39 minute read
Supply Chain Management in E-commerce 32
stages of team development; there are no exceptions. Regardless of whether a team is working on a small, simple initiative or a large, complex global initiative, the team will progress through the five stages.
What’s important for the project manager is to understand the five stages and how to manage the team through the stages so that they can work more effectively as a team sooner rather than later, thereby making progress on the project tasks earlier on in the project launch.
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1. Forming: • The Project Manager has identified individual members as required for the project • Some feel anxious, as individual roles and responsibilities are unclear • Highly dependent on the project manager to lead the team • manager − Commitment, trust, and unity increases
Situational Leadership style: Supporting
1. Performing: • The Team has high levels of goal orientation, independence, motivation & knowledge, and competence in team members • The team know what, why & how of the task they are executing • The team expects the Project Manager to delegate tasks instead of instruction/assistance Situational
Situational Leadership style: Delegating 5. Adjourning: • Happens when the project completes • Emphasis is on wrapping up final tasks and documenting the effort and results
Situational Leadership style: Directing
1. Storming: • The Project Manager leads brainstorming of ideas and how to proceed with the task and provides: clarity on the purpose of the task, task priorities & roles & responsibilities • The Project Manager needs to be aware of challenges to authority and potential differences of opinion within the team on how to go about the task
Situational Leadership style: Selling
1. Norming: • The Project Manager supports team-working on the task • Individual roles and responsibilities are clear and accepted • The team begin to exhibit participative behavior & decision making is facilitated by the project
Strategies
When developing the team
• It is also important to have a good understanding of the team member's skill set.
Doing so will help avoid team members overestimating their abilities and undermining the project. • Time should be devoted to discussing each team member's responsibilities and roles.
Establishing a rapport with each team member will help the project manager get them committed. • Discuss as a team what the most effective means of communication is for everyone.
Discuss your project management style and understand the team's general expectations in terms of what development/learning opportunities they would like to get out of the project.
When managing the team
• The commitment levels of team members may vary depending on the project's complexity and environment. In the middle of the project, team members may be struggling to maintain their commitment and motivation. When this happens, strategies like revisiting the project's overall goals (getting back to the big picture), hold a 'learning' meeting (e.g. get someone out to chat to them about the latest technology trends in the weekly team meeting) can be devised to prevent a rut setting in. • People tend to first work on tasks they enjoy doing. A pitfall to watch out for is that more time may be spent on these preferred tasks, leaving little or no time for other, less enjoyable tasks to be completed. The project could be in trouble if the tasks that are neglected are on the critical path. To overcome these problems, inform each team member which of their tasks are on the critical path and when the deadlines are due.
Provide rewards (such as movie vouchers, coffee vouchers) for the completion of the critical tasks and publicly celebrate the completion of these critical tasks. • Providing regular feedback to team members (both employees and contractors) is critical. • Everyone wants to know how well he or she is performing. Conduct regular review meetings with the team member to discuss how well they have performed. This session should be balanced and where you discuss any difficulties, they may have experienced. You should also discuss the areas of their performance you are very pleased with.
Conclusion
Only strong “people management” skills will help to establish a good rapport with all individuals on the project and ensure they are working effectively and efficiently to deliver the project tasks. A good people manager always stands up for his/her team, will win their hearts, and makes them want to follow him/her. Undoubtedly, “people management” is the key factor in project management. Strong project managers pay close attention to the “people management” part of managing projects. But let’s not forget about strong project management skills too!
About the Author:
Mr. Sumeet Rajan
He is currently working with Flex as Program Management Executive and has 7.5 years of experience in project management.
Corporate Angle
Supply Chain Management and ERP Systems
Mr. Rakesh Chourasia, Designation - GET Company - Alpha TND, Ghana
Supply Chain Management
Supply Chain Management or SCM is the term for the management of the complete procedure flow of a good or service being transformed from its raw materials to the last step of the procedure i.e., delivery of the goods or the services. It begins with setting up a network or link in the chain, that allows the smooth movement of the product from the suppliers of the raw materials used and the companies or the clients that deal directly with the potential customers or the users.
Components of The Supply Chain Management System
In a traditional Supply Chain Management System, there are five key components:
1. Planning
The first step is to plan out everything before doing anything any further. It includes listing the resources required to create the good or service to meet the target customer’s requirements. Thus, it might take a few revisions before finalizing all the resources; and mentoring whether the planning is efficient enough for the process or not.
2. Sourcing
Once, the planning is over, the sourcing procedure starts, where the company finds out the right resource suppliers for their product and further manage the supplies and inventories and, monitor them as well. The payments to the suppliers and everything related to them is carried out in this step.
