EDITOR’S LETTER
“With Evolution, Changes happen in every part of the world every day, every time.” Welcome to the eleventh edition of “LAKSHYA”, our monthly supplement designed for people who dare to think above the average and believe in connecting the dots. In an age where technology has taken over every sphere, information is abundant and data is omnipresent, we have planned to bring to you a collection of thoughtfully created and carefully crafted pieces of work by some bright aspiring minds of ICFAI Business School, Hyderabad on the current trends and receiving close review in the field of Operations Management and their relevance in different industries. From the ninth edition, we created a new segment, ‗The Corporate Angle’ where article will be featured from prominent business leaders which will enlighten minds of young managers and business enthusiasts. IBS Hyderabad and Club Kaizen express a sign of gratitude to all corporate leaders for taking out time and scripting their thoughts for our magazine. We look forward to providing you with some valuable insights and inculcate the passion for reading. We hope that you enjoy this issue and do let us know if there are any topics you‘d look forward to be covered in upcoming editions. Please write to us and become a part of this discussion Email ID: kaizenclub.ibs@gmail.com An Initiative by: MAHESH HIREMATH JOINT SECRETARY - KORE Kaizen – IBS Hyderabad MBA 2018-20
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CONTENTS
From the Mentor’s Desk
03
The Corporate Angle
04
Internet of Things (IoT) in Automotive Industry
08
Artificial Intelligence : Reshaping the Market
13
One Way : The Toyota Way
16
Blockchain : A new Technology of Trust and Transparency
21
Digitally Transformed Connected Supply Chain
26
Supply Chain Transformation with SAP ERP
30
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From the Mentor’s Desk
In the era of competition, it is imperative for students to be prepared for the ever-changing business environment. Knowledge creation plays an important role to learn to tackle the dynamic nature of business. I appreciate and congratulate the initiative of club KAIZEN for bridging the gap between corporate world and academia through LAKSHYA which is an excellent platform where industry practitioners, academicians and researchers can share their knowledge and experience, acting as a beacon guiding students to reach their goal. My best wishes to club KAIZEN in their endeavour of knowledge creation through LAKSHYA.
Nishit Kumar Srivastava Mentor, Club Kaizen
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The Corporate Angle 10 Rupee Market Mr. Firoz Sadik Sait Regional Head – Monster Gulf
We come across many small things in our life that bring up higher level of imagination coupled with anxiety to do better and think broader. One of the most prominent family time in today‘s busy and hectic schedules for individuals is the house hold shopping which generally happens on weekends, or many a times evening walk to purchase vegetables for the upcoming days or the preceding week. Considering I am a working individual with tight schedules and a very busy life, who equally values professional & personal life, and family being a vital part of my wellbeing, this routine of a weekend household shopping is a pleasant family time and times that I get to explore my thoughts and thought process along with other small but thought provoking lessons to learn and inspirations to lead a better daily life. Recently, I managed to get a chance to get out of the routine schedule & spend some time with my Wife and adorable kids and help them and myself get a chance out with each other and help each other with the basic household shopping and fulfillment of requirements. So in Hyderabad we have this unique concept of a particular street turning into complete vegetable market for the one specific day of the week in the evening, from about 05:00 PM to 10:00 PM Visiting this street turned market at first glance seemed like a tedious task, especially with the kids with you, the view of this place from the nook of the street made me think of how unorganized this place is, and like any sophisticated individual not used to all this hustle would, as the street would be completely crowded, the cars / bikes, pedestrians all over the street along with the vendors trying to make a living. Well my wife was particular she wanted to just pick up stuff from there so with a deep sigh holding my kids hands with a certain grip and directing them, appropriately we just walked into this not so organized market where it was difficult to move around. While exploring the market with keen observation and curious mind that I have and while taking a closer view at this market place, I thought to myself, ―Well, let us not judge a book by its cover.‖ Multiple Visits with Powerful observation into something can throw up amazing insights. 5 |K A I Z E N ’ S O P E R A T I O N S & R E S E A R C H E N T I T Y
Indeed, I am contradicting to the description of the market and I am taken aback too, as the more time I spent there with every passing minute & every vendor I talked to made me realize that this is one of most organized business places I have seen in the not so appreciated/ sophisticated and unorganized sector. Reason I say this?
Here we go.
