OPSESSION | Volume 2 | Issue 6
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Cover Story: Location Decision Using a New Technique: The UTA Method
E-Supply Chain Management It’s emergence in e-commerce businesses ____ X-Ops conducts NIRNAY
Opsession November Issue This is the sixth issue from Volume two of Opsession, the monthly newsletter of X-Ops. The newsletter was introduced last year by X-Ops with the intent of covering all the activities and events that took place during the span of a month.
Around the World with Operations Management
Xavier Institute of Management, Bhubaneswar Volume#2
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Around the world with Operations and Supply Chain Management Amazon India going “gyan-gyan” to other markets Amazon is making most out of the lessons learnt from its struggles with last mile delivery through India’s choked roads and cramped cities to some of its largest developed markets, exploring a model of cheaper deliveries and reduced warehousing costs. Online shopping is booming in India, making it Amazon’s largest contributor of new customers outside the US. The unreliability of Indian roads has been a constant woe for Amazon and its peers like Flipkart. In response, these firms have set up logistics networks and use motorbikes instead of trucks. The recent move by Flipkart, for using the highly reliable network of Mumbai’s dabbawalas is quite commendable. In Britain, it has started a delivery service called Easy Ship, where orders are picked up by Amazon’s crew directly from sellers, cutting out the time and cost of sending goods to a warehouse and the need for more space. This goes as lessons learnt in India for World.
Flipkart maps its logistic using MapMyIndia
Amazon introduces drones for takeaways
Flipkart’s renewed focus on supply chain and logistics is highlighted in its strategic investment in MapMyIndia, a digital map data, GPS navigation and location-based apps provider. It will use MapMyIndia’s location intelligence capabilities across its supply-chain network, from first-mile pick-up to last-mile delivery. The company also announced it would roll out ‘unique’ solutions in the areas of address verification, real-time shipment tracking, facility mapping and theft minimization with the help of MapMyIndia solutions. Flipkart reacquired its logistics business from WS Retail, the biggest merchant on the platform. WS Retail, too, used to be a subsidiary of Flipkart. These moves by Flipkart come at a time when its competitors, Amazon and Snapdeal, have upped their game significantly especially in logistics and delivery. For instance Snapdeal offers a 90-minute reverse pick-up in some locations.
Amazon is showing off a new drone prototype for its planned 30 minute unmanned delivery service, dubbed Amazon Air. The new drone contains elements of both a helicopter and an airplane, including a rear-facing propeller. According to Amazon, the drone can fly 15 miles at an altitude of nearly 400 feet. A new commercial of Amazon demonstrates how the drone stores the package, intelligently navigates to the delivery location, and gently drops the package off before returning to the warehouse.
VW has Fixes for 90% of Emissions Scandal Cars in Europe Volkswagen (IW 1000/7), mired in a massive emissions cheating scandal has found technical solutions for more than 90% of the vehicles affected in Europe. The recall process is now viable technically, financially and in terms of manpower. The carmaker has admitted to fitting 11 million diesel engines worldwide with sophisticated software fitted to skew the results of tests for nitrogen oxide emissions. That admission has triggered both regulatory and criminal investigations in several countries, including Germany and the United States. Volkswagen has subsequently revealed that beyond the nitrogen oxide scam, it had also understated carbon dioxide emissions of 800,000 vehicles, including petrol cars.
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Location Decision Using a New Technique Location decisions have long-term impact on a supply chain performance because it is very expensive to shut down a facility or move it to a different facility. Once the location decisions are taken the firm has to live with it. IMPORTANCE OF LOCATION DECISIONS TO AN ORGANISATION: Location decisions are often important – to both large and small businesses. The operation’s costs as well as its ability to serve customers is directly dependent on the location decision. And once the decision is made then it’s very difficult and costly to undo. The costs of moving an operation are often significant and run the risk of inconveniencing customers and staff. It is always best to get the location decision right first time. There is no such thing as the perfect business location. Every choice made involves having to balance the supply (cost) and demand (revenue) factors. Thus, good location decision can help Organization to be: i) Responsive to the market ii) Lowering the costs. And there always occurs a trade-off whether to centralize in order to gain economies of scale or to decentralize to become more responsiveness by being closer to the customer. The various factors affecting Locations decisions are:
the
Land availability and cost Labor availability and cost Availability of Raw material Market Proximity Unionization Transportation availability Taxes Pollution/environmental consideration Political factors
This research tries to provide the best possible answer to the questions related to location decisions considering both
the Qualitative and Quantitative aspects of factors affecting Locations decisions.
