STUDENT’S CERTIFICATE

Certified that this report is prepared based on the summer internship project undertaken by me in

HCL INFOSYSTEMS LTD. from 14th May 2012 to 6th July 2012, under the guidance of Ms.

Jayanti Srivastava in partial fulfilment of the requirement for award of degree of Bachelors of

Commerce(honors) from Amity University, Uttar Pradesh.

Date--------------------

--------------- ----------------- -----------------

Hiba Jameel Ms.Jayanti Srivastava Professor V. P. Sahi Student Faculty guide Director ABS ABS

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FACULTY CERTIFICATE

Forwarded here with a summer internship report on “Study on Operations Management at

HCL Infosystems Ltd.” submitted by Hiba Jameel Enrolment No A7004610053 student of

B.Com (HONS) III year (2010-13).

This project work is partial fulfilment of the requirement for the degree of Bachelors of

Commerce (honors) from Amity University Lucknow Campus, Uttar Pradesh.

--------------------------------

Ms. Jayanti Srivastava

ASSISTANT PROFESSOR

Amity University,

Lucknow Campus

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INDUSTRY GUIDE CERTIFICATE

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ACKNOWLEDGEMENT

First and foremost, I would like to express gratitude to my Institution, Amity University Lucknow for providing me a magnificent opportunity in the form of this internship to work and learn.

The report bears the imprint of many people. There are many kind of helping hands, to which I owe my sense of gratitude. So, I express my appreciation to all those, whose thoughts and insights helped me in understanding and completing project titled “Study On Operations Management at HCL Infosystems” .

I am highly grateful to my organization guide Mr. Jai Thomas, Regional Manager (Accounts &

Administration), HCL Infosystems, Lucknow, for his encouragement, guidance and valuable

suggestions, which I incorporated in my project. I dedicate this whole project work to him, who

has always been there to help, guide and support me throughout the project development process.

I express my sincere thanks to faculty guide Ms.Jayanti Srivsatava (Professor, Amity Business

School), as he gave me professional advice from time to time.

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TABLE OF CONTENTS

S.NO CONTENTS PAGE NO.

1. Chapter I-I NTRODUCTION

i. Background of study ii. Scope of the study

iii. Objective of the study

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2. Chapter II-Organizational Structure of the Company

i. History ii. Vision and mission

iii. Objectives of HCL iv. Alliances and partnershipv. Management team of HCL

vi. Corporate information vii. SWOT analysis

viii. Achievements of HCL

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1520212223242527

CHAPTER III-Presentation of data and analysis

i. methodology ii. Data sources

iii. Operations management at HCLiv. Role of operations management v. Objective of operations management

vi. Scope of operations management vii. Materials management at HCL

viii. Maintenance management at HCLix. Inventory management at HCL x. Cash management at HCL

xi. Collection policies at HCL xii. Role of operations manager at HCL

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2930313439

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4. CHAPTER IV-Findings and Conclusion

i. CONCLUDING ANALYSIS ii. CONCLUSION

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5. AnnexureFinancial Statements for HCL Infosystems Ltd.

BIBLIOGRAPHY

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LIST OF FIGURES AND TABLES

Topic Page NumberTable 1: Company Profile 13Table : 2: HCL- A Snap Shot 15Table 3: carrying cost 56Table 4: raw materials 58Table 5: work in progress 59Table 6: finished goods 59Table 7 :operating goods 60Table 8:raw materials consumptions 60

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CHAPTER I

BACKGROUND OF STUDY

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This project is based on the study of operations management at HCL. An insight view of the

project will encompass – what it is all about, what it aims to achieve, what is its purpose and

scope and drawing inferences from the learning so far.

HCL Infosystems Limited (HCL) is a leading domestic computer hardware and hardware

services company. HCL is engaged in selling manufactured (like PCs, servers, monitors and

peripherals) and traded hardware (like notebooks, peripherals) to institutional clients as well as in

retail segment. It also offers hardware support services to existing clients through annual

maintenance contracts, network consulting and facilities management.

Operations management is an area of management concerned with overseeing, designing,

controlling the process of production and redesigning business operations in the production of

goods and/or services. It involves the responsibility of ensuring that business operations

are efficient in terms of using as few resources as needed, and effective in terms of meeting

customer requirements. It is concerned with managing the process that converts inputs (in the

forms of materials, labour, and energy) into outputs (in the form of goods and/or services). The

relationship of operations management to senior management in commercial contexts can be

compared to the relationship of line officers to highest-level senior officers in military science.

The highest-level officers shape the strategy and revise it over time, while the line officers

make tactical decisions in support of carrying out the strategy. In business as in military affairs,

the boundaries between levels are not always distinct; tactical information dynamically informs

strategy, and individual people often move between roles over time.

SCOPE OF STUDY

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The scope of operations management ranges across the organization. In Operations management people are involved in product and service design, process selection, selection and management of technology, design of work systems, location planning, facilities planning, and quality improvement of the organization’s products or services.

The operations function includes many interrelated activities, such as forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, deciding where to locate facilities, and more.

We can use an airline company to illustrate a service organization’s operations system. The system consists of the airplanes, airport facilities, and maintenance facilities, sometimes spread out over a wide territory. Most of the activities performed by management and employees fall into the realm of operations management:

Forecasting such things as weather and landing conditions, seat demand for flights, and the growth in air travel.

Capacity planning, essential for the airline to maintain cash flow and make a reasonable profit. (Too few or too many planes, or even the right number of planes but in the wrong places, will hurt profits.)

Scheduling of planes for flights and for routine maintenance, scheduling of pilots and flight attendants and scheduling of ground crews, counter staff, and baggage handlers.

Managing inventories of such items as foods and beverages, first-aid equipment, in-flight magazines, pillows and blankets, and life preservers.

Assuring quality, essential in flying and maintenance operations, where the emphasis is on safety, and important in dealing with customers at ticket counters, check-in, telephone and electronic reservations, and curb service, where the emphasis is on efficiency and courtesy.

Motivating and training employees in all phases of operations.

Locating facilities according to managers’ decisions on which cities to provide service for, where to locate maintenance facilities, and where to locate major and minor hubs.

OBJECTIVE OF THE STUDY

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The objectives of this project were mainly to study operations management, its importance in an

organisation but there are some more and they are -

The main purpose of my study is to render a better understanding of the concept “Operations

Management”.

To understand the planning and management of business activity.

To know the advantages of operations management at HCL

Through this project I would study the various methods of operations management.

Develop a working knowledge of concepts and methods related to designing and managing

operations and supply chains.

Understand how operations relate to other business functions.

This project is vital to me in a significant way. It does have important role in the company.

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CHAPTER II

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Organizational Profile of HCL Infosystems

HINDUSTAN COMPUTERS LIMITED

Type Private

Founded 11th August 1976

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Headquarters Noida, India

Key People Shiv Nadar, Founder, Chairman & CEOSanjay Kumar Choudhary , Vineet Nayar

Industry Information Technology Services

Revenue ▲6.2 billion USD (2012)

Employees 90000 (2012)

Subsidiaries HCL Technologies

HCL Infosystems

Website www.hcl.com

FIG.1

THE BACKGROUND: HCL Infosystems is no flash in the Information Technology pan. Founded in 1976, the firm has climbed into pantheon of India's corporate giants on the strength of its IT products and services. HCL Infosystems specializes in IT hardware (PC's and servers, as well as networking, imaging and communications products), and system integration services serving the domestic Indian market. In addition to its consumer products, the company provides commercial IT products, facilities management, network services, and IT security services for clients in such industries as government, financial services, and education. HCL Corporation owns significant stakes in HCL Infosystems (about 44%) and sister company HCL Technologies.

HCL Infosystems Ltd, a listed subsidiary of HCL, is an India-based hardware and systems

integrator. It claims a presence in 170 locations and 300 service centers. Its manufacturing

facilities are based in Chennai, Pondicherry and Uttarakhand .Its headquarters is in Noida.

HCL Peripherals (A Unit of HCL Infosystems Limited) Founded in the year 1983, has

established itself as a leading manufacturer of computer peripherals in India, encompassing

Display Products, Thin Client solutions, Information and Interactive Kiosks. HCL Peripherals

has two Manufacturing facilities, one in Pondicherry (Electronics) and the other in Chennai

(Mechanical) .The Company has been accredited with ISO 9001:2000, ISO 14001, TS 16949 and

ISO 13485.

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HCL Technologies is a leading global IT services company, working with clients in the

areas that impact and redefine the core of their businesses.

HCL focuses on 'transformational outsourcing', underlined by innovation and value

creation, and offers integrated portfolio of services including software-led IT solutions,

remote infrastructure management, engineering and R&D services and BPO.]

HCL has global partnerships with several leading Fortune 1000 firms, including several

IT and technology majors.

Provides services to industry sectors including financial services, manufacturing,

aerospace & defence, telecom, retail & CPG, life sciences & healthcare, media &

entertainment, travel, transportation & logistics, automotive, government and energies &

utilities.

HISTORY

HCL Infosystems Ltd is one of the pioneers in the Indian IT market , with its origins in 1976.For over quarter of a century, we have developed and implemented solutions for multiple market

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segments, across a range of technologies in India. We have been in the forefront in introducing new technologies and solutions. The highlights of the HCL saga are summarized below:

Year Highlights

1976 Foundation of the Company laid Introduces microcomputer-based programmable calculators with wide acceptance in the scientific / education community.

1977 · Launch of the first microcomputer –based computer with a ROM.· Based Basic interpreter.· Unavailability of programming skill with customer result in HCL developing bespoke applications for their customers.

1978 · Initiation of application development in diverse segments such As textiles, sugar, paper, cement, transport.

1980 Formation of Far East Computers Ltd. a pioneer in theSingapore IT market, for SI (System Integration) solution.

1981 Software Export Division formed at Chennai to support theBespoke application development needs of Singapore.

1983 HCL launches an aggressive advertisement campaign with thetheme `even a typist can operate` to make the usage ofcomputers popular in the SME (Small & Medium Enterprises)Segment. This proposition involved menu-based application forThe first time, to increase ease of operations. The response toThe advertisement was phenomenal. HCL develops special program generators to speed up theDevelopment of application.