The Same Vendors move from one Street to another (so home makers & frequent visitors know whom to get to for what). All of them have designated places, systematically organized in the street every other day. Commonalities in Pricing Specific hours of operation (for customer convenience). Specific Day for each Street (every neighborhood has its own opportunity to be in limelight) Choosing high density Area for operation (marketing & sales growth strategy)
The most wonderful thing is that every vendor you go to has priced the good they are selling in multiples of Rs 10. Eg. Banana – Rs 10/- for 3 nos Lemon – Rs 10/- for 6 nos Onions – Rs 10/- for Half Kilo (1/2th ) Tomato – Rs 10/- for Half Kilo (1/2th) Anything you ask them would be available in multiples of Rs.10/- and it‘s so organized that everyone you deal with have some commonalities and are similar communication. There is no competition as vendors doing similar business as these sellers realize that only if they work along and help each other, they would be able to impact the market and bring in more crowd attraction and when customers have no confusion sales work well for the sellers and customer has similar options available even with someone else by the time he/ she decide on what needs to be purchase which not only brings customer satisfaction but increase market values & increases sales while getting the business to flourishing. With a satisfying time with my children and dearest wife, an evening has also taught me that these Indian Market places are an Unorganized - Organized Sector of Business, a Rs.10/market.
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When thinking about this as a corporate individual and from a business perspective I wish that if each team realize the importance of having stabilized pricing, within the organization and support the system and by not giving away with the pricing bargain of the client. I would put it that this is also an outcome of the discussion on a query raised by my Team Member in one of the meetings about pricing strategy, I am sure I would have a smaller session today with my observation on this to the team to set up our internal pricing strategy in place. This will also benefit as customer satisfaction will draw more business & income. ;)
We have more to learn from the daily life to inculcate in our daily business streams, let’s keep our ears and eyes open to build a better career and strategy at the place we work!
The author, Mr. Firoz Sadik Sait is a creative, diligent, passionate and progressive professional with 15+ years of work experience in Sales, Sales Operation, Channel Management, Marketing and management across BFSI, Internet and Media with highly reputed establishments across India and Middle East. He is currently working as Regional Head - Middle East business for Monster.com. The article originally published on LinkedIn.
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Internet of Things (IoT) in Automotive Industry
Mahesh Hiremath (MBA 2018-20)
IoT is an emerging trend where cyber world meets the physical world. It is independent communication between lifeless objects, in order to bring welfare for humans. It encompasses all technologies in SMAC (Social, Mobile, Analytics and Cloud). Automotive industry is on course to adopt IoT using developments for smart or concept vehicles and related infrastructure. It links people, machines, vehicles, auto parts and services to streamline the flow of data, enable real-time decisions, and improve automotive experience. Big Automotive manufacturers, suppliers, and dealers have started investing heavily in Internet of Things and are gaining returns in the form of ultra-efficient inventory management, real time promotions that grow sales, reduced operational expenses and increase in revenue. They are beginning to change their business processes and recognize that, in time, IoT will touch every area of automotive operations and customer engagement. Opportunities for Automotive Manufacturer: Operational – including telematics, predictive maintenance, software updates etc. Infotainment – in-car streaming and other consumer services. Value Added Services – for example, additional in-built intelligence to assist the owner. Self-driving / autonomous vehicles. Across the wide swathe of industrial IoT deployments the majority of successful use cases have been in the operational area where early deployments have tended to exist. These initial business cases rely less on user uptake or new business models and simply perform an existing function in a more efficient and streamlined manner, reducing costs and improving product quality. To date, this is where the majority of automotive manufacturers have also gained the most from investment in telematics related areas and associated data collation and action. Infotainment or in-car connectivity is evolving rapidly. Several manufacturers have developed their own systems and the ―sweet spot‖ for manufacturers is still being defined. A 9 |K A I Z E N ’ S O P E R A T I O N S & R E S E A R C H E N T I T Y
key enabler for success of in-car infotainment is the information connectivity element, particularly when a vehicle is on the move, the localization of the service to push contextual information to the driver or passenger, particularly as borders are traversed. The overall quality of connectivity performance can be critical in the delivery of a pleasing service experience. Value Added Services allow the expansion and evolution of existing components within a vehicle. Voice activated search and other features included with the in-car navigation system allow the automotive manufacturer to deliver added value to the consumer at a relatively low cost. Self-driving and fully autonomous vehicles are the current hot topic in the automotive sector. This will continue to be a focus of interest in coming years as the technology develops and promises to be an exciting area of innovation as well as disruption. The recent advertisement of MG Hector featuring Benedict Cumberbatch (Dr. Strange) showcases that soon IoT will be a competitive advantage for any automotive firm to make their good presence in a rapidly growing nation like India. The SUV will be equipped with the i-SMART technology, which combines connectivity services and applications hardware and software for a better driving experience. The i-SMART will feature an embedded Machine to Machine (M2M) SIM to ensure connectivity. The SUV will also get a voice Assist feature which happens to be a voice application that works on the cloud and head unit. It can be activated by saying 'Hello MG' and allows over 100 commands, including opening and closing of windows and sunroof, navigation and AC control. As per many automotive experts, MG Hector would be India’s First Smart Car with AI (Artificial Intelligence) capabilities.
