OR/MS Today - February 1998

February 1998

Country of Contrasts

INDIA:
The world's largest democracy has enormous problems and opportunities for operations researchers

By Goutam Dutta and Arabinda Tripathy

At a time when the value of operations research has been questioned by Corporate America and more and more MBA programs are reducing their OR offerings, it is interesting to note that operations research has come under closer scrutiny at another traditional stronghold: India. Like the United States and the United Kingdom, India boasts a long and successful OR tradition dating back more than 40 years. Indians have obviously made their mark on the international OR scene; even a casual observer at any INFORMS meeting has to be impressed with the number of Indians in attendance. To fully understand why operations research thrived for so long in India and to gauge where it might be going from here, it is first necessary to study the unique economic history and culture of the world's second most populous country.

In terms of purchasing power, the Indian economy is the fifth largest in the world behind the United States, China, Japan and Germany. After the country gained independence in 1947, the Indian economy began growing at an annual rate of 3-4 percent. Nehru, and later Indira Gandhi, modeled the economy after the former Soviet Union, which led to the development of state-run public sectors.

The growth of public sectors employing a large number of people led to inefficiency and encouraged corruption, but it enabled India, as a developing country, to achieve an enviable record of self-reliance in nuclear technology, missile development and computers. Although India was dependent on the United States for food throughout the 1960s, the country is now self-sufficient in that regard to the point that it has become a major exporter of grain and other food-related products.

In 1991, India faced a very serious monetary crisis when its foreign exchange reserves fell below $1 billion (U.S. dollars). Responding to the crisis, the government decided to liberalize the economy. This led to an accelerated growth rate of 7 percent for the last five years. Current reserves now total about $30 billion and foreign direct investment has soared to $20 billion.

India's booming software industry has contributed significantly to the economic growth. The sector is growing at an annual rate of 50 percent, and software exports, mainly to Western countries, are expected to reach $2.5 billion by the year 2000.

All of this sounds encouraging, but there are downsides to the Indian economy. India is home to one-third of the world's poorest people. Half of its population is illiterate. There are just 12 million phone lines to serve a population of 950 million. Only one in 47 Indians own a television set. The infant mortality is 71 per thousand compared to 8.3 per thousand in the United States.

Take a flight to Bombay, land at the Sahar International Airport in Bombay and drive to the Bombay House, part of the multi-billion dollar empire of the House of Tatas. Along the way you will pass by slums where people are languishing on incomes of less than one dollar a day. Add to this a population that is exploding at 18 million a year (equivalent to the population of Australia) and you begin to grasp the magnitude of the problems India faces.

As Newsweek magazine recently noted, "(India is) trying to accelerate on the information superhighway with 300 million people who can not read road signs."

Uniqueness of India

India occupies a unique position in the world. The world's largest democratic country, India represents one-sixth of the world's population. It has 26 different states, and 18 major languages that are recognized by the government. The country's major religions Hinduism, Islam, Christianity, Sikhism Jainism play important roles in shaping people's lives. Each language and each religion have several different divisions and subdivisions which try to maintain their own identity with the motto "unity in diversity."

Any OR professional working on real-life problems in India has to consider these challenges. These are no easy tasks. Let's consider some of India's problems, big and small, of interest to operations researchers.

Needless to say, the exploding population is India's biggest problem. Being a democratic country, India cannot impose harsh sanctions like the Chinese. Attempts to impose more moderate sanctions, such as those in 1975-77, did not work. In fact, they backfired.

To the poor, an additional child is an additional supply of labor. With no possible sight of eradication of illiteracy in sight, there is little hope that India's population will be under control in next 25 years. The problem is more acute in places like Rajastan where the female literacy rate stands at just over 20 percent, compared to Kerela which has a female literacy rate of about 86 percent. Any benefit the country may witness by increasing the GNP at 7 percent will be offset by its exploding population. At its current growth rate, India will surpass China by the year 2040 to become the most populous country on the planet. Given the political, social and cultural constraints, what can we can do to reduce this nightmare of population explosion?

