LAKSHYA- A BEACON OF KNOWLEDGE, DECEMBER EDITION 2022

Lakshya is an initiative by Club Kaizen which is 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 conspired to bring to you a collection of thoughtfully created and carefully curated pieces of work by some bright aspiring minds of ICFAI Business School, Hyderabad on the current trends and hot topics in the field of Operations Management and their relevance in different Industries.

Everything is growing at the pace of nanoseconds and hence it is quintessential to know about every minute change in the ecosystem. With Lakshya we aim to present our readers with compact yet explicit articles on vivid topics such as the Internet, Banking, IT, IoT, etc. A fair share of this edition focuses majorly on the banking systems and payment gateways. With the constantly evolving technology, it will be interesting to ponder over changes that could be seen soon.

We look forward to providing the students with some valuable insights and inculcate the passion for reading once again within our readers.

Lakshya is an amazing platform for readers as well as aspiring readers to showcase their talent and pen down their thoughts which in turn will be a gold mine for information for the students of not only IBS but from the outside world too.

OUR KNOWLEDGE PARTNER

Club Kaizen is privileged to have The International Supply Chain Education Alliance (ISCEA, USA) as the Knowledge Partner from Lakshya’s 24th edition.

To be a single source for Total Supply Chain Knowledge through Education, Certification, and Recognition is the mission of ISCEA. Many workshops/events are conducted by ISCEA to improve the knowledge of manufacturing and service industry professionals.

ISCEA provides a platform to explore leadership potential to the aspiring leaders in the supply chain industry while developing the skill sets and knowledge desired by corporations, through SCNext (ISCEA Young Supply Chain Professional Association).

Some of the internationally recognized certification programs developed by ISCEA include-

1. Certified Supply Chain Analyst (CSCA).

2. Certified Demand Driven Planner (CDDP).

3. Supply Chain Case Competition.

To know more about ISCEA, visit http://www.iscea.net/india

We look forward to working with ISCEA in spreading knowledge and reaching greater heights together.

EDITOR’S LETTER

“If you have knowledge, let others light their candles in it."

Welcome to the 55th edition of “LAKSHYA”, our monthly supplement designed for people who take that one extra step to reach perfection. To step above the average, one needs to strive for excellence. That is exactly what we aim to achieve here. Preaching continuous improvement since its inception, Club Kaizen brought forward this magazine, which enables young writers to garner a platform where they can learn, grow and re-learn new things every day. A magazine is a tool that aids students and professional managers to get deeper insights into the current trends and latest happenings around the world.

Lakshya is an amalgamation of articles from corporate professionals, faculties, and students from reputed organizations and institutions all across the world. The articles published through Lakshya aims to provide a hands-on experience from great minds and business leaders who wish to inculcate theoretical concepts and strategies with practical implementation. We all collectively wish to bring in the best, organic and fresh ideas from the young pool of budding managers as well.

Also, the most important aspect of a magazine is that it provides a platform for students to enhance and improve their writing skills, it would also create an environment for them to enrich their thought process where they research and write articles.

We hope that you like this issue and please let us know if there are any areas or topics that you'd like us to address in upcoming editions. Please write to us and become a part of this discussion.

Email ID: kaizenclub.ibs@gmail.com

In the era of competition, students must 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 the 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 endeavor of knowledge creation through LAKSHYA.

Dr. Nishit Kumar Srivastava Mentor, Club Kaizen

From the Mentor’s Desk

FACULTY’S INSIGHTS

Dr. Sayan Chakraborty Assistant Professor, Department of Operations Management and IT IBS, Hyderabad.

Game Theory for Modern Managers

Introduction:

Game theory studies conflict and cooperation among rational, logical decision-makers. In the theoretical discipline game theory, the results of a particular scenario are predicted using a mathematical model. People who work in political science, business, or poker frequently utilize it to forecast possible outcomes for circumstances relevant to their disciplines. It is focused on how players interact and cooperate in video games. The game theory uses sequential games to mimic several real-world, strategic situations to predict how individuals or organizations will behave.

However, the optimal course of action is typically cooperating to secure the most favorable, symmetric outcome for all parties. The dominating strategy is frequently for players to choose the option that benefits them the most.

To describe and evaluate strategic situations, one can turn to the field of game theory. Though John Von Neumann and Oskar Morgenstern were the ones who created it, and John Nash and F. Duncan Luce were the ones to use it first. Even though they initially appear to be straightforward, the game's rules have been established previously. Contrary to what occurs in real life, in which a player genuinely learns the management of a game (even the most basic ones). Some of its benefits in business are that in-depth research on potential player interactions within a particular industry or market segment might be done for companies aiming to dominate that market. Game theory also provides a valuable method for analyzing how individual behaviors affect interactions. This impact is frequently described in terms of observables. The frequency of agreements, disagreements, and variations in handshakes and facial expressions are a few examples of observables that can be measured.

Application of Game Theory In Modern Business:

When examining a specific economic environment, economists can use game theory to forecast the actions businesses (or players) take. It can also be used by private companies to conduct market research, monitor and evaluate competitive activity, and make business decisions. A collection of tactics and numerous solution concepts may be introduced to students by teachers in business schools using game theory models. These concepts and methods may be reflected in the actual world. When facing fierce competitors, game theory can aid businesses in making strategic decisions inside and outside their organizations. Simple games that create fictitious settings that replicate real-world conditions and forecast a player's reaction present various possibilities.

Some Common Game Theory Strategies:

a) The Prisoner's Dilemma: In this game, two players (or inmates) are separated and asked to admit to committing a crime they may have achieved together. There are several possible outcomes: either both sides can confess, either one party confesses, or neither party confesses. This game assumes that players would act strategically out of self-interest, leading to a conclusion that is less than ideal for both parties. This can be applied in business to a situation when there are two companies with rival products. The maximum profits for both businesses will be reduced if one changes its pricing to seek a competitive edge since the other will be compelled to do the same.

b) The Centipede Game: Two players choose whether to take or leave an amount that rises with each successive turn in the centipede game. Each participant will receive the maximum amount after the game, so they must trust one another and keep passing the money to raise it. Each player will have less money than they would have had they collaborated if one person took the total before the game ended. This game creates a situation where two entities which could be competing

businesses must have faith in one another. To achieve the best results, they must sacrifice their short-term self-interest for a more significant gain for everyone.

c) The Dictator Game: Two players divide the money in the dictator game. The second player must refrain from swaying the first player's choice regarding the best way to split the money with them. This creates an information asymmetry where one party has information that the other does not. They each get to keep their respective sums of money if the second player agrees to the first player's suggested capital division. Both parties lose out if they reject it, though. This is an additional example of how businesses can be separated or people employed by the same organization might collaborate to design a solution advantageous to both sides.

Advantages of Game Theory Approach:

Game theory sheds light on several lesser-known issues that come up when there are competing interests. It explains and characterizes processes like coalition formation and bartering. For instance, when considering the interdependent enterprises, game theory gives a framework for understanding the decision-making and provides a quantitative and scientific method that players can use to determine the best course of action, at least in two-player zero-sum games.

Disadvantages of Game Theory Approach:

Under certain circumstances, it might be unrealistic to assume that players know their own and other players' payoffs. Solving games containing mixed strategies is challenging, especially when there is a big payoff matrix. Game theory can only be used to examine some competitive dilemmas.

Some Examples of Game Theory Application:

a) Auction Bidding

A sale activity known as an auction is where potential buyers place bids on various goods or services, with the highest bidder winning the item. Bid auctions frequently use game theory, particularly when analyzing first-price sealed auction bidding. Bidders in this kind of auction are required to send their bids in a secure manner using sealed envelopes. Despite not having comprehensive information, different participants attempt to design a bidding strategy without knowing the value of each other's commodities or services. As judgments are being made throughout the bid preparation, the bidders' behavior and various other criteria are being considered.

b) Choices Concerning New Products

Businesses also employ game theory to decide whether to discontinue a product launch or make product-based decisions related to its introduction to the market. Using game theory, businesspeople can determine whether the first-mover advantage exists, what competitors might do with new products, and how to defend themselves, among other things. Similarly, the game theory concept is also used to determine whether to enter or leave a new market.

c) Investment choices

Game theory can help you make intelligent selections regarding purchasing and selling stocks. Investors arrive at various stock market conclusions by utilizing different investment techniques and considering various participants or investors. Game theory assists in foreseeing the investment decisions of other players, and based on these decisions; they can choose the tactics that maximize profit for themselves.