Inbuilt features of MG Hector
On a global level, Tesla is a big example of Internet of Things. When Tesla was founded in 2003, it might have hard to envision this auto manufacturer setting the standard for technologies surrounding the Internet of Things. 10 |K A I Z E N ’ S O P E R A T I O N S & R E S E A R C H E N T I T Y
Tesla‘s Model S came equipped with what a company called over-the-air software updates just like in mobile phones when it's time to update your phone's operating system, the provider pushes what it calls an over-the-air update directly to your phone. You can't, however, get a wireless update without wireless service, so Tesla includes and pays for this feature as a standard feature. This, combined with the car's Bluetooth capabilities, and even a built-in garage door opener, makes Tesla's cars part of the Internet of Things. Later, the auto manufacturer developed its own smartphone app, giving Tesla owners the ability to control the car's interior climate and communicate more fully with their vehicles. Tesla's over-the-air feature not only allows for software updates but also allows the manufacturer to essentially ''boot'' the car up (like you'd do with a sleeping computer) in order to conduct upgrades and necessary installations, all while the car's owner is asleep.
eSIM – Managing Non-Core Technology eSIM is a significant development for the automotive industry, to deliver the independence from the mobile network operator required over a vehicles long lifespan. eSIM and Remote SIM provisioning gives an automotive manufacturer the ability to change to a different mobile access supplier and thus address the problem of potential network lock-in. This ability to change a SIM profile over the air and to remotely configure the connectivity, depending on where the device is eventually, sold provides additional flexibility to the manufacturer. Whilst this does open new commercial options, it is also dependent on the connectivity access provider supporting eSIM and also having an eSIM platform that is interconnected with other networks, thereby allowing a profile to be switched between networks. Managing this engagement with mobile network operators and different interoperability standards also provide challenges to the implementation of this exciting technology by the automotive manufacturer themselves. Such technology is usually not core to an automotive manufacturer and as such represents additional cost and complexity. This in turn takes resources away from the core function of utilizing the IoT solution to provide value to the vehicle. 11 |K A I Z E N ’ S O P E R A T I O N S & R E S E A R C H E N T I T Y
ESIM – How it works? Summary The rapidly changing face of the automotive industry presents both challenge and opportunity for automotive manufacturers. The opportunities, in the face of this disruptive period, is to utilize the leaps in technology of computing power, storage, artificial intelligence, machine learning and communications connectivity technology to create additional value to the customer and make what was until recently science fiction into reality. New connected vehicle solutions, particularly those in their infancy, are complex and created from a fragmented combination of expertise from disparate providers. The challenge for the automotive manufacturer is in developing use cases which best suits the needs of their customers and successfully implementing them with the highest efficiency and lowest degree of complexity. Also, knowing that some developments in this early phase may fail, then the flexibility to change and adapt become paramount. IoT encompasses many of the everyday devices that have become internet-enabled in order to make our lives more full, connected and enjoyable. After all, if you can adjust your thermostat and turn on your lights before you ever get home, that's sure to make for a more pleasant arrival than showing up to a dark and cold house.
