsCPhysiciansCClinicsCPharmaciesCNursing Homes

CWholesalersCDistributorsCGPOs

Figure 2: A healthcare supply chain configuration.

Source: Burns, 2002

staff and minimizing inventory. Hospital supplychain has to ensure proper linkages to clinical sys-tems, revenue cycle, IT and clinical operations. Thesupply chain often is viewed as a “back dock” sup-port service that provides the products and servic-es required by clinical departments. To be fullyeffective, it must be an integrated link in the chainof clinical and non-clinical operations (Achryulu etal., 2012). Health supply chains can be character-ized by different modes of integration:1. Integration and co-ordination of processes2. Integration and co-ordination of information

flows 3. Integration and co-ordination of planning

processes.4. Integration of intra- and inter-organisational

processes.5. Integration of market-approach.6. Integration of market-development.

Considering health service providers, supplychain management often refers to the informa-tion, supplies and finances involved with themovement and acquisition of goods and servicesfrom the supplier side to the end user with majoremphasis on two aspects, firstly, to enhance clini-cal outcomes and secondly to optimize costs. Indoing so supply chain management puts a strongemphasis on the integration of processes.Considering the healthcare sector, these process-es refer to physical products like pharmaceuticals,medical devices & health aids and processes asso-ciated with the flow of patients. In both thesecases, an intensive co-ordination and integration

between operational processes might lead to abetter health supply chain performance.Information technology and the deployment of e-business are closely linked to the co-ordinationand integration of operational processes.Different studies have advocated the importanceof information technology in healthcare sector(Breen and Crawford, 2005; Harland andCaldwell, 2007) and it is not a matter of surprisethat many studies on health care supply chainsfocus on the role of e-business technologiesacross hospital supply chains (Siau et al., 2002).Similar to the co-ordination and integration ofoperational processes, information technology inthe healthcare sector is related to both physicalproducts as well as to the flow of patients withinand between health service organizations (Lowelland Celler, 1998). The use of information technol-

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Cfragmented alloca-tion of authoritiesand responsibilities

Clocal optimisation

Cemphasis on indi-vidual processes

Cintegrated authori-ties and responsi-bilities

Ccentral focus ondesigning and con-trolling materialflows on an organ-isational level

Cemphasis on coor-dination and inter-face questions

Capplication of com-pany-wide infor-mation systems

Cestablishing part-nership relation-ships and alliances

Cdesigning andimplementinginter-organisationalinformation sys-tems

Cintegration ofprocesses betweendifferent compa-nies (interfacequestions betweencompanies)

Cintegration of mar-ket-developmentand collaborationbetween compa-nies on a supplychain level

High

Supplychain

integration

Low

Phase 1 Phase 2 Phase 3

Supply Chain must be an integrated link in clinical

& non- clinical operations

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ogy-oriented applications can be found in theareas of procurement, inventory control andmaterials planning. One of the well-known exam-ples of an IT application being used in Health sec-tor is Electronic Patient Record Systems which hassignificantly contributed in improving the integra-tion and smoothening of processes within andbetween health service delivery organizations.

The application of supply chain managementpractices in healthcare setting is almost by defini-tion related to organizational aspects like buildingrelationships, allocating authorities and responsi-bilities, and organizing interface processes.Different studies have highlighted the importance

of organizational processes when applying supplychain management practices. Moreover, recentstudies reveal that elements like organisationalculture, the absence of strong leadership andmandating authority, as well as power and inter-est relationships between stakeholders mightseverely hinder the integration and co-ordinationof processes along the health care supply chain(McCutcheon and Stuart, 2000). Healthcare sup-ply chain integration is not only related to theintegration and co-ordination of planningprocesses but this can also be linked to joint“market development” and offering new “care-products”. Product co-development is a recog-nized phenomenon in the field of supply chainmanagement and within industrial supply chainsmany joint efforts are made to develop new prod-ucts across suppliers, customers and organisation-al units. Additionally, healthcare service providershave taken the initiative in different countries todevelop new care-products in close collaborationwith each other. Clearly, the above mentionedmodes of integration cannot be considered in iso-lation. Studies in the field of industrial companiesindicate that organizations often go through sev-eral stages of integration, starting with a trans-parency stage via a commitment/ coordinationstage to a full integrated stage encompassing allthe different modes of integration addressedabove (Ballou et al., 2000; van der Vaart and vanDonk, 2008). The ongoing transformation withinthe health care sector towards greater integrationand more process-oriented health care chainsrequires a shift in strategy, structure and controlmechanisms. As such, the supply chain orientationwithin the health care sector can be regarded asa complex social change process.

Best practices of Healthcare Supply Chain

The best practices of Healthcare Supply Chainare summarized in the following table:

Table 1: Best practices of Healthcare SupplyChain

Conclusion This article provides insight about supply

chain management practices in the healthcaresector. Although many health care organisationshave recognized the importance of adopting sup-ply chain management practices, the applicationof techniques, methods and best practices origi-nally developed in an industrial setting clearly isoften problematic. Improvements have beenmade in the healthcare supply chain, primarily inthe area of education but areas such as inventorycontrol, procurement processes, and informationsharing require more attention from supply chain

Supply chain integration within healthcare is a complex social process change

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managers. Improvements in all these areas canbecome possible with the aid of information tech-nology, along with collaboration and cooperationof stakeholders. Areas Recommended BestPractices Education ? Increase training on SCMprinciples such as executive support, communica-tion within internal departments, information sys-

tems and measurement systems Transportation &Logistics ? Use of cold storage infrastructure forstorage and transportation in pharmaceuticalindustry, a major player in healthcare InventoryManagement ? Use computer software applica-tions for calculating reorder points and quantitiesbased on demand forecast and safety stock levels

Areas Recommended Best Practices

EducationC Increase training on SCM principles such as executive support,

communication within internal departments, information sys-tems and measurement systems

Transportation & Logistics C Use of cold storage infrastructure for storage and transportationin pharmaceutical industry, a major player in healthcare

Inventory Management

C Use computer software applications for calculating reorderpoints and quantities based on demand forecast and safetystock levels

C Increase inventory turns to hold less capital at a given time

Procurement and Contracting

C Increase automated ordering process by using electronic means(EDI, Internet)

C Comply with GPO contracts to achieve cost savings C Standardize products to reduce number of contracts and trans-

actions

Quality Management

C Apply total quality management in hospitals and integrate asmooth running strategy for their supply chain management.Hospital integration with internal and external customers isrealized as important factors in implementing and empoweringthe overall integration process in quality management system inhospitals

Using RFID technology

C Use of Radio Frequency Identification (RFID) technology, whichwill continue to make inroads thru track-and-trace solutions,first, as asset and inventory management tools, then gravitatingtowards personnel, patient and clinical monitoring devices

Recalling drugs C Use of RFID technology can also help in keeping the track ofsuch products along the entire chin

Revenue-Cycle ManagementSystem and Decision SupportSystem

C Use technology solutions and healthcare consulting services tocover the full spectrum of a healthcare service provider's rev-enue cycle needs from improving patient access processes toreducing claims denials.

C Use decision support system to integrate financial, clinical andadministrative information and distribute that data enterprise-wide for timely analysis and decision-making that might posi-tively impact future performance

Information Sharing &Collaboration/Cooperation

C Share inventory related information with vendors for betterplanning. Information should include: sales data, backorders,and on-hand inventory; it should also be accurate and accessi-ble in a timely manner

C Involve physicians and other providers in the product selectionprocess through collaboration and cooperation

Table 1: Best practices of Healthcare Supply Chain

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? Increase inventory turns to hold less capital at agiven time Procurement and Contracting ?Increase automated ordering process by usingelectronic means (EDI, Internet) ? Comply withGPO contracts to achieve cost savings ?Standardize products to reduce number of con-tracts and transactions Quality Management ?Apply total quality management in hospitals andintegrate a smooth running strategy for their sup-ply chain management. Hospital integration withinternal and external customers is realized asimportant factors in implementing and empower-ing the overall integration process in quality man-agement system in hospitals Using RFID technol-ogy ? Use of Radio Frequency Identification (RFID)technology, which will continue to make inroadsthru track-and-trace solutions, first, as asset andinventory management tools, then gravitatingtowards personnel, patient and clinical monitor-ing devices Recalling drugs ? Use of RFID technol-ogy can also help in keeping the track of suchproducts along the entire chin Revenue-CycleManagement System and Decision SupportSystem ? Use technology solutions and healthcareconsulting services to cover the full spectrum of ahealthcare service provider's revenue cycle needsfrom improving patient access processes to reduc-ing claims denials. ? Use decision support systemto integrate financial, clinical and administrativeinformation and distribute that data enterprise-wide for timely analysis and decision-making thatmight positively impact future performanceInformation Sharing & Collaboration/Cooperation? Share inventory related information with ven-dors for better planning. Information shouldinclude: sales data, backorders, and on-handinventory; it should also be accurate and accessi-ble in a timely manner ? Involve physicians andother providers in the product selection processthrough collaboration and cooperation

The supply chain management best practicescan greatly help material managers with theircontinuous improvement efforts, while maintain-ing quality of care. Finally, the adoption of newemerging technologies, such as radio frequencyidentification (RFID) and its benefits to the health-care industry are also explored to identify innova-tive alternatives to material management in thehealthcare sector.

References 1. Nachtman, H. and Pohl, E.A. (2009), “The State of

Healthcare Logistics: Cost and Quality improve-ment Opportunities,” Center for innovation inHealthcare Logistics, University of Arkansas.

2. McKone-Sweet, Kathleen E., Hamilton, P. and Willis,S.B. (Winter 2005), “The Ailing Healthcare SupplyChain: Prescription for Change,” The Journal of

Supply Chain Management: A Global Review ofPurchasing and Supply, pp. 4-17.

3. Schneller, E.S., Schmeltzer, L.R. and Burns, L.R.(2006), Strategic Management of the Health CareSupply Chain, Jossey-Bass, San Francisco, CA.

4. Burns, L.R. (2002), The Healthcare Value Chain:Producers, Purchasers, and Providers, Jossey Bass,San Francisco, CA.

5. Jan de Vries, Huijsman, R. (2011) "Supply chainmanagement in health services: an overview",Supply Chain Management: An InternationalJournal, Vol. 16 Iss: 3, pp.159 – 165

6. Beier, F.J. (1995), “The management of the supplychain for hospital pharmacies: a focus on inventorymanagement practices”, Journal of BusinessLogistics, Vol. 16 No. 2, pp. 153-173.

7. Acharyulu, G.V.R.K. and Shekhar, B.R. (2012), “Roleof Value Chain Strategy in Healthcare Supply ChainManagement: An Empirical Study in India”,International Journal of Management Vol. 29 No. 1Part 1, pp. 93-94

8. Breen, L. and Crawford, H . (2005), “Improving thepharmaceutical supply chain: assessing the realityof e -quality through e-commerce application inhospital pharmacy”, International Journal ofQuality & Reliability Management, Vol. 22 No. 6,pp. 572-590.

9. Harland, C.M. and Caldwell, N.D. (2007), “Barriersto supply chain information integration : SMEsadrift of e-Lands”, Journal of OperationsManagement , Vol. 26 No. 6, pp. 1234-54.

10. Siau, K., Southard, P.B. and Hong, S. (2002), “E-healthcare strategies and implementation,”International Journal of Healthcare Technology andManagement, Vol. 4 Nos 1/2, pp. 118-131.

11. Lowell, N. H. and Celler, B. G. (1998 ), “Informationtechnology in primary health care”, InternationalJournal of Medical Informatics ,Vol. 55 No. 1, pp. 9-22.

12. McCutcheon, D. and Stuart, F.I. (2000), “Issues inthe choice of supplier alliance partners”, Journal ofOperations Management, Vol. 18 No. 3, pp. 279-303.