Now let's consider a slightly smaller problem: transportation in Calcutta, the city of Mother Teresa. In Calcutta, the road system comprises about 5 percent of the land area compared to about 25 percent in most major metropolitan cities in Western countries. Calcutta has one of the highest population densities in the world. The modes of transportation range from hand-driven rickshaws (running at 2 mph) to Maruti-Suzuki cars (running at 50 mph).The result is massive congestion and inefficiency.

The city was built by the British and looks somewhat similar to London. It has a metro system that is efficient, but not extensive (Calcutta's subway "system" has one line compared to London's 10). Given the resource constraints, what is a reasonable transportation plan for Calcutta?

Finally, let's consider another interesting problem on a much smaller scale: a unique queueing and logistics problem in a grocery shop in the city of Jamshedpur. Professor Edward Hughes McGrath of the Human Life Center, Vivekananda Marg, in Baleswar, describes the frustrating experience of a young cyclist. The cyclist wants to buy two simple grocery items from the store "Gokul Bhander." There are four customers in front of him. Mr. Gokul, the proprietor, takes down the orders and prepares the bills. He then shouts out the list to his assistant who weighs out the required items.

The process of weighing is interesting. If the assistant has to weigh one kilo of lintels (chana), he takes a paper bag (thonga) and a ladle and goes to a large sack of chana in the back of the store. He puts approximately one kilo in the bag, fills the ladle as well and comes to the counter where the scale is located. He places a one-kilogram weight on the left hand pan and the thonga with the chana on the right. If the bag proves too heavy, he removes some chana. If it proves light he adds some more chana. He then folds the thonga, and proceeds to the next item until the order is complete. Once the bill is paid (cash only), Mr. Gokul and the customer greet each other and the customer departs. The young cyclist, meanwhile, waits for half an hour through four such order-cycles before it is his turn.

In terms of wasted man-hours, the cost of such an inefficient system is enormous, and would be unthinkable in supermarkets in Chicago and London where waits seldom exceed more than a few minutes. Again, the Indian experience is somewhat unique. It is worth noting that that the same city that tolerates such an inefficient market also produced the individuals whose work on an energy distribution problem won the Franz Edelman Prize for Management Science Achievement in 1994 (Tata Iron and Steel Co. Ltd.). Such is the uneven history of operations research in India.

Development of Operations Research in India

Operational research firmly established itself in India as an area of interest in the early 1950s. The first major application reported was a modeling effort by Professor P. C. Mahalanobis for the national planning of India. The study was carried out at the Indian Statistical Institute, one of the earliest institutes involved in teaching, research and application of OR in India. Since then, teaching and research in operations research have grown many fold and can be compared favorably to that in many developed countries.

The potential of OR in India was recognized early on. The study and application of OR as well as the organizational development of the OR community quickly took off. The effort was led by the Council of Scientific and Industrial Research (CSIR), the premier body to coordinate all scientific research in the county in the post-independence era. A core group was formed in CSIR to propagate use of operational research. Around the same time, the Indian Statistical Institute started developing a mathematical programming model for the national planning of India.

One of the major outcomes of these efforts was the birth of the Operational Research Society of India (ORSI) in 1957. ORSI was the first operational research society founded in a developing country, and predated many similar societies in developed countries. ORSI became one of the initial members of the International Federation of Operational Research Societies (IFORS) in 1959, and the first from a developing country.

ORSI began holding annual conventions in 1969; the 30th convention was held this past December. The society also publishes a quarterly journal, OPSEARCH, which enters its 35th year of publication in 1998. Again, OPSEARCH predates the journals of most other national OR societies, including some in the developed countries.

Despite taking an early lead in the development of operational research, India could not sustain the pace. Though substantial work continues in OR-related areas, the status of operational research in India needs to be boosted to match the potential that exists.

Teaching and Research in Operations Reasearch

The Indian Statistical Institute (ISI), basically a teaching and research institute in statistics and related areas, forged ahead with the application and research in operational research in the 1950s with its modeling exercise of the national economy. ISI also introduced various OR-related undergraduate and graduate courses. Later in the 1960s, ISI offered full-fledged graduate-level programs in operational research.