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Artificial Intelligence : Reshaping the Market
Hemantika Chakravarty (MBA 2018-20)
Artificial intelligence also referred to as machine intelligence is intelligence exhibited by the machines when they mimic the cognitive functions associated with human beings like learning and problem solving. Some of the modern machine capabilities classified under artificial intelligence include understanding human speech, autonomously operated cars and military solutions. Artificial intelligence can be classified into three different types of system mainly analytical, human inspired and humanized artificial intelligence. Artificial intelligence generally revolves around a set of unambiguous statements executed by the computer known as algorithms. The various tools that have been devised to solve the problems in computer science are – Search and optimization, logic, probabilistic methods of uncertain reasoning, classifiers and statistical learning methods like decision tree, neural networks. Customer satisfaction is the prime focus of the marketer and thus artificial intelligence has given this a better dimension. Leveraging the customer data and using the concepts of artificial intelligence to anticipate the demands of the customer has broadened the horizon of the marketers to target the audiences in the best way possible. Thus artificial intelligence marketing has helped the market gain impetus and also gives a clearer picture about the types of products and the particular segments that the product would cater to. Using elements like big data, machine learning the customer preferences and the purchase trends can be studied and decisions can be taken accordingly. Talking about the industrial markets artificial intelligence has played a major role in making the marketers more efficient. Targeting the advertisements for the buyers in the pivotal stage of value chain process requires machine learning and an integration of AI with digital marketing. Retargeting is done to re-engage the buyers to visit the site and purchase the items that are still in the cart and amazon does this with the use of artificial intelligence. Chat bots are very essential in case of the industrial marketing as pitching about the product and selecting the appropriate supplier becomes very important to initiate the business in case of the industrial marketing. Content annotation and integration based on the various data collected from the customer visiting the website helps the marketer as customized contents 14 |K A I Z E N ’ S O P E R A T I O N S & R E S E A R C H E N T I T Y
and articles are suggested to the customers with a specific inclination towards a certain kind of product. Thus AI creates detailed customer profiles that collect the data of the consumers at every customer interaction. Every time a customer visits an ecommerce site like Amazon or Flip kart the prices for the products are dynamic depending on the customer profile. This is again because of the AI that through the cookies the demographic information of the consumer is collected in order to classify in a particular segment. Safron –a division of Intel has quite mastered the art of predictive customer service. Knowing the time of the customer call and the type of query can further improve the prospects of upselling as well as crossselling and an improved customer service. In case of the consumer markets also AI has played a major role in reshaping the markets. Products like echo and Alexa that uses natural language understanding and automatic speech recognition are examples of AI and its necessity in every household. The AI operated grocery store in Seattle named Amazon-Go helps the customer to purchase products as per their convenience without the hassle of long queues and limited cashiers for the payment. When buying and selling the products become so lucid with the introduction of AI, it can be rightly said that artificial intelligence would integrate the entire supply chain and make it more efficient. From managing the inventory to the selling of the products artificial intelligence has made the processes so seamless and hence this technological advancement has enhanced us and hence augmented our intelligence for better marketing prospects. Thus artificial intelligence is executing the processes that are impossible and hence considering it as a farfetched dream would only make the idea bleak. AI is ruling our present and will empower us in the future. AI is everywhere and instead of considering it as a danger to mankind we must consider it as an adrenaline rush for innovation and a process that would technologically equip very individual to think more challenging for the machines to perform better than them!
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One Way : The Toyota Way Megha Choudhary (MBA 2019-21)
―Mutual ownership of problems,‖ is one slogan. Other tenets include solving problems at the source instead of behind desks, and the ―kaizen mind,‖ an unending sense of crisis behind the company‘s constant drive to improve. Toyota Motor Corporation is a Japanese multinational automotive manufacturer headquarters in Toyota, Aichi. The company was founded by Kiichiro Toyoda in 1937. Toyota's corporate structure consisted of around 364,445 employees worldwide and as of September 2018, was the sixth-largest company in the world by revenue. As of 2017, Toyota is the largest automotive manufacturer. Toyota was the world's first automobile manufacturer to produce more than 10 million vehicles per year which it has done since 2012, when it also reported the production of its 200-millionth vehicle. The success story of Toyota is not a hidden affair. The Toyota Way written by Dr. Jeffrey Liker was released in 2003. It helped other keen entrepreneurs to understand lean philosophy. It unlocks our mind from the conventional perception of operation and quality. It was written to make people understand the Toyota Production System philosophy thoroughly and how they do business. It was their revolutionary way of thinking that has held its ground in the face of stiff competition. "This book will give you an understanding of what has made Toyota successful and some practical ideas that you can use to develop your own approach to business."-Gary Convis, Managing Office of Toyota. The two pillars which support the principles of Toyota way are: Continuous Improvement – challenge everything Respect for people – engage employees 17 |K A I Z E N ’ S O P E R A T I O N S & R E S E A R C H E N T I T Y
Dr. Jeffrey Liker, a renowned authority on Toyota's Lean methods, explains how you can adopt these principles - known as the "Toyota Production System" or "Lean Production" - to improve the speed of your business processes, improve product and service quality, and cut costs. The 14 Lean Management Principles are: Principle 1 – Base your management decisions on long term philosophy, even at the expense
of short term financial goals. Principle 2 – Create continuous process flow to bring problems to the surface (Just In Time) Principle 3 – Use pull systems to avoid ‗overproduction‘ Principle 4 – Level out the workload. (Eliminate waiting)
Principle 5 – Build a culture of ‗stopping to fix problems‘ to get quality right. (Eliminate rework) Principle 6 – Standardized tasks are the foundation for continuous improvement and employee empowerment. Principle 7 – Use visual controls so no problems are hidden. (opportunities are exposed to all) Principle 8 – Use only reliable and thoroughly tested technology that serves your people and processes. Principle 9 – Grow leaders, who thoroughly understand the work, live the philosophy and teach it to others. Principle 10 – Develop exceptional people and teams who follow your company‘s philosophy. Principle 11 – Respect your extended network of partners & suppliers by challenging them and helping them improve. Principle 12 – Go and see for yourself and thoroughly understand the situation. Principle 13 – Make decisions slowly by consensus, thoroughly considering all options and then implement rapidly. Principle 14 – Become a learning organization through relentless reflection and continuous improvement.