13. Ballou, R.H., Gilbert, S.M. and Mukherjee, A. (2000),“New managerial challenges from supply chainopportunities”, Industrial Marketing Management,Vol. 29 No. 1, pp. 7-18.

14. Van der Vaart, T. and van Donk, D.P. (2008), “A crit-ical review of survey-based research in supplychain integration”, International Journal ofProduction Economics, Vol. 111 No. 1, pp. 42-55.

15. Callender, C. and Grasman, S.E. (2010), “Barriersand Best Practices for Material Management inHealthcare Sector”, Engineering ManagementJournal, Vol. 22 No. 4, pp. 11-17

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Supply Chain Challenges in IOL & Gas Industry

INTRODUCTIONThe term “Supply- chain management (SCM)” can be

best defined as the configuration, coordination and continu-ous improvement of a sequentially organized set of opera-tions. The primary aim of a supply chain management systemin any organization is to provide maximum customer serviceat the lowest cost possible.

The Oil & Gas industry currently faces numerous com-plexities and challenges that should be addressed in order tosustain and survive in today’s era of heightened global com-petition. The Oil & Gas industry needs to work continuouslyunder the most difficult situations and challenging circum-stances, which include matching the dynamic demand withsupply, working in harshest terrains & tougher access to newupstream resources. In addition to this, there is a markedincrease in the exploration and production costs in theindustry and oil prices are also near an all time high. Againstthis backdrop, there seems to be a necessity to focus onachieving the highest standards in supply chain manage-ment of the Oil & Gas industry so as to streamline all theoperations and generate value for all the stakeholders.

Anubhav SoodIIM Raipur

AUTHOR

ISupply Chain Challenges in IOL & Gas Industry - Indian Context

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SUPPLY CHAIN LINKAGE IN OIL AND GAS INDUSTRY

The supply chain linkage in the Oil and Gasindustry can be represented as below:

Exploration is the search for crude oil or gasreserves by petroleum geologists and geophysi-cists beneath the Earth’s surface. It could either beon the sea bed or on the mainland. The aim ofexploration is to find the reserves of crude petro-leum which could be harnessed and convertedinto usable petroleum products.

Exploitation is the term used for extractingthe crude oil from the oil wells. For exampleIndian Oil Corporation Limited (IOCL) has share inoil pits at Digboi in Assam and Bombay high fromwhere oil is extracted and sent to refineries. Theentire requirement for crude oil is not met by self-exploitation. Some part is procured from othercrude oil producing nations which predominantlyconsist of Gulf countries and Singapore market.

This crude oil is shipped through Very LargeCrude Carriers or Ultra Large Crude Carriers hav-ing capacities of 50,000 KL to 2,00,000 KL. Thesetankers are docked at the ports and the oil isunloaded using pumping and piping equipmentinto the storage tankers. These locations arecalled ‘terminals’. Generally, terminals have stor-age capacities ranging from 1,00,000 KL to3,00,000 KL.

From these terminals, the oil is sent to refiner-ies through pipelines where it undergoes theprocess of refining and various products like Flaregas, Lighter gases, LPG, Naptha, ATF, SuperiorKerosene Oil, Light Diesel Oil (LDO), Heavy dieselOil (HDO), Base oil and Sludge are produced.

These products are stored in cylindrical tanks nearrefineries; these areas are also called as terminals.The capacities of these tanks range from 25000KL to 40000 KL. From here the finished products

are transported to various other terminals all overthe country through pipelines, rail wagons or tanktrucks.

ISSUES FACED IN SUPPLY CHAIN MANAGEMENTPIPELINE NETWORK:

Amongst road, rail and pipeline transporta-tion, road transportation is the costliest methodand transportation through pipelines is the cheap-est. However a drawback with the pipeline is thatit has very low penetration. In the light of thisbackdrop many oil marketing companies areworking on extending their pipeline network.

Constructing pipelines is an extreme capitalintensive venture. Therefore, it is much more fea-sible if different companies come together andshare the financial burden for constructing themand then reap benefits of using them. One suchinitiative is taken by GSPL,HPCL, IOCL and BPCL.These companies have signed joint venture agree-ments for constructing three such cross countryprojects: Mallavaram-Bhilwara (1585 kms),Mehsana-Bhatinda (1670) and Bhatinda-Jammu-Srinagar (740 kms). More such projects will helpin bringing down the transportation costs in thelong run. Further pipelines also bring about reduc-tion in losses due to transportation. For example,the 573 km long Visakha-Vijayawada-Secunderabad pipeline saved (HPCL) an amountof about Rs 95 crore in 2003-04. (Cited fromhttp://www.business-standard.com/india/-news/hpcl-saves-rs-95cr-due-to-pipeline-opera-tions/147489/ accessed on 23.02.2013).

THEFT & PILFERAGE:There is a particularly high rate of theft and pil-

ferage while transporting oil by road through tankers.A method to bring it down under control is to installthe Vehicle Monitoring System (VMS), which tracksthe movement of vehicles by installing a device withSIM card using GPS technology. But there are issuesrelated to implementation of the same. There havebeen instances where drivers damage these devicesand use the SIM cards to make personal phone callsor the service is not proper due to bandwidth prob-

Constructing pipelines, being an extremecapital intensive venture is much more feasible if different companies come together and share the financial burden.

EXPLORATION EXPLOITATION REFINING MARKETING CONSUMER

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lem of the service provider. Also, in some cases, thelocking system that is used for the tank-trucks (pad-locks) has been found to be tampered with.Moreover the outlet valve assemblies have also beenfound to be damaged in some cases.

These incidents of theft, pilferage and damagecan be improved by training the drivers andincreasing their awareness about these technolo-gy driven initiatives. Another method of reducingthe pilferage is the usage of electromagnetic lock-ing systems in the valves of the tankers. However,after installation of the same it has been reportedthat the operators and drivers complain of notknowing how to use these locking systems.Training and selection of educated drivers canhelp to overcome these problems.

PIPELINE SECURITY:Cases of pilferage through pipelines have also

been reported where the miscreants have dam-aged the pipeline to steal away the products.Moreover a damaged pipeline poses a threattowards safety of environment and causes loss offinished products. Pressure Monitoring Systemsare installed in the pipelines to detect any suchdamage. But the challenge lies in correcting thefault as soon as possible and recommissioning theline. Security guards are also deployed forpatrolling these pipelines; one guard covers 8kilometres of pipeline length. These guards aretagged with satellite surveillance which causeshuge costs to OMCs. For further safety, rather thanlaying pipelines overground they are usually laidunderground where they are not visible, this how-ever, raises several maintenance issues of thepipelines.

HIGH IN-TRANSIT INVENTORY:The inequitable distribution of petroleum

resources across the globe makes the scope oflogistics global. These products have to be trans-ported between different locations, which in mostof the cases span across different continents. Thelong distance between the supplier and buyerresults in higher costs of transportation and highin-transit inventory. One method to overcome thisis by structuring of new deals like that of EssarEnergy with Barclays bank for its Stanlow refinery.The In-transit inventory is transferred to thebank’s assets when it starts on the ship and justbefore the destination port it is again transferredto Essar Energy This approach helps Essar to miti-gate the risks associated with in transit inventoryownership, saves working capital costs and thebank gets benefit because it can show the crudeoil as an asset over long transit periods and lever-age the same for oil derivatives business.

INFORMATION TECHNOLOGY:We can also examine the role of information

technology and management information sys-tems in the supply chain management in Oil &Gas sector. As compared to the earlier paperbased system for giving indents by the dealers,the indents are now taken through SMS basedIndent Management System. This indent is notedby the planning officer and after confirming thepayment terms the material is dispatched to thedealer. In this field HPCL has started a new initia-tive called Optimised Logistics Assistant (OLA).OLA helps in bringing rationalization in assign-ments to logistic partners and provides them withan equal opportunity. As this is an automaticassignment, it reduces the favouritism towards aparticular transporter due to any influence exert-ed by him. Implementation of such IT driven sys-tems across the industry will help in bringingabout more transparent systems.

SAFETY:Due to the hazardous characteristics of Oil &

Gas raw materials and final products, there is aneed to exercise extra caution which involves lotof money, time, effort etc. Also, the risk involvedwith the supply chain is higher. The products inOil & Gas industry are highly inflammable; as a

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result, risks involved in delivering, transportingand storing are greater as compared to any otherindustry (Sinha et al. (2011) as cited in supply-chain-management-issues-in-oil (2012)).

LONG LEAD TIMES:The lack of flexibility of the overall logistic

network in this industry is another major issue.This can perhaps be owed to the challenges inproduction, long transportation lead times andthe constraints of transportation modes used. Asa result of these problems, each and every node ofthe supply chain network poses huge challenges.

UNECONOMIC ORDERS:Another delivery related issue is the irregular

or small quantities ordered by some dealers. Fore.g. one dealer may have daily requirement of15000 to 20000 KL where as another will haveonly 3000-4000 KL. It is easier to supply to theformer dealer, but in the latter case, the issue ofpart load comes into the picture and reduces theeconomies of transportation. To prevent this, thecompanies can ensure that the dealers have largesize reservoirs which have ullage of one tanktruck atleast. Alternatively, companies can alsotake a decision to supply the material only whenthe dealer gives order of equivalent to atleastwhat can be transported in one tanker.

DISPOSAL OF FLARE GAS:The flare gases which come out of the refining

process are not useful and were earlier disposed-off by burning. But now the environmental regu-lations have become more stringent due to whichthere are restrictions over burning these gases.Now the refining companies have two optionseither to install flare gas recovery systems whichentail heavy investments or to store the flare gasand send it to a third party to dispose it off. Thelatter option can also be expensive and willrequire good logistics for flare gas transportation.

SLUDGE TRANSPORTATION:The other prominent issue is regarding the

transportation of sludge. As the sludge is veryheavy and tends to solidify if allowed to cool, itpresents a unique challenge in transportation. Itrequires special heated tanks, which are heatedelectrically or by using steam. But in case of thefailure of heating mechanism the sludge can getdeposited inside the tanker which will then beextremely difficult to remove. In some cases solid-ification has rendered the whole truck to go out ofservice.

Thus, we can conclude that supply chain is themost crucial and essential function in oil and gasindustry. This is because of the fact that the oiland gas industry has its own unique featureswhich can sometimes pose various challenges forall those involved in its supply chain. Today, thesupply chains in this industry are looking at vari-ous ways of improving their efficiencies and over-coming the above mentioned impediments. Theseimprovements made over a period of time alsohelp in creating a competitive advantage for thefirms. Therefore, the need of the hour is a supplychain optimization at an operational as well as ata strategic level. Various supply chain firms in Oil& Gas industry can adopt methods like customiz-ing the logistic network, strategic sourcing, appli-cation of channel wide information technologystrategy, adopting operational innovation in termsof order filling, customer service etc. This will leadto success and also contribute towards optimisa-tion in the long run. Tomorrow’s successful play-ers would perhaps be those who adopt suchmethods of optimization, implement a strategicview of the role of their supply chain and imple-ment advanced contracting strategies in order tomanage their costs and secure supplies.

REFRENCES1. Chima, M. C. (2007) “Supply-Chain Management

Issues In The Oil And Gas Industry” Journal ofBusiness & Economic Research Vol. 5, No. 6

2. Siddiqui, F. & Sharma, C. (2011) “The Impactof various Dimensions of SCM Practices inIndian Oil and Gas Sector” Global Journal ofEnterprise Information System Vol. 3, No.4

3. http://articles.economictimes.india times.com/2012-05-01/news/31528157_1_bhatinda-jammu-srinagar-gspl-pipel ine-projectsaccessed on 23.02.13

4. http://ivyarticles.blogspot.in/2012/12/supply-chain-management- issues- in-o i l .html?detail=yes accessed on 24.02.13

The oil and gas industry has its own uniquefeatures which can sometimes pose variouschallenges for all those involved in its supply chain.