Steps involved in UTA Method:
Methods used worldwide are as follows:
The Factor-Rating method Location Break-Even Analysis Centre-of-Gravity method Sampat Padhi and Anuja Verma Transportation model Location decision using a recent technique - The UTA Method The Utility Additive (UTA) method, proposed by Jacquet-Lagreze and Siskos (1982),aims at inferring one or more additive value functions from a given ranking on reference set. The decision maker usually considers a set of actions (alternatives), called A, which is valued by a family of criteria, g = (g1, g2,…, gn). A classical operational attitude of assessing a model of overall preference of the decision maker leads to the aggregation of all the criteria a utility function, U(g). Utility function is a unique criterion for assessing level of satisfaction from different relevant parameters considered during deciding location by a company. U(g)=U(g1, g2,…, gn) Let gi* and gi* be respectively the most and the least preferred value (grade) of ith criterion. The most common normalization constraints using the additive form Equation are as follows:
i) Utility function of each action using multi-criteria evaluation is done ii) Using the data, the normalized decision data is created setting most preferred as 1 and calculating the value of others with respect to the most preferred. iii) The interval range, number of intervals and the interval difference is calculated. iv) Based on the results, the least and most preferred value of criteria is taken and the range is set. v) For each attribute, marginal utility at of each alternative is calculated. vi) The utility values of alternative facility locations are calculated using the above results. vii) Objective function for minimizing the error relative to the utility function is formulated. viii) The constraints taken are set as per the minimum utility condition. ix) The above LPP is solved using LINDO software which gives us the required results. x) The utility functions are arranged in descending order. xi) Based on values, the final ranking of facility locations is done.
STEPS INVOLVED IN UTA METHOD:
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Few approaches used in UTA method: (a)The value system approach: Value system takes selection problem and decision maker's preferences together. Aggregation of preferences is done based on different criteria. Aggregation is done for the value or utility of those criteria which help decision maker in taking decision. (b)The outranking relationship approach (as illustrated in figure) BRIEFLY UTA METHOD DEALS IN SOLVING FACILITY LOCATION SELECTION PROBLEMS WHERE THE OBTAINED RESULTS CAN BE QUITE VALUABLE TO THE DECISION MAKER IN FRAMING THE LOCATION SELECTION STRATEGIES
IMPLICATION TO THE INDUSTRY As the optimal solution of the Linear Programming problem results in a zero value to the objective function, the utility functions are perfectly compatible with the reference sequence. Due to this characteristic, UTA method is quite reliable with the location requirements.
UTA Method gives the same ranking of the alternative locations as the ranking given by Graph Theory and Matrix Approach (GTMA), Simple Additive Weighting (SAW), Weighted Product Method (WPM) and TOPSIS method. So, UTA method can be adopted by different industry which previously used these methods for location selection.
impact on the performance of the manufacturing organizations. It also has long-term implications because changing the locations of the existing facilities may be quite expensive. It is essential to select the most appropriate facility location for a given industrial application which will minimize the cost over an extended period of time.
CONCLUSION
UTA method deals in solving facility location selection problems where the obtained results can be quite valuable to the decision maker in framing the location selection strategies. It is observed that the UTA method is a viable tool in solving the location selection decision problems. It allows the decision maker to rank the candidate alternatives more efficiently and precisely.
The problem of facility location selection is a strategic issue and has a significant
References 
Facility Location Selection Using the UTA Method by Rajanikar Kumar, Vijay Manikrao Athawale and Shankar Chakraborty from IUP Journal of Operations Management.

Operation management by Nigel Slack, Alistair Jones and Robert Johnstan.
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E-Supply Chain Management Electronic Supply Chain Management (eSCM) combines both business processes and business value for the benefit of the entire network of extended enterprise comprising of all the vendors and customers. It takes care of all the steps in the business cycle, from initial product design and procurement of raw materials, through shipping, distribution, and warehousing right up to the point of delivery of finished products to the customer. Over the past decade a gamut of economic changes, technological innovation and market forces such as globalization, the ever expanding variety of product offerings and increasing complexity of supply networks has encouraged companies to examine and redesign their supply chain strategies.
The approach of conducting business has been continuously changing from the face-to-face human interactions towards the virtual business environment, resulting in the emergence of E-business. E business refers to automated business processes conducted by means of information and electronic. The term “end-to-end business operation” implies smooth interactive and collaborating connections between different parties of an extended demand and supply chain, which involves integrating "designers, suppliers, and buyers, trading partners, logistics providers and end-customers" in the supply chain. E-business has transformed business operations and processes as well as creating completely new business models and markets.
It consists of electronic business and supply chain management and depicts the way how trade channel members work together to optimize resources and opportunities.
The success of an e-supply chain depends on:
The ability of all supply chain partners to view partner collaboration as a strategic asset
Visibility of information along the entire supply chain Speed, cost, quality, and customer service Tighter integration of the supply chain Supply Chain Elements
Upstream supply chain- 1st tier supplier and 2nd tier supplier which are dealing with activities of a manufacturing company‘s suppliers. Internal supply chain- Manufacturing and Packaging dealing with internal value chain, manufacturing and inventory control Downstream Supply-chain: distribution, retailer and customer centre dealing with distribution, warehousing and transportation. The capabilities of e-SCM are logistics capabilities; inventory and fulfilment capabilities; information technology resources, IT human resource and partner readiness capabilities; managerial IT knowledge and IT deployment capabilities.