1985 Bank trade unions allow computerization in banks. However, acomputer can only run one application such as Saving Bank,Current account, loansetc…· HCL sets up core team to develop the required software-ALPM (Advanced Ledger Posting Machines). The team usesreusable code to reduce development efforts and produce moreReliable code.HCL designs and launches Unix –based computers and IBMPC dons.

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HCL promotes 3rd party PC application nationally.

1986 Zonal offices of banks and general insurance companies adoptComputerization. Purchase specification demand the availability of RDBMSproducts on the supplied (Unify,Orade).HCL arranges for suchProducts to be ported to its platform. HCL assists customers to migrate from flat-file based systemsTo RDBMS.

1991 HCL enters into a joint venture with Hewlett Packard· HP assists HCL to introduce new services: Systems Integration,IT consulting, packaged support services (baseline, team line)· HCL establishes a Response Centre for HP products, which isConnected to the HP Response Centre in Singapore.· There is a vertical segment focus on Telecom ,ManufacturingAnd Financial Services.

1994 HCL acquires and executes the first offshore project from IBMThailand· HCL sets up core group to define software developmentMethodologies.

1995 Starts executions of Information System Planning projects. Execution projects for Germany and Australia. Begins Help desk services.

1996 Sets up the STP (Software Technology Park) at Chennai toExecute software projects for international customers. Becomes national integration partner for SAP.

1997 Chennai and Coimbatore development facilities get ISO 9001Certification.

1998 Kolkata and Noida STPs set up. HCL buys back HP stake in HCL Hewlett Packard.

1999 Acquires and sets up fully owned subsidiaries in USA and UK. Sets up fully owned subsidiary in Australia. HL ties up with Broad vision as an integration partner.

2000 Sets up fully owned subsidiary in Australia Chennai and Coimbatore development facilities get SET level 4Certification. Bags Award for Top PC Vendor In India. Becomes the 1st IT Company to be recommended for latestVersion of ISO 9001:2000.

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Bags MAIT,s Award for Business Excellences. Rated as No. 1 IT Group in India.

2001 Launched Pentium IV PCs at below Rs 40,000 IDC rated HCL Infosystems as No. 1 Desktop PC Company of2001.

2002 Declared as Top PC Vendor by Dataquest. HCL Infosystems & Sun Microsystems enters into a EnterpriseDistribution Agreement.

2003 Became the first vendor to register sales of 50.000 PCs in aQuarter. First Indian company to be numero uno in the commercial PCMarket. Enters into partnership with AMD. Launched Home PC for Rs 19.999 HCL Infosystems Info Structure Services Division receivedISO 9001:2000 certification. Launches Infiniti mobile Desktops on Intel Platform. Launched Infiniti PCs, Workstations & Servers on AMDPlatform.

2004 1st to announce PC price cut in India ,post duty reduction ,offersEzeebee at Rs.17, 990.IDC India-DQ Customer Satisfaction Audit rates HCL as No.1Brand in Desktop PCs.

Maintains No. 1 position in the Desktop PC segment for year2003. Enters into partnership with Port Wise to support & distributeSecurity& VPN solution in India. Partners with Microsoft & Intel to launch Beanstalk Neo PC. Becomes the 1st company to cross 1 lac unit milestone in theIndia Desktop PC market.Launched RP2 systems to overcome power problem for PCUsers.Registers a market share of 13.7% to become No.1 Desktop PCCompany for year 2004.Crosses the landmark of $1 billion in revenue in just month.

2005 1st to announce PC price cut in India ,post duty reduction ,offersEzeebee at Rs.17, 990. IDC India-DQ Customer Satisfaction Audit rates HCL as No.1Brand in Desktop PCs.Maintains No. 1 position in the Desktop PC segment for year

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2003. Enters into partnership with Port Wise to support & distributeSecurity& VPN solution in India. Partners with Microsoft & Intel to launch Beanstalk Neo PC. Becomes the 1st company to cross 1 lac unit milestone in theIndia Desktop PC market. Launched RP2 systems to overcome power problem for PCUsers. Registers a market share of 13.7% to become No.1 Desktop PCCompany for year 2004. Crosses the landmark of $1 billon in revenue in just month.

2006 75,000+machines produced in a single month. HCL Infosystems in partnership with Toshiba its retail presenceIn India by unveiling shop Toshiba. HCL Infosystems & Nokia announce a long team distributionStrategy. IDBI selects HCL as SI partner for 100 branches ICTinfrastructure rollout HCL Infosystems showcases computer Solution for the RuralMarket in India. HCL From a strategic Partnership with APPLE to provide Sales&Services Support for IPods in India. HCL Infosystems sustains its commercial Desktop PCLeadership for the fifth consecutive year. HCL Infosystems rated as number one Desktop PC Company byIDC, Sixth year successively. HCL launches “trusted ICT infrastructure platform” for theBPO –IteS segment. HCL launches India’s first High Performance Enterprise ServerPlatforms Powered by dual core Intel titanium. HCL completes 30 years in India. HCL in association with The Music Academy, Madras bringsHCL Concert Series to Chennai City. Enters into partnership with Casio.

2008 HCL unveils that e future of personal computer Launches nextgenerating, ultra portable, sub 14000/laptop Milled series forThe first time in India. HCL strengthens its BPSI system Integration Portfolio-Acquires a niche banging Software Product Company.

2010 Awarded with best telecom support services.Selected as business super brand of India.

2011 Awarded with number one employer of the year Launches its sleek tablet.

2012 India jury award for best open and distance learning practices in higher education.

TABLE 2.

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VISION AND MISSION OF THE COMPANY

VISION STATEMENT:

"Together we create the Enterprises of Tomorrow"

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MISSION STATEMENT:

"To provide world-class Information Technology solutions and services in order to enable our customers to serve their customers better"

CORE VALUES:

Nothing transforms life like education.

We shall honor all commitments

We shall be committed to Quality, Innovation and Growth in every endeavor

We shall be responsible corporate citizens

QUALITY POLICY:

"We shall deliver defect-free products, services and solutions to meet the requirements of our external and internal customers, the first time, every time."

OBJECTIVES OF HCL INFOSYSTEMS

MANAGEMENT OBJECTIVES –

To fuel initiative and foster activity by allowing individuals, freedom of action and

innovation in attaining defined objectives.

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PEOPLE OBJECTIVES –

To help people in HCL Infosystems Ltd., Share Company’s success, which they

make possible; to provide job security based on their performance; to

Recognize their individual achievements; and help them gain a sense of satisfaction and

accomplishment from their work.

ALLIANCES AND PARTNERSHIPS

To provide world-class solutions and services to all our customers, HCL Infosystems have

formed Alliances and Partnerships with leading IT companies worldwide.

HCL Infosystems has alliances with global technology leaders like Intel, AMD, Microsoft, Bull,

Toshiba, Nokia, Sun Microsystems, Ericsson, and nVIDIA, SAP, Scansoft, SCO, EMC, Veritas,

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Citrix, CISCO, Oracle, Computer Associates, RedHat, Infocus, Duplo, Samsung and Novell.

These alliances on one hand give us access to best technology & products as well as enhancing

our understanding of the latest in technology. On the other hand they enhance our product

portfolio, and enable us to be one stop shop for our customers.

     

MANAGEMENT TEAM

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Ajai ChowdhryCo-Founder HCL, Chairman and CEO - HCL Infosystems.An engineer by training, Ajai Chowdhry is one of the six co-founder members of HCL, India’s premier IT conglomerate. J V RamamurthyChief Operating Officer HCL Infosystems Ltd.J V Ramamurthy has an engineering degree in Electronics & Communications, from Guindy Engineering College, and a Masters' degree in Applied Electronics from the Madras Institute of Technology, both in Chennai.

Rajendra Kumar Executive Vice President - Frontline Division HCL Infosystems Ltd. Mr. Rajendra Kumar has been with HCL for over 30 years and has seen HCL grow from a start-up company to a gigantic conglomerate that it is today.

CORPORATE INFORMATION:

BOARD OF DIRECTORS Chairman AND Chief Executive Officer Ajai Chowdhry Whole-time Director J.V. Ramamurthy

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Directors S. Bhattacharya D.S. Puri R.P. Khosla E.A. Kshirsagar Anita Ramachandran T.S. Purushothaman Narasimhan Jegadeesh V.N. Koura

COMPANY SECRETARY Sushil Kumar Jain

AUDITORS Price Waterhouse, New Delhi

BANKERS State Bank of India Canara Bank

HDFC Bank Ltd. ICICI Bank Ltd. Societe Generale Standard Chartered Bank State Bank of Patiala State Bank of Saurashtra

REGISTERED OFFICE 806, Siddharth, 96, Nehru Place, New Delhi - 110 019.

SWOT ANALYSIS OF HCL INFOSYSTEMS LTD

STRENGH:

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a) Global Presence:

Its collaborations and joint ventures with international companies such as Perot System, and partnership with world leaders like Ericsson, Toshiba, Nokia, Oracle and Microsoft, enable it to bring the best technology available worldwide to its consumers.

24 locations in 16 countries.

b) Fast paced and flexible work culture which provides its employees Autonomy to accomplish the task without much pressure from the higher authorities. Thus, employees are motivated to give their best to the organization.

c) The core strength of HCL is the talent and innovativeness of its people which enables it to provide the “right solution at the right time.”

d) The mass markets handled through a chain of dealers, resellers andRetailers which help bring technology usage closer to the individual.It has very strong distribution network.

e) Its pool of competencies: Hardware, Software, Training, Networking, Telecom and System Integration.

f) Ability to understand customer's business and offer right technology.

g) Long standing relationship with customers.

h) Pan India support & service infrastructure.

I) Best-value-for-money offerings.

WEAKNESSES:

After sales service. Less promotional campaigns.

