4.

728 OPERATION STRATEGY AND TECHNOLOGY

INDIVIDUAL ASSIGNMENT

Prepared for - Dr. Nevan Wright

Prepared by - Kshitiz Malhotra
Student ID- 20150431
Email Id- malhotratiz@gmail.com
Words Count- 1702

Executive Summary:

The main objective of this assignment was to analyse the operational strategies and tools of advanced
technologies that were used to make the organization perform successfully by reducing the operational
cost and increase the profits and the overall growth of the organization.
I am going to highlight the operational and strategic tools that were used with the help of adopting
advanced technologies in the organization where I spent 6 years which actually helped them gain
momentum in the market and in the Luggage Industry in India and Asia.
The organization was working in a typical orthodox ideology by taking advantage of their brand legacy
which is the oldest travel luggage product brand in India. Between 2011 and 2013 the organization was
struggling to sustain the market position amongst its competitors and losing out the faith in their loyal
and prospect consumers. After certain period of time the company started realising that what went
wrong and why the oldest and the experiences brand is unable to sustain and retain in the market,
what is in there that is stopping them to be a leader in the market. What are the problems is it internal
or external or what are the key areas of improvement and focus. The Brand committed to turn back the
game and started improving the overall operational strategies by adopting various plans and
technologies with an aim to bring optimistic desired results and gaining what they had lost in the
unforeseen time.

Table of Contents:

Page No
1. Background of the Organization ------------------------------------------------------------------------------ 34
2. Problems ------------------------------------------------------------------------------------------------------------ 4-5
3. Strategic Decisions -----------------------------------------------------------------------------------------------

4. Action-----------------------------------------------------------------------------------------------------------------

5. Benefits --------------------------------------------------------------------------------------------------------------

6. References ---------------------------------------------------------------------------------------------------------- 9

1. Background:

VIP Industries Limited established in 1971 is the first and oldest organization in India who started
manufacturing travel luggage products. The company was the first face of introducing moulded
luggage and the briefcases. This organization is presently the Asias largest luggage brand and
world second manufacturer of moulded luggage products.
The organization enjoys the big market share nearly to 60% in organised sector followed by the
strong competitor who has world-wide presence in travel luggage products i.e., Samsonite
Luggage.
VIP brand sells their products under six brands i.e. VIP, Carlton, Skybags, Aristocrat, Alfa, and
Caprese consist of Hard and Soft luggage, Backpacks, Travel Accessories, Women Handbags.
The brand has classified all its sub-brands which serves every customer from lower class to super
higher class consumers.
VIP Brand serves the customers of middle class to semi-higher class
Carlton serves high class to super premium customers
Skybags serves the middle class to higher class of consumers with a focus of targeting the youth
generation by manufacturing the trendy and classy products.
Aristocrat serves the lower class to semi middle consumers with an aim to keep this brand under
the discounted category
Alfa which is one of the oldest sub brand of VIP family is meant specifically for only economic class
consumers with an aim to give strong competition to unorganised and Chinese economical
luggage products.
Caprese a new baby of VIP family introduced in 2011 specifically created for womens.
VIP has had always came up with many innovative products and features since its inception to
create a buzz in the mind of the consumers. They were the first to introduce wheels in the luggage,
they introduced the special premium Odyssey line of briefcases that showcases the class and the
quality briefcases for business professionals in 1988.
In 1996 they launched a premium product called Elanza Suitcase(Hard Luggage) which later
became a flagship icon of the organization and is still today is one of the most classy and
demanding product in Indian market. Later on in 2000 the company introduced another form of

luggage i.e. Soft Luggage which has a unique feature in terms of looks, features, various size
options and the durability also. Spinners/ 360* and lightweight products are the new innovations
that has changed the entire view of being just a Luggage

2. Problems:

Strategic planning are tend to taken as a high level game in all the organizations. However the
word of strategy is seldom evident until after it is implemented well along. Rather than people in
the organizations usually identifies the opportunities, better alternatives, innovating new
capabilities and demonstrating their ideas.
During the period of 2010 and 2013 the VIP organization was struggling due to failure in their
internal operational planning and strategy that led them losing out the market share and sales.
Following are the problems through which the organization were failed to meet their desired goals:

A. Supply Chain Management - Management of the supply chain is the key to success for the
organizations. Managing the inventory from the point of origin to the point of consumption is used
to be the backbone of the organization. This is where this organization failed to meet the
requirement internally as well as externally. Certain policies and regulatory procedures were
maintained to adhere with the guidelines for managing the supply chain and inventory level of the
products but somehow they were unable to manage it in systemic manner. Sales happens only
when you have adequate inventory lying at your top. Soft Luggage products were manufactured in
China and Hong Kong which takes 5-6 months to deliver the products in the mother warehouse.
Supplies were critically suffered which resulted in huge loss of sales and profits