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Towards better Maintenance The experiment with Defects

INTRODUCTION:In an organization like SAIL, quality production at optimum

cost plays a vital role, to achieve profitability. In order to achievethis, all the major operations like planning, production and mar-keting are to be done with quality parameters in mind. Whereplanning and marketing are dependent on various factorsbeyond the control of the individual plants, production at opti-mum level at minimum cost is instrumental and well within thecontrol of the production team. Production demands the threesections i.e., Operation, Maintenance(both Mechanical &Electrical) and services (ETL, HMC, PCE, EMD, GEM, INST etc.) towork together having a single common goal of ,"maximisingquality product and minimizing production cost".

The manufacturing industries in the world are now strictlymonitoring to improve the following parameters to attain com-petitiveness and a sustained positive growth.

1) Maximisation of production 2) Ensuring quality standard3) Minimising cost of production To achieve all these parameters it requires a healthy main-

tenance system. Though maintenance is not a branch ofEngineering taught in Technical Institutions, it requires thewholesome knowledge of technology and progressive develop-ments in the world, updated at regular interval of time. In thefollowing paragraphs let us discuss "maintenance as a tool forprofitability of any manufacturing industry".

MAINTENANCE:Out of many definitions that describe maintenance, the fol-

lowing definition fits best for all industries or manufacturingorganizations around the world. "Maintenance is the process ofensuring the availability of equipment/ machines in perfectorder for maximizing the quality product at lower cost".

To be precise, every organization should have a systemwhich will increase the availability of equipment for a longerperiod at lower cost. Many private organization, reduce the costof maintenance by out sourcing or giving AMCs to smaller com-panies and increase the performance of machines and equip-ment by adopting new technology as and when required. But it

Towards better MaintenanceThe experiment with Defects

Debrup MohantyManager(Durgapur Steel Plant, SAIL)

Gujja Eswar RaoSenior Manager (Durgapur Steel Plant, SAIL)

AUTHORS

I

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is not always possible for company as vast asSAIL, where the Capital Investment required forswitching over to new technology is huge andtime required to carry out projects is also more (as the size of project in such cases are big andpro-ject clearance formalities are complicated due toGovernment obligations).

To cater to the need of such organizations,where equipment involved are complicated innature and working environment is challenging incomparison to normal working condition andwhere the breakdown of equipment pose a threatto the balance sheet of the company, many main-tenance techniques or theories have been evolvedby expert teams in recent past. These theories arebased on different schools of thought anddesigned to suit various maintenance environ-ments. Some of the popular theories are:a) Breakdown maintenanceb) Inspection & preventive maintenance c) Predictive maintenance d) Maintenance by redesign e) Time based maintenance

Out of the above methods, most commonlyused system is Inspection & Preventive mainte-nance. In some cases, this system of maintenancecombined with Maintenance by redesign paves away for continual improvement.The following para-graphs will depict how best this can be achieved.

FACTORS FOR SELECTING MAINTENANCE MODULE:

Although different organizations adopt differ-ent forms of maintenance practices or processes,yet they follow almost the same sequences /methods based on a simple logic of SMPs. Themethods or the processes being adopted and putin use by organizations are decided by DOCTORanalysis of factors that shapes the maintenancemodule for a particular environment. These are:1) Design (unidirectional/ reversible/ roughing/

finishing etc.)2) Operation (intermittent/continuous etc.)3) Criticality of Equipment (spares availability in

market/ cost of spares/repair time etc.) 4) Technology (old/new/manual/automated etc.) 5) Option in hand (stand by machine/alternate

route of production etc.) 6) Resource availability (man/spare inventory/

time availability etc.) The design parameters and standard operat-

ing practices as prescribed by the designer aresubjected to be changed at later stages due tomany factors or changes brought to the system inorder to increase profitability. Like Blooming Millwas initially designed for Ingots of 5 to be rolledthrough it, but later on it has been changed to 8 TIngots without significant change in its equip-ment. The effect of change of load is not visibleimmediately, but in the long run many problems

I R F

D P E M

A

O

REV MOD

A

Maintenance Module Based on Inspection & preventive Maintenance along with redesign

Dia. : A

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of perennial nature surfaced and some of themwere eliminated by a suitable method of modifi-cation arrived by blending the two systems ofmaintenance described above.

MAINTENANCE MODULE:The maintenance module should have the fol-

lowing activities:1) Inspection [I] 2) Record IR] 3) Generation of Defect list [D] 4) Planning [P] 5) Observation [O]6) Execution(repair) [E]7) Feedback [F] 8) Monitoring [M] 9) Analysis [A] 10) Modification (change) [MOD]11) Record modification & review [REV]

The module is designed as shown in the flowdiagram below

ANALYSIS:The total job of maintenance based on inspec-

tion.The list of equipment to be inspected, frequen-cy of inspection, time of inspection should be sojudiciously designed so that it should not hamperproduction nor it should violate any safety norm.Once the list is prepared, the inspection to be doneas per designated schedule and all other activitiesshould be followed till the cycle is complete.

GENERAL CASE (I-R-D-P-E-F-R):• Inspect equipment• Record the data from Inspection report• Generate defect list from record•Plan the job to liquidate the defects found• Execute the job or eliminate defects as per plan• Give feedback to record

CONDITIONAL CASE (I-R-D-O-P-E-F-R) There may be cases where defect liquidation

cannot be planned immediately due to productionpressure but defect can be allowed to continuekeeping the equipment in question on observa-tion, till the liquidation is planned and defect iseliminated. For such cases this method is adoptedwith addition of observation after defect list isgenerated.

UNUSUAL DEFECT WITHOUT RECURRANCE (I-R-D-P-E-M-A):

In some cases an unusual defect surfaces likea bearing is broken, a shaft is sheared, a gear isslipped over a shaft etc. As the defect is to beeliminated at the earliest opportunity or in manycases immediately, the execution of job for elimi-nation of defect is planned, executedand a feed-

back is given in the form of report. Since the causeof the defect is not ascertained immediately, itshould be monitored for a period. As the defect isof unusual nature, a thorough analysis or rootcause analysis is to be done for finding out thecause(s). After finding out the cause(s) all possiblecauses should be eliminated.

UNUSUAL DEFECT WITH RECURRANCE(I-R-D-P-E-M-A-M0D-12EV):

If the same defect is repeated, a thoroughanalysis or root cause analysis is to be done. Afterfinding out the cause(s) all possible causes shouldbe eliminated.

In many cases the probable or certain causeswhich triggered the break down, become respon-sible for similar breakdowns after a certain periodof time. This is the point where the maintenanceengineer should find out ways to eliminate thesource of cause which impend defects by modifi-cation or change in design parameters or by sim-ple alterations where ever possible. While doingmodification all factors should be considered likerecurring cost, impact on other equipment, per-formance of modified system in comparison toexisting system etc. Once the modification is doneand tested it should be documented for future ref-erence and any change required in drawingshould also be incorporated. Then the inspectionschedule should be accordingly reviewed to incor-porate the new modification.

Conclusion:Though there are many processes in achieving

good machinery health, the best way of mainte-nance can only be decided by people who moni-tor them regularly. Machine behavior is a reflec-tion of human behavior. As the great author Mr.Stephen Covey said, 10% of the events around ushappen automatically upon which we have nocontrol, but 90% of the of the events occur as aresult of our reactions towards these 10%happen-ings.

The total job of maintenance should bebased on inspection wherein the design ofactivities should not hamper production or

violate any safety norm.

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Site Identification for new AIIMS-like Institutions based on Network Analysis

1. Introduction Pradhan Mantri Swasthya Suraksha Yojana

The Pradhan Mantri Swasthya Suraksha Yojana (PMSSY)was floated by the Central Government in 2006 as a measureto address the imbalance in the availability of the best health-care facilities across the nation and to augment the country’smedical education facilities. The Yojana is to be implemented inmultiple stages. The first phase would consist of development ofsix AIIMS-like Institutions (ALIs), besides up-gradation of sever-al other existing medical colleges. The next phase would consistof construction of two super-specialty facilities, one each inWest Bengal and Uttar Pradesh. The third stage, which wasrecently approved by the Union Cabinet, involves the construc-tion of four more facilities. This stage is the one that this paperis concerned with. The Union government is yet to decide on thestates in which these facilities would be located. Consideringthat any such endeavor involves a huge expenditure (the latestCentral government estimates have put the figure at Rs.847crore on average for each of the institutes), we believe it isimperative that these facilities be located so as to not only ful-fill the criteria laid down by the committee that has proposedthe latest phase, but also to ensure the optimum utilization ofthe facilities. It is with this aim that we have designed a modelthat suggests the best locations for the four proposed institu-tions.

Criteria As per the Hon. Union Health & Family Welfare Minister1,

the location of the initial six institutions were decided based onseveral socio-economic indicators such as the human develop-ment index, the regional per capita income, the number of peo-ple living below poverty line and health indicators such asinfant mortality rate, the population-to-bed ratio, etc.

The steering committee on health for the 12th five year planhas listed a broader set of criteria for deciding the sites for thefour new hospitals2. The committee recommends that the deci-sion be taken based on:

1. Geographical Location

Site Identification for new AIIMS-likeInstitutions based on NetworkAnalysis of similar existing facilities

AUTHORSNeeraj GuptaIIM Lucknow

Mukul KauraIIM Lucknow

I

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2. Physical Infrastructure 3. Ease of connectivity with medical facilities 4. Health indicators 5. Local disease burden

2. Methodology Accessibility

Considering that these facilities are few innumber and dispersed across the nation, we havelaid down a criterion for defining the accessibility(or catchment area) for each facility. We believethe distance that can be covered in an overnighttrain journey is a good indicator for the area thatcan be serviced through one facility. Consideringthat an express train travels at a little over50kmph (when accounting for stoppages), we geta radial distance of 400km (50kmph X 8 hours) asour catchment area indicator.

Geographical Distribution We then proceeded to plot the area serviced

by each of the facilities already finalized using the

above indicator. Figure 1 shows the region expect-ed to be covered by the eight approved ALIs aswell as the AIIMS at New Delhi. In order to ensurethat maximum area gets the coverage, as well asconsidering the hilly terrain in J&K as well as inthe North-East, we decided to allocate one ALI toeach of these two regions. Considering thatJammu city and Guwahati are by far the mostaccessible and developed cities in these tworegions respectively, we propose that the facilitiesbe located there.

For the western and southern regions, it can beseen by visual inspection of Figure 1, that maximumcoverage can be provided only if one of the ALIs isdistributed to one of the Western states (Gujarat,Maharashtra & Goa) and other to the southernstates and Union territories (Andhra Pradesh,Karnataka, Kerala, Tamil Nadu and Puducherry). Wehave therefore formed two clusters with candidatecities from these two regions and applied anAnalytical Hierarchy Process (AHP) model to comeup with the best candidates from these two regions.

Figure 1: Area catered to by the approved facilities and the AIIMS at New Delhi

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Candidate Locations The candidates were taken to be the top 21

Tier-I, Tier-II and Tier-III cities from the two clusterstaken together.

AHP Model One of the five factors that would determine

the ALI locations has already been incorporated inthe analysis manually. The other four factors havebeen incorporated in the decision making processthrough the use of a four factor AHP model.

Ease of connectivity with medical facilities

We have taken the density of rail network as ameasure of connectivity and the number of HealthSub-Centers as the indicator of level of medicalfacilities in a particular state. Each of the two data3sets have been normalized to represent a fractionof the highest density (or sub-centers) and the

product of the two taken to arrive at a final score.The data suffers from a limitation in sense

that the two data sets are for different instancesin time. However, their use can be rationalized byassuming the growth of sub-centers to be propor-tional for each of the states.

Health Indicators The life expectancy4 in each of states/UTs for

the candidate cities has been taken as a surrogatefor health indicator. Once again, the life expectan-cies have been normalized using the highest datapoint to arrive at a health indicator score.