OPPORTUINITES:

a) IT industry booming at a rate of 45% every year.b) Increasing consumer awareness about IT and its use.c) Tremendous untapped potential of IT products in India.

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d) Increasing competition.e) Tie ups with various MNCs enable to extract their core competencies.

THREATS:

a) Local assemblers are biggest menace for the company.b) Entry of MNCs i.e. IBM, Compaq giving direct competition.c) Govt. instability has a long term repercussions affecting companies Policies & its growth.d) Technological shift as a result of research & development. Daily new Technologies are emerging.

Concluding the S.W.O.T. analysis in words that prosperity lies ahead forHCL. In order to retain its position as India’s No. 1 IT conglomerate, it has toCome out with the state of art as well as futuristic technologies to its consumersWell before time.

ACHEIVEMENTS AND AWARDS OF HCL

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India's Most Preferred Personal Computer Brand by CNBC AWAAZ Consumer Award2007

India's 'No. 1 PC Vendor' consecutively for six years. HCL among the Top 3 IT companies for the last 3 years, DQ & IDC,Best Employer Survey, 'Best employer 2005' with Five Star Ratings.

Top 50 in ET Top 500 Companies' Listings for 2006

Top 21 companies in Business Standard 1000 Ranking 2006

7th IETE - Corporate Award 2005' for performance excellence in the field of Computer & Telecommunications Systems

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CHAPTER III

RESEARCH METHODOLOGY

This project requires a detailed understanding of the concept – “Operations

Management”. Therefore, firstly we need to have a clear idea of what are operations and

how it is managed in HCL Infosystems.

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The management of operations involves managing inventories, accounts receivable and

payable and cash.

And, in the end, suggestions and recommendations on ways for better management and

control over operations are provided.

DATA SOURCES

The following sources have been sought for the preparation of this report:

Primary sources such as internet websites the important amongst them being:

www.hclinfosystems.in

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Secondary sources like previous year’s annual reports, reports on working capital for

research, analysis and comparison of the data gathered.

While doing this project, the data relating to cash management, receivables management,

and inventory management was required.

This data was gathered through the company’s websites, its corporate intranet, and

HCL’s annual reports of five years.

A detailed study on the actual working processes of the company is also done through

direct interaction with the employees and by timely studying the happenings at the

company.

OPERATIONS MANAGEMENT AT HCL

With intense global competition, companies today understand that the best way to boost the bottom line is to cut costs through more efficient operations management (OM). Beyond the intimidating jargons and sophisticated tools that operations management offer, how does it help companies improve operations efficiency?

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Operations management is an area of management concerned with overseeing, designing, controlling the process of production and redesigning business operations in the production of goods and/or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed, and effective in terms of meeting customer requirements. It is concerned with managing the process that converts inputs (in the forms of materials, labour, and energy) into outputs (in the form of goods and/or services). The relationship of operations management to senior management in commercial contexts can be compared to the relationship of line officers to highest-level senior officers in military science. The highest-level officers shape the strategy and revise it over time, while the line officers make tactical decisions in support of carrying out the strategy. In business as in military affairs, the boundaries between levels are not always distinct; tactical information dynamically informs strategy, and individual people often move between roles over time

Nature and Scope of Operations Management

Operations management is often used along with production management in literature on the subject. It is therefore, useful to understand the nature of operations management .Operations management is understood as the process whereby resources or inputs are converted into more useful products .A second reading of the sentence reveals that, there is hardly any difference between the terms produ7ction management and operations management .But, there are a least two points of distinction between production management and operations management .First, the term production management is more used for a system where tangible goods are produced .Whereas ,operations management is more frequently used where various inputs are transformed into tangible services .Viewed from this perspective, operations management will cover such services organization as banks ,airlines ,utilities ,pollution control agencies super bazaars, educational institutions ,libraries ,consultancy firm and police departments, in addition ,of course ,to manufacturing enterprises. The second distinction relates to the evolution of the subject. Operation management is the term that is used nowadays .Production management precedes operations management in the historical growth of the subject .The two distinctions notwithstanding, the terms production management and operations management are used interchangeably.Scope of Production and Operation Management

The scope of production and operations management is indeed vast .Commencing with the selection of location production management covers such activities as acquisition of land, constructing building, procuring and installing machinery, purchasing and storing raw material and converting them into saleable products.

Added to the above are other related topics such as quality management, maintenance

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management, production planning and control, methods improvement and work simplification and other related areas.

Evolution of Production Function

In order to trace the evolution of production function, we identify six historical developments: the Industrial Revolution, scientific management, the human relations movement, operations research, computers and advanced production technology and the service revolution a brief explanation of each stage follows.

The industrial Revolution

Since times ancient production systems were used in one form or another. The Egyptian Pyramids, the Greek Parthenon, the Great Wall o0f China and the aqueducts and the roads of the Roman Empire, dams built by the Chola kings attest to the ingenuity and industry of the people of ancient times but the ways the people in the ancient days produced goods were different from the production methods of today. Production systems prior to the 1700s are often referred to as the cottage system, because the production of goods took place in homes or cottages, where craftsman directed apprentices in performing hand work on, products.

From 1770 to the early 1800s series of events took p[lace in England which together are called the Industrial Revolution. Industrial Revolution resulted in two major developments: widespread substitution of machine power for human power and establishment of the factory system.

The events that took p[lace from 1770 to the 1800s are characterized by great inventions. The great inventions were eight in number ,with six of them having been conceived in England, one in France and one in the United States .The eight inventions are—Hargreaves Spinning Jenny, Arkwright’s Water Frame, Crompton’s Mule, Cartwright’s Power Loom, Watt’s steam engine, Berthelot’s Chlorine Bleaching Discovery.Mandslay’s Screw-Cutting Lathe and Eli Whitney’s Interchangeable Manufacture.

As observed from eight inventions, most of them have to do with the spinning of yarn and weaving of cloth .This is logical from the point o view that cloth was the principal export commodity of England at that time and was in short supply owi8ng to the considerable expansion of England’s colonial empire and its commercial trade.

The availability of machine power greatly facilitated the gathering of workers in factories that housed the machines .The large number of workers congregated in the factories, created the need for organizing them in logical ways to produce goods. The publication of Adam Smith’s The Wealth of Nations in 1776 advocated the benefits of the division of labour or specialization of labour, which broke production of goods into small specialized tasks that were assigned to

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workers on production lines.Thus, the factories of late 1700s not only had developed production machinery ,but also ways of planning and controlling the output of workersThe impact of the Industrial Revolution was first felt in England .From here, it spread to other European countries and to the United states.

The Industrial Revolution advanced further with the development of the gasoline engine and electricity in the 1800s.Other industries emerged and along with them new factories came into being. By the middle of 1800s. The old cottage system of production had been laced by the factory system .As days went by, production capacities expanded, demand for capital grew and labour became highly dependent on jobs and urbanised. At the commencement of the 20th century, the one element that was missing was a management –the ability to develop and use the existing facilities to produce on a large scale to meet massive markets of today.

ROLE OF OPERATONS MANAGEMENT AT HCL

Operations manager fills a pivotal role in a business, government or other organization. The precise tasks of an operations manager depend in large part upon the nature and size of the enterprise, but she needs a wide range of business and interpersonal skills to succeed. In general, operations manager plans, oversees and smooth communication.

Management of Resources

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Operations management play a leading role in managing both raw materials and personnel. Oversight of inventory, purchasing and supplies is central to the job. Human resources tasks include determining needs, hiring employees, overseeing assignment of employees and planning staff development.

Financial ManagementOperations management play a key role in budgeting, controlling costs and keeping the organization on track financially. The management of the supply chain and other resources helps minimize costs of production. They study business forecasts, sales reports and financial statements to find ways to maximize results. They use methods such as cost-benefit analysis to improve efficiency. Modern operations management even includes sustainability in the financial equation.

Goal-settingOperations management set goals and objectives and establish policies for various departments in the organization. For example, operations manager duties include sales forecasting and planning of sales promotions. In cooperation with other managers, they help establish procedures and put them into effect.

CommunicationsOperations managers need good communication and interpersonal skills to help the different parts of an organization work together. Their job includes creating a positive culture where the work can get done. They facilitate communication between employees and departments. At times, operation managers help resolve disputes or disagreements. Operations managers cooperate in high-level decision making with other top executives of an organization, such as the president, chief financial officer and chief executive.

OPERATIONS SYSTEM

An operation was defined in terms of the mission it serves for the organisation, technology it employs and the human and managerial processes it involves. Operations in an organisation can be categorised into Manufacturing Operations and Service Operations. Manufacturing

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Operations is a conversion process that includes manufacturing yields a tangible output: a product, whereas, a conversion process that includes service yields an intangible output: a deed, a performance, an effort.

Operations system converts inputs in order to provide outputs, which are required by a customer. It converts physical resources into outputs, the function of which is to satisfy customer wants.

Everett E. Adam & Ronald J. Ebert defines as ‘An operating system is the part of an organization that produces the organization’s physical goods and services’.

Ray Wild defines operations system as ‘a configuration of resources combined for the provision of goods or services’.

In some of the organisation the product is a physical good (breakfast in hotels) while in others it is a service (treatment in hospitals). Bus and taxi services, tailors, hospital and builders are the examples of an operations system

A departmental store's has an input like land upon which the building is located, labour as a stock clerk, capital in the form of building, equipment and merchandise, management skills in the form of the store manager. Output will be serviced customer with desired merchandise. Random fluctuations will be from external or internal sources, monitored through a feedback system.

A Framework of Managing Operations

Managing Operations can be enclosed in a frame of general management. Operation managers are concerned with planning, organising, and controlling the activities, which affect human behaviour through models.

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Planning is the activity that establishes a course of action and guide future decision-making. The operations manager defines the objectives for the operations subsystem of the organisation, and the policies, and procedures for achieving the objectives. This stage includes clarifying the role and focus of operations in the organization’s overall strategy. It also involves product planning, facility designing and using the conversion process.