B. Quality and Warranty - As the brand became old and bigger, the standard and the quality of
the products and customer service were falling down speedily. This is supposed be maintained
with essential hygiene factors at all levels of the organization. Manufactured products were found
to be defected with small manufacturing defects which were ignore4d by the quality inspectors at
factory levels. Quality inspectors were advised to check the finished products randomly and on an
average 700-1000 units were used to manufacture per day which normally shoots up in a peak
period of festival seasons to 1200-1500 units per day. Apparently the issue became more critical
when it comes at consumers, the consumer used to pay hefty amounts for satisfying that they

have purchased the brand with distinctive features and quality and in result what they got a
defected product?
C. Operational Challenges using the traditional methods for maintaining the accounts of Trade
partners and business partners, failed to utilized the Salesforce productivity to spend more time
efficiently in markets to fetch the purchasing orders from the channel partners and trade partners
were part of their failure in operational strategy which made them apparently losing out the sales
and profits. Lack of co-ordination and communication between the operational levels internally
from Top Management and Lower Management appeared to be the block between the successes
of the organization.

3. Strategic Decisions:

A. Reducing the dependency on China The dependency of VIP Industries Limited on China for
sourcing soft luggage continues. Any appreciation in Chinese currency and depreciation on Indian
Rupees could adversely affects the margins and the supplies of the products in the organization.
The organization took the strategic decision to set up a new manufacturing facility in Bangladesh
with the name of their wholly subsidiary firm VIP Industries Limited Bangladesh Pvt Ltd, which
started its operation on 2013 and believed to start manufacturing the all soft luggage products and
became fully operated by 2017. This resulted in reducing the time frame of importing the soft
luggage products and controlling over the prices and the margins overall.

B. Increasing the workforce - One of the major strategic decision which company decided to
move forward was increasing the workforce, expanding the numbers of employees to bring the
work done more effectively and efficiently. This would have definitely increase the operational cost
of the organization but would have considered profitable in coming period of progressive years.
Workforce was increased in every core department where organization need the most to improve
the working culture of the organization be it quality, production, accounts, marketing, operations,
design team, and IT.

4. Action:

A. Implementation of TOC Policy( Theory of Constraints) - One of the most successful method
where big FMCG and other Consumer Durable companies have adopted and are successfully
working and managing the inventory at all levels( externally and Internally)
This methods is called as automatic replenishment of products from the warehouse or the factory
to the required store or branch across the country.
B. Introduction of Web-portal for Sales force Creating a webpage login for sales-force to book
orders of channel partners online in the system which sends the confirmation of available stock
and the stocks that are in transit from the factory in the specific branch.
C. Introduction of New Designs By using advanced technologies that can help to meet the
demands of the potential consumers the organization started developing the new designs with
copyright technology to use specifically for their products.
D. Monthly review meetings of Sales Head with Regional Sales Head and other functional Top
Managers to share the feedbacks on last months performance and steps to be taken to improve
any error occurred while functioning in the organization.
E. Pre Strategy and operational planning with production managers and Heads at operational
levels.
F. Depending on the decisions taken in monthly review meeting the information sends downward
at sales force and other lower management levels.
G. Update the Sales and sales forecast- Making supply head and marketing head responsible for
availability of stocks and promotions at all times for the sales branch and respective branches
across the country.

5. Benefits:
A. Smooth Operations - By introducing the TOC the issues in inventory levels were brought down
the availability of stocks at all branches were increased to 90% from 60% - 65% against the
forecasting of products.
B. Productivity Improvement - Creating Sales webpage for sales force resulted successfully in
improving the overall productivity of sales force and sales of all the brands products which in turns
brings high volume of sales and profits for the organization. The company managed to retain the
market share and started growing.
C. Innovation and Designs turned to be a success for the company, they had achieved the sales
volume of 7 Billion units of backpacks in 3 years by touching sales figure of 22 Million NZD$( 10
Billion INR) and became the leader in backpack category.

Refernces:

1. http://www.vipindustries.co.in/resources/images/vip/pdf/2013-14.pdf
2. http://shop.vipbags.com/luggage/soft-luggage.html
3. www.termpaperwarehouse.com/search_results.php?query=operation+strategy+and+technology

4. https://www.coursehero.com/tutors-problems/Business/8755028-Assignment-3-Part-1-OperationTechnology-and-Management-Plan-Due-We/
5. http://searchmanufacturingerp.techtarget.com/definition/supply-chain-management
6. http://www.termpaperwarehouse.com/essay-on/Impact-Of-Operations-Strategy-In-The/24048