The Indian Institutes of Technologies (IITs), the premier institutes of technology in India, introduced graduate level courses (M.Tech. - Master of Technology) in "Industrial Engineering and Operational Research" or similar courses beginning in the early 1960s. Many of these institutes also offered doctoral-level programs at the same time.

In the mid-1960s the Indian Institutes of Management (IIMs) started offering MBA-level programs, largely based along the same lines of some of the best North American business schools. OR-related input through production/operations management, quantitative methods and other courses formed a part of the basic curriculum of the MBA-level courses offered by the IIMs. These IIMs also started offering doctoral-level programs. Many of the doctoral-level dissertations were based on applications of OR approaches in industry, public systems and government.

The IIMs and IITs are the major centers of OR-related teaching and research. In addition these institutes have also played a significant role in the application of OR through case studies, research and consulting. The Indian Institute of Science (IISc) is another center, which, during the 1980s and 1990s, has played a significant role in the application of OR approaches in industry and public systems.

The University of Delhi has been offering M.Sc. courses in operational research for more than 25 years. Even today, it is one of the few places to offer an exclusive graduate-level course in OR in India. Almost all universities in India now offer teaching facilities in OR, both undergraduate and graduate-level.

ORSI, recognizing the need for OR-related education and the inadequacy of facilities for such education, introduced a post-graduate diploma program in operational research in 1974 through correspondence and distance learning. The program was quite popular early on. Though still popular, interest in the program has been reduced largely due to the growth of OR teaching in universities and institutes.

Glimpses into OR publication and research activities in India are provided by Jaiswal [4] and Gupta [6]. Various specialized conferences have been held and proceedings published from time to time. There is a special interest in India on application of operational research to development-related areas. The Centre for Applied Systems Analysis and Development (CASAD) is primarily engaged in research in this area. In addition, a substantial amount of work is being done in OR-related studies in the field of municipal administration, transport planning, energy, public systems, agriculture, etc.

So far as the facilities are concerned, institutes like IITS, IIMs and IISc are well-equipped with computing and software supports. These institutes are also good faculty resources for teaching and research in OR. On the other hand, most of the universities are not so fortunate and lack strong computing and software support.

Operations Reasearch in Industry and Corporate Sector

Use of operational research in industry and the corporate sector started in India in the late 1950s. A fairly large number of Indian industries had industrial engineering departments or sections by the 1950s. For many years, industrial engineering and operational research were considered one and the same by Indian industries, and uses of OR were initiated by the industrial engineering departments. This was further strengthened by the offering of graduate-level courses on "Industrial Engineering and Operational Research" by the IITs. At a later stage in many industrial enterprises, operational research groups were formed by carving out a section of the Industrial Engineering Department.

Some of the early applications were in the area of network techniques. In the early 1960s, network techniques were used by the ship-building industry and also by integrated steel plants for relining of blast furnaces. The benefits derived from these early applications were very encouraging, and the application of these techniques spread rapidly across industries.

Today, though the network techniques for management of projects are quite common, the use of these techniques has remained at the very basic level in most industries. Location decision has been another area of early application of OR. A large mathematical programming model was developed during the 1960s to determine the location of a large fertilizer plant by a multinational organization. The model took into account the existing fertilizer plants and their capacities, existing demand patterns and its growth in different areas, raw material availability, logistics and other parameters.

There have also been many unit-based applications of OR in industry. Some of these have been shared at the annual conventions of the ORSI. But the publicity and sharing of these applications cannot be considered to be of high order. As a result, knowledge of many of the applications are limited to only those who are directly involved in the study.

Though there are many industries with in-house OR groups named as systems group, optimization group, etc., the number of success stories are limited. Following are some examples from the rail, steel, power industries and advertising industries.

Integrated Steel Plants: The integrated steel plants in particular have carried out many useful OR studies, which have been beneficial to the unit concerned and also recognized as work of good quality by the greater OR community. In this connection the work done at Tata Steel is worth mentioning. The originality and applicability of the work was recognized by two international prizes: the IFORS Prize for developing countries and INFORMS/CPMS Edelman Prize.