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Toyota’s response to real life crisis Toyota‘s sales and profitability were gaining elite position and then Japanese earthquake and tsunami of 2011 struck. It was the worst disaster in the recorded history of Japan. Here the company displayed its Toyota Way Principles. Even though the plants were shut down for three months, team members were not laid off during the downtime. Rather, the company invested in developing people via training and kaizen activities. Toyota‘s ability to invest in team members rather than laying off massive number of workers. As every other global automotive firm did during the recession, was based on another Toyota way principle: self-reliance. Akio Toyoda used all his powers as president to turn the energy of the recall crisis toward continuous improvement rather the blaming. As he put it in an interview with Liker : When I appeared in front of the [U.S.] media in February for the first time because of the recall, I was very harshly attacked, I was almost like a sandbag…I decided I would never point fingers at somebody else. And during the congressional hearings…I was thinking about the dealers, and customers, and suppliers, and our U.S colleagues in Toyota…So rather than trying to be too aggressive, or seeming to be arrogant, I tried to talk to those people. How Toyota Production System (TPS) benefits your organization Toyota Production System influences every aspect of Toyota‘s organization and includes a common set of values, knowledge and procedures. It entrusts employees with well-defined responsibilities in each production step and encourages every team member to strive for overall improvement. The Toyota Way's 5 Principles
Challenge, Kaizen (improvement), Genchi genbutsu (go and see), Respect
"It's a disciplined environment, but it's a system that seeks continuous improvement and respect for its people," said Liker, who spoke to dozens of Toyota workers to research his book. "It has provided a model for thousands of organizations throughout the world." "The real Toyota way is a culture of control," said Masaki Saruta, a business professor at Japan's Chukyo University who has written several books on Toyota. "The company is very proud of this concept. They've been doing it for 50 years."
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Today, some U.S. companies have fired employees for dating colleagues or gaining too much weight and have refused insurance policies for those who engage in such risky activities as skydiving or riding motorcycles. But pressure for conformity is stronger at Toyota than most other major firms in Japan, in part because of its size, its history as one of the nation's earliest overseas success story. "The Toyota Man always says yes," said Hiroshi Oba, a veteran assembly-line worker who rebelled against the image to become a union activist. "He does whatever he's asked, works any shift and then makes his reports on quality control, mostly on his own time." The success of the Toyota Way has lured automakers from Germany and South Korea. Naoshi Sugiyama, a business lecturer at Chukyo University who has researched Toyota, said employees put up with the system because of the pay, benefits and status that come with a Toyota employee badge. Those include day-care centers for children and working for a company with a nationwide reputation. "The Toyota Man enjoys a high social status as part of the company," Sugiyama said. "Workers there feel superior to others." “They just set out to learn how to make it possible�.
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Blockchain : A new technology of Trust and Transparency Nithin Abraham (MBA 2019-21)
Before we get into the routine questions of what, when and how, we need to understand why millions of people over the past one decade are discussing about this technology and its future prospects. That would in turn help us understand rest of the queries though. The easiest way to go for explaining the people‘s concern would be to quote the application of this technology in cryptocurrency like Bitcoin and to know its current market value.