Organizing is the activities that establish a structure of tasks and authority. Operation managers establish a structure of roles and the flow of information within the operations subsystem. They determine the activities required to achieve the goals and assign authority and responsibility for carrying them out.

Controlling is the activities that assure the actual performance in accordance with planned performance. To ensure that the plans for the operations subsystems are accomplished, the operations manager must exercise control by measuring actual outputs and comparing them to planned operations management. Controlling costs, quality, and schedules are the important functions here.

1. Behaviour: Operations managers are concerned with the activities, which affect human behaviour through models. They want to know the behaviour of subordinates, which affects managerial activities. Their main interest lies in the decision-making behaviour.

2. Models: Models represents schematic representation of the situation, which will be used as a tool for decision-making. Following are some of the models used.

Aggregate planning models for examining how best to use existing capacity in short term, break-even analysis to identify break-even volumes, Linear programming and computer simulation for capacity utilisation, Decision tree analysis for long-term capacity problem of facility expansion, simple median model for determining best locations of facilities, etc.

OPERATIONS MANAGEMENT

Joseph G .Monks defines Operations Management as the process whereby resources, flowing within a defined system, are combined and transformed by a controlled manner to add value in accordance with policies communicated by management

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The operations managers have the prime responsibility for processing inputs into outputs. They must bring together under production plan that effectively uses the materials, capacity and knowledge available in the production facility. Given a demand on the system work must be scheduled and controlled to produce goods and/or services required. Control must be exercised over such parameters such as costs, quality and inventory levels.

The definition of the operations Management contains following keywords: Resources, Systems, transformation and Value addition Activities.

RESOURCES

Resources are the human, material and capital inputs to the production process. Human resources are the key assets of an organisation. As the technology advances, a large proportion of human input is in planning and controlling activities. By using the intellectual capabilities of people, managers can multiply the value of their employees into by many times. Material resources are the physical facilities and materials such as plant equipment, inventories and supplies. These are the major assets of an organisation. Capital in the form of stock, bonds, and/or taxes and contributions is a vital asset.

Capital is a store of value, which is used to regulate the flow of the other resources.

SYSTEMS

Systems are the arrangement of components designed to achieve objectives according to the plan. The business systems are subsystem of large social systems. In turn, it contains subsystem such as personnel, engineering, finance and operations, which will function for the good of the organisation.

A systems approach to operations management recognises the hierarchical management responsibilities. If subsystems goals are pursued independently, it will results in sub-optimization. A consistent and integrative approach will lead to optimization of overall system goals.

The system approach to specific problems requires that the problem first be identified an isolated from the maze of the less relevant data that constitute the environment. The problem abstracted

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from the overall (macro) environment. Then it can be broken into manageable (micro) parts an analysed and solutions proposed. Doing this analysis is advantageous before making any changes. If the solution appears to solve the problem in a satisfactory way, changes can be made to the real system in an orderly and predictable way.

The ability of any system to achieve its objective depends on its design and its control. System design is a predetermined arrangement of components. It establishes the relationships that must exist between inputs, transformation activities and outputs in order to achieve the system objectives.

With the most structured design, there will be less planning and decision-making in the operations of the system. System control consists of all actions necessary to ensure that activities conform to preconceived plans or goals. It involves following four essential elements:

1. Measurement by an accurate sensory device.

2. Feedback of information in a timely manner.

3. Comparison with standards such as time and cost standards.

4. Corrective actions by someone with the authority and ability to correct.

A closed loop control system can automatically function on the basis of data from within its own system.

OPERATIONS MANAGEMENT OBJECTIVES AT HCL

The processes whereby resources, flowing within a defined system, are combined and transformed by a controlled manner to add value in accordance with policies communicate by management.

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Objectives of Operations Management can be categorized into Customer Service and Resource Utilisation.

CUSTOMER SERVICE

The first objective of operating systems is to utilize resources for the satisfaction of customer wants. Therefore, customer service is a key objective of operations management. The operating system must provide something to a specification, which can satisfy the customer in terms of cost and timing. Thus, providing the ‘right thing at a right price at the right time’ can satisfy primary objective.

These aspects of customer service – specification, cost and timing – are described for four functions in They are the principal sources of customer satisfaction and must therefore be the principal dimension of the customer service objective for operations managers.

Generally, an organisation will aim reliably and consistently to achieve certain standards and operations manager will be influential in attempting to achieve these standards. Hence, this objective will influence the operations manager’s decisions to achieve. Other considerations

Manufacture Goods of a given, requested Cost, i.e. purchase price or cost of obtaining or acceptable specification goods. Timing, i.e. delivery delay from order or request to receipt of goods.

Transport Management of a given, Cost, i.e. cost of movements.

Timing, i.e. requested or acceptable

1. Duration or time to move. Specification

2. Wait or delay from requesting to its commencement.

Supply Goods of a given, requested or Cost, i.e. purchase price or cost of obtaining acceptable specification goods. Timing, i.e. delivery delay from order or request to receipt of goods.

Service Treatment of a given, requested Cost, i.e. cost of movements. Timing, i.e.

Or acceptable specification

1. Duration or time required for treatment.

2. Wait or delay from requesting treatment to its commencement.

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RESOURCE UTILISATION

Another major objective of operating systems is to utilize resources for the satisfaction of customer wants effectively. Customer service must be provided with the achievement of effective operations through efficient use of resources. Inefficient use of resources or inadequate customer service leads to commercial failure of an operating system.

Operations management is concerned essentially with the utilisation of resources, i.e. obtaining maximum effect from resources or minimising their loss, under utilisation or waste. The extent of the utilisation of the resources’ potential might be expressed in terms of the proportion of available time used or occupied, space utilisation, levels of activity, etc. Each measure indicates the extent to which the potential or capacity of such resources is utilised. This is referred as the objective of resource utilisation.

Operations management is concerned with the achievement of both satisfactory customer service and resource utilisation. An improvement in one will often give rise to deterioration in the other.

Often both cannot be maximized, and hence a satisfactory performance must be achieved on both objectives. All the activities of operations management must be tackled with these two objectives in mind, and because of this conflict, operations managers’ will face many of the problems. Hence, operations managers must attempt to balance these basic objectives.

The type of balance established both between and within these basic objectives will be influenced by market considerations competitions, the strengths and weaknesses of the organization, etc. Hence, the operations managers should make a contribution when these objectives are set.

The twin objectives of operations management

The customer service objective The resource utilizations objective i.e. to provide agreed/adequate levels of customer i.e. to achieve adequate levels of resource service (and hence customer satisfaction) by providing utilizations (or productivity) e.g. to achieve goods or services with the right specification, at the right agreed levels of utilizations of materials, cost and at the right time, machines and labour.

THE STRATEGIC ROLE OF OPERATIONS

Primary goals of the organisations are related market opportunities. Economy and efficiency of conversion operations are the secondary goals, which will be predominant with the study and practice of operations management.

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A STRATEGIC PERSPECTIVE

The general thrust of the process is guided by competitive and market conditions in the industry, which provide the basis for determining the organization’s strategy. Where is the industry now and where it will be in the future? What are the existing and potential markets?

What market gaps exist, and what competencies do we have for filling them? A careful analysis of market segments and the ability of our competitors and ourselves to meet the needs of these segments will determine the best direction for focusing an organization’s efforts.

After assessing the potential within an industry, an overall organizational strategy must be developed, including some basic choices of the primary basis for competing. In doing so, priorities are established among the following four characteristics:

• Quality (product performance).

• Cost efficiency (low product price).

• Dependability (reliable, timely delivery of orders to customers).

• Flexibility (responding rapidly with new products or changes in volume).

In recent years, most organizations cannot be best on all these dimensions and, by trying to do so, they end up doing nothing well. Furthermore, when a competency exists in one of these areas, an attempt to switch to a different one can lead to a downfall in effectiveness (meeting the primary objectives).

Time is emerging as a critical dimension of competition in both manufacturing and service industries. In any industry the firm with the fastest response to customer demands has the potential to achieve an overwhelming market advantage. In an era of time-based competition, a firm's competitive advantage is defined by the total time required to produce a product or service. Firms able to respond quickly have reported growth rates over three times the industry average and double the profitability. Thus the pay-off for quick response is market dominance. These basic strategic choices set the tone for the shape and content of the operations functions.

OPERATIONS OBJECTIVES

The overall objective of the operations subsystem is to provide conversion capabilities for meeting the organization’s goals and strategy. The sub-goals of the operations sub system, must specify the following:

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1. Product/service characteristics.

2. Process characteristics.

3. Product/service quality.

4. Efficiency

5. Effective employee relations and cost control of labour.

6. Cost control of material.

7. Cost control in facility utilization.

8. Customer service (schedule)

9. Producing quantities to meet expected demand.

10. Meeting the required delivery date for goods or services.

11. Adaptability for future survival.

The priorities among these operations’ sub-goals and their relative emphases should be direct reflections of the organization’s mission. Relating these six operations sub-goals to the broader strategic choices above, it is clear that quality, efficiency, and dependability (customer service) are reflected in the sub-goals. Flexibility encompasses adaptability but also relates to product/service and process characteristics: Once choices about product and process are made, boundaries for meeting the other operations objectives are set.

OPERATIONS ALTERNATIVES AND TRADEOFFS

The operations sub-goals can be attained through the decisions that are made in the various operations areas. Each decision involves important tradeoffs between choices about product and process versus choices about quality, efficiency, schedule and adaptability.

Once a decision is made, it leads to many choices. Where should facilities be located? How large should they be? What degree of automation should be used? How skilled must labour be to operate the automated equipment? Will the product be produced on site? How do these decisions impact quality, efficiency, schedule (customer service), and adaptability? Are we prepared for changes in product or service, or do these decisions lock in our operations? These are examples of the tough, crucial tradeoffs that are at the heart of understanding the choices that must be made when planning strategically and tactically

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STRATEGIC PLANNING

Strategic planning is the process of thinking through the current mission of the organization and the current environmental conditions facing it, then setting forth a guide for tomorrow’s decisions and results. Strategic planning is built on fundamental concepts: that current decisions are based on future conditions and results.