Indian Railways: The Indian Railway is the second largest railroad in the world with rolling stock of 9,000 locomotives, 38,000 passenger cars, 350,000 freights cars and 1.6 million employees. It operates 10,000 trains carrying 10 million passengers and one million tonnes of freight traffic. It is expected to carry 430 billion-passenger kilometres by year 2000. A DSS was developed to generate optimal train links for each terminal. To date, it has been implemented in five of the eight zones in India, resulting in many tangible and intangible benefits.

Transmission Network Planning: A mixed integer linear programming model was developed for understanding the present operational constraints of the Indian energy transmission and distribution. This is a large-scale optimization model with more than 10,000 variables that minimizes the cost of energy generation, transmission and distribution. Several strategic alternatives were discussed. This work was developed in the India Gandhi Institute of Developmental Research. It demonstrates a saving potential of millions of dollars per year.

Media Planning: In advertising the media plan consists of deciding where to advertise, what elements of the medium to choose and how many insertions should appear in each vehicle. It is difficult to quantify all parameters like the impact in audience and recall. An optimization-based decision support system was developed and used at Mudra Communications Limited at Ahmedabad that helped the agency save about 20-30 percent of the cost of the ad campaign. The DSS obtained a solution different from the traditional trial-and-error method. The system has been successfully integrated into the planning process of the advertising company.

Future of Operations Reasearch in India

The future of OR appears to be very bright. The information technology revolution has brought unprecedented opportunity in India. U.S. customers are working jointly with Indian counterparts in developing software. For example, before going home for the night, a consulting firm in New York hands their software problems over the Internet to a software engineer just arriving for work at her office in Bangalore. During her work day, she debugs the software and delivers the solutions over the Internet back to the consulting firm In New York. The next morning, the New Yorker arrives with his problems solved overnight by a colleague half a world away.

The economic liberalization program has brought the world much closer to India. Operations research is one area where India and the United States can cooperate. A developing country like India needs OR methodologies to effectively deal with its rapid economic growth. The time has come for OR professionals in India and the United States to step up their cooperative efforts. Clearly, there is plenty of work to be done.

References

1. CIA, World Factbook, 1996.

2. Datta P.C., ³Facts and Figures about Operational Research Society of India,² pp. xi-xiii, ³OR In India: A Retrospective,² 1992.

3. Dutta G., Sinha G.P., Roy P.N., and Mitter N., ³A Linear Programming Model for Distribution of Electrical Energy in Steel Plant,² International Transaction of Operational Research, Vol. 1. No. 1, pp. 17-29. 1994

4. N.K. Jaiswal, ³Operational Research and ORSI Publications,² pp. xiv, ³OR In India: A Retrospective,² 1992.

5. Newsweek, ³India: Next 50 years, Special Report,² Aug. 4, 1997.

6. Gupta O.K., ³OR Conventions in India: A Retrospection,² pp. 20-26, ³OR in India: A Retrospective,² 1992.

7. McGrath E.H., ³One Hundred Years in a Day: Basic Managerial Skills for All,² Prentice Hall India Publications Limited, pp. 361-362.

8. Tripathy A. (Ed.), ³Modelling and Analysis of Large Systems,² Oxford & IBH Publishing Co. Pvt. Ltd., New Delhi, 1991.

9. Shah Janat and Tripathy Arabinda, ³Operational Research in Indian Steel Industry,² Wiley Eastern Limited, New Delhi, 1993.

10. Ramni and Mandal, ³Operational Planning of Passenger Trains in Indian Railways,² Interfaces, Vol. 22, No. 5.

11. Rosenhead Jonathan and Tripathy Arabinda, (Eds.), ³Operational Research for Development,² New Age International (P) Limited, Publishers, New Delhi, 1996.

Goutam Dutta is an associate professor, and Arabinda Tripathy is a professor, at the Indian Institute of Management, Ahmedabad.

For more information, put the number 3 in the appropriate space on the
Reader Service Form

Table of Contents

OR/MS Today Home Page

Lionheart Publishing, Inc.
506 Roswell Street, Suite 220, Marietta, GA 30060, USA
Phone: 770-431-0867 | Fax: 770-432-696
E-mail: lpi@lionhrtpub.com