Future of Game Theory

Despite being condensed and limited, this summary is sufficient to show how functional game theory has been for economics. The solution concepts have been helpful for thoroughly modeling fundamental economic challenges involving commitment, information, competition, and collaboration. In exchange, applying the formal theory to particular circumstances has been a helpful testing ground and has occasionally helped the theory advance. However, the overview also identifies some areas and subjects that require further study in the future. Let me reiterate a few of these.

The first such undertaking is to improve our knowledge of the scope and boundaries of behavioral and rational choice methods to decision theory and game theory. Several pieces of evidence have been found through econometric analysis of non-experimental data and laboratory and field trials. In terms of scientific control or lack thereof, practical relevance or artificiality of the situation, participant experience in comparable games or lack thereof, and stakes or incentive amounts, these have varied advantages and disadvantages and create diverse choices. Since no empirical method is flawless, we shouldn't depend too heavily on any of them and should be open to learning from each. The results of all of them, including those from econometric studies, qualitative case studies, field experiments, and lab experiments, should be considered when making our final judgment.

Conclusion:

A classic theory that applies to almost every subject is game theory. Game theory's primary contribution is the formulation of competing for alternative strategies. Similarly, it serves as a crucial instrument for decision-making processes in response to changes in pertinent content. Game theory is motivating because its words and ideas are easier to understand than other theories.

About Author

Ph.D. in Operations Management from Industrial & Systems Engineering, Indian Institute of Technology Kharagpur. Presently Working as an Assistant Professor in the Department of Operations at ICFAI Business School. My research interests include Operations Management, Inventory Distribution, Simulation, Forecasting, Operations Research, Supply Chain Management.

Metaverse

Dive Into the Amazing World of the Metaverse

Have you ever wanted to escape the mundane reality and explore a world of endless possibilities? Well, the metaverse is here to make that dream a reality. This blog article will explore the fantastic world of the metaverse, its history, its uses, and its implications for the future. Let's dive in!

What is the Metaverse?

The metaverse is a collaborative virtual reality space where people can interact with each other in a virtual world. It is a 3D world where users can meet, participate, explore, create, and share content and views. It is an ever-expanding universe that is constantly being updated with new content. It is a place where the boundaries between the real and the virtual worlds are blurred.

The metaverse is a network of decentralized virtual spaces. It is a world with many possibilities. It is a place where people can explore and interact with each other in a virtual space.

The metaverse is different from other virtual spaces, such as augmented and virtual reality, in that it is self-contained. It is not simply a projection of the natural world but rather an entirely separate existence. It's a metaphor for the real world.

History of the metaverse

The metaverse concept dates back to the early 1990s when it was first coined by Neal Stephenson in his novel Snow Crash. In the book, Stephenson described a world in which people could explore a virtual world and interact with each other in a virtual space.

Since then, the concept of the metaverse has been explored by many different authors, companies, and organizations. In 2005, the term "metaverse" was officially adopted by the International Game Developers Association.

Mr. Vaidik Bhatt Research Scholar, IBS, Hyderabad.

In recent years, the metaverse concept has gained more attention and has become more popular. This is due to the development of virtual reality technology and the increasing prevalence of video games and virtual worlds.

Benefits of the metaverse

The metaverse offers many benefits to its users. It allows people to explore new worlds, create and share content, and interact with each other in a virtual space. It is where people can express themselves in ways they may not be able to in the real world.

The metaverse also provides a platform for people to collaborate and connect. It is a space where people can come together to share ideas and work on projects. It is also a place where people can network and build relationships.

The metaverse is also an excellent way for businesses to reach new audiences. Companies can create virtual worlds and experiences to engage customers and promote their products and services.

The metaverse also offers many educational opportunities. It is an excellent way for students to learn and explore new topics in a virtual space. It is also a perfect way for teachers to engage students and help them understand complex concepts.

Uses of the metaverse

The metaverse is used for many different purposes. It is an excellent platform for gaming, as gaming is the largest entertainment industry, and the metaverse provides the most immersive experience to the players. Metaverse not only allows players to have a completely new experience in gaming but also allows them to play traditional games in a new way with the help of augmented reality and holograms. It is also an excellent platform for social networking, as it allows people to connect in a virtual space.

The metaverse is also used for education and training. It is an excellent way for students to learn and explore new topics in a virtual space. It is also a perfect way for teachers to engage students and help them understand complex topics. Imagine that in the future, management case studies will be discussed in the metaverse. A student will take the manager's place in the case study, and the whole office space, meeting room, cubicles, and other employees are virtually available in the metaverse. Every decision made by a student (here manager in metaverse) will have its replication and impact on the company's performance, and that's how students will learn to reason and make a rational decisions. This process is iterative, which enables students to make a combination of decisions and see the output of every decision on the company's performance.

The metaverse is also used for business and marketing purposes. Companies can create virtual worlds and experiences to engage customers and promote their products and services. It is also an excellent way for businesses to reach new audiences.

Immersive experiences in the metaverse

In the metaverse, users can experience a truly immersive experience. This experience is enhanced by virtual reality technology, which allows users to feel as if they are actually in the virtual world. It is an entirely immersive experience, as users can interact with their environment and other users in the virtual space.

The metaverse also allows users to experience a sense of freedom. They can explore and create their content and do things they may not be able to do in the real world. This feeling of freedom is enhanced by the ability to express themselves in ways they may not be able to in the real world.

The metaverse also allows for a sense of connection. It is a place where people can connect and share their thoughts and experiences. It is a place where people can come together to collaborate and build relationships.

Popular metaverse platforms

Many different platforms allow users to explore the metaverse. Some popular platforms include Second Life, High Fidelity, and Sansar.

Second Life is a virtual world where users can explore, create, and share content. It is an excellent platform for social networking, gaming, and education.

High Fidelity is a virtual reality platform that allows users to create and explore virtual worlds. It is an excellent platform for gaming, social networking, and education.

Sansar is a platform that allows users to create and explore virtual experiences. It is an excellent platform for gaming, social networking, and education.

How to develop for the metaverse

Developing for the metaverse is a challenging task. It requires a good understanding of computer programming, 3D modeling, architecture, and virtual reality technology. It also requires a good knowledge of the metaverse platforms, such as Second Life, High Fidelity, and Sansar.

Many different tools and resources are available for developers. These tools and resources include software development kits, 3D modeling tools, and tutorials.

Developers can also use open-source tools and frameworks, such as Unity and Unreal Engine, to create virtual worlds and experiences. These tools allow developers to create high-quality experiences with minimal effort.

The future of the metaverse

The future of the metaverse is looking bright. With the increasing prevalence of virtual reality technology, the metaverse is becoming more accessible and popular. It is becoming a more common platform for gaming, social networking, and education.

The future of the metaverse also holds many possibilities. As technology advances, the prospects for the metaverse are endless. It could become a platform for commerce, entertainment, and more.

The future of the metaverse also holds many security implications. As the metaverse becomes more popular, there will be an increased need for security measures to ensure the safety of users.

Conclusion

The metaverse is a fantastic world of endless possibilities. It is a space where people can explore, create, and share content. It is a place where people can connect and build relationships. It is a platform for gaming, social networking, education, and more.

The metaverse is becoming more popular and accessible, and the possibilities for the future are endless. The metaverse is an exciting world, and it will surely be an essential part of our lives in the future. So, what are you waiting for? Dive into the fantastic world of the metaverse!

About Author

Vaidik Bhatt is currently working as an incubation associate at IFHE Innovation and Entrepreneurship Council and visiting faculty at IBS Hyderabad. He is pursuing his Ph.D. from IBS Hyderbad (AACSB accredited) affiliated with IFHE University, Hyderabad. He holds dual postgraduation; one is in data science (Post Graduate Diploma in Data Science) from IIIT-B (International Institute of Information technology – Bangalore), and the other is in management (MBA) from IBS Hyderabad. As a data science enthusiast and tech fanatic, he loves working with supervised machine learning and predictive analytics. He analyzed data for automobile giants like Mahindra automobile, Ford Motors, Nissan, Yamaha India, Advanced Diabetes care Centre, etc. Being a research fellow in operations and IT management, his niche research areas are at the intersection of healthcare and technology (mHealth, telemedicine, health information systems, health informatics, and healthcare operations management). He published several research papers in the journal of repute indexed by ABDC and Scopus, like TIS, JSTPM, IJEGR, JITIM, AMSJ, and publishers like Elsevier, Emerald, Taylor & Frances, IEEE, IGI Global, etc.

