Systems View of Vedanta Aluminium Ltd

System View in Operations Management A study of Vedanta Aluminium Ltd

(Jharsuguda, Orissa)

Submitted By Anshika Srivatava(10810007) Aviral Pundir(10810015) Chetna yadav (10810018) Kartik Menon(10810032) Rohit Menon(10810053)

Department of Management Studies, IIT Roorkee

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Systems View of Vedanta Aluminium Ltd

Introduction

A System is a group of interrelated items in which no item studied in isolation will act in the same way as it would in the system.A system is divided into a series of parts or subsystems, and any system is a part of a larger system.The systems boundary defines what is inside the system and what is outside.A systems environment is everything outside the system boundary that may have an impact on the behaviour of the system.A systems inputs are the physical objects of information that enter it from the environment and its outputs are the same which leave it for the environment. Systems view of operations management states that activities in an operations system can be classified as inputs, transformation process and output. Inputs are classified into three general categories-external, market and primary resources. Transformation resources are the elements that act on, or carry out, the transformation process on other elements. These include such elements as labour, equipment/plant and energy. The nature and mix of these resources will differ between operations. The transformed resources are the elements which give the operations system its purpose and goal. The operations system is concerned with converting the transformed resources from inputs into outputs in the form of goods and services. There are three main types of transformed resource of materials which can be transformed either physically(e.g. manufacturing),by location (e.g. transportation),by ownership(e.g.retail) or by storage(e.g.Warehousing) For our study of systems view of an organization we chose, Vedanta Resources Pvt. Ltd.We concentrated on its Goa unit, which is called Vedanta Aluminium Manufacturing Unit.The unit produces aluminium from aluminium oxide through electrolytic reduction. We consider the factory as a systems compromising of various subsystems. As we defined earlier, a system consists of these major components: Input- Input into an operation systems can be classified into these categories.: o External- Legal inputs (the Companies Act etc), Economic, Social, Technological (Electrolytic cells, power generation machinery etc ) o Market Competition (HINDALCO, NALCO,BALCO etc), Customer Desires, Product info

Department of Management Studies, IIT Roorkee

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Systems View of Vedanta Aluminium Ltd

o Primary resources Material (Alumina, raw aluminium ore ), personnel, capital, utilitiesHere the input is Al2 O3 or Alumina. This is the aluminium ore which is extracted from earth Conversion Subsytems- The ore is transformed into pure aluminium. The transformation process is carried out mainly through electrolytic reduction. Output- The output consists of pure aluminium. o Direct o Indirect Waste Pollution Technological Advances Products : Pure Aluminium Services : Aluminum Manufacturing

INPUT
Vedanta Resources Pvt Ltd

OUTPUT
Transformation Process

Alumina Al2O3
Energy Water Building Labor Equipment Refining Concentrating the ore Electrolysis Processing of Pure Aluminium

Pure Aluminium
Pollution, Advancement in Aluminuim reduction technology

Now if we view the aluminium plant as the system, we can break down the system into various subsystems.The plant is mainly divided into 3 sections. We can consider these sections as subsystems which combine together to form the whole system i.e the Aluminum Plant .The sections or subsystems are: Carbon Section This section basically deals with the preparation and maintenance of Carbon anode. The electrolytic process used for reducing Alumina (Al2 O3 ) to pure aluminium. For carrying out this process the anode used is made up of carbon mainly graphite. This section deals with the construction and maintenance of Carbon anodes.
Department of Management Studies, IIT Roorkee Page 3

Systems View of Vedanta Aluminium Ltd

Pot Room Cell This is the section where the process of electrolysis actually takes place. Here the raw aluminium ore is reduced to aluminium by electrolysis with the help of carbon anodes. This section deals with the complete process. The electrolytic cells are called Pot and thus the department is called Pot Room Cell

Cast House This section deals with processing of pure aluminium. Once the aluminium has been extracted from the ore, it needs to be converted into more suitable forms which can be further sold in the markets. The extracted aluminium is casted into ingots and plates which are more suitable for selling in the market.

Captive Power Plant This section of the plant deals with generation of electricity for running the whole plant. The electricity generated here is used by all the other d departments.

Vedanta Resources Pvt Ltd

Pot Room Cell Captive Power Plant

Carbon

Cast House

Each section can be treated as a system in its own and can be divide into following general parts : Human Resource Finance Production and Operation Logistics Information Technology
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Department of Management Studies, IIT Roorkee

Systems View of Vedanta Aluminium Ltd

These sub systems are present in all the 4 major sections. They are centrally controlled by the Plant Management Office(PMO).

Plant Management Office

Carbon
HR

Pot Room Cell

Cast House

Captive Power Plant

Finance

Production/O perations

Logistics

IT

The PMO controls the central decision making and is responsible for running all the departments in sync. The PMO ensures that the decisions made by the departments do not contradict and a healthy harmony is maintained so that all of them work together as a part of a system.

Department of Management Studies, IIT Roorkee

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Systems View of Vedanta Aluminium Ltd

Conclusion
Thus we see how systems view in operations can be put to a practical use. The idea behind systems model is that the operations function can concentrate solely on transforming input of raw material into goods and services without considering the external environment. The systems view gives a very simplified view of the company and thus helps us in understanding the basic processes in a company. We can see what are the major areas of attention in a company and helps us in understanding the hierarchy and layout of an organization. However the disadvantages of this model includes the slowness of response to change in environment as they are transmitted through various connected functions and the inability of operations to develop in response of the needs of the customers. Systems view gives us an oversimplified view. In real life the processes are much more complex and cannot be differentiated so easily.

Department of Management Studies, IIT Roorkee

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