Local Disease BurdenThe local disease burden has been measured

using the number of people hospitalized on a perthousand basis. The inverse of the data5 has thenbeen normalized (using the same process as before)to get an indicator for the local disease burden.

As on31.3.2001

As on 1.4.1996

Route Kms. Per '000 Sq.

Kms.

Route Kms. Per‘000 Sq. Kms.(Normalized)

Sub-CentersSub-Centers(Normalized)

ConnectivityScore

Andhra Pradesh 67.89 1.00 7894 0.81 0.81

Goa 27.02 0.40 175 0.02 0.01

Gujarat 22.56 0.33 7284 0.75 0.25

Karnataka 17.32 0.26 7793 0.80 0.20

Kerala 15.52 0.23 5094 0.52 0.12

Maharashtra 8.73 0.13 9725 1.00 0.13

Puducherry 0.07 0.00 79 0.01 0.00

Tamil Nadu* 31.22 0.46 8681 0.89 0.41

Figure 2: Ease of connectivity with medical facilities

Life Expectancy atBirth

Proportion Life Expectancy

Life Expectancy Score

States/UTs Male Female Male Female

Andhra Pradesh 61.7 64.3 0.50 0.50 63.0 0.86

Goa 64.7 67.2 0.51 0.49 65.9 0.90

Gujarat 62.1 64 0.52 0.48 63.0 0.86

Karnataka 62.5 65.8 0.51 0.49 64.1 0.87

Kerala 70.7 76.1 0.48 0.52 73.5 1.00

Maharashtra 64.7 67.2 0.52 0.48 65.9 0.90

Puducherry# 63.9 65.9 0.49 0.51 64.9 0.88

Tamil Nadu 63.9 65.9 0.50 0.50 64.9 0.88

* For Goa, Maharashtra figures have been used# For Puducherry, Tamil Nadu figures have been usedFigure 3: Life expectancies

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State-wise Persons Hospitalized During Last 365 Days (Per OOP's)

States/UTs Rural PersonsUrban

PersonsRural

ProportionUrban

ProportionTotal Inverse

UrbanProportion

Andhra Pradesh 14 17 0.67 0.33 15.00 0.07 1.00

Goa 26 25 0.38 0.62 25.38 0.04 0.59

Gujarat 14 21 0.57 0.43 16.98 0.06 0.88

Karnataka 14 18 0.61 0.39 15.54 0.06 0.97

Kerala 70 65 0.52 0.48 67.61 0.01 0.22

Maharashtra 19 26 0.55 0-45 22.17 0.05 0.68

Tamil Nadu 18 23 0.52 0.48 20.42 0.05 0.73

Pondicherry 44 22 0.32 0.68 28.97 0.03 0.52

Figure 4: Persons hospitalized during last 365 days

CityExpenses

Scaled for2011-12

Physical Infrastructure Score

Source

Solapur 283.34 283.34 0.013http://www.urbanindia.nic.in/Droeramme/uwss/CSP/DraftCSP/Solapur CSP.pdf

Pune 3196.12 4489.94 0.213http://www.punecorporation.ore/pmcwebn/about us.aspx

Mumbai 21096.56 21096.56 1.000http://www.mceni.eov.in/iri/portal/anonvmous/qlbudeet-speechtf

Nashik 1500.00 1500.00 0.071http://www.hindustantimes.com/India-news/Mumbai/MNS-NCP- fight-to-control-Nashik-as-Bhujbal-tries-to-rustle-up-numbcrs/Articlel-815596.aspx

Surat 3194.00 3194.00 0.151http://articles.timesofindia.indiatimes.com/2012-02-03/surat/31021057_1_smc-budget-surat-municipal-corpo-ration-gopi-talav

Rajkot 500.00 500.00 0.024http://ibnlive.in.com/generalnewsfeed/news/rajkot-corpo-

rations-draft-budget-presented/958525.html

Jamnagar 356.88 501.35 0.024 Source: Jamanagar Municipality

Panaji 23.93 33.62 0.002 http://www.navhindtimes.in/content/ccp-presents-evenly-balanced-annual-budget

Anantapur 27.03 27.03 0.001http://www.cdma.gov.in/cdma/Downloads/Anantapur_District/Anantapur%20Corp._Working%20Sheet.xls

Vijaywada 293.23 293.23 0.014 http://www.ourvmc.org/general/Budget_2011-12.pdf

Hyderabad 2237.76 3193.52 0.151 http://www.ghmc.gov.in/tender%20pdfs/Disclosure_to_Public_New.pdf

Mysore 253.46 356.06 0.017 http://mysorecity.gov.in/sites/mysorecity.gov.in/files/Budget-final_2.pdf

Bangalore 9196.09 9196.09 0.436 http://218.248.45.169/download/budget/Budget%20Speech.pdf

Shimoga 47.86 47.86 0.002

Chennai 1850.66 1850.66 0.088 http://chennaicorporation.gov.in/budget/budgetImages/2011-12.pdf

Vellore 3.03 4.32 0.000 http://vellorecorp.tn.gov.in/

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CityExpenses

Scaled for2011-12

Physical Infrastructure Score

Source

Coimbatore 415.56 415.56 0.020 http://www.thehindu.com/news/cities/Coimbatore/arti-cle1485944.ece

Madurai 255.12 358.40 0.017 http://203.101.40.168/newmducorp/budget.htm

Puducherry* 20.24 28.89 0.001 Population of Puducherry 6.6 Times of Vellore, HenceVellore budget has been multiplied by 6.69

Travindrum 106.68 152.25 0.007 http://www.corporationoftrivandrum.in/sites/default/files/8BudgetedIncome&Exp.pdf

Kozhikode 53.27 74.84 0.004 http://www.kozhikodecorporation.org/images/news/iek310311.pdf

Cochin 80.37 114.70 0.005 http://corporationofcochin.net/finance/incExp201003.pdf

Figure 5 Local Bodies' budgets for respective candidate cities

CityPhysicalInfrastructure

PhysicalInfrastructure

Ease ofConnectivity toMedicalInstitutions

HealthIndicators

Local DiseaseBurden

Final Score

0.153846 0.307692 0.076923 0.461538

Cluster 1

Panaji 0.001593 0.000245 0.002204 0.068992 0.461538 0.532979

Surat 0.151399 0.023292 0.076583 0.065936 0.27288 0.438691

Jamnagar 0.023765 0.003656 0.076583 0.065936 0.27288 0.419055

Rajkot 0.023701 0.003646 0.076583 0.065936 0.27288 0.419045

Mumbai 1 0.153846 0.039566 0.068963 0.102423 0.364798

Pune 0.212828 0.032743 0.039566 0.068963 0.102423 0.243695

Nashik 0.071102 0.010939 0.039566 0.068963 0.102423 0.221891

Solapur 0.013431 0.002066 0.039566 0.068963 0.102423 0.213018

Cluster 2

Hyderabad 0.151376 0.023289 0.249761 0.065921 0.461538 0.800508

Vijaywada 0.0139 0.002138 0.249761 0.065921 0.461538 0.779358

Anantapur 0.001281 0.000197 0.249761 0.065921 0.461538 0.777417

Bangalore 0.435905 0.067062 0.062903 0.067102 0.407828 0.604895

Travindrum 0.007217 0.00111 0.036844 0.076923 0.445559 0.560437

Cochin 0.005437 0.000836 0.036844 0.076923 0.445559 0.560163

Kozhikode 0.003547 0.000546 0.036844 0.076923 0.445559 0.559872

Chennai 0.087723 0.013496 0.126323 0.067912 0.3391 0.546831

Mysore 0.016878 0.002597 0.062903 0.067102 0.407828 0.54043

Shimoga 0.002269 0.000349 0.062903 0.067102 0.407828 0.538182

Coimbatore 0.019698 0.00303 0.126323 0.067912 0.3391 0.536365

Madurai 0.016988 0.002614 0.126323 0.067912 0.3391 0.535949

Vellore 0.000205 3.15E-05 0.126323 0.067912 0.3391 0.533366

Puducherry 0.001369 0.000211 2.58E-06 0.067934 0 0.068147

Figure 8: Weighted aggregate score for candidate cities

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Physical Infrastructure The budget for municipal corporations/munic-

ipalities of respective candidate cities/UTs wastaken as a proxy for the physical infrastructure.

Relative Factor Ratings for AHP Model We believe that the four factors are not all

equally important. The local disease burdenshould be given the highest rating since it is themost relevant factor in determining which areasneeds the most medical help. Ease of connectivityshould be considered most important amongstthe rest since this would ensure that the facilitycould be used in time. The level of physical infra-structure in a city/town should be deemed morevital than health indicator since this can helpinduce the best talent in the medical fraternity tocome and work at these centers.

Based on the above reasoning, we haveassigned the following initial rating to the factors:

3. Results The following table shows the aggregate

weighted factor score for each candidate city:(Figure 8)

4. ConclusionsWe recommend that the new ALI’sbe located

in new facilities be located at Jammu (Jammu &Kashmir), Guwahati (Assam), Panaji (Goa)&Hyderabad (Andhra Pradesh).

Factor Weights Local Disease Burden 6

Ease of Connectivity to MedicalInstitutions 4

Physical Infrastructure 2 Health Indicators 1 Figure 6: Initial Factor Ratings

Physical Infrastructure Ease of Connectivity to MedicalInstitutions Health Indicators Local Disease Burden

0.153846 0.307692 0.076923 0.461538

Figure 7: Factor Weights

Figure 9: Sites for ALI’s

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Appendix: Analytical Hierarchical Process

Factors PhysicalInfrastructure

Ease ofConnectivity to

Medical InstitutionsHealth Indicators Local Disease

Burden

PhysicalInfrastructure Easeof Connectivity toMedical Institutions

1

2

1

1

1

4

1

0.666667

Health Indicators 0.5 0.25 1 0.166667

Local DiseaseBurden 3 1.5 6 1

6.5 3.75 12 2.833333


Ease ofConnectivity toMedicalInstitutions

HealthIndicators

Local DiseaseBurden

Row Sum Weights


0.153846 0.266667 0.083333 0.352941 0.856787 0.214197

Ease ofConnectivity toMedicalInstitutionsHealthIndicatorsLocal DiseaseBurden

0.3076920.076923

0.461538

0.2666670.066667

0.4

0.3333330.083333

0.5

0.235294 0.058824

0.352941

1.1429860.285747

1.71448

0.2857470.071437

0.42862 11 1 1 1 4 1

Table 1: Factor weight calculation through AHP Framework

OPSWorldQuiz1. Identify the operation term related to

the following picture.