CORPORATE ANGLE

Global Integration in a Financial sense

“Life is a process of becoming a combination of states we have to go through” – Anais Nin

You can open your mobile phone right now and order a sweatshirt available only in Korea. You can open your phone right now and send a gift to your friend who stays in Paris. Your parents can send money to you within seconds. Imagine what life would be like if there was no internet.

At the core of it, global integration is nothing but the internet. Something that binds the whole world together as a one whole unit. Without internet, there would be no integration. Without integration, there would be no global trade.

But where does finance come in this? I have tried explaining in this article the effect of global markets on each other – be it capital markets, currency markets, commodity markets, or any other market for that matter. Let us start from the very basic forces of markets: Demand and Supply.

Demand is nothing but the buyer’s willingness to buy at a certain price. Supply is nothing but the seller’s willingness to sell at a certain price. A trade occurs when the buyer and seller meet at a price acceptable to both. This is demand-supply match.

Now say, you buy a pencil for Rs. 5 from your local vendor. The very next day, there are 13 people in the store willing to buy the same pencil. The vendor will obviously hike the prices to more than Rs. 5 (profit motive). So one can say that as the demand for a certain good rises, the prices of that good will rise as well.

On the contrary, there are 10 people buying the pencil today for Rs. 5, and tomorrow the number of people reduce to 2. The shopkeeper will be willing to forgo the profit motive and make a sale on a bare minimum. As demand for a good falls, the prices will fall too. Here is a small table for your reference.

Mr. Raunak Vijan Wealth First Finserv, India Financial Analyst, Marketing Executive

Demand Supply Effect

Constant Rise Price decrease

Constant Fall Price increase

Like our dear pencil vendor, the price of any good, asset, commodity is dictated by the market forces. How does Global Integration relate to this? Just think of the world as one big giant market, where all sorts of assets and goods are traded. Replace pencil with crude oil. Replace the 13 with 13 million. Replace the Rs. 5 with $5 million.

The world today is so intertwined that one movement in US markets leads to a similar movement in Indian markets. The interest rate decisions of the Federal Reserve end up affecting the whole world. A lot of this dependency comes from the trade relations they have with each other.

For example: US and China are India’s biggest trade partners, so they have a higher interconnection. So, the chances of aftereffects showing in India from a shock in US or China are higher. Similarly, China is the biggest exporter in the world – and the countries depending on China will face a lot of issues in case if a supply disruption arises in China.

India is very much reliant on oil exporting countries, in order to produce petroleum products and exporting them itself!

We will look at some of the times where Global Integration and Finance have shaken hands. Sometimes on good terms, sometimes on bad terms.

Global Financial Crisis – 2008-2007

Every heard about “Too much of something is bad for you”? A classic case of greed.

I told you that an increase in demand for a good will lead to an increase in the price. But, if the demand is unhealthily excessive, a price bubble is formed. This price bubble keeps on growing, giving investors a hope for further profits. But what they do not realise is that a bubble formed must burst sometime.

Prior to 2007, US economy was booming. Great conditions and a robust economic growth. In such favourable growth conditions, housing sector bloomed well. The general expectation was that the realty sector will be a good investment, looking at how well the economy was doing. This led to people borrowing money to invest in realty.

In the similar expectations, other major markets (like Europe) started borrowing money to invest in real-estate. This drove the prices of real-estate further up. Additionally, a lot of borrowing was done by risky borrowers, i.e., people unlikely to pay it back.

In the similar expectations, other major markets (like Europe) started borrowing money to invest in real-estate. This drove the prices of real-estate further up. Additionally, a lot of borrowing was done by risky borrowers, i.e., people unlikely to pay it back.

But like I said, an abnormally high demand leads to a price bubble. The prices started surging and

peaked in 2006. When the prices did begin to fall, a lot of borrowers failed to repay the loan that they had taken, putting big banks in jeopardy. A house is not an easy asset to sell, and that is another factor that led to an asset-liability mismatch. As a result, US markets crashed. What came after was a result of Global Integration. Global economies went in a recession following what is now known as “The Great Financial Crisis 2007-2008”. Let us look at how Indian markets were affected by the GFC 2007-2008

GFC: 2007-2008 (NIFTY 50)

Peak 08-01-2008 6,287.85

Trough 27-10-2008 2,524.20 -59.9%

A fall of almost 60% in a period of 11 months!

GFC: 2007-2008 (S&P 500)

Peak 09-10-2007 6,287.85

Trough 09-03-2009 676.53 -89.2%

The fall was greater for S&P 500, and far longer. So, see how western markets and Indian markets are interconnected by this invisible chain. Let us move on to a much recent example.

Covid 2019

“The bat seemed tasty” – Some Chinese guy. In the late 2019, Covid outbreak started picking pace. By the time it was 2020, it was a global pandemic – forcing all markets, businesses, and institutions to shut down. This resulted in a crash of markets throughout the globe. Attaching some figures for your reference:

COVID: 2020-2021 (NIFTY 50)

Peak 19-02-2020 12,125.90 Trough 23-03-2020 7,610.25 -37.2%

COVID: 2020-2021 (S&P 500)

Peak 19-02-2020 3,386.15

Trough 23-03-2020 2,237.40 -33.9%

COVID: 2020-2021 (Hang Seng)

Peak 17-01-2020 29,056.4 2

Trough 23-03-2020 21,696.1 3 -25.3%

3 major markets so interconnected that they all fell in a similar time range. Why did Covid affect the global trade so much? How is it that a disease that came from a country, affecting the entire world trade? As I mentioned, there is a lot of dependency on China, since it is the world’s largest exporter. Another fact is that China is one of the biggest importers as well, so it accounts for a large chunk of world demand. Just think of China as one of the people in that local vendor’s store who demands for more pencils than other people.

Let us take one last example of how global markets affect each other.

Russia-Ukraine 2021

“We invade Ukraine, take all the vodka” – Putin, probably.

Russia is a major exporter of crude oil. When it decided to wage a war on Ukraine, crude oil prices spiked to more than $100/barrel. The result was a global disruption of economies due to high oil prices. I cannot stress this enough – oil is the most important commodity in the world. Without oil, there would be no factories, transport, business, electricity, cooking, and everything that you use right now.

Another thing to note is that oil was already rising since Covid times, due to a supply crunch and constant demand leading to a rise in oil price.

Higher oil prices means higher input costs for manufacturing companies. Higher input costs translate to lower profit margins. Lower profit margins means low growth. See what I mean when I say oil is the most important commodity!

Let us look at some figures to understand the movement of oil prices and global markets:

RUSSIA-UKRAINE: 2021 (NIFTY 50)

Peak 18-10-2021 18,477.05

Trough 17-06-2022 15,293.50 -17.2%

RUSSIA-UKRAINE: 2021 (S&P 500)

Peak 17-02-2021 31,084.94

Trough 31-10-2022 14,687.02 -52.8%

RUSSIA-UKRAINE: 2021 (Brent Oil)

Trough 01-12-2021 68.87

Peak 08-03-2022 127.98 85.8%

Oil prices spiked by around 86% in a matter of 4 months, with inflation already on the roll. Thankfully, the domestic conditions in India helped in controlling the market crash. Many of the major global economies are struggling to keep the inflation tamed currently. After oil prices subside and all the geo-political tensions relax, we can hope for a healthy fundamental growth of the global economy.

So, these were some of the global events that are proof enough that Global Integration is real and very strong.

About Author:

Raunak Vijan has completed his BBA in Marketing and Finance in 2022 from IFHE School of Business, Hyderabad. He is currently working as a Financial Analyst; Marketing Executive in Wealth First Finserv.

Mr. Manish V Rami HUL, South Asia

Lead HVAC & Utilities – Supply Chain

How an RFDI Inventory system can Revolutionize business

Welcome to the future of inventory management. RFID (radio-frequency identification) inventory systems have been around for years and have revolutionized the way businesses manage their inventory. In this blog, we’ll explore the different types of RFID inventory systems, the benefits they offer to businesses, and the best on the market today.

What is an RFID Inventory System?

An RFID inventory system is a type of technology that uses radio waves to identify and track items in a warehouse or store. RFID systems use tags or labels that contain a unique identifier, or RFID chip, which can be read and tracked by a reader. This allows businesses to keep track of their inventory in real-time.