Strategic Planning for Production and Operations

In the production or operations function, strategic planning is the broad, overall planning that precedes the more detailed operational planning. Executives who head the production and operations function are actively involved in strategic planning, developing plans that are consistent with the firm’s overall strategies as well as such functions as marketing, finance accounting and engineering.

Production and operations strategic plans are the basis for (1) operational planning of facilities (design) and (2) operational planning for the use of these facilities.

Strategic Planning Approaches for Production/Operations

Henry Mint berg suggests three contrasting modes of strategic planning: the entrepreneurial, the adaptive, and the planning modes. In the entrepreneurial mode, one strong, bold leader takes planning action on behalf of the production/operations function. In the adaptive mode, a manager’s plan is formulated in a series of small, disjointed steps in reaction to a disjointed environment. The planning model uses planning essentials combined with the logical analysis of management science.

There are many approaches to strategic planning. The key point is that operations strategies must be consistent with the overall strategies of the firm. Operations typically utilize the overall corporate approach to strategic planning, with special modifications and a focus upon operations issues and opportunities. One general approach to strategic planning is a forced choice model given by Adam and Ebert.

Strategic Planning—Forced Choice Model

One of many planning models that have been used in strategic planning is a forced choice model,. In-group sessions or individually, analysts assess environmental considerations together with the organization’s current production/operations position, thus forcing management to develop strategic options for operations.

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A Strategic Planning Operations Model

Professor Chris A. Voss of the London Business School, England, has set forth a framework for strategy and policy development in manufacturing. Concept is that manufacturing strategy tries to link the policy decisions associated with operations to the marketplace, the environment, and the company’s overall goals. A simplified framework for examining operations strategy is shown in

One feature of this approach that is crucial to competitiveness is market-based view of strategic planning. It suggests that any strategic business unit of a company operates in the context of its corporate resources, the general and competitive industry environment, and the specific corporate goals of the company. In any area in which the company chooses to compete is a set of specific market-based criteria for success.

A low-cost, high productivity operation makes efficiency possible. Minimum use of scarce resources while sustaining high outputs is the key to productivity. Effectiveness is how well a company is able to meet specific criteria such as delivery schedules and technical capability. Quality is the degree to which the product or services meets customer and organisation expectations.

Quality reflects the ‘goodness’ of the product or services to the customer. Flexibility is the adoptability, the capability to change as business conditions change.

An increasingly significant trend in the Indian economy is the gradual shift of productive effort from manufacturing (industrial) to service and information based products. With this, the demand for communication and information based product is gradually restructuring the society. Traditional ways of doing things are being replaced by efficient methods. Computers play a major role in this transition along with fiber optics, microwaves, lasers and other communication technologies.

Following characteristics can be considered for distinguishing Manufacturing Operations with

Service Operations:

1. Tangible/Intangible nature of output

2. Production and consumption

3. Nature of work (job)

4. Degree of customer contact

5. Customer participation in conversion

6. Measurement of performance

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7. Quality of output

8. Inventory accumulated.

Manufacturing is characterized by tangible outputs (products). Consumption of outputs at overtime. Jobs useless labour and more equipment, little customer contact, no customer participation in the conversion process (in production). Sophisticated methods for measuring production activities and resource consumption as product are made.

Service is characterized by intangible outputs. In addition, it possess a potential for high variability in quality of output. Production and consumption occurs simultaneously. Jobs use more labour and less equipment, direct consumer contact, frequent customer participation in the conversion process.

Elementary methods for measuring conversion activities and resource consumption are used.

PRODUCTIVITY

Productivity is defined in terms of utilization of resources, like material and labour. In simple terms, productivity is the ratio of output to input. For example, productivity of labour can be measured as units produced per labour hour worked. Productivity is closely inked with quality, technology and profitability.

Hence, there is a strong stress on productivity improvement in competitive business environment. Productivity can be improved by (a) controlling inputs, (b) improving process so that the same input yields higher output, and (c) by improvement of technology. These aspects are discussed in more detail in the lesson on Productivity Management.

Productivity can be measured at firm level, at industry level, at national level and at international level.

Modern Dynamic Concept of Productivity

Productivity can be treated as a multidimensional phenomenon. The modern dynamic concept of productivity looks at productivity as what may be called “productivity flywheel”. The productivity is energized by competition. Competition leads to higher productivity, higher productivity results in better value for customers, and these results in higher share of market for the organization, which results in still keener competition. Productivity thus forms a cycle, relating to design and products to satisfy customer needs, leading to improved quality of life,

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higher competition i.e. need for having still higher goals and higher share of market, and thereby leading to still better designs.

Dynamic concept of productivity

When productivity is measured separately for each input resource to the production process it is called factor productivity or partial productivity. When productivity is measured for all the factors of production together, it is called total factor productivity.

Generally factor productivity calculations are required at firm level and industry level, whereas total factor productivity calculations are made for measuring productivity at national and international level.

Productivity of materials can be measured as output units per unit material consumed. It can also be measured in terms of value generated per unit expenditure in materials.

For measuring productivity of different groups of operatives, different ratios can be used, which are indicative of output/input relationship. For example, the productivity of assembly line work can be measured as output units per man-hour or alternatively, the value of good produced per cost of labour on assembly line.

Productivity Analysis

For the purposes of studies of productivity for improvement purposes, following types of analysis can be carried out:

1. Trend analysis: Studying productivity changes for the firm over a period of time.

2. Horizontal analysis: Studying productivity in comparison with other firms of same size and engaged in similar business.

3. Vertical analysis: Studying productivity in comparison with other industries and other firms of different sizes in the same industry.

4. Budgetary analysis: Setting up a norm for productivity for a future period as budget, based on studies as above, and planning strategies to achieve it.

FACTORS AFFECTING PRODUCTIVITY

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Economists site a variety of reasons for changes in productivity. However some of the principle factors influencing productivity rate are:

1. Capital/labour ratio: It is a measure of whether enough investment is being made in plant, machinery, and tools to make effective use of labour hours.

2. Scarcity of some resources: Resources such as energy, water and number of metals will create productivity problems.

3. Work-force changes: Change in work-force effect productivity to a larger extent, because of the labour turnover.

4. Innovations and technology: This is the major cause of increasing productivity.

5. Regulatory effects: These impose substantial constraints on some firms, which lead to change in productivity.

6. Bargaining power: Bargaining power of organized labour to command wage increases excess of output increases has had a detrimental effect on productivity.

7. Managerial factors: Managerial factors are the ways an organization benefits from the unique planning and managerial skills of its manager.

8. Quality of work life: It is a term that describes the organizational culture, and the extent to which it motivates and satisfies employees.20 Operations Management

TREND TOWARDS MORE FLEXIBLE SYSTEMS

The production runs of these higher valued specialty items and custom designed products are often much shorter than for traditional mass produced goods. But the non-productive time (downtime) required to set up equipment for producing different options, new models and new products are very costly. So production facilities must be designed with the utmost flexibility to accommodate change over in rapid fashion. This is where computers, robotics come into play.

German executives understand the need for a strong technological focus and the dangers of hierarchical bureaucracies and paper profits. Studies reveal that over 50 per cent of Germany’s large manufacturing firms are managed by Ph.D.’s with technical backgrounds.

In recent years, the managerial techniques and productivity methods in Japanese firms have attracted worldwide attention. The following are some of the characteristics of the Japanese firm as compared with the American firms.

1. Corporate objectives: Employees and customers are given priority over shareholders. Honesty in business is important.

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2. Time horizon: Long-term viability is more important than short-term profits.

3. Production systems: Automated systems with extensive use of microprocessors and robotics. Quality is paramount, and things happen on schedule.

4. Employment relations: Long-term employment of loyal workers. Unions cooperate to benefit total firm. Politeness and harmony are emphasized.

5. Materials: Resources are limited. Space is used efficiently and inventories are kept to a bare minimum.

6. Financing: More use is made of debt capital and less of equity capital.

7. Training: Employees are thoroughly trained and rotated to learn a variety of skills.

8. Worker participation: Employees are thoroughly trained and rotated to learn a variety of productivity improvements via suggestions, quality circles and consultation with supervisors.

THE ENVIRONMENT OF OPERATIONS

One of the most encompassing influences on productivity is the environment in which organization operates.

It evolves from the religious and cultural norms of society, from childhood training, education, and reflection on the purpose of life and the value of one’s self and of others. The preferred values of the society reflect purpose, integrity and a respect for the life and humanity of others.

Every facet of our economic and social environment regulated and controlled by law designed to protect general public. The figure illustrates some of the laws impact on the productivity of the firms.

SCOPE OF OPERATIONS MANAGEMENT

Operations Management concern with the conversion of inputs into outputs, using physical resources, so as to provide the desired utilities to the customer while meeting the other

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organizational objectives of effectiveness, efficiency and adoptability. It distinguishes itself from other functions such as personnel, marketing, finance, etc. by its primary concern for ‘conversion by using physical resources’.

Following are the activities, which are listed under Production and Operations Management functions:

1. Location of facilities.

2. Plant layouts and Material Handling.

3. Product Design.

4. Process Design.

5. Production and Planning Control.

6. Quality Control.

7. Materials Management.

8. Maintenance Management.

Scope of production and operations management

LOCATION OF FACILITIES

Location of facilities for operations is a long-term capacity decision, which involves a long-term commitment about the geographically static factors that affect a business organisation. It is an important strategic level decision-making for an organisation. It deals with the questions such as ‘where our main operations should be based?’

The selection of location is a key-decision as large investment is made in building plant and machinery. An improper location of plant may lead to waste of all the investments made in plant and machinery equipments. Hence, location of plant should be based on the company’s expansion plan and policy, diversification plan for the products, changing sources of raw materials and many other factors. The purpose of the location study is to find the optimal location that will results in the greatest advantage to the organization.