2. Daily demand for a product is 120units with a standard deviation of 30units. The review period is 14days andthe lead time is 7 days. At the time ofreview 130 units are in stock. If only 1percent risk of stocking out is accept-able, how many units should beordered? (Take z=2.33)

3. Connect the pictures

4. Afamous term used in famous 1984book titled “The Goal”. Hint:- Picture

5. Three identical components each hav-ing a MTTF of 1000 hours are func-tionally connected in series. If the fail-ure time distribution is exponential,the MTTF of system is :

a. 333.3 hours

b. 3333 hoursc. 3000 hoursd. 545.5 hourse. 1833.3 hours6. Terminology used in figure for animal

tracking

7. Which type of layout is generally usedin JIT manufacturing?

a. L-shapeb. Straight Linec. Zig-Zagd. U-shape

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27

OPSWorldQuiz

OPS World

QuizOPS World

Quiz8. System representing highest level of

automation in manufacturing industry.a. Flexible manufacturing systemb. Computer aided manufacturingc. Computer aided designd. Computer integrated manufacturing

9. To convert ‘n’ jobs and 3-machineproblem into ‘n’ jobs and 2-machineproblem, the following rule must besatisfied

a. All the processing times of secondmachine must be the same

b. The minimum processing time of 2ndmachine must be ? the minimum pro-cessing times of first and thirdmachines

c. The maximum processing time of 2ndmachine must be ? the minimum pro-cessing times of first and third

machinesd. The maximum processing time of 1st

machine must be ? the minimum pro-cessing times of second and thirdmachines

10.Which of the following would beincluded in a list of dependent demanditems?

a. Computer audio subsystems deliveredto a computer superstore for sale asupgrade items

b. Car mirrors delivered to an automotivedealership as repair parts

c. Shirts delivered to a retailer for stock-ing on shelves

d. Computer hard drives delivered to thecomputer manufacturer for installationdepending on customer requests

1.Backlog2.27103.PERT4.Theory of constraints5.(a)6.RFID7.(d)8.(d)9.(c)10.(d)

OPSWorldQuiz

Answers

Across4 Diverts attention on

Highways, Japanese (6)5 ___ Armstrong and a

famous audio equipmentmanufacturer (4,2,4)

6 Imbalance, Japanese (4)8 The Father of SCM (3,3)9 Christened the word Supply

Chain Management11 Cleanliness is next to

Godliness, Japanese (5)12 Credit 4$, Debit 6$, func-

tion, (7)13 Mistake proofing, Japanese

(4,4)15 Lock, Stock and 2 smoking

____, synonym (4)16 Counter Strike Condition

Zero version (4,4)17 Beep on radar, used to

measure variability in oper-ations (8,6)

Down1 Time of work, again and again (4,4)2 Important character in The Goal1, _____ Reloaded (6)3 Bombay->Pune->Delhi-Patna, Still couldnt sell an Indigo Marina

(10,8)6 It was never meant to work the right way, because it had to (6)7 A team of 5, with 4 free riders (6)10 Child Genus, anagram (10) 14 Deadly Manifestation About

Insignificant Crap, acronym (5)

Credits: Bharat Subramony, IIM Kozhikode, Deepak Kumar, IIM Kozhikode.

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Bargain Air Fares

It all started with Expedia introducing it in the year 2004 butceased to exist as on date. Now Makemytrip has introduced thisconcept in 2011.The Idea is to sell unsold tickets in variousflights at the last moments by offering cheap prices. That shouldraise an immediate Question; passengers would be desperatelywaiting till last moment instead of taking a risk of prior book-ing for which cancellation charges are too high. Also, it is notnecessary that this type of provision with fixed seats need to beopened for every flight or trip in specified time zone. It’s purelydependent on number of seats empty on flight that moment.

Though it is in conflict with premium prices charged in airfares as day of flight nears, the tickets booked via Bargain faresquota has some exceptions because of which prior bookingscontinue to happen. Under bargain booking they need notinform about flight name or timings which you are going totravel by. Mostly, a booked passenger can only take a wild-guess on the airline. Sometimes, there can also be ahopping/connecting flight instead of direct flight. You are onlyguaranteed a flight time between 6am and 2pm (for every 8hours’ time zone), tickets are non-refundable, non-transferableand cannot be cancelled or changed (like postpone/prepone)once purchased. Nor can Bargain Fares be purchased with flyermiles or any discounts. These prices are similar to range of ini-tial price of flight ticket when booked earlier before 2 monthsor so.

Let analysis to understand it better, the Expected MarginalSeat Revenue Concept of air lines in lines with News-VendorProblem analysis says that for Optimal Booking

F(Q) =

Where Cu is Underage Cost (Price of Business class – Priceof economy class) and Co is Overage cost (Price of EconomyClass)

The above formula is used for Economy Class v/s BusinessClass

But this should be applied at other aspects alsoC Business class Price v/s Penalty paid

CuCo + Cu

AUTHORSivakumar NandipatiIIM Indore

IBargain AirFares

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Bargain Air Fares

C Economy Class Price v/s Empty seats lossUnderneath Idea comes from root of this to

form bargain fares. Let us have a clear illustrationof all possibilities and advantages caused in intro-duction of bargain fares.

There are 3 possibilities for flight ticketscapacity(supply) v/s Flight passengers for thatflight(demand).Let’s go case by case.

Scenario 1: Deals with when supply isgreater than demand

To sell unsold tickets in last hours - so that youcan make some money.

With Generic model- when the seats are notfilled full, but as the time proceeds the pricesalways keeps on increasing which creates a cumu-lative effect on decreasing demand further there-by keeping the emptier seat capacity. Now thisbargain fare just erases that problem and createsa new mode to sell tickets. Customer cannot iden-tify –whether airlines are selling tickets beingthere are excess or they are keeping buffer forcancelled forecast. They also unaware of howmany tickets being available as they never knewwhen they finish this bargain fares mode & startbooking tickets sooner thereby increasingdemand.

Scenario 2: Deals with when supply is lessthan demand

To avoid penalty charges to pre-booked cus-tomers for moving to other flight – as with thismodel, airlines will never go for over booking intheir premium or economy classes. They wouldshorten their economical class capacity – increasetheir premium class quota. So, It is evident thatprices starts increasing sooner compared to earli-er scenario. The Price they save earlier can be nul-lified in end case, incase if flight seats are notfilled. Please find below table:

Old scenario was to get over-booked tickets inpremium segment v/s penalty charges. Forecastmodel of cancellations on previous booked ticketsand last minute no-shows as explained earlier isdealt. The power in transaction stays with airlines.

Suppose airline expected a cancellation and

no shows by their forecast model and went forover-booking tickets, if it cannot accommodaterespective person on respective flight on plannedtime – It needs to pay penalty to boarded passen-ger which is much more than fare of ticket forinconvenience it caused. The demanding power offlight or money stays with customer and there isnever a written rule as such. However, Bargainfares itself don’t confirm about any uncertain inci-dents. The decision making ability stays with air-lines to use the bargain customers as buffer toavoid inconvenience to any confirmed/ pre-planned booked customer.

Urgency and economy is addressed together.

Scenario 3: Deals with supply equalsdemand,

This takes care of last minute cancellationsand no-shows resulting in accumulation of thoseseats. This is extra amount earned, as no showsand last minute cancellations (most of cost isretained with airline) are revenues already earnedand Bargain fare is a icing on the cake.

Tie-ups with Other Airline companiesSometimes, when the Overbooking shoots up

and less than expected no-shows happens , wewill have a 2-way tie-ups with other airlineswhich slowly builds up to sustain relationshipsand cooperate to dominate technique. It’s a WIN-WIN strategy for both of them.

So this seems useful in all cases. But nothingis free. Disadvantages beingC Few of the Premium/Business/urgency class

people who on traditional basis go via premi-um fares now hold for a while and check outthese fares when both of the modes are openin last hours.

C Few of prior planned customers are waitingand aiming at bargain fares, instead of book-ing earlier. That reduces booking limit of econ-omy fare and time taken to convert them intopremium segment.Once these loop holes are managed properly,

with this different pricing mechanism, revenuemanagement of airlines are honored efficientlyand effectively.

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ERP in operations management

IntroductionIn a business landscape that is getting increasingly compet-

itive and where time is money, most manufacturers depend onthe efficiency and increased delivery rates to gain and maintainthat enviable portion of market share. In this context, ERP islooked upon as the current trend and possibly the way forwardfor many manufacturing companies, and with good reason.Coming up Later is also a case of how L’Oreal leveraged ERP torevamp its operations systems and gain that much needed“makeover”.

The first commercial ERP software packages took the mar-ket by storm in the 1990’s, wherein it integrated all data andprocess related information into one single information system.But, the downside was that this was huge and as a result non-customised and unwieldy, and naturally, was branded as a com-plex tool to use. Today, the next-generation ERP has evolved tobeing operations-management-specific and a highly scalableend-to-end solution that promises to streamline and automatebusiness processes across the organisation.

ERP in recent timesERP today has morphed into a requirement-specific model.

Previously, it failed when the same package was applied to dif-ferent verticals like chemicals and Beverage industry, because,

I

ERP in operationsmanagement

AUTHORHymavathi Pavitra K.IIM Raipur

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ERP in operations management

for instance, the terminology specific to an indus-try used was not supported by the package. Thelatest ERP package, however offers industry-spe-cific functionalities that meets the diverse needsof the users.

Some of the more important features of theERP include streamlining and integrating variousorganization units like inventory, production, pur-chasing, sales and warehouse management. Theyalso use customisable web services to connectquickly and easily with suppliers, customers andlogistics-providers, enabling real time dataexchange.

The result is a simple, customisable, ERP toolthat can be used by anyone from shopfloor-upward.

ERP systems help the service engineerstremendously. An all-in-one system allows serviceengineers real time access to jobs, schedules anddata and also ensures that all changes are relayedto the management directly.

Previously, companies had to integrate theirstandalone workforce management solutions totheir ERP systems and this led to the all-too-famil-iar issue of integrating disparate systems. Now,there is a single, fully integrated system coveringall requirements, whether field service, CRM orthe mobile sales-force.

L’Oreal’s effective use of ERP in operations management

In 2011, L’Oreal, the cosmetics giant, success-fully re-engineered their entire manufacturingprocess to work efficiently, and at the same timemaintaining the quality and integrity of theirbrand. They integrated SAP’s ERP system withApriso’s FlexNet. FlexNet ran all the manufactur-ing processes on the shop floor. This project wassuccessful in ensuring that highest quality and

production standards are met while manufactur-ing 4.9 billion units within 23 global brandsacross 38 production sites.

The take-away from this, as the CIO JacquesPlaye says is the fact that operations manage-ment, when used along with ERP, can delivergreater benefits that separate implementations.

The road aheadAn ERP links the different but vital compo-

nents of an organization. It provides a backboneon which effective operations can take place.From monitoring to forecasting to gaining criticalbusiness information, ERP does it all. It providesexciting future opportunities with regard to thefact that further improvement or enhancements inERP could mean an organisational change thatflows down to each and every component that islinked. A tweak in the strategy of the organisationas a whole would flow easily to all the depart-ments.

Also, as the building block of ERP is IT, and thefact that IT is a dynamic field undergoing changes,for the better, cloud computing, for instance, ERPwill benefit greatly and the operations manage-ment, which is in conjunction with ERP, will in turnbenefit too.

References1. Kumar, R 2011, 'ERP refines operations manage-

ment and planning', Operations Management(1755-1501), 37, 5, pp. 34-36, Business SourceComplete, EBSCOhost.

2. 'All-in-one … and one for all' 2012, WorksManagement, 65, 6, p. 39, Business SourceComplete, EBSCOhost.

3. Playe, J 2011, 'L'Oréal's manufacturingMAKEOVER', Baseline, 108, pp. 34-35, BusinessSource Complete, EBSCOhost.

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Abstract:Inventory accounts for about 40-50% of the total cost in a

supply chain. Hence inventory control becomes important andeffective tool to bring down total cost. This article comparestwo strategies of inventory control- ‘traditional single deliverymethod’ (also known as EOQ model) and ‘Just-In-Time’ (SingleSetup Multiple Delivery) model. For this a matlab code has beendeveloped and implicated. This code first compares inventorycosts from both single and multiple delivery methods; thenapplies whatsoever method is more economic. Though JIT isconsidered to be more economic, it has been shown with anexample that for a supply chain least costs can be obtained byusing a combination of both of them.

1). Introduction:By traditional inventory policy we mean that goods are

transported in a single delivery. Whole stock for a season isimported at a single go and then uses throughout. The basic dif-ference between JIT and traditional method is that in JIT stockfor a season is imported in multiple deliveries thus reducinginventory cost and material wastage; but on the other handorder cost and transportation costs are increased. So a balancehas to be set between them to get economic inventory policy.