RFID inventory systems can be used in a variety of ways, including to track inventory levels, monitor product sales, and even to prevent shoplifting. Additionally, RFID inventory systems can be used to automate processes such as stock counting, order fulfilment, and customer service.

Benefits of an RFID Inventory System

There are several benefits to using an RFID inventory system, such as improved accuracy and reliability. RFID inventory systems are more accurate than traditional barcodes because they can read multiple items at once, and they can also provide real-time updates. This eliminates the need for manual inventory counting, which can be time-consuming and prone to errors.

Another benefit of using an RFID inventory system is improved efficiency. Since RFID systems can track inventory levels in real-time, businesses can better manage their stock and reduce the risk of overstocking or understocking. This allows businesses to save time and money, as well as improve customer service.

Finally, RFID inventory systems can help businesses prevent shoplifting and theft. By tracking individual items, businesses can easily identify any items that have been stolen or misplaced. This can help reduce losses and increase profits.

RFID Inventory System Statistics

According to recent studies, RFID inventory systems can improve inventory accuracy by up to 99%. Additionally, RFID inventory systems can reduce costs by up to 25%, and can increase inventory turnover by up to 20%.

In addition, RFID inventory systems can reduce check-in time for customers by up to 50%, and can reduce store employees’ workloads by up to 25%. This can help businesses improve customer service and save time and money.

How an RFID Inventory System Works

An RFID inventory system is composed of two main components: tags or labels and readers. The tags or labels contain a unique identifier, or RFID chip, which can be read and tracked by a reader. The reader then sends the data to a server, which stores the information for later retrieval.

The tags or labels can be placed on individual items or containers, and the readers can be placed at strategic locations throughout the warehouse or store. This allows businesses to track the movement of items in real time.

The Different Types of RFID Inventory Systems

There are several different types of RFID inventory systems, including active and passive systems. Active systems use batteries to power the tags or labels, while passive systems use the energy from the reader to power the tags or labels.

In addition, there are also fixed and mobile systems. Fixed systems are typically used for tracking items in a warehouse, while mobile systems are typically used for tracking items in a retail store.

Finally, there are also short-range and long-range systems. Short-range systems are typically used for tracking items in a warehouse or store, while long-range systems are typically used for tracking items over a larger area.

Creating Your RFID Inventory System Plan

When creating your RFID inventory system plan, the first step is to assess your needs. This includes determining how many items you need to track, what type of RFID system you need, and where the readers need to be located.

Once you have determined your needs, the next step is to choose the right RFID system for your business. This includes researching different RFID systems and deciding which one is the best fit for your business.

Finally, you will need to create a plan for setting up and maintaining your RFID inventory system. This includes determining the best location for the readers, setting up the software and hardware, and training staff on how to use the system.

Tips for Setting Up an RFID Inventory System

When setting up an RFID inventory system, there are several tips to keep in mind. First, make sure to install the readers in the right places. This includes areas with high traffic and areas that are prone to theft.

Second, make sure to use the right tags or labels. This includes tags or labels that are compatible with the readers and tags or labels that are resistant to damage.

Third, make sure to train your staff on how to use the system. This includes teaching them how to read the tags and labels, how to troubleshoot any issues, and how to keep the system running smoothly.

Finally, make sure to monitor the system regularly. This includes checking the readers and tags or labels, checking the software and hardware, and checking the accuracy of the data.

The Best RFID Inventory Systems on the Market

When it comes to choosing the best RFID inventory system, there are several factors to consider. This includes the type of system you need, the features you need, and the price.

For example, the Impinj Speedway RFID reader is a popular choice for warehouses and stores. It features an easy-to-use interface, a range of up to 10 meters, and a low price tag.

For retail stores, the Alien Technology ALR-9900X system is a great choice. It features a long-range reader with a range of up to 30 meters, advanced software, and a wide range of features.

Finally, for businesses that need a mobile RFID inventory system, the Motorola MC9190-Z is a great choice. It features a rugged design, a range of up to 10 meters, and an easy-to-use interface.

RFID Inventory System Services

In addition to purchasing an RFID inventory system, there are also RFID inventory system services available. These services can help businesses set up and maintain their RFID systems, as well as provide training and support.

For example, RFID inventory system services can provide installation and configuration services, such as setting up the system and installing the readers and tags or labels. They can also provide training services, such as teaching staff how to use the system and troubleshoot any issues.

Finally, RFID inventory system services can provide support and maintenance services, such as checking the readers and tags or labels, checking the software and hardware, and checking the accuracy of the data.

Conclusion

In conclusion, RFID inventory systems are a great way to improve inventory accuracy, reduce costs, and increase efficiency. By assessing your needs, choosing the right RFID system, and setting up and maintaining the system, businesses can revolutionize their inventory management.

If you’re looking for an RFID inventory system, there are several great options on the market. Additionally, there are also RFID inventory system services available to help businesses set up and maintain their RFID systems.

If you’re ready to take your business to the next level, an RFID inventory system is the way to go. So what are you waiting for? Get started today and revolutionize your business with an RFID inventory system!

About Author:

Manish V Rami Diploma in electrical engineering from Gujarat technical board. He also completed AMIE sec. A from institute of engineers India for electrical engineering. He is currently working as an Assistant Manager – lead HVAC and utilities for South Asia region

EMERGING MANAGERS

Mr. Nipun Gupta MBA, 202 2-2024

IBS Hyderabad

Competition Oriented Dynamic Pricing in The E-Commerce Industry

E-Commerce is not only limited to buying and selling the goods online. It also includes transmitting funds and various types of data and even using services over the internet. Some trending e-commerce websites offering goods and services are:

• Amazon

• Flipkart

• Myntra

• Paytm

• Urban Company (formerly Urban Clap), etc.

As the business environment is always dynamic, i.e., it changes over-time, the competition levels amongst various e-commerce companies keeps on changing. They need to adopt various competitive strategies to survive and grow. One such technique used by them is Dynamic Pricing.

Dynamic pricing includes solutions for ongoing, scalable repricing, which involves changing the product prices constantly depending on the following factors:

• Product’s Demand and Supply

• Changing Market Trends

• Competition in the Industry

• Inventory Availability

• Consumer Behaviour

An example of dynamic pricing can be the pricing model used by Amazon. Using the abovementioned criteria as filters, Amazon keeps on updating the product price from minute-to-minute. It uses various machine learning algorithms to do so. This helps them in making the highest possible

profits. Also, it can be noticed when a person adds items to cart and does not buy, Amazon usually notifies when the price changes.

Working of The Dynamic Pricing Model

Dynamic Pricing is done using various algorithms by a supervised machine learning program. The algorithms consider many variables for optimizing the prices such as profitability index, competition, personalized pricing analysis and many others. Dynamic Pricing works in the following way:

• Collects Market Data: Firstly, the competitor price data, customer reviews, trend of purchase and time period data is collected.

• Listing of Alternative Modules: There are numerous pricing modules alone under the dynamic pricing. Based on the collected data, various alternative modules are listed down.

• Selecting the Best Alternative: Out of the various listed alternate dynamic pricing modules, the one best-suited is chosen based on seasons, inventory in hand, competitors, etc.

• Application of Algorithms: Now the dynamic pricing algorithms come into place. They summarize the data and give out a price range. It uses reinforced machine learning to do so for accurate results.

• Updating and Optimizing: As the trends keeps on changing, dynamic pricing needs to be updated from time-to-time. So, the prices are collected and updated frequently to always compare with real time data and produce an effective and efficient price as the output.

Benefits of Dynamic Pricing

Dynamic pricing has many benefits to a company as the company gets advantage as compared to its competitors. Some benefits of the technique are:

• More Control: As a player in the industry, one gets more data related to real-time price trends of various products and services across the whole industry. The changes in competitors’ prices are more visible which helps to control own product prices leading to a more controllable mechanism.

• Flexibility: Using dynamic pricing modules, a price floor can be created. This allows flexibility for profits. Many times, seasonal sales such as “Flipkart Big Billion Days” sale also determines the product pricing using dynamic pricing technique.

• Cost Efficient: Every business is considered to run for a long period of time. Setting of dynamic prices requires software and applications which are one-time investment. It eliminates managerial cost and reduces the time which ultimately saves a lot of cost in the long run.

Utilizing dynamic pricing helps you outperform your rivals. Using software for price optimization, you can keep tabs on your rivals in real time to assess trends and decide on any pricing adjustments they want to make.