PLANT LAYOUT AND MATERIAL HANDLING

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Plant layout refers to the physical arrangement of facilities. It is the configuration of departments, work centres and equipment in the conversion process. The overall objective of the plant layout is to design a physical arrangement that meets the required output quality and quantity most economically.

According to James More ‘Plant layout is a plan of an optimum arrangement of facilities including personnel, operating equipment, storage space, material handling equipments and all other supporting services along with the design of best structure to contain all these facilities’.

‘Material Handling’ refers to the ‘moving of materials from the store room to the machine and from one machine to the next during the process of manufacture’. It is also defined as the ‘art and science of moving, packing and storing of products in any form’. It is a specialized activity for a modern manufacturing concern, with 50 to 75% of the cost of production. This cost can be reduced by proper section, operation and maintenance of material handling devices. Material handling devices increases the output, improves quality, speeds up the deliveries and decreases the cost of production. Hence, material handling is a prime consideration in the designing new plant and several existing plants.

PRODUCT DESIGN

Product design deals with conversion of ideas into reality. Every business organisation have to design, develop and introduce new products as a survival and growth strategy. Developing the new products and launching them in the market is the biggest challenge faced by the organizations. The entire process of need identification to physical manufactures of product involves three functions—

Design and Marketing, Product, Development and manufacturing. Product Development translates the needs of customers given by marketing into technical specifications and designing the various features into the product to these specifications. Manufacturing has the responsibility of selecting the processes by which the product can be manufactured. Product design and development provides link between marketing, customer needs and expectations and the activities required to manufacture the product.

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PROCESS DESIGN

Process design is a macroscopic decision-making of an overall process route for converting the raw material into finished goods. These decisions encompass the selection of a process, choice of technology, process flow analysis and layout of the facilities. Hence, the important decisions in process design are to analyse the workflow for converting raw material into finished product and to select the workstation for each included in the workflow.

PRODUCTION PLANNING AND CONTROL

Production planning and control can be defined as the process of planning the production in advance,

setting the exact route of each item, fixing the starting and finishing dates for each item, to give production orders to shops and to follow-up the progress of products according to orders.

The principle of production planning and control lies in the statement ‘First Plan Your Work and then Work on Your Plan’. Main functions of production planning and control include Planning, Routing, Scheduling, Dispatching and Follow-up.

Planning is deciding in advance what to do, how to do it, when to do it and who is to do it.

Planning bridges the gap from where we are, to where we want to go. It makes it possible for things to occur which would not otherwise happen.

Routing may be defined as the selection of path, which each part of the product will follow, which being transformed from raw material to finished products. Routing determines the most advantageous path to be followed for department to department and machine to machine till raw material gets its final shape.24 Operations Management

Scheduling determines the programme for the operations. Scheduling may be defined as 'the fixation of time and date for each operation' as well as it determines the sequence of operations to be followed.

Dispatching is concerned with the starting the processes. It gives necessary authority so as to start a particular work, which has been already been planned under ‘Routing’ and ‘Scheduling’.

Therefore, dispatching is ‘Release of orders and instruction for the starting of production for any item in acceptance with the Route sheet and Schedule Charts’.

The function of Follow-up is to report daily the progress of work in each shop in a prescribed proforma and to investigate the causes of deviations from the planned performance.

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QUALITY CONTROL (QC)

Quality Control may be defined as ‘a system that is used to maintain a desired level of quality in a product or service’. It is a systematic control of various factors that affect the quality of the product.

Quality Control aims at prevention of defects at the source, relies on effective feedback system and corrective action procedure.

Quality Control can also be defined as ‘that Industrial Management technique by means of which product of uniform acceptable quality is manufactured’. It is the entire collection of activities, which ensures that the operation will produce the optimum quality products at minimum cost.

The main objectives of Quality Control are:

1. To improve the company’s income by making the production more acceptable to the customers i.e. by providing long life, greater usefulness, maintainability, etc.

2. To reduce companies cost through reduction of losses due to defects.

3. To achieve interchange ability of manufacture in large-scale production.

4. To produce optimal quality at reduced price.

5. To ensure satisfaction of customers with productions or services or high quality level, to build customer good will, confidence and reputation of manufacturer.

6. To make inspection prompt to ensure quality control.

7. To check the variation during manufacturing.

MATERIALS MANAGEMENT AT HCL

Materials Management is that aspect of management function, which is primarily concerned with the acquisition, control, and use of materials needed and flow of goods and services connected with the production process having some predetermined objectives in view.

The main objectives of Material Management are:

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1. To minimise material cost.

2. To purchase, receive, transport and store materials efficiently and to reduce the related cost.

3. To cut down costs through simplification, standardisation, value analysis, import substitution, etc.

4. To trace new sources of supply and to develop cordial relations with them in order to ensure continuous supply at reasonable rates.

5. To reduce investment tied in the inventories for use in other productive purposes and to develop high inventory turnover ratios.

MAINTENANCE MANAGEMENT AT HCL

In modern industry, equipment and machinery are a very important part of the total productive effort. Therefore their idleness or downtime becomes are very expensive. Hence, it is very important that the plant machinery should be properly maintained.

The main objectives of Maintenance Management are:

1. To achieve minimum breakdown and to keep the plant in good working condition at the lowest possible cost.

2. To keep the machines and other facilities in such a condition that permits them to be used at their optimal capacity without interruption.

3. To ensure the availability of the machines, buildings and services required by other sections of the factory for the performance of their functions at optimal return on investment.

INVENTORY MANAGEMENT AT HCL

Inventories

Inventories constitute the most important part of the current assets of large majority of companies. On an average the inventories are approximately 60% of the current assets in public

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limited companies in India. Because of the large size of inventories maintained by the firms, a considerable amount of funds is committed to them. It is therefore, imperative to manage the inventories efficiently and effectively in order to avoid unnecessary investment.

Nature of Inventories

Inventories are stock of the product of the company is manufacturing for sale and components make up of the product. The various forms of the inventories in the manufacturing companies are:

Raw Material: It is the basic input that is converted into the finished product through the manufacturing process. Raw materials are those units which have been purchased and stored for future production.

Work-in-progress: Inventories are semi-manufactured products. They represent product that need more work they become finished products for sale.

Finished Goods: Inventories are those completely manufactured products which are ready for sale. Stocks of raw materials and work-in-progress facilitate production, while stock of finished goods is required for smooth marketing operations. Thus, inventories

serve as a link between the production and consumption of goods.

Inventory Management Techniques at HCL

In managing inventories, the firm’s objective should be to be in consonance with the shareholder wealth maximization principle. To achieve this, the firm should determine the optimum level of inventory. Efficiently controlled inventories make the firm flexible. Inefficient inventory control results in unbalanced inventory and inflexibility-the firm may sometimes run out of stock and sometimes pile up unnecessary stocks.

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Economic Order Quantity (EOQ): The major problem to be resolved is how much the inventory should be added when inventory is replenished. If the firm is buying raw materials, it has to decide lots in which it has to purchase on replenishment. If the firm is planning a production run, the issue is how much production to schedule. These problems are called order quantity problems, and the task of the firm is to determine the optimum or economic lot size. Determine an optimum level involves two types of costs:-

Ordering Costs: This term is used in case of raw material and includes all the cost of acquiring raw material. They include the costs incurred in the following activities:

Requisition Purchase Ordering Transporting Receiving Inspecting Storing

Ordering cost increase with the number of orders placed; thus the more frequently inventory is acquired, the higher the firm’s ordering costs. On the other hand, if the firm maintains large inventory’s level, there will be few orders placed and ordering costs will be relatively small. Thus, ordering costs decrease with the increasing size of inventory.

Carrying Costs: Costs are incurred for maintaining a given level of inventory are called carrying costs. These include the following activities:

Warehousing Cost Handling Administrative cost Insurance Deterioration and obsolescence

Carrying costs are varying with inventory size. This behavior is contrary to that of ordering costs which decline with increase in inventory size. The economic size of inventory would thus depend on trade-off between carrying costs and ordering cost.

Composition 2006 2005 2004Raw Material 6349 7749 6127Stores and Spares 3713 2987 2622Finished Goods 13374 7245 6506

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Work-in-progress 595 784 871

Table 3

The increasing component of raw materials in inventory is due to the fact that the company has gone for bulk purchases and has increased consumption due to a fall in prices and reduced margins for the year. Another reason might be the increasing sales, which might have induced them to purchase more in anticipation of a further increase in demand of the product. And the low composition of work-in-progress is understandable as because of the nature of the business firm is involved in.

To the question as to whether the increasing costs in inventory are justified by the returns from it the answer could be found in the HCL retail expansion. HCL caters to the need of the two separate segments:

a) Institutions for which they manufacture against orders and,b) Retail segment of the market.

They are more into retail than earlier and at present more than 650 retail outlets branded with HCL sign ages and more are in the pipeline

The company in order to meet its raw materials requirements could have gone for frequent purchases, which would have resulted in lesser cash flows for the firm rather than the high expenditure involved when procuring in at bulk. The reason why the firm has gone for these bulk purchases because of the lower margins and the discounts it availed because of procuring in bulk quantities.

A negative growth in WIP could be because:

a) The time taken to convert raw materials to finished goods is very minimalb) This is also due to capacity being not utilized at the optimum.

ABC System: ABC system of inventory keeping is followed in the factories. Various items are categorized into three different levels in the order of their importance. For e.g. items such as memory, high capacity processors and royalty are placed in the ‘A’ category. Large number of firms has to maintain several types of inventories. It is not desirable the same degree of control all the items. The firm should pay maximum attention to those items whose value is highest. The firm should therefore, classify inventories to identify which items should receive the most effort in controlling. The firm should be selective in approach to control investment in various types of

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inventories. This analytical approach is called “ABC Analysis”. The high-value items are classified as “A items” and would be under tightest control. “C items” represent relatively least value and would require simple control. “ B items” fall in between the two categories and require reasonable attention of management.

JIT: The relevance of JIT in HCL Info system can be questioned. This is because they procure materials on the basis of projections made at least two or three months before. Even at the time of procurement they ensure that they procure much more than what actually is required by the firm that is they hold significant amount of inventory as safety stock. This is done to counter the threat involved in default and accidental breakdowns. The levels of safety stock usually vary according to the usage.