3. Manufacturing
Another crucial step in the process is manufacturing, where all the raw materials are collected and put together to create the final product. As soon as the product has been created successfully, it is then tested for its quality and; at last, once the quality test is passed, the product is packed and is ready to be delivered or shipped to the users.
4. Delivery and Logistics
The delivery and logistics include scheduling the delivery of products, shipping of the products to the customers, provide them with the invoices and collecting the payment from them in return.
5. Returning
In the last step, if there is any query raised by a customer regarding the product being defected in any manner, it is returned to the manufacturer for checking if there is anything wrong with the product. The product is hence, collected from the customer. It might also be the case if the customer chooses to return the product without receiving it as it might; no more be their need.
Altogether, these keys work towards providing a good experience to the customer with the quality of the product, as well as; the service. Thus, Supply Chain Management plays a crucial role in a company’s management processes.
Enterprise Resource Planning or ERP
All the core or; vital processes, that are needed to run a company are integrated by the Enterprise Resource Planning Systems. These processes are Finances, Procurements, Supply Chain Services, Human Resources, Manufacturing and many more required for the smooth functioning of the company, which implies there are many different components or functional modules of ERP, unlike a Supply Chain Management System. Such systems play an important role in the company due to the need for; interaction with several suppliers or vendors for raw materials and other essential items.
Key benefits of ERP
1. Better Efficiency and Productivity The better efficiency and productivity are a result of better planning possible with the Enterprise Resource Planning System. It helps every employee of an organization to work efficiently with a fewer resource. Thus, reducing the cycle time.
2. Business Integration
The ERP modules-update all the related modules of a company when any of the modules are updated, bringing all the operations of the business together. Hence, Business Integration takes place.
3. Improved Agility
With ERP Systems, access to real-time data becomes quite easy, which results in taking necessary actions regarding a new opportunity as soon as it is; identified.
4. Lower Risk with Standardized
Procedure
The best international practices are adopted by an organization while implementing the ERP System. These practices lower the risk of any maverick practice like fraud or theft taking place in the organization.
Role of ERP in Supply Chain Management
Integrating both Supply Chain Management (SCM) System with the Enterprise Resource Planning (ERP) System gives the business or companies the ability to have better visibility into all the operations, being performed with better efficiency, productivity, agility and, low risk of fraud or theft. The SCM allows businesses to interact with their suppliers and vendors, but with the integration with ERP, they can overcome the
inefficiency in work, as well as; reducing the waste generated in the process.
Thus, combining both the systems can result in numerous; important advantages:
1. Improvement in the efficiency and productivity across various departments of the company working within the supply chain system. 2. The automated flow of work reducing the operational and overhead costs. 3. IT issues like maverick practices are less likely to bother. 4. Improvement in customer services resulting in increasing the chances of repeat opportunities. 5. Easy adaption of new solutions based on the supply chain for future growth or expansion of the business.
The SCM and ERP Systems can altogether be very much beneficial to a business or an organization in providing a better work experience to all the employees and hence, good customer service to its customers. Proper implementation with best practices can also prevent any mishap in the future, keeping it a safe place to work and grow the business.
Emerging Managers
Mr. Arko Ghosh MBA IMC 2020-22, K J Somaiya Institute of Management.
Poshmark: Re-Shaping the Shopping Experience
In a competitive market where the dynamics change every minute, being a mediator could help one get the best of both worlds. One does not always have to be in the thick of it, instead, they could just create a platform empowering other to reap benefits off their creation. Poshmark is a social commerce marketplace based out of the United States where people can buy and sell used as well as new clothes, shoes, and accessories. They have their headquarters in California and are growing astronomically with the surge of people trying to get the best out of the market.
The founder of Poshmark is Manish Chandra who established the company in 2011 with the idea of changing the whole dynamic of shopping as well as the perception of people involved in the process. He thrived to create a community-based service where everyone would work cohesively, helping themselves as well as others. He was also the founder of the first social shopping company, Kaboodle in the year 2007 which was eventually acquired by Hearst Corporation. This whole platform has enhanced the love people have for fashion and has helped them find more people who share similar interests.
The reason why Poshmark has been so successful in this endeavor is because of the ease at which people can operate this website. Irrespective of whether you are the seller or the buyer, the setup is such that it allows everyone a chance to reap the benefits and eventually serves the purpose of the platform. A seller just needs to click a picture on their phone, add a description for the item being sold, put a price to the item, and upload it on the website. From the buyer's point of view, it is similar to any other shopping app where you just type the item you need, and the array of options are there at your disposal. With over 60 million people using the website and more than 100 million items, there is hardly a scenario where people do not find what they need.