You have more control over your rates thanks to dynamic pricing. You can modify prices in a matter of minutes with almost immediate consequences, as opposed to waiting to see if your goods and services are priced correctly. Because dynamic pricing involves the gathering and use of data to swiftly and intuitively alter prices, it can help you save money.

Future of Dynamic Pricing

Behaviourally-based pricing is now a part of the evolution of dynamic pricing. Pricing is determined not only by item-specific factors but also by product performance, website user behaviour, and warehouse inventory levels. a concept that combines our understanding of our own products with our understanding of the market and the insights we have gained from our product performance. This will change the emphasis from a downward spiral in pricing to maximising your product's profit and securing the prices that customers want to pay rather than what the market demands.

Imagine being able to automatically classify your products depending on the last time they were sold, the number of people who visited the product page, the percentage of conversion rates, and the quantity of inventory. Together, they could be referred to as your "slow movers," which could be integrated into a more aggressive approach to move more merchandise and raise your turnover rate. When looking for a dynamic pricing solution, capabilities like these should be a top priority.

CAPACITY PLANNING

IBS Hyderabad

Capacity Planning

Capacity Planning Process: Capacity planning is a tool used by operations managers to estimate future demand for a company’s goods or services and make sure the required resources are accessible when demand rises.

Step One: Determine Current Capacity

Identifying the current resource capacity of the organization is the first stage. Finding out how much production the company can currently produce with its available resources is the goal. The number of personnel, the amount of available space, and the kind of equipment in use will all have an impact on the current capacity.

Step Two: Forecast Future Demand

Forecasting future demand for the company's goods or services is the second phase. This entails forecasting future demand growth and identifying the new goods or services the business will require to meet it.

Step Three:

Identify Gaps in Capacity

To determine any capacity shortfalls, proceed to step three. It involves identifying any areas where the company's resources won't be able to satisfy future demand. There might not be enough personnel, room, or tools, which would explain the gaps. Operations managers can spot these gaps and take action to close them with the help of capacity planning.

Step Four: Develop a Plan to Fill the Gaps

Making a plan to fill the capacity shortages is the fourth phase. It includes bringing on board more personnel, leasing more space, or investing in new machinery. Operations managers can make sure the business is ready for future demand by developing a plan to handle the capacity demands of the organization.

Step Five: Implement

the Plan

The capacity planning method must be put into action as the last phase. It executes the strategy and makes sure all the required resources are available. Operations managers may make sure their

Ms. Khushi MBA, 2022-2024

business is ready for expansion by using the capacity planning process.

Types of Capacity Planning: There are four types of capacity planning in operations management:

• Resource Capacity Planning

• Project Capacity Planning

• Team Capacity Planning

• HR Capacity Planning

• Resource Capacity Planning

Planning for resource capacity establishes the quantity of resources (such as equipment, labour, and materials) necessary to satisfy future demand. As it guarantees that the required resources are available when they are required, it is an essential component of operations management. Planning for resource capacity helps organisations prevent the over- or under-use of their resources, which results in waste and increased expenses. To determine their future production capacity needs, the majority of organisations use capacity planning and operations management.

Project Capacity Planning

The goal of project capacity planning is to estimate how much work a team can accomplish in a given period of time. This process entails making estimates for the project's time frame and resource requirements, both in terms of quantity and kind. The process of figuring out how much work a company can finish in a given amount of time is known as operations management capacity planning. This process entails making estimates for the project's time frame and resource requirements, both in terms of quantity and kind. By using capacity planning, organisations may more accurately determine the resources needed to finish a project and prepare for subsequent ones. Potential bottlenecks and capacity restrictions inside the organisation may be found using this technique. In terms of operations management, capacity planning is a crucial step that can aid organisations in making the most of their resources and better planning for upcoming initiatives.

Team Capacity Planning

The process of matching your team's capacity to the quantity of work that needs to be done is known as team capacity planning. Through careful planning, you can make sure that you have the proper number of workers who are qualified to work on various goals. Planning for capacity in operations management is a little different. You aim to match the capacity of your resources to the demand for your good or service when you plan your operations capacity. This covers items like tools, supplies, and labour. Finding the ideal level of capacity to satisfy client demand without creating too much or too little is the aim.There are several various approaches to capacity planning, but they all aim to make sure you're able to meet client demand without going overboard with capacity. Capacity utilization, bottleneck analysis, and capacity planning tools are the most popular types.

HR Capacity Planning

The process of estimating future demand for human resources and creating a strategy to satisfy that demand is known as HR capacity planning. Planning for HR capacity attempts to guarantee that a company has an enough number of workers with the necessary skills to accomplish its goals. Planning for operations management capacity is essential since it aids organisations in preventing both understaffing and overstaffing. Overstaffing can result in higher costs while understaffing can result in lower productivity and quality.The predicting of future demand for human resources is the first step in the planning of HR capacity. Numerous techniques, including as trend analysis, market research, and customer surveys, might be used. Making a plan to meet that demand comes after the future demand has been predicted.The strategy should take into account the amount of personnel required, the qualifications they must have, and the places they must be. The objective is to have the appropriate number of workers with the appropriate skills in the proper location at the appropriate time.

How Does Capacity Planning Help in Operations Management?

Capacity planning operations management is an essential component of operations management. By doing so, it guarantees that a company has the resources at its disposal to meet demand. Capacity planning can assist in preventing issues like overproduction or underutilization of resources by having a thorough awareness of the organization's and its resources' capacities.

Strategic and tactical capacity planning are the two basic forms. Strategic capacity planning is longterm and considers the overall direction and objectives of an organisation. Planning for tactical capacity is more short-term and focuses on making the best use of an organization's resources. Making sure that an organization's resources are utilised optimally to achieve its objectives requires both types of capacity planning. Planning for capacity can help prevent issues like overproduction and underuse of resources.

The organization's immediate and long-term needs must be taken into account while planning capacity. Capacity planning helps ensure that an organisation has all the resources necessary to achieve its objectives by taking into account both the large picture and the particular. Lack of capacity planning can result in a variety of issues, including:

Ø Overproduction: When capacity outpaces demand, this occurs. This can result in excess inventory and the waste of resources.

Ø Underutilization: When capacity is insufficient to meet demand, sales are lost, and customers are unhappy.

Ø Poor utilization: When capacity is not utilised effectively, resources are wasted, and processes are inefficient.

The process of estimating the quantity of resources necessary to fulfil future demand is known as operations capacity planning. It is essential to making sure that a company can achieve its goals and objectives. Organizations can better utilise their resources and prevent issues with excess or under capacity by understanding capacity requirements.

IBS Hyderabad

Logistics Operation

Operations and Supply Chain Management covers manufacturing and service industries involving sourcing, material management, operations planning, distribution logistics, and many more. It manages the entire system that produces products or deliveries services. Operations refer to manufacturing and service processes used to transform the resources employed by the firm into products desired by customers. In contrast, Supply Chain refers to the processes that move information and material to and from the manufacturing and service process of the firm.

Now, if we talk about logistics, it is the backbone on which supply chains are driven. It refers to managing the flow of goods and supplies involving information, data, and documentation between two entities or points.

"Logistics" was a military-related word, first used in 1838 in the book "The Art of War," written by a French General in Napoleon's army.

Logistics is now widely used in business sectors, particularly in manufacturing sectors. Its goal is to manage the right amount of resources or input at the right time, get the appropriate location in the proper condition, and deliver it to the correct customer. Manufacturing companies may outsource their logistics management to specialists or manage logistics internally if it is cost-effective.

Logistics operation has become an essential part of the supply chain, and the entire process consists of managing e-commerce inventory and fulfilling and shipping orders. The e-commerce supply chain can make or break one's business depending on the system and processes.

Now take the example of Amazon, the most significant buying and selling platform in the ecommerce industry. Traditionally, Amazon relied heavily on third-party logistics companies like FedEx and UPS to deliver customer packages. However, the company shifted its strategy after the 2013 holiday shopping season, when it failed to deliver services on time, due to which Amazon accelerated the construction of its distribution centers and shifted towards its in-house logistics

Ms. Harshita Srivastava MBA, 2022-2024

operation. Today, Amazon controls one-fifth of the delivery market and is on track to overtake UPS and even the US Postal Service (USPS).

