Operations Management Case Study

NSPL: Importance of Facility Location in Business Success

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Abstract:
Naveen Stylish Garments Private Limited (NSPL) was founded by a reputed technocrat, Deepak Chawla (Deepak), near Gwalior in 1990. In the beginning, the technical capabilities and managerial skills of Deepak helped NSPL in streamlining its operations. His rationalised plans and global experiences were customised to Indian conditions to suit Indian culture and economic standards. Within no time the company attained 200% growth and decided to go for expansion in South India.

The management considered ‘Factor ratings’ method, for identification of a suitable state in South India for their proposed operations. Accordingly, NSPL chose Andhra Pradesh for its opertaions in South India. The company identified the exact coordinates of their distribution centre with the help of Simple Median Model (SMM), and reduced its transportation costs considerably.

Pedagogical Objectives:

This Case Study can be used for understanding :
• How to select a region with the help of ‘Factor Ratings’ method
• How to identify the coordinates of a new Facility location, with the help of ‘Simple Median Model(SMM)’
• Estimating the total costs involved in transporting the goods from the new Facility location to the associated destinations.

Keywords : Textile and apparel industry, Facility Location, Factor ratings, Simple Median Model, Transportation costs, Identification of coordinates

Contents:

• Introduction
• Suggested Questions for Discussion