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India Auto Components: Facility Location Dilemma

CASELET, OPERATIONS MANAGEMENT
ET Cases, 2 pages
AUTHOR(S) : R. Muthukumar and Dr. Nagendra V. Chowdary

Case Preview

India Auto Components: Facility Location Dilemma

 

India Auto Components Pvt. Ltd. (IAC) founded in 2000, is today counted among one of the renowned auto components manufacturers in South India. IAC focused on manufacturing equipment & electrical parts (brackets, washers, bolts, nuts, etc.) in SUV segment. IAC was setup by T N Shetty (Shetty) who was basically a technocrat for SUVs. Shetty, a graduate from IIT Chennai, joined Lucas TVS as Graduate Engineer Trainee in 1974 and worked his way up to be known as a successful Line Manager by 1985. As a Line Manager for more than 10 years Shetty acquired adequate knowledge in manufacturing auto components and during his tenure at Lucas TVS, at times he used to get defective lots from the suppliers. Shetty used to discuss with the suppliers and suggest solutions for the quality issues that surfaced.

Quite intrigued and emboldened by this, Shetty decided to start an auto components manufacturing company, which would be known for its premium quality and thus IAC was born in 2000.........

Teaching Note Preview

India Auto Components: Facility Location Dilemma

 

Prerequisite Conceptual Understanding

Jay Heizer, et al., “Chapter 7: Location Strategies”, Operations Management, 9th Edition, Pearson Education, 2008

Synopsis

This caselet enables an understanding of the methods of location decision and also the application of Porter’s Diamond Model. T N Shetty (Shetty) started ‘India Auto Components Private Limited’ (IAC) in 2000, in South India. Shetty a technical person, with adequate experience in the manufacturing sector, had decided to set up an auto component manufacturing unit. After zeroing in on four cities to set up a plant, Shetty was in a dilemma to select the most favorable location. Based on his proficiency in the field, he estimated the critical factors and rated the four chosen options. He estimated the number of trailer loads from six different suppliers and tabulated the longitude and latitude coordinates from the map. Can the application of these methods help in to zero in an apt location for his facility?

Expected Learning Outcomes

  • • Methods of location decision – Factor Rating Method, Simple Median Model, Centre of Gravity Technique and Load distance Method
  • • How to select a place/location with the help of ‘Factor Ratings’ method
  • • How to identify the coordinates of a new facility location
  • • Analyzing competitive advantage of a location using Porter’s Diamond Model

 

Assignment Questions

  • I. Evaluate the factors (that affect location of a plant) considered by Shetty to identify the plant location for IAC.
  • II. Suggest a location for manufacturing plant for IAC using Factor Ratings method.
  • III. .........................

 

Teaching Plan

The Teaching Note follows the specific Teaching Plan [Annexure (TN)-I]...............


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Abstract


This caselet enables an understanding of the methods of location decision and also the application of Porter's Diamond Model. T N Shetty (Shetty) started 'India Auto Components Private Limited' (IAC) in 2000, in South India. Shetty, a technical person, with adequate experience in the manufacturing sector, had decided to set up an auto component manufacturing unit. After zeroing in on four cities to set up a plant, Shetty was in a dilemma to select the most favorable location. Based on his proficiency in the field, he estimated the critical factors and rated the four chosen options. He estimated the number of trailer loads from six different suppliers and tabulated the longitude and latitude coordinates from the map. Can the application of these methods help in to zero in an apt location for his facility?



Pedagogical Objectives

  • To understand methods of location decision - Factor Rating Method, Simple Median Model, Centre of Gravity Technique and Load Distance Method
  • To understand how to select a place/location with the help of 'Factor Ratings' method
  • To understand how to identify the coordinates of a new facility location
  • To analyze competitive advantage of a location using Porter's Diamond Model



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- Abstract
- Caselet
- Teaching Note (**ONLY for Academicians)
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