Amazon Logistics was launched with two objectives in mind:

• Make their customer happy

• Lessen the shipping time

Amazon logistics can improve its capability to serve many customers and provide faster delivery. It has a network for delivery, can completely control and monitor through technology and can address various customer concerns. Also, it cuts costs and increases their delivery capacity. It targets to give shoppers an alternative same-day shipping and delivery option, but only for Prime members. They make deliveries all seven days per week, the entire day from early mornings to late evenings, making it perfect for shipments with signature. They load packages at a local facility, help customers navigate efficiently using amazon's routing technology, and then earn money by delivering packages to Amazon customers. Now, thinking from the customers' perspective, the two factors matter the most:

•

Shipping time

•

Delivery Expectations

Amazon provides its customers with an excellent experience. They usually hit their goals within 1-2 hours, according to what they estimate.

As the risk of breaking the business evolves, it is necessary to have the best action plan, from sale to delivery. It is done by implementing an excellent automated messaging system that requests feedback after customer service. Can ensure that a customer has various options to contact, giving multiple links for tracking, storefront, reviewing, etc.

Amazon continually creates a denser and more extensive shipping network, competing with many well-known national carriers. With the going competition, Amazon is creating a difference with its logistics services, such as drone delivery. Their operational tactics and managing more immense orders are paving the way to better control over every step of the supply chain, allowing them to meet their growing demands. Amazon Logistics grows every month and delivers about 2% of all packages.

In this era where digitalization is increasing, logistics is integral in optimizing the supply chain process and enhancing the customer experience. It boosts profitability, customer experience, operational cost, warehouse management, risk management, and many more. The supply chain could be complex, so for smooth functioning, logistics is essential to keep pace with changing trends. Therefore, streamlining and developing effective logistics strategies is the only way to upscale the businesses.

Importance of Inventory Management in Supply Chain

What is Inventory Management

The procedure of ordering, keeping, and utilizing the products or materials of a corporation is referred to as inventory management. Businesses can offer the right number of products to consumers' demand levels by effectively managing their inventory. Because of poor management, there may be too much stock, which increases the chance of rotting, damage, or a change in demand. If the inventory is not sold before any of these take place, it is frequently either destroyed or sold for a discount.

It is essential for each company to manage the inventory so that the excess stock is not stored at the company and at the same time the demand for customers is met. The main objective of inventory management is to keep the products safe. Based on the area of the store and the size of the company safety measures can be implemented for the inventory. Surveillance systems and alarms are employed for the safety check and how the materials are handled and breakages are checked during storing of the inventory.

Sales of the products at the company should be monitored and evaluated throughout time as part of managing inventories. There may be a demand for some products during specific seasons, and inventory needs to be preserved to satisfy that need. Additionally, it is crucial for identifying the top supply chain vendors and managing them successfully to boost sales. By correctly monitoring the inventory, excess stock can also be handled.

To avoid supply chain delays and customer complaints, the inventory data that is readily available should be correct. The inventory database needs to be updated as soon as possible once a shipment is made within the company. A proper inventory log should be kept in order to keep the supply current.

Ms. Isha Joshi

MBA, 202 2-2024 IBS Hyderabad

Controlling the extra goods is also crucial for inventory management. At the business, unsold stock builds up and causes issues with capital flows. To maintain inventory control, this ought to be either returned or sold for a lower price.

Role of inventory management in supply chain

Managing relationships with customers and suppliers is essential to managing supply chains. The idea of collaborative relationships has frequently been seen as the core of supply chain management. However, a closer look into supply chain linkages, especially those involving product flows, indicates that inventory movement and storage are at the core of these relationships. The buying, selling, or managing of inventories accounts for a large portion of the activities required in managing relationships. As a result, because it is a prominent focus of supply networks, inventory plays a crucial part in them.

The ability of inventory in supply networks to facilitate the balancing of demand and supply may be its most fundamental function. Businesses must deal with upstream supplier exchanges and downstream consumer needs in order to efficiently manage the forward and reverse flows in the supply chain. As a result, a business is forced to strive to balance maintaining a sufficient supply of materials and goods with meeting client expectations, which are frequently challenging to predict precisely or accurately. Inventory is a common way to attain this equilibrium.

Inventory Management Risk for Supply Chain

• Poor forecasting of inventory. There is no such thing as a perfect forecast, but if you do not have any knowledge of how your supply chain's inventory is controlled, it's very difficult to match supply and demand for your products. Supply chain managers must solve the problems of inventory waste and liquidity by utilizing contemporary SKU tracking and paying close attention to data from retail partners and distributors.

• Driving sales and distribution within the product's shelf life. The shelf life and expiration of vaccinations were among the top supply chain challenges that businesses, governments, and consumers were thinking about. States raced to increase awareness and made significant investments to get vaccines into the hands of the populace, but there is still a sizable amount of product waste. The bottom-line spending is the main concern in the conventional approach to supply. We were concerned about the opportunity cost of not spreading the sickness in this instance as well.

• Carrying costs because there are not enough warehouses: Although brick-and-mortar stores have faced considerable difficulties over the past year, the growth of e-commerce has continued to boost product demand across industries. There is a massive grab for real estate. This means that governments will be under more pressure to rezone land or provide permits for additional construction, which isn't happening soon enough. A shortage of inventory storage space could result in higher costs due to peak demand, thus it is crucial possibly more so than ever to maintain the flow of product from the warehouses to the final consumer.

Element of Inventory Management

• Long before the products even enter the warehouse, inventory management begins. Let us examine the components of effective inventory management for businesses that employ qualified individuals with a broad education in supply chain management.

• Inventory management: Think of inventory optimization as the process of balancing inventory depending on demand: ordering just the right quantity rather than too much or too little. Utilizing a dynamic inventory management approach can help you find the sweet spot with the appropriate inventory amount for each item you stock. The visibility of the supply chain from raw materials to sales data is necessary for an optimal inventory management system. It necessitates flexible supply chain planning that can react immediately to shifts in consumer demand or disruptions in your worldwide logistics operations. It will be your job as the supply chain manager to continually recalculate the ideal inventory levels to satisfy client demand. One of the things that make supply chain management such an intriguing profession is the fluid nature of inventory management.

• Management of transportation. Management of transportation and inventory are interdependent. Your supply chain's transportation component generally moves goods from the production to the fulfillment facility or distribution hub. Because a transport delay can destabilize a carefully organized global supply chain, proactive and aggressive transportation management is essential to just-in-time supply chain management. Maintaining visibility into your logistics operations, developing repeatable transportation processes, and being prepared to quickly pivot in order to sustain inventory flow are all part of your duties as a supply chain manager.

• Management of the warehouse. Distribution, fulfilment, and storage are all included in warehouse management. Customer satisfaction depends on choosing the right warehouse sites to match customer demands for quick delivery and making sure that fulfilment processes go smoothly. Effective warehouse management enhances inventory visibility and reduces loss from theft or damage. Instead of assuming that transportation specialists can deliver the caliber of fulfilment services your firm requires without sufficient control, it is crucial to incorporate your storage operations in your supply chain visibility.

The foundation of efficient supply chain management is technology. Eliminating conventional, frequently manual methods saves time and lower the possibility of error. Any information recorded is easier to share across the whole supply chain when operations are managed digitally. You are halfway to complete supply chain optimization if your business has already put in place a transportation management system.

A strong supply chain must have effective control of both the transportation and the inventory. The movement of goods along the supply chain is managed through transportation management systems, which also give carriers, shippers, and manufacturers a channel for communication. Platforms for inventory management concentrate mostly on the quantity and kind of inventory present in a warehouse or other storage location.

Logistics Management Delivering a competitive edge

Introduction:

Logistics management is the act of setting up the flow of products and goods in the warehouse to cut down on the time and expense needed to prepare and dispatch orders. Businesses can get a competitive edge by using the best commercial management and logistical practices. Companies must be able to meet and surpass high consumer expectations in today's fast-paced business and consumer contexts, which calls for a high level of logistical expertise. Logistics management encompasses the domains of order processing, inventory, transportation, and the combination of warehousing, materials handling, and packaging, all integrated into an interactive facility design, for a corporation to achieve and surpass these high requirements.