This is not all that the website offers. There are also various "posh parties" that take place which essentially is virtual selling and buying events that happen through the course of the year. A wide variety of themes and brands ensure that there is something for everyone. In terms of packaging, the
company sends the pre-paid and pre-addressed label to the person who has made the sale. Once the person has put the item in the box, the order can be picked up from the home for free, making the shipping process more convenient than ever. The app ensures safety through the Posh protect feature which does not allow any hiccups in the whole buying and selling process and there is a customer service feature readily available as and when required.
The growth of Poshmark can be seen through the financial numbers that act as a testament to its success. In November 2017, they had raised $87.5 million and had a valuation of $600 million in venture-backed funding led by Temasek. With other venture capitalists backing the company, it reached a staggering $160 million. The company recently started earning $1 billion through its website and while there are rumours that there are a select few who are successful, reports show almost 4 million users of the app and website. They decided to go public on the 14th January website this year with a valuation of over $3 billion listed on the NASDAQ stock market. Various credible reports state how the second-hand clothing market is expected to grow massively in the next 5 years and reach a value of $51 billion as people continue to embrace resale with a motive of profit as well as sustainability. Poshmark leads the way for the same by reaching new landmarks with every passing day. By selling items worth almost $2 billion, the vision that Manish Chandra had seen while establishing this dynasty is surely on the path to greatness.
x Emerging Managers
Ms. Bhavya Mishra MBA, Batch-2020-2022, IIM Jammu.
The Art of Value Investing
Indian stock market is at an all-time high, with Nifty recently touching a high of 15,946. This has been the case amidst the covid - 19 crisis, the falling GDP growth rates, pessimistic outlook on India's growth, and even political instability. It would not be wrong to say that the markets today are starkly disconnected from the ground reality. There have been many factors attributed to this ongoing market rally since the April of 2020. The hopes of economic recovery, attractive valuations, optimism due to the vaccination program have kept the public invested in the market. Historically, the market movement has been linked to economic growth in the long term. In the short term, however, the market is guided by investors' sentiments, rumors, daily news, etc. And while a lot of "investors" make profits riding on the wave of investors' sentiments, most of the retail investors find themselves stuck in the market frenzy. The reason being what is popularly known as the Efficient market hypothesis. The theory says that the market is always efficient. By the time a retail investor acts upon the information, it is already too late because the stock price has already discounted the publicly available information.
The most common answer to this problem would be avoiding speculation and staying invested in the market for a longer-term as these noises get smoothed out during longer time horizons. However, just staying put in the market does not guarantee returns. Most successful investors focus on the value of the stock rather than its price action. This essentially means that they identify highquality companies with an intrinsic value much higher than their price in the market. This investing style is known as value investing. Popularized by Benjamin Graham in his book “The Intelligent Investor”, it has been adopted by well-known compounders of capital like Warren Buffett.
Let’s talk value!
The guiding principle behind value investing is that the stock market overreacts to every good and bad
news. The market prices are not in line with the true/intrinsic value based on the company's longterm fundamentals. Thus, making the stock overvalued or undervalued. And this presents the opportunity for value investors to create wealth.
Okay, but what exactly is this value we are talking about here? In the words of Benjamin Graham –“Price is what you pay. Value is what you get." To elaborate, the value of a company depends on the inherent strength of its business or its capability to create a superior economic value over a period of time.
How to identify a value company?
Some general parameters can be looked at for spotting value bargains.
Qualitative aspects of a business.
Understanding the primary business of the company. When you own the stocks of a company, you become an owner of the company itself. And while you cannot choose how business activities are done in the company you are invested in; you can decide which kind of business you want to own. Thus, investing in the businesses you understand becomes a crucial first step. If you do not understand how the company generates revenue, how can you decide its value?
The nature and sources of revenue. A company can have cyclical revenues, or transactional revenues, or recurring revenues. You, as an owner, would want your business to have a steady cash flows coming in from multiple sources.
The people behind the action. Warren Buffet has been a strong proponent of a strong management board in a company. Here, strong management translates to rational decision-making by the board members in the best interests of the shareholders. Investors can look at the decisions related to dividends, executive compensations, disclosures, etc., to gauge the integrity and mindset of the management.
Market power. Look out for natural monopolies or companies which have significantly less direct competition. Value investors tend to favor companies with substantial market share and brand value.
Quantitative factors. While the qualitative factors help you determine the intrinsic strength of the business, it is important to see how the company is priced in the market. Because the main aim of value investing is to find great bargains. A great company trading at a PE of 60 is not something a value investor will be interested in.
The Price to Book value ratio measures how much the market is willing to pay for each dollar of a company's assets. When the ratio is one or less, the stock is said to be undervalued.