1 Bitcoin = 8,642.32 $ = 6,03,925.32 INR!
(As on 16th March 2019)
Now that‘s one huge amount and as students of management, this is something that should be in our concern. It‘s related to money and has the potential to hold the future! We got to know about this! Started as a research project in 1991 by Dr W. Scott Stornetta and Dr Stuart Haber, this technology had started getting recognition from 2008 with the arrival of Bitcoin. What is Blockchain? Yes, you are right. The picture you got in your mind is exactly what it is literally i.e. a chain of blocks. In technological perspective the block represent data which is interconnected by a database which is in turn the chain. In simple terms it can be explained as a public digital 22 |K A I Z E N ’ S O P E R A T I O N S & R E S E A R C H E N T I T Y
transaction report that contains the data (block) arranged in sequence. This report copy is hold on by millions of computers across the globe. Each block contains information about the date, time, and dollar amount and about those who are involved in the transaction. It maintains the anonymity of the people involved by just providing their digital username rather than their real identity. However it‘s an open report such that any person in the network could access the details of any transaction at any point of time which brings the transparency factor of this technology into play. Working For understanding the working of Blockchain, let‘s sit onto the banking perspective because that‘s something we deal with every day. Banks work on a centralized system i.e. every transaction between two persons or entities has to be verified by the bank‘s server first. The bank does this by checking the account holder‘s information, balance, and the recipient information and if everything is clear it‘s a green signal for the transaction and it‘s done. There‘s a fee associated to this service by the way. Now, let‘s get into blockchain technology perspective in banking sector which works on a decentralized system. Here also, the transaction takes place only when it‘s verified but instead of a central server this process is carried out by a network of computers within the system. These computers are interconnected and each of these has a copy of the ledger i.e. the report. So when a transaction takes place all these computers verify your credentials together i.e. details of the purchase, time, dollar amount, wallet details etc. If you are good to go then all of them would wave you thumbs up and voila! Your transaction is done and the details are added as the latest block in the chain of data. At the same time this is updated in all the systems and now the ledger with each of them contains the latest block containing data of your transaction. This is how blockchain grows. It‘s similar to how your newsfeed gets updated with the latest stories in Facebook, Instagram etc. Once a block is added it‘s nearly impossible to tamper with as the security system is pretty much complicated in this technology. This transaction is very cheap compared to the conventional method.
The two systems: centralised vs decentralised
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Security The verification of a transaction in blockchain is carried out by solving a cryptographic hash function. In this process the computer takes all the details of a transaction of any length and creates an output of fixed length. Thus all the blocks in a blockchain have details encoded in same length. This process is known as hashing. Each hash consists of a string of numbers and letters. In Bitcoin, verification is done by solving hash function SHA-256 (Secure Hash Funtion-256 Bit). So any block in Bitcoin ledger would contain data in 256 bits. Unless verified the transaction in blockchain does not take place. And this process isn‘t a piece of cake. In Bitcoin, the odds of solving a problem were about 1 in 5.8 trillion as in Feb 2019 and to solve it at these odds, enormous computational power and energy is required. Popularly known as mining, this process has a very heavy competition as solving them would fetch them a very high amount.
Inputs and outputs of hash function
Moreover, each block contains hash of its own and also the hash of the block before it. That‘s how each block is connected in this chain. Any change done in the transaction details would in turn change the hash. So if anyone tries to alter or manipulate the data the hash of that block changes which in turn creates mismatch with the adjacent blocks. This would alter the flow of the chain which is not possible. So once verified it‘s nearly impossible to manipulate it. Applications 1. Banks: Interlinking banking into Blockchain would enable us to carry out transactions at a much faster rate i.e. max of 10 mins. Another advantage of this technology is that it works 24x7 which means transactions can be done at any point of time irrespective of public holidays, bank timings etc. 2. Cryptocurrency: Already with the widespread popularity of Bitcoin this technology provides support to other digital currencies as well like Litecoin (LTC), Ethereum (ETH), Zcash (ZEC) etc. As a result, situations like unstable government; potential bank collapse etc.
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wouldn‘t affect the value. And moreover it provides a way to unite the world with a single currency. 3. Voting: When each vote can be turned into blocks in Blockchain it would be impossible to tamper with. This would lead to better transparency in the election process. And the list continues…. Thus with no doubt we can say that this technology has widespread potential for future which is in turn the reason why many multi-national giants like Microsoft, Google etc. are researching on this project. This technology has the potential to change the way we transact. It provides a platform where it combines the openness of internet with the security of cryptography and thereby opens the door to future technology of trust and transparency.
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Digitally Transformed Connected Supply Chain Sunil Vijayan (MBA 2019-21)
The world today is evolving at such a rapid pace into a massive digital network and there is an intense battle among top organisations to stay connected and in communication with their trading partner networks. The complex nature of business makes it so complicated that technologies and requirements change in a blink of an eye. Just when a company feels that they found the right tool that works for them, a new requirement emerges in the market. And it is without any doubt that for any business to thrive, the basic necessity is getting your supply chain management (a combination of sourcing, logistics & shipping, and warehouse facilities) in proper sync. This is something businesses have worked on much before digitization. With better connectivity and advancements in communication systems being enabled by digitization, the advent of Internet of Things (IoT) just took things to the next level in terms of speed, which is a key for manufacturing industry.
Digitally Connected Supply Chain-The need of the hour ―The best laid schemes o' mice an' men / Gang aft a-gley.‖ As the above quotes says that no matter how carefully a project is planned it can still go wrong. In retail world inaccurate forecasts and plans too often lead to over stocks of all wrong items, out of stock of the right items.