Logistics Management in Businesses:

To assure the eventual distribution of these products, logistics management includes the planning of operations for the storage and transportation of goods. This process consists of workflows from when the business receives the raw materials to create the goods or the items delivered by suppliers until the orders are distributed. Several organizational departments are involved in logistics. Their position in the organizational structure will change depending on the sort of business and how crucial the supply chain is to the overall business plan. It is possible to outsource logistics, incorporate it into the sales division, or create a separate division that collaborates with manufacturing. Depending on the requirements of each organization, logistics management includes a wide range of procedures, including stock control, order picking optimization, an inspection of warehousing duties, design of the warehouse layout, and others. Supply chain technicians secure the resources required to coordinate the movement of goods, stock management technicians, oversee the status of products in the warehouse, operations managers, ensure the best possible organization of logistics processes, and logistics managers, plan the daily operations of the logistics facility, are just a few of the job profiles that perform logistics management tasks.

Mr. Subhagato Banerjee MBA, 2022-2024 IBS Hyderabad

The function of supply chain management is crucial for coordinating operations and ensuring a successful logistics strategy in businesses with complicated supply networks.

Objectives

Ø Cost cutting: By using logistics resources wisely, businesses can save costs and improve their ability to regulate profit margins. Process optimization can be used to achieve this goal. For instance, pick-to-light devices can be installed in the warehouse, allowing workers to prepare orders more quickly.

Ø Reducing the time of order delivery: Fast service with delivery made as soon as feasible is essential for keeping customers happy. Businesses implement strategies to hasten the distribution of goods to achieve this. For instance, they use cross-docking, which involves distributing goods without first storing them.

Ø Boosting competitiveness: Organization of the flow of products is only one aspect of logistics management. Prioritizing features like order dispatch agility and product traceability management enables businesses to add value and differentiate themselves from the competition.

Ø Optimizing inventory management: One of an organization's key assets is its stock. Businesses may guarantee effective service and prevent logistical mistakes, such as overstock and stockouts, as a result of inadequate planning, by maintaining ideal stock levels.

Ø Achieving maximum efficiency: By eliminating pointless stages, logistics management seeks to maximize productivity across all operations. Companies may enhance customer service by putting in place solutions that streamline warehouse operations (e.g., through logistics automation).

Ø Protection of the environment: The future of logistics is green. More and more businesses are adopting practices that lessen the environmental effect of their operations in the logistics management methods they use. For instance, companies can utilize computer programs like warehouse management system software to reduce paper use or develop a waste sorting procedure for recyclable goods.

Areas

1.) Supply Chain: This component of logistics management is responsible for planning the procedures required for distributing items under specified circumstances. For instance, logistics management of supplies in the food industry makes sure that products are carried and stored at the ideal temperature and under ideal circumstances to preserve their quality.

2.) Goods Distribution: The distribution of commodities is being optimized throughout this supply chain phase. Sorting the goods to be put onto the delivery truck, planning the route of travel, and unloading the truck at the destination are all parts of the dispatch process.

3.) Production: Raw material deliveries must be organized in advance for product manufacture. To achieve this, it is essential that all processes be closely monitored and that the warehouse and manufacturing lines work in unison.

4.) Reverse Logistics: The arrangement of returns to the vendor or manufacturer is the focus of this kind of logistics management. Reverse logistics is responsible for getting the most money out of a product or getting rid of it properly.

5.) International Logistics: Logistics management in businesses with international markets includes activities intended to move goods from one nation to another. To deliver goods internationally safely and error-free, this process requires outstanding organization.

A competitive edge through the tech revolution

Given the logistics industry's constant development, logistics management inevitably consists of a wide range of components. These elements include product development strategy, planning, buying, and coordinating manufacturing materials, as well as recovering materials and supplies used in product manufacture. It can be quite difficult for logistics managers to keep track of all the many components of a supply chain. Fortunately, logistics technology has successfully changed the business, making it a strong sector is driven by the emergence of cutting-edge new technologies.

• AI and Optimization: The need to optimize logistics is more important than ever as the demand for online delivery rises and consumer expectations rise. Software developers have therefore started to concentrate on building systems intended to improve supply chain management. Supply chain operators are empowered by real-time visibility software vendors like FourKites, project44, and FreightVerify to easily spot problems and find quick solutions, saving businesses a tonne of time so they can concentrate on other elements of the logistics process. Also, Amazon's e-commerce services heavily rely on cutting-edge technology to meet its consumer delivery objectives. The company used machine learning to create the Amazon Echo, a portable virtual assistant.

• Warehouse Automation: Amazon uses a variety of strategies to improve the customer experience. The business's technological know-how actually extends to its packing and shipping services. After purchasing Kiva Systems, the e-commerce company made news in 2012 by automating its supply chain. Not only has Amazon unlocked the promise of robotics, but so have other top logistics companies. This industry's expansion is partly related to the steady increase in e-commerce, which has sparked a demand for speedy product delivery at cheap operating costs. The rise of warehouse automation has been aided by the popularity of online grocery shopping in particular, which has prompted online grocery companies to keep up with consumers' rising expectations while competing with brick-and-mortar stores.

• Autonomous Vehicles: Autonomous cars are becoming a supply chain necessity as warehouse automation permeates the logistics sector. Self-driving cars are beneficial for businesses like Amazon outside of the warehouse because they have the ability to speed up and improve on-road delivery. Innovative new methods of autonomously transporting items are being developed by businesses like Starship Technologies, opening up new opportunities in the logistics industry.

• Drones in Logistics: In addition to the development of autonomous cars, commercial drone use has created new opportunities for the supply chain management. Drones can be utilized in a warehouse setting for airborne inspection and even complete maintenance requests, which will save manufacturers a tremendous amount of time. Many IT firms are experimenting with creating aerial transportation methods since drones can quickly move small objects. For instance, the logistics start-up Volansi has developed unmanned aerial devices that are intended to speed up item delivery and minimize extra warehouse inventory. The company hopes to accomplish this while helping managers significantly reduce their costs and gain more control over their supply chain.

• 3D printing in Logistics: Even though there are numerous choices for quickly packaging and distributing items, supply chain specialists are still looking for ways to produce things quickly enough to meet consumers' expanding expectations. Within the supply chain setup, the activities of acquiring materials and creating a product frequently demand the most time and effort. A consumer might be able to request a product, and a nearby 3D printing firm would swiftly make it before sending it out for delivery. The ability to generate complex and personalized goods more quickly than ever thanks to 3D printing could ultimately cause disruption in the logistics sector.

IBS Hyderabad

Battery demand is rising as the car industry embraces electric vehicles. Industry participants can advance by making strong initiatives in giga-factory building, supply chain planning, and talent acquisition.

Major automobile markets in Europe and the US have seen a sharp increase in demand for batteries as the world accelerates the switch to electric vehicles. The battery supply chain is currently experiencing a challenging period of uncertainty, and many automotive and battery manufacturers are looking to creating their own battery giga-factories or establishing joint ventures to manage the tight supply.

By 2030, global consumption is projected to increase by around 30%, approaching 4,500 gigawatthours (GWh), and the battery value chain is projected to grow by up to ten times between 2020 and 2030, with potential annual revenue of $410 billion.

China is anticipated to account for 40% of global lithium-ion battery demand by 2030. This rapid scaling of new technology creates several significant problems, including labour and material shortages, delays in building gigafactories to make batteries at scale, and rivalry for resources in the supply chain. In reality, the supply chain for batteries runs the risk of encountering a situation akin to the current shortage of semiconductor chips, where demand growth has outpaced capital investment in new supply. Additionally, environmental, social, and governance (ESG) aspects will have a bigger impact, posing a new set of problems for businesses to deal with.

The issue is challenging and unusual. But for those who decide to tackle the problems at hand and hasten their entry into the EV battery industry, it offers tremendous prospects for expansion across the value chain.

Ms. Manvi Mishra MBA, 2022-2024

Tackling battery demand in a surging EVs market

Cost-effective scale-up of gigafactories:

Even the most seasoned battery manufacturers frequently endure nine-month or longer start-ofproduction delays. This has a major impact on a project's economics. First-year yields are frequently only about 60% of maximum output once facilities are operational, with losses evenly distributed between higher-than-anticipated yield losses and machine downtime. Quality problems during battery production potentially pose a risk to both reputation and finances.

The three key building blocks of best practise for overcoming these obstacles are: ideal factory design; efficient construction schedule optimization; and effective governance and performance management frameworks. Factory layout based on simple process flow, combined with a serious reduction of material conveyance, could highly reduce operating expenses and production time. This coupled with principles such as ownership and flexibility to pivot on decisions can provide the basis for training and company culture.

