Operations
Management - II
Project
Presented by: Group 1
THE PANIPAT HANDLOOM
Founded in 1975, The Panipat Handloom is a well-known name in home décor and textile
manufacturing.
Initially focused on handwoven textiles, the company expanded into wall panel manufacturing,
producing laminate, PVC, and wooden wall panels.
It serves a wide range of clients, including interior designers, construction firms, and
homeowners, across Delhi, Chandigarh, and Jaipur.
Known for its high-quality and customizable panels, the company has built a strong reputation
in the home décor and construction market.
Despite its success, The Panipat Handloom faces operational challenges due to seasonal
demand fluctuations, making inventory and workforce management a critical issue.
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The Panipat Handloom is struggling with demand fluctuations, leading to inefficiencies
in production, workforce management, and inventory control.
SEASONAL DEMAND VARIATION:
High demand during festive seasons, home renovations, and real estate booms
(October–March).
Low demand during off-seasons (April–September), causing excess inventory and
underutilized labor.
WORKFORCE MANAGEMENT ISSUES:
Hiring full-time workers for peak demand leads to idle labor and increased
costs in the off-season.
Frequent hiring & firing may affect employee morale and skill retention.
The company must choose an optimal strategy—Hiring & Firing,
Subcontracting, or Overtime—to balance demand fluctuations while
controlling costs and maintaining efficiency.
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Lead Times
Laminated Surface Sheet – 1 week
PVC Resin – 1 week
Wood Adhesive – 2 weeks
Wood Veneers – 1 week
Hiring Cost - 1 Month's salary (approx ₹10000)
Firing Cost - 0.5 X Month salary (approx ₹5000)
Cost of Subcontracting - Rs. 300/unit
Inventory Holding Cost - Rs 20/unit
To manage fluctuating demand, The Panipat Handloom is considering three
strategies:
HIRING & FIRING SUBCONTRACTING OVERTIME WORK
WORKERS ORDERS FOR EMPLOYEES
Hire extra workers during peak Outsource extra production to third- Use existing workforce for extra
seasons and lay them off during party vendors during peak seasons. shifts during high-demand periods.
low demand periods. ✔ Pros: Flexible capacity ✔ Pros: No need for hiring/firing,
✔ Pros: Lower labor costs in off- management, no workforce skilled workers ensure quality.
seasons, avoids overstaffing. adjustments needed. ✔ Cons: Higher labor costs
✔ Cons: Employee morale issues, ✔ Cons: Higher per-unit cost (₹300 (overtime wage ₹80/hour), worker
loss of skilled workers, hiring/firing per unit), loss of quality control, fatigue, risk of reduced
costs. dependency on external vendors. productivity.
Hire Fire is the best strategy in this case: It incurs the lowest cost compared to other
strategies of resource planning Since, in reality, hiring and firing workers every week is not
feasible, the workers can be given shifts, i.e., similar to working on the bench
Use a controlled hiring & firing approach to balance
labor costs while retaining key skilled workers.
Provide seasonal training programs to ensure a
smooth transition for temporary workers.
Forecast demand accurately to order
raw materials (PVC resin, wood veneer)
just in time, reducing excess inventory.
Improve coordination with suppliers to
minimize lead times.
Prevent warping and moisture damage in
wood veneer and laminated sheets, ensuring
product quality.
Reduce inventory wastage and customer
complaints due to defective panels.
Produce panels based on actual
demand, avoiding overproduction and
storage costs.
Strengthen supplier relationships to
ensure raw materials arrive on time. Repurpose wood veneer offcuts and excess
resin by selling them to furniture and
construction companies.
Reduce waste disposal costs while creating
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an additional revenue stream.
Siddharth Gupta IPM03158
Suhani Tayal PGP15237
Tanisha Mittal PGP15245
Vanshika Garg PGP15256
Vanshita Gupta PGP15257
Vanshika Gupta PGP15258