In JIT purchasing cost is minimized by the sharing of differ-ent spends between seller and buyer. The total cost for an inte-grated inventory model includes all costs from both buyer andsupplier. The buyer’s total cost consists of ordering cost, holdingcost, transportation and order receiving costs incurred due tomultiple deliveries. The supplier’s cost includes holding cost andsetup and order handling costs. In this model, the buyer isassumed to pay transportation and order handling costs inorder to facilitate frequent deliveries. In fact, the buyer’s pay-ment of transportation and order receiving costs can be viewed

ACost Effectiveness:JIT vs EOQ

AUTHORS

Gunjan SoniMalaviya National Institute of Technology, Jaipur

Aman JainIIM Lucknow

Cost Effectiveness: JIT vs EOQ

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as an investment for the sake of streamlininginventory. When the buyer places an order, in a JITenvironment, the supplier splits the order quanti-ty into small lot sizes and delivers them over mul-tiple periods. The supplier then needs to hold theinventory throughout the production of the orderquantity. An integrated approach allows the buyerand the supplier to reduce their total costs ascompared to non-integrated approach. Both par-ties in some equitable fashion can share savingsresulting from cost reduction.The supplier reducesits cost by imposing shipping and order handlingcosts on the buyer, and in turn, the buyer receivesa unit price discount because of large order quan-tities over the contract period. Thus, both partiesin the process of price negotiation share the sav-ings in the total costs occurring in their model.

3). Mathematical treatment to JIT*:Consider the following notations:D: monthly demand of buyer P: monthly production rate of seller A: ordering cost per order C: hourly setup cost for seller S: setup time F: transportation cost for linkageV: unit variable cost for buyer Hs: holding cost per unit per month for sellerHb: holding cost per unit per month for buyer.N: number of trips Q: order quantity q : quantity per trip.Total cost for buyer composed of ordering

cost, receiving cost and transportation cost. andseller’s cost consists of setup cost and holdingcost.

Equations 1 and 2 on addition gives the totalcost of both as:

from the total cost calculated above we canget the optimal number of trips and optimal orderquantity. By taking first derivative of equation 3with respect to N and Q setting them equal tozero and thus solving simultaneously for N and Q,we obtain:

Where N* and Q* are the optimum values oforder quantity and number of trips required. Thesevalues are calculated by Adding both costs we gettotal cost function in two variables N and Q,which can be, prove to be convex. Equation men-tioned above usually doesn’t give a integer. So wehave to take nearest integer greater and smallerthan N* and check the total cost value.Whatsoever gives lesser cost is taken as optimalnumber of trips.

Total saving of JIT :Any savings from implementing the SSMD

policy over the single-delivery policy can beobtained by subtracting total cost function fromtotal cost when 1 as replaces N.

Note that the N=1 is a special case for classicEOQ model. Thus we get the total saving whichcan be gained by JIT instead of classical EOQmethod. But, JIT is not always beneficial. It isadvised to adopt JIT only when order quantity

(Q) is greater than a certain limit. This limit iscalculated as:

Where N is the number of trips calculatedabove. Qmin is a function monotonically increas-ing in N.

Optimal delivery size:optimal delivery size q* can be calculated by

dividing the order quantity with number of trips,i.e. q* = Q* / N*

From above calculated values of Q* and N* isfollows that

Note that N, q and Q should be integer values.Algorithm for this is mentioned later in the paper.

Sales data for other nodes can be taken in twoways: first simply user input and secondly, it can

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be generated using forecasting techniques. In thegiven code double exponential smoothingtechnique is used to forecast sales data.

4). Sample Problem:Consider the 4-tier supply chain mentioned

above. Sales data of retailer for last six months is– 4200, 4180, 4280, 4190, 4000, 4100. Otherparameters of supply chain are given in tablesbelow. We have to optimize inventory cost.

Enter the sales data for the retailer

Calculate monthly demand for buyerusing sales data and customer service

Enter the parameters for this step (production cost, holding costs etc.)

Calculate N*, Q* and Qmiri using mathematical relations given above.

IF (Q*>Q min)

(Total cost +)=TC(Ncr; Qcr)

q*=Q*/Ncr;qcr= round (q*)Qcr=qcr*Ncr;

Ncr=N1Ner=N1

If TC(N1, Q*)>TC(N2,Q*)

Ner = 1;Qer = Q;qcr = Q;

Get smallest and great-est integers next to N* say N1 and N2

respectively

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6). Analysis:Here we see that for ‘supplier-to-manufactur-

er’ step traditional method of inventory is moreeconomic than JIT. Hence we cannot generalizethat JIT is always beneficial; although we can sayin most situations JIT is better technique forinventory control. For best results we have tocheck which of the two methods costs less- atevery step. This is done by comparing the orderquantity with Qmin. (Minimum order quantity forwhich JIT is beneficial) which is mentioned above.This code applies this logic at every step of supplychain for providing best results for you.

References:1). ‘Handbook of supply chain management’-

James B. Ayers, St. Lucia press 2001

Introduction to supply chain (3-8) ; Evolutionof supply chain models (25-35).

2). ‘Inventory management in India’ – R.S. chadda, 1964

3). ‘Statistical forecasting for inventory control’ –Robert G. Brown, TMH publications Movingaverage, single and double exponential sys-tems (26-70)

4). ‘Physical distribution systems’ – Alan C.Mckinnon ,1989 customer service level (83-92)

5). ‘Operation research – seventh edition’ –Hamdy H.Taha, Pearson education, 2004Forecasting models (491-503)

6). Research paper on ‘JIT lot splitting model forsupply chain management’ by Seung-Lae kimand Daesung Ha, 2001

Quantity Retailer ManufacturermodifiedmaterialSupplier

Raw material/source

Production rate(per month) ----* 6000 8000 10000 Holding cost(Rs. Per unit per year) 7 6 5 3 Ordering cost(Rs. Per order) 50 40 45 ---- Hourly setup cost ---- 200 100 150Set up time ---- 2 1.5 3 Variable cost (Rs. Per unit per year) 1 0.5 1.5 ----- Customer service level 96 95 98 ----- Exponential smoothing factor --- 0.9 0.9 0.9 Trend factor --- 0.9 0.9 0.9 Transportation cost 200 150 250

Step JIT cost Traditional cost JIT profit Economic Retailer-Manufacturer 10989 14822 3833 JIT Manufacturer- Supplier 7073 7139 42 JIT Supplier-Raw material 13232 14621 1389 JIT Total Supply chain 31294 36582 5288 JIT

Results obtained:

Results

Step JIT cost Traditional cost JIT profit Economic Retailer-Manufacturer 11252 11736 484 JITManufacturer- Supplier 7210 6988 -222 Traditional Supplier-Raw material 13200 13806 606 JIT Total Supply chain 31662 32530 868 JIT

Input Data:

Thus we see that a inventory cost in supply chain is reduced by Rs. 5264. Now question rises thatis JIT always profitable????

CASE 2: Here we take the same values as above but we change the production rate at steps.New production rate: For manufacturer = 12000; For supplier = 14000;For raw-material resource = 16000

It is evident that for 2nd step Traditional method of inventory control is more beneficial

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Microgrid optimization as an OR problem

Around 20% of world’s population is still without access toelectricity(The World Bank, 2012) and studies show proximity tomain electricity grid as the determining factor in people havingaccess to electricity(Oda & Tsujita, 2011). This essentially iso-lates the remote places from having access; therefore, self-sus-taining community managing local generation, storage, andgrid connected electricity model, popularly termed as micro-grids is a key solution. According to Microgrid Exchange Group(2011) “A microgrid is a group of interconnected loads and dis-tributed energy resources within clearly defined electricalboundaries that acts as a single controllable entity with respectto the grid.” Microgrids provide significant advantages likereduced energy costs, increased overall energy efficiency,improved environmental performance, and reliability(NYSERDA,2010).Microgrids essentially consist of a combination of differ-ent power generating sources, primarily renewables. A typicalmicrogrid would have a combination of power sources asshown in Figure 1.

This composite nature energy generating model throws upunique challenges like:a. Modeling the combination of sources to minimize on the

costsb. Optimizing the nature of energy distribution, andc. Distributing power requirements among the various sources

in order toensure that the combined system is reliable andsustainable.The costs associated with each of the energy generating

sources, the environmental conditions governing the amount ofpower generated by each, and the period for which each of thegenerating sources are expected to contribute vary. This calls foran Operations Research approach to optimize the costs of gen-eration subject to environment, financial, and demand con-straints.

AMicrogrid optimization as an OR problem

AUTHORSSreevas SahasranamamDoctoral Student, Strategic ManagementIIM Kozhikode

Dr. Mahesh P. BhaveVisiting Professor, Strategic ManagementIIM Kozhikode

Dr. P.N. Ram KumarAssistant Professor, Quantitative Methods and Operations ManagementIIM Kozhikode

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Microgrid optimization as an OR problem

The objective function of this OperationsResearch problem seeks to minimize the totalcostof the overall microgrid. Total cost is a func-tion of per unit energy cost associated with eachgenerating source, and costs associated withinverters and battery units. This objective functionis subject to the following constraints:

• Environmental constraint: Solar power isonly available during day time and is subjectto variations based on weather conditions likerain and cloud cover.Wind power is also sub-ject to variations depending on wind speed,location of windmill, and windmill height andsize. The amount of power generated frommicro-hydro sources depends on the amountof water available, seasonal factors, andspeed of water flow. Biogas source is depend-ent on the availability of household organicand cattle waste and organic material avail-able from nature and farming. Thusdependingon daily weather variations, theoperationalmodelhas todynamically provide an optimizedenergy solution.

• Financial constraint: Solar, wind,andmicro-hydro generation units are associated

with high initial investment but they have along life and minimal post installation costs.Diesel generator units have less initial invest-ment costs but diesel is a scarce, pollutingresource and prices have been rising signifi-cantly every year.

• Demand constraint: The power generatedfrom the microgrid must be capable of ade-quately meeting the energy demand of thecommunity.

REFERENCESDepartment of Energy Microgrid Exchange Group.

(2011). DOE Microgrid Workshop Repor. SanDiego: Office of Electricity Deliver and EnergyReliability.

NYSERDA. (2010). Microgrids: An Assessment of theValue, Opportunities and Barriers to Deploymentin New York State. New York: NYSERDA.

Oda, H., & Tsujita, Y. (2011). The determinants of ruralelectrification: The case of Bihar, India. EnergyPolicy, 3086-3095.

The World Bank. (2012). Energy - The Facts. RetrievedMarch 16, 2013, from The World Bank:http://go.worldbank.org/6ITD8WA1A0

Figure 1. Different energy sources that normally constitute a microgrid

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Operational Excellence at Erection Site:

Introduction :Simhadri Project, Stage 1, is not only a benchmark for NTPC

limited but also for other power majors in terms of project man-agement and operational excellence . The project was complet-ed in record 33 months which is a milestone in Indian context.

The Project involved the construction of a coal-fired thermalelectric power plant with an output of 1,000 MW (2X 500 MW)at a coastal location in Simhadri, in the proximity of the portand industrial town of Vishakhapatnam, in Andhra Pradesh. Thepower generated from the Project is exclusively meant formeeting the requirements of Andhra Pradesh. The primary fuel,coal [6 million tones annually] is sourced from Talcher coalfields in Orissa of the public sector Mahanadi Coalfields Ltd(MCL), located at 450 Km from the Project. The broad-gaugeline of Southeastern Railway provides the basic rail link totransport daily two rake loads of washed coal from the pitheadat Talcher to the coal handling plant of the Project with a stock-ing capacity of three-lakhs tones. The make-up cooling water[9,100 cubic meters per hour] for the Project is sourced fromBay Of Bengal Sea and sweet water [600 cubic meters per hour]from the Yeluru canal. The water is drawn from an intake wellpump house, located at 700 meters offshore of the Bay ofBengal and anchored at 25 meters below sea level. The intake-well [size; 9100 cubic meters] is the largest offshore well-con-structed in India. The two cooling towers of 165 meter heightand chimney of 275 meter height are the Asia's tallest struc-tures. Power generated from the Project is evacuated through400 kV double circuit lines from Vizag to Nunna and Khammamwhich are owned, engineered and constructed by AndhraPradesh Transmission Company.