It can further lead to lost sales opportunities and reduced profit margins. Getting inventory right in the distribution centre and on the store shelf is an essential component in today‘s world as costumers have at their fingertips access to real time information that helps them to make real time information thus helping them to make informed decisions about purchase shopping preferences and recommendations. Retailers that don‘t change and deliver to the always-on consumer will be faced with lost sales, poor supply chain performance and resulting decline in margin and profits. To overcome these pressures and respond to the increasingly demanding requests from customers, retailers have been constantly trying to improve upon supply chain
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agility and responsiveness. Retailers and manufacturers are collaborating in order to plan and execute to drive all planning and execution as close to the consumer as possible. A recent McKinsey study found that the average supply chain has a digitization level of 43 percent, the lowest of five business areas that were examined. A mere 2 percent of the surveyed executives said the supply chain is the focus of their digital strategies. The same McKinsey research suggests that, on an average, companies that aggressively digitize their supply chains can expect to boost annual growth of earnings before interest and taxes by 3.2 percent—the largest increase from digitizing any business area—and annual revenue growth by 2.3 percent.
Steps for an effective and connected supply chain
Understanding where digitization can help in the supply chain Every manufacturer has an end game that it works towards. In-depth knowledge of where your organization needs the help like service, costing, speed, inventory maintenance or consistency; and digitization can help achieve that operational excellence. If analysing market trends is a requirement, focusing on analytical tools that digitization brings in, allows compilation of big data and the extraction of useful information for decision-making will help your organization.
Empower your eco-system Being a part of digitalized economy requires you, as an organisation to provide value that will open up opportunities at multiple levels. You will have to create an ecosystem that will allow digital upgrading. This means that all processes as well as services will be a part of the digitization effort, in order to work seamlessly. This requires executive level decisions on processes and services that will enable such integration.
Updated operations processes with integrated technology The basis of transformation process will require operational changes to be made at multiple levels. This involves current assessment, final goals and arriving at a plan to achieve the goals. When you factor in digitization, there are a few more aspects to take into consideration. At the assessment level – you need to understand whether you have manpower with the technical know-how to upgrade and manage the transition. You also need to be open to making radical changes as well.
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Various levers in which digital transformation works
Digital Data: Capturing, processing and analysing digital data allows better predictions and decisions to be made.
Automation: Combining traditional technologies with artificial intelligence is increasingly giving rise to systems that work autonomously and organize themselves. This reduces error rates, adds speed and cuts operating costs.
Connectivity: Interconnecting the entire value chain via mobile or fixed-line highbandwidth telecom networks synchronizes supply chains and shortens both production lead times and innovation cycles.
Digital Consumer Access: The (mobile) internet gives new intermediaries direct access to customers to whom they can offer full transparency and new kinds of services.
There is no doubt that digitization helps organizations improve their supply-chain processes. But it is precisely this cost appeal that had several companies jump onto the bandwagon without a clear line of thought on implementation. For digitization of any supply chain, it is essential that a clear vision be charted out, which is based on evaluation of current performance and a view of the level it has to be scaled. It is also important to recognize that supply chain digitization is essentially based on both technology and operations coming together. Those organizations that take these factors into consideration will be able to reap the complete benefits of digital technology in the supply-chain domain.
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Supply Chain Transformation With SAP ERP Laxmi Mani (MBA 2019-21)
The dawn of digital age has brought an immense transformation to the world of business. Organisations from healthcare facilities, manufacturing giants to small shops and restaurants have many loosely coupled activities to match the current and future demands and supply via supply chain or demand supply network. Supply chain combines obtaining raw materials, manufacturing and delivering final product to the customers and many other small processes along with it. By this, operations functionality becomes fast and efficient. Day by day, planning and scheduling of all these processes in supply chain is becoming more complex. There is growing number of software suites that can help maximising efficiency in company‘s supply chain. There are specific software packages that can be implemented for purchasing and planning. What better product than SAP ERP system across business functions which incorporates all aspects of enterprise?
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What is ERP? ERP is Enterprise Resource Planning. The full name doesn‘t shed light on what ERP is or what it does. ERP is a process used by companies for integrated management of main business processes, in real time and mediated by a software system. The main business processes includes planning, purchasing inventory, producing, marketing, selling, finance, human resources and more.
What is SAP? SAP is System Application and Products in Data Processing. This incorporates all business functions and also offer businesses a unified platform to handle diverse database. SAP is used as a comprehensive solution provider for companies of all sizes and all industry sectors. Companies deal with developing new products in dynamic market conditions. There are many difficulties faced by the sectors without SAP ERP system. SAP helps the industry to implement the best practices, to maintain a competitive advantage.