Effective talent and labor retention strategy

A highly skilled and effective workforce is the backbone in the construction and subsequent operation of any factory. The local labour market plays a crucial consideration when choosing a location and is one of the most factor in guaranteeing sufficient supply of necessary skill sets in relation to industry activities in the area. The availability of construction and operations labour, the attractiveness of the area within a suitable commute distance, and regional labour pools that may be utilised, could all be considered when making a decision. Investing in local infrastructure to enable a localised cell component supply base is another effective move.

Robust and efficient supply chains

The key to making a robust and efficient supply chain in EV batteries should entails the following consideration:

1. Battery Manufacturing Equipment:

Due to the rapid expansion of giga-factory construction, lead times of 1.5 years between ordering and commissioning are typical for equipment specifically designed for batteries. In fact, some OEMs are already beginning to acquire essential equipment for construction scheduled to begin in 2025.

Companies have four options for securing the supply of machinery for making batteries. The best case scenario is to get supply from manufacturers of battery-related equipment; the second best case scenario is to locate manufacturers with a similar level of knowledge. A few OEMs might also use their knowledge of other industries' equipment to modernise the production of battery manufacturing equipment, or in the most disruptive case to reinvent the cell manufacturing process using cutting-edge technology.

2. Raw Material:

Creating a solid strategy for acquiring raw materials can aid businesses in cost control and manufacturing ramp-up. Recycled end-of-life batteries, production scrap, or recently extracted and purified metals are the sources of raw materials.

Considering the high demand it is crucial to take into consideration: Enhancing the raw material supply. Battery manufacturers should think about negotiating multiyear supply agreements with mining firms in the near future to lessen the impact of pricing swings.

Localising the supply chain. There is a growing tendency toward localising battery manufacturing close to EV manufacturing plants, even though considerable expenditures are anticipated across the battery value chain globally.

Buying batteries from other suppliers. For smaller firms who are just planning a limited entry into the EV arena as well as for businesses wanting to keep strategic flexibility, this is frequently a tactically sound choice.

3. Recycling and life cycle strategies for end-of-life batteries:

Battery recycling and reuse will be essential for the supply chain and ESG responsibilities as the sector develops and evolves. The process of extending the lifespan of battery packs used in EVs is perhaps the simplest. Reusing batteries in various second-life applications (such grid storage), as an alternative, could have considerable advantages for both utilities and power users. Finally, employing recycled battery components would lessen demand pressures on important commodities and lower the resource footprint of batteries.

Concluding Thoughts

Battery production is accelerating quickly due to the switch to EVs, creating enormous development potential throughout the value chain. However, taking advantage of the possibility will necessitate substantial investments and expose manufacturers' main business to danger. Players in the automotive and battery industries that take action in three critical areas can embrace the opportunity to increase their revenues and profitability while meeting EV demand from vehicle owners.

Supply chain management (SCM) is an umbrella term for various supply chain operations including planning, procurement, production, fulfillment and logistics. To streamline operations as well as cut costs, businesses implement various supply chain management systems. Some of these include warehouse management system (WMS), order picking and packing software, material handling software and more. Besides these stand-alone solutions that address different aspects of the supply chain, businesses also use more integrated SCM software like ERP and demand forecasting tools to optimize their supply chains.

What is Inventory Management in Supply Chain Management?

Inventory management is the process of managing the flow of inventory (raw materials, work-inprogress, finished goods etc.) within a business to ensure that the right quantity of the right type of inventory is available at the right time in the right location and in the right condition. Inventory management is one of the most important aspects of supply chain management. Inventory management is a critical part of supply chain management and can be broken down into three main components: procurement, inventory management and logistics. Procurement is the process of purchasing inventory from suppliers. The goal of procurement is to acquire inventory at the lowest possible cost while maintaining a reliable source of supply. Inventory management is the process of managing inventory throughout the supply chain, from the point of procurement until the item is consumed or sold. Logistics is the process of managing the flow of goods from supplier to customer and includes transportation, warehousing and distribution.

Mr. Vaibhav Punmiya MBA, 2022-2024

IBS Hyderabad

Inventory Management: The Backbone of the Supply Chain Management

Why Is Inventory Management Important in SCM?

Good inventory management is key to supply chain operations. It ensures that your business has a steady and consistent supply of inventory. This is especially important for companies that deal with large volumes of inventory. Inventory management software helps businesses to keep track of their inventory. It can help you track the quantity and location of your inventory, reduce the amount of inventory you are holding and provide you with a forecast of where you need to increase your inventory levels. If you don’t have enough inventory, you might lose sales because customers can’t get what they want. If you have too much inventory, you might lose money because you’re paying for inventory that you can’t sell. Inventory management software will help you get the right amount of inventory to meet your customer’s needs while also keeping your costs in check.

Importance of Inventory Management Software in SCM

Inventory management software is an excellent SCM tool that helps businesses to manage their inventory easily and efficiently. Inventory management software makes it easy to track the quantity and location of your inventory. You can set up automatic reminders to help you know when to reorder items or which products are running low. Customers can also use the inventory management system to track their items online. Inventory management software can help businesses improve their inventory turnover. Inventory turnover is the average amount of time it takes for a company to sell its inventory. Inventory turnover is an important metric for businesses that deal in inventory. The faster your company sells its inventory, the more profit it will make. Inventory management software can help businesses increase their inventory turnover.

Benefits of a Good Inventory Management System

A good inventory management system will help you to keep track of your inventory. It will tell you where your inventory is located and whether it’s in the condition that it should be in. It will help you to forecast the demand for your products so that you don’t have to over- or under-produce. Inventory management software will make it easier for you to order the right amount of inventory. It will also help you to reduce the amount of inventory you are holding. This is important because inventory that is not in use is basically lost money. Inventory management software will help you to avoid this common source of waste. Inventory management software is essential for businesses that deal in inventory. It will help you to reduce the amount of money you are losing due to inefficiencies in your supply chain.

Drawback of Poor Inventory Management System

Poor inventory management can have a negative impact on your business in more than one way. You might end up losing sales because of the lack of inventory. A customer might want to buy something from your company but can’t because you don’t have it in stock. You might also have to increase your prices because you are paying more for your inventory since you don’t have a proper inventory management system. Inventory management software can help you avoid these problems. It can help you reduce the amount of money you are spending on inventory. It can also help you avoid having to increase your prices because of the high inventory costs. It can help you forecast the demand for your products so you know when you need to order more.

Example of practical implementation of Inventory Management System in Supply chain

The demand for a product is uncertain and ever-changing. Thus, the supply chain must be responsive enough to match customer demand. Without proper inventory management, businesses may not be able to forecast customer demand accurately and may end up running out of inventory. This can lead to a loss of sales as customers may not be able to purchase the products. It may also lead to an increase in inventory cost if businesses have to replenish inventory more frequently than intended. Supply chain inventory management software can help businesses forecast customer demand and manage their inventory accordingly. It can help businesses track the amount of inventory they have in stock. It can also help businesses track the location of their inventory. This information can help businesses forecast customer demand. If you sell a product that is used to make another product, you need to track both products. If your supply chain management software can integrate with your other business applications, it can track both products as one and give you a complete picture of your inventory.

Conclusion

Inventory management is important in any business that deals with inventory. Whether you manufacture products or sell goods that you purchase from vendors, you need to manage your inventory to keep your business running smoothly. Inventory management software can help you do that. It can help you track the quantity and location of your inventory and forecast future demand for your products. It can help you reorder inventory before it runs out and track your suppliers so that you always have a steady and consistent supply of inventory.

ABOUT US

The word “Kaizen”, where “Kai” = change, “Zen” = good, signifies change for the better. In its birthplace Japan, the word Kaizen is imbibed as a process that many small continuous changes in systems and policies bring effective results than few major changes. This methodology applies to every department across different sectors.

Kaizen – The Official Operations Club of IBS Hyderabad has always been aspiring “Constant Change ad Evolvement”. We, as an organization work to inspire and aspire to the student community for the betterment of the future.

KORE – Kaizen’s Operations and Research Entity, one of our primary wings provide the students with a platform to improve and hone their technical competencies to meet the changing demands of the organizations. KORE’s sphere of influence includes Case-Based Research, Consultancy, Live Projects, and Workshops. LAKSHYA, an initiative of KORE focuses on improving the reader's knowledge about Operations Management by providing insights in the form of articles on various operation techniques followed by different companies and also updating the emerging trends in the communities.

Swagat Pattnaik

Joint Secretary – IA and Admin

Club Kaizen – IBS Hyderabad

Batch 2021-23

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