CONVERSION PERIODS

Raw Material

Particulars 2006 2005 2004

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Raw Material Consumption 121077 97971.31 57775.14Raw Material Consumption/day 332 268.41 158.28Raw Material Inventory 7072 6960.275 4364.735Raw Material Holding Days 21 25.93 27.57

Table 4.

The raw material conversion period or the raw material holding cost has reduced from 26 to 21. This is despite an increase in its consumption. This indicates that the firm is able to convert the raw material at its disposal to the work-in-progress at a lesser time as compared to the last year. It would be to the benefit of the firm to reduce the production process and increase the conversion rate still as the firm is required to meet the increasing demand.

Work-in-progress

Particulars 2006 2005 2004Cost of Production 191911 159651.19 113500.33Cost of Production/day 525.78 437.4 310.95Work in progress inventory 689.5 827.52 679.455WIP Holding days 1.31 1.89 2.19

Table 5.

The work-in-progress holding time is important for a firm in the sense that it determines the rate of time at which the production process will be complete or the finished goods will be ready for disposal by the firm. The firm as it is in the process of assembling should take the least possible time in conversion to finished goods unlike a hard core manufacturing firm, as any firm would like to have its inventory in the work-in-progress at the minimum. There would also be less of stock out costs as due to better conversion rates the firm is able to meet the rise in demand situations. More the time it spends lesser its efficiency would be in the market. Here the firm has been able to bring down its WIP conversion periods.

Finished Goods

Particulars 2006 2005 20004

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Cost of goods sold 228177 178438.85 124768.92Cost of goods sold/day 625 488.87 341.832Finished goods inventory 10310 6875.725 5026.505Finished goods inventory Holding days 16 14.06 14.8

Table 6

The time taken for the firm to realize its finished goods as sales has increased as compared to last year. This growth in sales could be traced back to the growing domestic IT market for the commercial as consumer segment in India. HCL has around 15% of the market in desktop and it is the market leader in this segment. So it is only natural that they are able to better their conversion rate of finished goods to sales.

Operating Cycle

Particulars 2006 2005 2004Inventory conversion period 38 42 45Average collection period 70 63 66Gross operating cycle 108 105 111Average payment period 22 23 17Operating cycle 86 82 94

Table 7

The operating cycle of the firm reveals the days within which the inventory procured gets converted to sales or revenue for the firm. This time period is of importance to the firm as a lag here could significantly affect the profitability, liquidity, credit terms, and the policies of the firm. All the firms would like to reduce it to such extend that their cash inflows are timely enough to meet their obligations and support the operations. That the firm has been able to reduce the ratio is in itself an achievement as they were having huge stocks of inventory. But the reduction in the cycle could also be attributed to the boom in the market and the growth it is expected to reach. This boom automatically ensures the demand for the finished goods and thus helping in it to garner sales for the firm.

Raw Material Consumption

Particulars 2006 2005 2004Imported 92007 70784.27 42129.63Indigenous 29070 27187.04 15645.51% Imports 75.99 72.25 72.92

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Table 8.

A major chunk of the imports come from Korea and Taiwan and is purchased in US$. The value of imported and indigenous raw material consumed give a clear picture that if there is a change in the EXIM policy of the government it is bound to affect the company adversely as more than 70% of their consumption is from imports. But this is the scenario witnessed in the industry as a whole and though HCL is into expanding its operation to Uttaranchal it in the present state is would be affected by a change in the import duty structure.

A major chunk of their current assets are in the form of inventory and the change in technology will invariably be a threat faced by the firm. The question of technology applying here like says a certain device going say out of fashion or outdated. For e.g. TFT monitors being in demand more than CRT.

CASH MANAGEMENT AT HCL

Sources of cash:

Sources of additional working capital include the following:

Existing cash reserves

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Profits (when you secure it as cash!)

Payables (credit from suppliers)

New equity or loans from shareholders

Bank overdrafts or lines of credit.

Long-term loans

If you have insufficient working capital and try to increase sales, you can easily over-stretch the

financial resources of the business. This is called overtrading.

Early warning signs include:

Pressure on existing cash

Exceptional cash generating activities e.g. offering high discounts for early cash

payment

Bank overdraft exceeds authorized limit.

Seeking greater overdrafts or lines of credit

Part-paying suppliers or other creditors

Paying bills in cash to secure additional supplies

Management pre-occupation with surviving rather than managing

Frequent short-term emergency requests to the bank (to help pay wages, pending receipt

of a cheque).

CASH MANAGEMENT IN HCL INFOSYSTEMS

The cash management system followed by the HCL Infosystems is mainly lock box system.

Cash Management System involves the following steps:

1. The branch offices of the company at various locations hold the collection of cheques of the customers.

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2. Those cheques are either handed over to the CMS agencies or bank of the particular location take charge of whole collection.

3. These CMS agencies or bank send those cheques to the clearing house to make them realized. These cheques can be local or outstation.

4. The CMS agencies or bank send information to the central hub of the company regarding realization/cheque bounced.

5. The central hub passes on the realized funds to the company as per the agreed agreements.

6. The CMS agencies or concerned bank provides the necessary MIS to the company as per requirement.

In cash management the collect float taken for the cheques to be realized into cash is irrelevant and non-interfering because banks such as Standard Chartered, HDFC and Citibank who give credit on the basis of these cheques after charging a very small amount. These credits are given to immediately and the maximum time taken might be just a day. The amount they charge is very low and this might cover the threat of the cheque sent in by two or three customers bouncing. Even otherwise the time taken for the cheques to be processed is instantaneous. Their Cash Management System is quite efficient.

Cash Flow in Operating Activities

Working Capital Changes

Working Capital Changes 2006 2005 2004Trade and other receivables -14166 -14510.69 -7106.68Inventories -5221 -2683.92 -7221.11Trade Payables and other Liabilities 13026 6419.13 14311.5

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The cash from the operation has been subject to considerable change due to the changes that could be adjusted towards trade receivables and trade payables. The outflows in inventory have become as low as 37% of what it was last year despite an increase in the inventory consumption by 16.64%. The resulting reduction in the cash outflows might be because of the inventories being procured more on credit. That the cash from operations has declined has affected the current liability index of the firm.

Cash Flow in Investing Activities

Investments in Mutual Funds 2006 2005 2004Investments (year end) 13539 12277.44 28059.88Purchase of Investment -65992 -53075.99 -59249.81Disposal/Redemption of Investment 65312 65489.84 52087.36

The investments have reduced from the last year due to the redemption of investments taken place to meet various needs such as increasing demand in stock or inventory and to ensure better credit and receivables policy. We can see that the firm has in these three years increased their cash inflow from the investing activities by way of disposal of investments when in need. That is the firm has redeemed to realize cash as to meet its expanding operations, fund the inventory procurement and meet the obligations.

The investments in mutual funds are beneficial to the firm in the context that they contain interest bearing securities which add up as a source of revenue for the firm unlike cash which remains idle and unproductive when not in use. This reduction of dividend could be attributed to disposal of investments in mutual funds and subsidiary. This disposal creates a fund, which can be used by the company as and when the need arises.

COLLECTION POLICIES AT HCL INFOSYSTEMS

It refers to the collection procedures such as letters, phone calls and other follow up mechanism to recover the amount due from the customers. It is obvious that costs are incurred towards the collection efforts, but bad debts as well as average collection period would decrease. Further, a strict collection policy of the firm is expensive for the firm because of the high cost is required to

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be incurred by the firm and it may also result in loss of goodwill. But at the same time it minimizes the loss on account of bad debts. Therefore, a firm has to strike a balance between the cost and benefits associated with collection policies.

The steps usually followed in collection efforts are:

Sending repeated letters and reminders to the customers Personal visits Using agencies involved in collection process Making telephonic reminders Initiating legal actions Real Time Gross Settlement (RTGS)

Real Time Gross Settlement as such is a concept new in nature and though the firm uses the system with all the members of the consortium, it is still in its primal stage and will take time before all of the clients of the firm are willing to accept it. The firm has made a proposal to the consortium of the banks during appraisal for faster implementation of internet based banking facility by all the banks and adoption of RTGS payment system through net.

The debtor’s turnover ratio is completely dependent upon the credit policy followed by the firm. The credit policy followed by the firm should be such that the threat of bad debts and the default rate involved should be terminated.

PARTICULARS 2006 2005 2004 2003

CREDITORS TURNOVER RATIO 16.44 15.68 21.29 21.14

PAYMENT PERIOD 22 23 17 16

That the creditors turnover ratio has declined and payment period has increased indicate that the company has got a leeway in making the payment to the creditors by way of increased time.

With creditors they are having pre-agreements and have undertaken arrangements with them, which they believe to be the best in the business and these are fixed.

FINANCIAL FOLLOW UP REPORTS (FFRI & FFRII):

Every quarterly and half quarterly interval, the firm submits Financial Follow Up Reports I and II. FFR I is an extract of the balance sheet. In this report, the company is required to submit the details of sales, current assets and current liabilities for the quarter and the estimates for the current year. FFR II – the company is required to prepare P&L, B/S and Cash Flow in a different

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format. The information is to be provided for the last year (actual), current year half yearly results (actual) and the estimates for the next year.

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ROLE OF OPERATIONS MANAGER AT HCL

Operations manager is responsible for the day-to-day running of the company and administrative issues. To help in projects co-ordination, logistics, headhunting, procurement of resource and management.

Business development: To assist in marketing, presentation, conference organisation and implementation. Lead, motivate and manage teams and support all aspects of business projects. Regular visits to Client sites presenting to between 20 and 40 senior executives on behalf of subcontractors

Project management: Take responsibility for client satisfaction for all work conducted by its subcontractors and to assist in deal making and signing contracts with suppliers of software development, data centres and ISPs. Work with teams and subcontractors to ensure everyone understands the project ‘end-goal’, to ensure delivery to the client on time and within agreed budgets.