Project Management Systems:NTPC has proven and integrated project management sys-

tem [IPMS] for implementation of power projects. The system isISO 9002 certified. A project is reviewed not only against phys-

Operational Excellence atErection Site:Simhadri Stage 1, NTPC Limited

AUTHOR

Alok Kumar SinghIIM Kozhikode

I

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ical progress but cost, material requirement andmanpower resource requirement. In order toachieve the Project Schedule dates, NTPC devel-ops three separate networks Master Network,Level -2 networks with the contractors and Level-3 networks are developed at project site for con-struction activities even with the sub-contractors.As a strategy, internal schedules are set upaheadof external schedules committed to GOI. In caseof Simhadri Project, NTPC project focused on tar-get dates which were generally a few monthsahead of external MNW schedule dates. Then, italso set up best estimate schedule [BES] in case itfails to meet the target dates. If target dates weremissed, BES dates were invariably achieved. ForExample, the following three separate goals wereset up for two MNW Schedule dates: [box1]

Close Monitoring :Project was closely monitored at various lev-

els. At Project site activities are monitored ondaily/ weekly basis with the representative of thecontractor/subcontractor working at the site.Every month under Project General Manger, aproject review meeting is regularly held at sitewhich is attended by the representatives of site,region and corporate center to review theprogress of the project in all areas and disciplines.At Regional Head Quarter, ED of the concerned

region monitored the project at least once inQuarter at site. Director Project also reviewed theprogress of the Project at site. Apart from thisministry of program implementation also moni-tored power projects through a flash report gen-erated by NTPC every month.

Critical material follow -up The project involved dispatch of over 8.5 lakhs

dispatch units [DUs] for Boiler alone. Over dimen-sional heavy consignments like Boiler Drum,Turbine stators, generators, nonmetallic expan-sion joints and transformers needed special trans-port arrangement. Most of the transportation was

NTPC project focused on target dates.If it fails to meet the target dates, it set up

best estimate schedule [BES],which was invariably met.

Goals Boiler Hydro Test [Unit #1] Boiler Light Up #1

Schedule Date May 2001 November 2001

Best Estimate Schedule [BES] April 2001 October 2001

Target March 2001 August 2001

[box1]

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by Road. Most of the OD consignments werethrough Railways which involved rail clearancesfrom as many as 8 railway headquarters. NTPC incase of Simhadri Project set up a special cell atRegional head Quarter in Hyderabad to monitor,co-ordinate and follow up on day to day basis alldispatches from works of the vendor/ supplier.Such methodology ensured that Project couldfocus on actual erection/ construction work atsite. The comparative time taken for transporta-tion by road and rail for two typical OD consign-ments are summarized below: [box2]

Monitoring of CommissioningSchedules :

General Manger of the Simhadri Project intro-duced new project management practices whichproved to be very effective for timely commission-ing of various system of the plant. In past, theemphasis at site was on monitoring of the erec-tion program based on availability of materials atsite and other exigencies. It was generally recog-nized that that commissioning activities ifplanned sufficiently in advance should lead tobetter quality standards and identification of allmissing links in the erection front at an earlystage for necessary corrective action. As a result,the following four levels of team were constitutedto monitor the commissioning activities sixmonths in advance:• Commissioning Steering Committee was

formed on 02/01/2001 with GM Simhadri asChairman and concerned HODS at CorporateCentre and Project Sites as Members to pro-vide key decisions and guidelines.

• Commissioning Panel formed on 26/12/2000,consisting of HODs at the Project to co-ordi-nate the activities of working panel and inorder to remove constraints and provideresources. 17

• 23 Working Parties formed for various systemsconsisting of a representative of all the func-tional departments. The panel met almostdaily to plan and reviewed with the progressand program with the contractor.

• Test Teams were formed for commissioning ofkey equipment and documentation ControlCentre Established The system proved veryeffective for early commissioning of the plant.

Application of IT IT Department at Simhadri Project started

functioning as early as January 1999 that is with-in a few months of the start of the Project office.MCPC, VSAT communication system was estab-lished in December 1999. PCs were procured atthe early stage and peer to peer connectivity wasestablished. It also installed super-mini computerby April 2000 and extended all local network con-nectivity, internet and e-mail facilities withinadministrative building, stores, workshop etc.Thereafter, the Project was fully geared to exten-sively use IT in the areas such as Finance andAccounts, Material Control, Monitoring of pend-ing material list, Issue of receipt certificates,Verifying and release of payment to the contrac-tor as per detailed terms of payment, Engineeringdrawings and documentations control at site,Monitoring and reporting of progress at site usingMS Project Scheduler. Simhadri is the first projectof NTPC where IT is used to maximum extent. Inthe absence of ERP solutions adopted in NTPC,the Project developed number of application soft-ware in all the above areas of IT application.

NTPC Manpower DeploymentNTPC deployed minimum manpower for this

project as compared to other Projects of NTPC.Average manpower deployed in other projects ofNTPC is in average 0.9 per MW.Whereas the actu-al manpower deployed in case of Simhadri Projectwas always less than 0.6/MW. Less manpowerdeployed ensured effective usage of the manpow-er. More Important NTPC did not recruit new man-power for this Project but re-deployed manpowerfrom other projects of NTPC. NTPC also adopted astrategy of deploying operational staff well aheadof commissioning schedule which helped them toco-ordinate all erection activities from commis-sioning and operational perspective which in turnensured early commissioning

Conclusion:Simhadri Project is an example of sheer oper-

ational excellence. NTPC proved that with theexisting system , people and skillsets , new landmarks can be achieved .

Consignment Weight Mode From ToNo. of days

Unit #1 Unit #2

Boiler Drum . Road Trichy Site 28 24

Generator . Rail Hardware Site 30 40

[box2]

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Recent perspectives on electric power quality

The proliferation of ‘sensitive’ equipment such as electronicappliances, process controllers in manufacture, computingdevices and so on during last couple of decades has broughtpower quality issues to the center stage since break down ofsuch devices, mainly due to transient voltage spikes, sagsand swells, caused large financial losses. Besides this lot ofimportant issues such as the cost of ‘poor quality’, legalrights to ‘good quality’ and economics of installation ofequipment for power quality improvement are discussedworldwide. The aim of this article is to highlight some of therecent power quality issues, especially relating to Indian con-text. Since 1960 to till date power system reliability is theprominent area for research for many research scholars.Various reliability indices for example Customer AverageInterruption Frequency Index (CAIFI) and System AverageInterruption Frequency Index (SAIFI) were developed toquantify power supply interruptions. But till date there is noagreement on whether reliability supplements or comple-ments power quality.

History of Power QualityThe origin of the term ‘power quality’ is difficult to trace

in the evolution of electrical power system. The rise of trans-formers has overruled early ‘constant current’ DC distribu-tion systems by ‘constant voltage’ AC transmission and dis-tribution. The three basic features or qualities of voltage,


Amol Subhash DhaigudeFPMIIM Indore

AUTHOR

T

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namely magnitude, frequency and sinusoidalwaveform were assumed to be inherently main-tained uniformly in any power system, and allappliances were designed to operate efficientlywhile adhering to these three features. With theadvent of large power electronic invertors andconvertors and adjustable speed drivers gave riseto harmonic current. However the problem stillremained steady one. Supply interruptions wereconsidered more from a reliability point of view.Lighting surges and other transient phenomenawere still viewed as contributing more to supplyreliability than to power quality.

The proliferation of ‘sensitive’ equipmentsuch as electronic appliances, process controllersin manufacture, computing devices and so on dur-ing last couple of decades has brought powerquality issues to the center stage since breakdown of such devices, mainly due to transientvoltage spikes, sags and swells, caused largefinancial losses. Besides this lot of importantissues such as the cost of ‘poor quality’, legalrights to ‘good quality’ and economics of installa-tion of equipment for power quality improvementare discussed worldwide. The aim of this article isto highlight some of the recent power qualityissues, especially relating to Indian context.

What is Power Quality?The simplest definition of power quality is

“any deviation from the specified magnitude andfrequency of the voltage, and its non-sinusoidalcontent.” A pithy and somewhat adequate defini-tion of power quality is offered in IEEE standards1159 [1]: “ Any power problem manifested involtage, current, or frequency deviations thatresults in failure or mis-operation of customerequipment is based on deficient power supply.”But in a nut shell we can infer that “Good powerquality is not easy to define because what is goodpower quality for refrigerator motor may not begood enough for today’s personal computers orother sensitive loads. For example a short outagewould not be noticeably affect motors, lights etc.but could cause major nuisance to digital clocks,videocassette recorders etc.”

A summary of common Power QualityProblems

Power quality problems can be classified indifferent ways. One common description iswhether it is a transient or a steady state prob-lem. Transient problems need time domain analy-sis where as steady state one uses a phasor modelof the system. Table 1 lists the various types ofpower quality disturbances.

Table 1: Power Quality Disturbance

Power Quality Problem ResolutionTechniques

When the source of the problem is identifieschoice of solutions can be developed. Table 2 listssome typical problems and their causes with pos-sible mitigating solutions. Any deviation from thenominal constant frequency sinusoidal waveformcan have wide ranging consequences in the entiresystem operation. Some of the impacts are listedbelow

Table 2: Problems and Solutions

Impact of Deficient Power SystemA generalization of the impacts of deficient

power quality is difficult, since adequate qualitydiffers for different situations. It can be mentionedin general that harmonic currents flowing in thesystem increase energy losses. Voltage dips cancause brownouts and blackouts that can lead tolarge financial losses. Table 3 lists the costsincurred in some typical industries due to onesuch event of supply interruption.

Table 3: Cost of Poor Power Quality

• Metering: poor power quality can affect theaccuracy of utility metering

• Proactive relays: poor power quality can causeproactive relays to malfunction.

• Downtime: poor power quality can result inequipment downtime and/or damage, result-ing loss of productivity.

• Costs: poor power quality can result inincreased costs due to the effects mentionedabove.

• Electromagnetic compatibility: poor powerquality can result in problems related to elec-tromagnetic compatibility and noise.

Power Quality Monitoring and Auditing

Extensive power monitoring and recording ofthe electrical quantities becomes necessary totrace the source of any power quality problemand design suitable mitigation solutions. Freepower quality monitoring services are made avail-able to clients at their premises by utilities likeTennessee Valley Authority (TVA). Latest powerquality metering equipments are pressed intoaction, and field engineers are trained to interpret

IndustryTypical financial losses per event

Semiconductor Production 3800000

Financial trading 6000000 ( Per hour)

Computer Center 750000

Telecommunication 30000 ( per minute )

Steel Works 350000

Glass Industry 250000

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Categories and Characteristics of Power System Electromagnetic Phenomena

CategoriesTypical Spectral

ContentTypical Duration

Typical VoltageMagnitude

1.0 Transient

1.1 Impulsive

1.1.1 Nanosecond 5-ns rise <50 ns

1.1.2 Microsecond 1-micro sec rise 50 ns-1 ms

1.1.3 Millisecond 0.1-ms rise >1 ms

1.1 Oscillatory

1.2.1 Low Frequency <5 kHz 0.3-50 ms 0-4 pu

1.2.2 Medium Frequency 5-500 kHz 20 micro s 0-8 pu

1.2.3 High Frequency 0.5-5 Mhz 5 micro s 0-4 pu

2.0 Short-duration variations

2.1 Instantaneous

2.1.1 Interruption 0.5-30 cycles <0.1 pu

2.1.2 Sag(dip) 0.5-30 cycles 0.1-0.9 pu

2.1.3 Swell 0.5-30 cycles 1.1-1.8 pu

2.2 Momentary

2.2.1 Interruption 30 cycles-3 s <0.1 pu

2.2.2 Sag(dip) 31 cycles-3 s 0.1-0.9 pu

2.2.3 Swell 32 cycles-3 s 1.1-1.4 pu

2.3 Temporary

2.3.1 Interruption 3 s- 1 min <0.1 pu

2.3.2 Sag(dip) 3 s- 1 min 0.1-0.9 pu

2.3.3 Swell 3 s- 1 min 1.1-1.2 pu

3.0 Long-duration variations

3.1 Interruption, sustained >1 min 0.0 pu

3.2 Under voltages >1 min 0.8-0.9 pu

3.3 Overvoltage >1 min 1.1-1.2 pu

4.0 Voltage unbalances Steady State 0.5-2%

5.0 Waveform distortion

5.1 DC offset Steady State

5.2 Harmonics 0-100th harmonic Steady State 0-0.1%

5.3 Interharmonics 0-6 kHz Steady State 0-20%

5.4 Notching Steady State 0-2%

5.5 Noise Broadband Steady State 0-1%

6.0 Voltage fluctuations <25 Hz <25 Hz 0.1-7%

0-2-2 pst

7.0 Power frequency Variations <10 s

NOTE : s=seconds, ns=nanoseconds, ms=milliseconds, kHz=kilohertz, MHz=Megahertz,min=minute, pu=per unit

Table 1: Power Quality Disturbance

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the data and recommend remedial solutions.Dranetz was one of the pioneering leaders inpower quality measurements and had compiled alarge number of ‘power signatures’ of voltage andcurrent waveforms in a single volume [2]. Manyelectrical consulting companies offer services at acharge to study potential power quality problemsin commercial and industrial establishments. Anautomobile factory at Pune, India faced poorpower factor due to their spot welding machinesand utilized the services of an agency for improv-ing the plant power factor to almost 100% [3]. Anew term ‘power quality auditing’ signifies anextensive, all embracing approach to power qual-ity problems that includes the following in a sin-gle package.

