Case Study
Supporting Company
Tata Global Beverages
The Challenge
There is a common paradigm that states that the assets’ utilisation must be maximised to fully return the value of the investment made. Consequently, literature addresses this issue by proposing an alternative perspective where obsolete inventory has a higher cost to the organisation than apparent idle assets. The importance of addressing this paradigm is so that the value of implementing a buffering strategy based on spare capacity can be fully appreciated.
The Outcome
To calculate the required spare capacity, a continuous cycle of inductive and deductive approaches allows a combination of theoretical concepts along with observations and information gathered from semi-structured interviews to be formed, as well as pattern identification and testing through data analysis. The resulting model has provided Tata Global Beverages with an ideal manufacturing model designed specifically to cope with the uncertainty provoked by the different commercial strategies. The flexibility of the model to accommodate different managerial decisions and targets which makes it a useful tool for other organisations to use.