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CHAPTER IV

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CONCLUDING ANALYSIS

Sound operations management at HCL causes corporate leadership to challenge conventional wisdom or employees' sense of what's operationally correct. Simply put, senior executives rely on this activity to question existing processes and ask personnel to come up with new ideas to do business and increase sales. In fact, companies with experienced, competent operations managers are generally adept at monitoring their revenues and expenses. They do so by delving into corporate statements of income, profitability trends and budget reports, to name a few.

HCL adequately manage their operations to get a handle on key internal and external factors. Internal factors include operating policies, intellectual capital and the average attrition rate. This reflects the number of employees leaving as a result of resignations, retirements and deaths. Forced workforce reductions, such as terminations, do not count as attrition-rate components. Intellectual capital represents various abilities, expertise and knowledge that a firm has gathered over time. External factors that operations managers heed include the state of the economy and rivals' strategies. By helping a firm understand its internal and external conditions, operations management improves the company's competitive standing. This is because the business gets a better understanding of its operating environment and can adapt its tactics more effectively to changing conditions. Marketing specialists use the SWOT concept -- strengths, weaknesses, and opportunities, threats -- to describe this analytical process.

Operations management allows a manufacturing firm to change or improve the way it produces goods, as well as how it stores items such as raw materials, work-in process merchandise and completely finished products. This important benefit helps the manufacturer prevent deterioration in debt affordability, which may happen if the firm incurs losses and cannot repay its existing liabilities. Manufacturing tools used in operations management include computer-aided production software, defect-tracking programs, warehouse management software and process re-engineering applications.

By studiously analyzing operating activities, corporate management waves goodbye to the days of hefty government fines and adverse regulatory decisions. Department heads and segment chiefs set adequate internal controls to make sure rank-and-file personnel perform tasks in accordance with the law. For example, adequate operations management helps improve workplace safety, a key criterion that the U.S. Occupational Safety and Health Administration watch closely.

CONCLUSION

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Operation management is one of the major functions of business organisation among finance and marketing. Operations management can significantly contribute to the success of the business by using your available resources to effectively produce products and services in a way that satisfies customers.To do this one must be creative, innovative and energetic in improving processes, products and services. The four main advantages an effective operation can provide to the business include:

reducing the costs of producing products and services and being efficient

increasing revenue by increasing customer satisfaction through good quality and service

reducing the amount of investment that is necessary to produce the required type and quantity of products and services by increasing the effective capacity of the operation

Providing the basis for future innovation by building a solid base of operations skills and knowledge within the business.

All operations produce products and services by changing inputs into outputs. They do this by using the ‘input-transformation-output' process. In other words, operations are processes that take in a set of input resources which are used to transform something, or are transformed themselves, into outputs of products and services.

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ANNEXURE

FINANCIAL HIGHLIGHTS OF HCL INFOSYSTEMS LTD.

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FINANCIAL STATEMENTS FOR HCL INFOSYSTEMS LTD.

4 years Balance Sheet:

Although debt as a percent of total capital increased at HCL Infosystems Ltd. over the last fiscal year to 21.53%, it is still in-line with the IT Services industry's norm. Additionally, even though there are not enough liquid assets to satisfy current obligations, Operating Profits are more than adequate to service the debt. Accounts Receivable are among the industry's worst with 28.44 days worth of sales outstanding. This implies that revenues are not being collected in an efficient manner. Last, inventories seem to be well managed as the Inventory Processing Period is typical for the industry, at 21.29 days.

Currency inMillions of Indian Rupees

As of:

Jun 302004

Restated

Jun 302005

Restated

Jun 302006

Reclassified

Jun 302007

Assets        

Cash and Equivalents 1,452.3 2,512.7 2,149.2 1,976.5

Short-Term Investments 114.8 1,573.6 3,137.7 2,939.9

TOTAL CASH AND SHORT TERM INVESTMENTS

1,567.1 4,086.3 5,286.9 4,916.4

Accounts Receivable 4,390.4 6,103.1 7,691.4 10,520.0

Other Receivables 228.2 400.5 468.1 593.4

TOTAL RECEIVABLES 4,618.7 6,503.6 8,159.5 11,113.4

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Inventory 2,804.2 3,493.9 4,696.1 7,918.8

Prepaid Expenses 107.0 163.0 146.0 287.8

Other Current Assets 23.8 56.4 86.8 84.8

TOTAL CURRENT ASSETS 9,120.8 14,303.2 18,375.3 24,321.2

Gross Property Plant and Equipment

1,406.1 1,404.7 1,731.9 2,431.0

Accumulated Depreciation -749.1 -744.9 -852.4 -966.5

NET PROPERTY PLANT AND EQUIPMENT

657.0 659.8 879.5 1,464.5

Goodwill -- -- 0.2 0.8

Long-Term Investments 2,190.9 -- -- --

Deferred Tax Assets, Long Term 59.1 -- -- --

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Other Intangibles -- 95.3 32.4 30.9

Other Long-Term Assets -- 5.1 71.8 16.0

TOTAL ASSETS 12,027.9 15,063.4 19,359.2 25,833.4

       

LIABILITIES & EQUITY        

Accounts Payable 3,390.6 4,100.9 5,964.8 8,298.5

Accrued Expenses 100.4 101.0 140.4 209.8

Short-Term Borrowings -- 307.9 784.9 1,182.4

Current Portion of Long-Term Debt/Capital Lease

690.4 499.6 0.4 892.5

Current Income Taxes Payable 30.1 80.9 77.4 252.8

Other Current Liabilities, Total 2,914.6 3,377.3 4,687.9 5,216.6

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Unearned Revenue, Current 536.4 965.8 557.9 775.2

TOTAL CURRENT LIABILITIES 7,662.6 9,433.4 12,213.7 16,827.8

Long-Term Debt 15.8 7.2 60.1 284.0

Deferred Tax Liability Non-Current

109.0 73.5 107.6 124.8

Other Non-Current Liabilities 13.9 3.8 1.0 --

TOTAL LIABILITIES 7,801.3 9,517.9 12,382.4 17,236.6

Common Stock 328.9 334.4 337.5 338.3

Additional Paid in Capital 673.9 883.7 1,044.5 1,087.9

Retained Earnings 3,193.2 4,297.3 5,565.2 7,141.4

Comprehensive Income and Other 30.6 30.1 29.6 29.2

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TOTAL COMMON EQUITY 4,226.6 5,545.5 6,976.8 8,596.8

TOTAL EQUITY 4,226.6 5,545.5 6,976.8 8,596.8

TOTAL LIABILITIES AND EQUITY

12,027.9 15,063.4 19,359.2 25,833.4

Table. 23 (Source: Annual Reports

4 years Cash Flow Statement:

In 2007, cash reserves at HCL Infosystems Ltd. fell by 172.7M. However, as a percent of revenues, this change was similar to the IT Services industry median. By looking at the Cash Flow Statement, analysts can easily see the sources and use of cash generated throughout the year.

Currency inMillions of Indian Rupees

As of:

Jun 302004

Restated

Jun 302005

Restated

Jun 302006

Reclassified

Jun 302007

NET INCOME 1,751.1 2,277.0 2,803.6 3,159.5

Depreciation & Amortization 180.1 152.4 124.3 144.0

Amortization of Goodwill and Intangible Assets

-- -- -- 4.1

DEPRECIATION & AMORTIZATION, TOTAL

180.1 152.4 124.3 148.1

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(Gain) Loss from Sale of Asset -0.4 -1.6 0.5 0.6

(Gain) Loss on Sale of Investment -79.6 -84.9 -61.5 -55.2

Asset Writendown & Restructuring Costs

0.0 0.5 -- --

Other Operating Activities 292.8 31.2 79.6 271.8

Provision & Write-off of Bad Debts 14.8 14.4 7.2 9.2

Change in Accounts Receivable -1,593.4 -1,993.4 -1,724.7 -3,158.

8

Change in Inventories -423.3 -689.7 -1,202.2 -3,222.

7

Change in Accounts Payable 1,471.8 1,561.6 2,759.5 3,112.2

CASH FROM OPERATIONS 1,614.0 1,267.5 2,786.3 264.7

Capital Expenditure -180.7 -267.8 -424.3 -674.5

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Sale of Property, Plant, and Equipment

3.5 10.7 80.3 1.6

Investments in Marketable & Equity Securities

73.7 841.4 -1,453.6 289.0

CASH FROM INVESTING 30.8 622.4 -1,683.3 -231.9

Short-Term Debt Issued 41.1 169.5 -- --

Long-Term Debt Issued 200.8 231.3 200.5 1,837.2

TOTAL DEBT ISSUED 241.9 400.8 200.5 1,837.2

Short Term Debt Repaid -- -- -172.3 -74.7

Long Term Debt Repaid -707.9 -302.7 -- -250.0

TOTAL DEBT REPAID -707.9 -302.7 -172.3 -324.7

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Issuance of Common Stock 283.3 215.2 163.9 44.2

Common Dividends Paid -866.2 -1,047.4 -1,526.6 -1,546.

1

TOTAL DIVIDEND PAID -866.2 -1,047.4 -1,526.6 -1,546.

1

Other Financing Activities -98.9 -95.4 -132.0 -216.1

CASH FROM FINANCING -1,147.8 -829.5 -1,466.5 -205.5

NET CHANGE IN CASH 497.1 1,060.4 -363.5 -172.7

Table. 24 (Source: Annual Reports)

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BIBLIOGRAPHY

OFFICE REFFRENCES)

Corporate intranet

Financial Statements(Annual Report)

http://www.citeman.com/10630-the-importance-of-operations-management-2.html#ixzz224SiNhxQ

bution: http://www.citeops.com/5-nature-scope-operations-management.html#ixzz221WjH8SK

http://toolkit.smallbiz.nsw.gov.au/part/13/63/261

Benefits of Operation Management | eHow.com http://www.ehow.com/info_8038762_benefits-operation-management.html#ixzz22hE2Au9R

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