• Site survey• Thermograph test• Power quality monitoring• Analyzing measurement results from electrical

and cost point of view• Solving power quality problems• Giving a comprehensive economic analysis of

the solution and its impact

Power Quality StandardsSince latter half of the 1980s, standards

organizations such as Institute of Electrical andElectronic Engineering (IEEE), American NationalStandard Institute (ANSI) and InternationalEletrotechnical Commission (IEC) and industryvoices such as Computer Business Equipment

Table 2: Problems and Solutions

Problem Description Duration Cause Effect Possible Solution

MomentaryInterruption

Very shortplanned or acci-dental power loss

0.5 cycles to 3sec

Switching opera-tions interruptingto locate electri-cal problem andmaintain powerto your area

Equipment tripsoff, Programmingis lost, Disk drivecrashes

UPS or Standbypower supply(SPS) for criticalloads

TemporaryInterruption/Longterm outage

Planned or acci-dental total lossof power in alocalized area ofthe service area

Temporary (3 sec-1 min). Long-Term(Over 1 Min)

Equipment fail-ure, Contractorsdigging intounderground con-ductor wires,vehicle hittingpole, storms

System shutsdown

Uninterruptablepower supply(UPS) for criticalloads

Sag/Swell Brief reductionsor increases involtages

0.5 cycle to 1minute. Sags orSwell longer than1 minute arecalled under volt-ages or over volt-ages

Major equipmentstart up or shutdown .ShortCircuits (faults).Undersized elec-trical wiring

.Memory loss.Data errors. Dimor bright lights.Shrinking displayscreens.Equipment shut-down

Relocate equip-ment to differentelectrical circuitwithin facility,Power condition-ers or UOS sys-tems for Criticalloads

Surge Sudden change involtage up to sev-eral thousandvolts (also calledimpulse, spike ortransient)

< 1 msec Lighting. Turningmajor equipmenton or off. Utilityswitching

. Processingerrors. Data loss.Burned circuitsboards

Install surge sup-pressor at mainpanel ( best whenused in combina-tion with branchcircuit surge sup-pressor)

Noise HarmonicDistortion

Continues distor-tion of normalvoltage

Steady State . Electromagneticinterference fromappliances,machines, radiosand TV broad-casts. Harmonicdistortion fromnon linear loads(computer, lights)

. Continuous dis-tortion of normalvoltage. Randomdata errors

. Use a noise fiberdesigned forapplication(sometimes incor-porated withsurge suppres-sors). Power con-ditioners

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Manufacturers Association (CBEMA), US NationalElectrical Manufacturers Association (NEMA)have been actively working on developing powerquality standards. Standards are helpful to all endusers (industrial, commercial and residential) andtransmission and distribution agencies achievesome common ground on issues affecting them.Mandatory acceptance of the standards is still leftsomewhat open to the stakeholders. IEEE 519 and1159, IEC 61000 Series of the Standards and ANSIC84.1 are documents directly addressing powerquality, whereas IEEE colour-coded books such asgray, green, orange emerald and gold focus onspecific topics such as grounding, standby sup-plies and so on for commercial and industrial sup-plies.

In a recent study on power standards in Indiathe conclusion is that “Existing norms in India areunsatisfactory and we have to aim at achievinginternational standards.” India was given the low-est rating of 1.85, the rating point being 1 to 6 forpoor to excellent position of power supply, by theWorld Economic Forum in its 1996 reports onGlobal Competitiveness. There seems to be littleor no efforts to develop specific norms for Indianconditions.

Cost of Good Power QualityRecent advancements in digital monitoring

and control and high capacity power electronicsdevices are helping alleviate, mitigate or evencompletely solve many power quality problems.Harmonics are eliminated at the source throughuse of filters. Line conditioners using activedevices can supply the required quantity of supplyto any consumer equipment. The root cause ofmany power quality problems, namely, powerelectronic devices, in conjunction with microcon-trollers and switching logic, helps eliminates allproblems of clean and constant power. A goodpower system designer possesses the analyticalability to mitigate the electromagnetic causes ofpower quality deterioration with digital controland programmed microcontrollers. An example isthe elimination of line current distortion causeddue to non-linear and phase controlled loads [4].

The cost of power quality improving solutionsstill remains quite high in many instances, whichcan be from Rs. 2500 to few lakhs of rupees perkVA[5]. The question is - Who bears this cost: is itthe customer or the utility?

Power Quality perspectives in IndiaThe results of a power quality survey on a 33

kV industrial supply system in India are describedby Kushare et al [6]. The conclusion is that thepower quality has been deteriorated over the last10 years and that no power quality standards

have been enforced in India. MoreoverGovernment of India’s energy conservation act of2001 will increase the use of non-linear loads andworsen the trend. Malleswara Rao et al [7] citethe statistics of power quality problems catego-rized in terms of customers: Domestic customers(56%) account for the major share of problem fol-lowed by commercial (12%), agricultural (11%),industrial (10%) and others (11%) customers.Voltage- related problems are shown to be themajor ones with a contribution of almost 92%overall. The voltage regulator is used by majorityof Indian as a remedial.

As pointed out in the report prepared for theUSAID_SARI/ENERGY Program Nexant[8], indus-try in most Asian countries are now served fromstandby generation due to poor quality andpower shortages, leading to significant environ-mental impacts and higher energy costs to endusers. The report points out the chronic power andenergy shortage and notes that “ the actualpower supply position for India as on March 2002indicates that, at the aggregate level, power con-sumers in India face power shortages to the tuneof 12.6% in peak power (kVA) availability and tothe tune of 7.5% in energy (kWh) availability.”This situation exists in many Latin American andAfrican countries [9]. The real power quality prob-lem is traced to this ever-widening gap between

The power quality has deteriorated as no standards have been

enforced in India. With GoI’s EnergyConservation Act,

2001 the trend is set to worsen.

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generation and demand, and pointed efforts needto be made to balance environmental concernsand power quality requirements in an economicalmanner.

Legal Aspects of Power QualityAs mentioned earlier, the responsibility for

good power quality is still very difficult to assignto any particular party. There are many legal bat-tles underway related to power quality com-plaints, and it is mostly customer versus utility. Thebasic question is what the rights of the consumersare with regard to power availability in generaland power quality in particular. The IndianElectricity Act of 2003 [10] mentions quality ofsupply in many of the places (mostly coupled withcontinuity) but no definition, not even a vagueone, is given. Maharashtra Electrical RegulatoryCommission (electricity supply code and otherconditions of supply) Regulations 2005 containssections on quality of supply and system of sup-ply, and power/harmonics. It mentions that it shallbe obligatory for the HT consumers and LT con-sumers (Industrial and commercial only) to con-trol the harmonics of their loads at levels pre-scribed by IEEE STD 519-1992 and in accordancewith the relevant orders of the commission.However, dispute resolution procedures are notvery clear.

Greening the Power QualityAll attempts to deliver clean power need to

focus on environmental concerns. The design of allequipments starting from the energy-consumingones such as household, commercial, industrialand agricultural need to go back to drawing table,and environmental factors such as efficiency,heating, and waste disposal need to be factoredinto. As indicated in various reports, conversationefforts seem to be counteracting the power qual-ity standards. While choosing and designingstandby power supplies, environmental factorsshould override cost benefits. Sustainable devel-opment needs a long-range perspective. End userpower quality problems such as harmonics, volt-age sags and transients can be effectively elimi-nated from leaking into supply grid by many mit-igation procedures. The question is that of eco-nomics and how manufacturers and end userscome to a compromise and give priority to theresulting good power quality and the associatedbenefits. The standby supplies have to bedesigned from an all-encompassing point of viewof conversion, environmental preservation andclean power. In the Indian context, stronger normsand standard specific to the situations existinghere need to be set. The electricity acts and regu-lations must protect the interest of all consumers.

As Director Ralph van Hof of Ecopower insists,“Rules are necessary to guarantee continuity ofpower supply.”[11]

References1. Standard Handbook for Electrical Engineers, 14th

edition (1999) New York: McgGraw Hill2. Draenetz-BMI (1997) The handbook of Power

Signatures, 2nd edition3. http://www.electricalmonitor.com/ArticleDetails.

aspx?aid=743&sid=14. Cobben J.F.G. and Casteren J.F.L. van (2006)

Classification methodologies for power Quality.Electrical Power Quality and Utilization MagazineII(1): 11-18

5. Doughetry J.G. W.L. (1997) power Quality: A utilityand industry perspective. Proceedings of the IEEE1997 Annual textile, fiber and Film IndustryTechnical Conference, 6-8 May 1997, pp 1-10

6. Kushare B.E., Ghatol A.A., and Date T.N. (2007)Power Quality survey of 33 kV Indian industrialsupply system: Results and Remedial Actions.International Power Engineering conference, 3-6December 2007, pp 320-325

7. Malleswars Rao A.N., Ramesh Reddy K. and SankerRam B.V. (2010) Economic Aspects of PQDisturbance in India. International Journal ofAdvanced Engineering Sciences and Technologies10(1), pp 76-81

8. Economic impact of poor power quality on indus-try: Review studies. Report prepared forUSAID_SARI/Energy program, Nexant, November2003.

9. Nicolas R. and Estsva M. (2011) Why there is poorquality of service in electrical power systems andwhat to do to stop its propagation. CONCAPANXXXI, IEEE, Section EI Salvador EI Salvador,November 2011.

10. Ministry of Law and Justice, Govt. of India (2003)The Electrical Act, 2003 New Delhi: LegislativeDepartment, Ministry of Law and Justice, Govt. ofIndia.

11. Rules Are Necessary to Guarantee Continuity ofPower Supply. Disdag, 31 January 2012 08: 12

Bibliography1. Baggini A 9ed.) (2008) Handbook of power Quality.

Chichester, UK: John Wiley & Sons Ltd2. Fuchd E.F. and Masoum M.A.S. (2008) Power qual-

ity in Power systems and Electrical machines.London

3. Kusco A. and Thompson M.T. (2007) power Qualityin Electrical Systems, McGraw Hill.

4. Singh L.P., Jain S.P. and Jain D.K. (2009) PowerQuality related consumer Rights in IndianElectricity Market. IEEE Electrical Power & EnergyConference, 2009. de

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equipment manufacturer (4,2,4)6 Imbalance, Japanese (4)8 The Father of SCM (3,3)9 Christened the word Supply Chain

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