OPSESSION | Volume 2 | Issue 6 E-SCM is a 3-tiered process. The foremost stage is the integration of processes and functions within an organization. Followed by the crossintegration of operational functions in the supply chain partners, such transportation and supply forecasting and an inventory in supply chains. The final stage is the highest level of achieving synchronization functions in the entire supply chain from the whole purchasing network into a single virtual organization to optimize the competencies and resources in the supply chain. CHARACTERISTICS OF SUPPLY CHAIN MANAGEMENT IN E-ENVIRONMENT The total activation of SCM models was main barrier to allow a connection between business systems. The Internet overcomes this gap. In the entire supply chain, an access to and display of capacity planning, product information database data, forecasts, an inventory, financial data and other aspects of organizations needed for effective decision-making are allowed. The components of e-SCM: •E-information •e-collaboration •e-synchronization
6 BRIEFLY E-SCM IS A 3-TIERED PROCESS. THE FOREMOST STAGE IS THE INTEGRATION OF PROCESSES AND FUNCTIONS WITHIN AN ORGANIZATION. FOLLOWED BY THE CROSS-INTEGRATION OF OPERATIONAL FUNCTIONS IN THE SUPPLY CHAIN PARTNERS. THE FINAL STAGE IS THE HIGHEST LEVEL OF ACHIEVING SYNCHRONIZATION FUNCTIONS IN THE ENTIRE SUPPLY CHAIN
E-information: Speed is the fundamental attribute of information obtained from the Internet. Organizations, to acquire capital using e-information on the basis of the created system allowing a use of real time data about the supply chain. It helps to manage the supply chain in any situation and respond effectively to the planned as well as unexpected situations. E-information allows greater control and more transparency throughout the supply chain. Thus it strengthens the organization with more efficient models of process management in supply. Information about unforeseen events allows a management-efficient analysis, planning and forecasting in the supply chain. It ensures a deeper and broader relationship between organizations in the supply chain network.
E-collaboration E-SCM allows organizations healthy relations with partners throughout the supply chain and create superb networking. Better synchronization of information between networked business partners allows better integration in whole supply chain like a single organization. The supply chain network is created with traditional entities such as suppliers, manufacturers, distributors and retailers. The realization of completely new sales methods and new sales channels is also enabled. For a business to be successful, organizations must be abreast with new principles of cooperation within the supply chain. E-synchronization: - Challenges of operating in the market, can be met by adopting new methods of timely connecting e-information. It is the transfer of e-information in the quickest possible way through the supply chain and the interconnecting of all parts of the network in order to form a smooth supply chain, i.e. e-supply chain synchronization. The e-SCM being implemented by ecommerce has definitely helped Flipkart, Amazon and others likely. Yet it has more to catch up on.
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NIRNAY 2015
T
he much awaited event, NIRNAY ’15 organized by X-OPS the operations committee of XIMB has been conducted in a befitting manner. The event was conducted during Xpressions ’15 in two phases. Being a pan-India event, participation came in from various premier B-schools across India. The event was focused to test the agility of participants to apply the concepts of operations and supply chain on real time problems. BRIEFLY A TOUGH FIGHT IN THE FINALS SAW TEAM MARCOPS FROM IIM RANCHI AND TEAM 100X FROM XIMB FINISH AT THE TOP SPOTS. TEAM NM WARRIORS OF NMIMS CAME A CLOSE THIRD.
The first round of the event being an online quiz saw a good number of participation which was conducted as a basic elimination round. The quiz comprised of 35 questions with a time constraint of 25 minutes with the objective of selecting the most capable candidates. The questions ranged from a gamut of topics, starting from operations management through supply chain to the current happenings and techniques being used to optimize businesses. These
topics tested not only the knowledge on trending topics but also about its history. Rated as an average questionnaire the quiz received a good feedback from the participants. After the quiz a total of 12 teams were selected for the next round. The second or the finale round was held on 13th of November with the 12 finalists battling it out in the simulation game designed by the Nirnay team. The game was based on the setting up of an ecommerce firm. It was designed for a period of four years with various conditions applied for different years. In the first year, the participants were required to do the basic setup of the organization, as in choosing the correct business model to maximize the revenue and minimize the cost, setting up the web portal, choosing the courier service and the marketing budget. In the second year, along with the above mentioned factors other options were added from which the participants had to choose the
optimal one. The choices available were cash on delivery and mobile app. In the third year, the participants got options of choosing between expanding it to more cities or providing after sales service in those cities.
The fourth year provided options of setting up in-house courier service and offline stores. Demands were specified for each available option based on which profits were calculated. The team which maximized profit was declared the winner. It was a tough fight amongst the finalists with marginal differences in the scores. The team Marcops from IIM Ranchi had a neck to neck fight with team 100X from XIMB and they eventually grabbed the 1st and 2nd positions respectively. The NM Warriors from NMIMS finished a close 3rd. The sincere efforts put in by the organizing team made Nirnay ’15 a success and was a good learning experience for the participants.
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