Without SAP
With SAP
No collaboration
Collaborative working with Real-Time Data
Risk of losing orders
No chance of missing orders
Inventory wastage
Maximum inventory in minimum keeping cost
Inaccurate scheduling
Efficient planned production
Delayed Deliveries
On-time deliveries
Non-compliant operations
Standardized processes
Time wastage creating reports
Generate reports on single click
Unsatisfied customers
Happy customers
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How SAP ERP simplifies a business process? When a customer approaches the sales team to buy product on urgent basis, the sales team has real time information access to the products in inventory which is updated by the inventory department in the SAP ERP system. The sales team responds on time leading to increased revenue and customer delight. In case manufacturing is required, the sales team updates the centralised SAP ERP database. Production planning department is auto updated by the SAP database for requirements. The production planning team checks the availability of the raw materials required via SAP database which is updated by the inventory department. Hence, data duplication is avoided and accurate data is made available. The shop floor team updates their manpower status regularly in the SAP database which can be accessed by the HR department. In case of shortage of workforce, the HR team starts recruitment with considerable lead time to hire a suitable candidate at market price. Thus, labour cost is reduced. Vendors can directly submit their invoices to the SAP system which can be accessed by the finance department. Thus, payments are made on time and possible legal actions are avoided.
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SAP Supply Chain Management SAP supply chain management covers supply chain networking, supply chain planning and coordination and supply chain execution. This controls Production Planning, Business forecasting and Demand Planning. SAP Supply chain can be used to monitor, control, manage and plan the supply chain activities of the organisation.
The main features of SAP SCM in an organisation are
Management of their supply chain process in dynamic environment. Helps suppliers, customers, manufacturers, and retailers, business partners connect with each other to manage supply chain effectively and efficiently. Helps organisation to accelerate and optimize end to end procure-to-pay process. SCM products from SAP allows an organization enforce contract compliance for supply-side and supplier-side through supply chain processes in distributed environment. It includes planning applications related to Advance planning and Optimization.
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Unilever and SAP Supply Chain Management Unilever is a fast moving consumer goods company. They focus on doubling the size of business which indeed impacts their relationships with the suppliers and also they need partners who work with them, who provide ideas and technology. All these include immense set of business processes. All supply chain processes including creating invoices to goods receipt are cumbersome and hence could be run on a quarterly basis. There were issues where users had to extract data from multiple tables, analyse it in excel and find potential issues which indeed was tiresome and a waste of time. SAP has played a major role in redesigning their Supply chain:
Team doesn‘t spend time in tying the data; instead time is spent on analysing the content. This has helped them to become information analyst rather than data crunchers. It has brought them speed and simplification as in, it has helped them to reduce from ten reports to one report or invoices on daily basis. It has provided them the flexibility to turn around the process as it becomes more online, more frequent and thus reducing the time spent on each process. Even though, there‘s no static data present, it helps them to go into the details and elaborate more into the root cause of issues which indeed leads to better decision making. SAP user interface has simplified user experience in the way of presenting information. Easy access to data relating to 40000 cost centres and split seconds at start to 4.6 billion records now and providing reconciliation solutions has provided them Customer Delight. SAP has provided them with face to face discussion with all business functions to investigate new scenarios or new business process. Thus helps them to drive into New Territories.
SAP as in whole has helped almost all Fortune 500 organisations, companies of various sizes ranging from small to large business, in providing them speed, simplicity, efficiency, effectiveness, and customer delight. SAP ERP system is not expenditure; it’s an asset to the organisation in all means.
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About Us The word ―Kaizen‖, where ―Kai‖ = change ―Zen‖ = good, simply means ―change for better‖. In English Kaizen is typically applied to measures for implementing continuous improvement. It is an approach to activity organisation based on common sense, self-discipline, order and economy and is a strong contributor and fundamental part of a lean production process model in lean manufacturing. Kaizen- The Official Operations Club of IBS Hyderabad believes in relishing in the essence of "Constant Change and Evolvement" and hence we, as an organization work willingly for the betterment of the student community. KORE- Kaizen‘s Operations and Research Entity, one of our primary wings which flaps to cater to the needs of students and motivate them to soar high by polishing their technical competencies. KORE‘s area of expertise includes Case Based Research, Consultancy, Live Projects and Workshops. LAKSHYA, an initiative taken by KORE primarily focuses on the concepts of operations management and various articles based on the day to day operations and logistics of an organisation DHANANJAY HARKARE HEAD - KORE MBA 2018-20
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LAKSHYA is an academic print and is not for any commercial sale. Reliability and Responsibility, for sources of data for the article vests with the respective authors. Please feel free to drop in your suggestions at kaizenclub.ibs@gmail.com KORE: Kaizen’s Operations & Research Entity. Kaizen – The Official Operations Club of IBS Hyderabad All Rights Reserved
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