The price-to-earnings ratio indicates how much the market is willing to pay for each dollar of earnings based on the company's earnings. The ideal ratio differs from industry to industry. But an undervalued stock can be in the bottom 30% of the companies in a particular sector.
PEG ratio helps to analyze a company's performance and expected growth. P/E ratio divided by the expected growth in earnings over a specific time gives the PEG ratio. A ratio of < 1 may suggest that the stock is undervalued.
Free Cash Flow (FCF) tells you how much cash the company has after financing its debt and paying for its operating and capital expenses. Naturally, an investor would like to see a growing FCF over a sustained period.
Debt to equity measures the relationship between the amount of borrowed capital and the capital contributed by shareholders. As a thumb rule, companies with a ratio of more than 1 are considered risky.
Now that we know that price and value of a company are not always in sync, it is important to note that no one can say when a particular stock will realize its full potential. It can take 5 years for some, while a company can see the reconciliation of price and intrinsic value within 6 months. Also, the true value can change over time as the businesses change and evolve. Thus, this style of investing demands a lot of patience and active involvement from its followers.
Emerging Managers
The Crisis Of Covid–19 And Tech Industry
Ms. Ashita Dashottar Master of Science in Information Systems, 2019-21, Northeastern University, Boston.
In the month of March 2020, the unprecedented happened! Every business was pushed into uncharted territory. Normal became a thing of the past. Business processes got affected, change was needed and urgently needed. The people were suffering and an unwavering leadership was much required than ever for every company to withstand the jolt of the pandemic. Homes became the new offices and here comes the new chapter of “Work from Home” (WFH). While many tech companies took similar short-term measures, layoffs were happening at a rate faster than ever as companies started struggling to keep the business intact.
Talking about some of the worst hit businesses were supply-chain industry, recreation industry and travel industry. Talking about one such company is Airbnb, an online marketplace for lodging and vacation rentals. COVID – 19 had limited the travel to a great extent and lockdowns in many countries stopped the travel for an unknown indefinite time. This led Airbnb into a massive loss as revenue fell 67% from what it was compared to previous year’s data. However, in recent times as pandemic started to decline and the new normal has started to settle-in, total listings of Airbnb have recovered and grown 2.5% off of pre- pandemic levels.
On the brighter side, there are a few giants in tech industry, which not just survived the pandemic but thrived during it! One such classic example is of Amazon, e-commerce and cloud services provider was one of the first responders to the COVID–19 pandemic. In March 2020, the lockdown led to a sudden increase the orders which made the company hire more people instead of firing them. Around 36,400 people were hired by Amazon, most of which as warehouse workers for handling the surge in orders. As small-scale companies and businesses shifted for online platforms, Amazon Web Services saw a staggering increase of sales, surpassing a $40 billion run rate in the first quarter of 2020 as reported by CRN.
COVID-19 impacts have to do with the kind of services and products these companies provide and how COVID-19 affects the way consumers can or cannot experience them.
Now, as these industries and world move towards a new normal, WFH is turning out to be a more
feasible option for most of the jobs and companies no longer need huge company spaces rather shifting the focus on investing in better health care coverage for its employees, especially the ones who are front-line workers working on grass-root levels, providing flexible work hours. The concept of “Staycation” is also highly appreciated. As Darwin said, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” So here we all are, who have adopted the new change with grace and commitment to make this new normal a better version of the past.
Emerging Managers
Mr. Anirudh Srinivasan
MBA, Batch 2020-22,
SIBM Pune.
The Integration of Lean Management and Six Sigma
Introduction
Industrial companies have adopted a wide range of management programmes, which they think will improve competitiveness, over the previous two decades. Today, Six Sigma and lean management are two of the most popular programmes. Six Sigma, which was established and then adopted by numerous American firms like GE and Allied Signal, was established by Motorola Corporation. Lean management has been managed by several big US corporations, such as Danaher Corporation, Harley-Davidson and Toyota in Japan. Six Sigma and lean administration have a range of roots. The main problem behind the Six Sigma creation was the necessity to enhance quality while manufacturing complicated items with a large number of components, leading to an equally high likelihood of faulty finished goods. The motivating cause behind lean management growth was trash disposal, particularly in Japan, where there is little natural resource. Six Sigma and lean management have both developed into integrated management systems. The efficient execution of these policies includes cultural transformations in businesses, new approaches to customers' production and service and a high level of training for workers, from top management to the shop floor. As such, both systems include common elements, such as customer happiness, excellent quality, and extensive training and empowerment for employees. The aim of this article is to dispel many misunderstandings concerning Six Sigma and lean management by outlining each system and its major principles and approaches.
Overview of Six Sigma
Six Sigma's roots may be traced from two main sources: total quality management (TQM) and the Motorola Corporation Six Sigma statistical measure. Six Sigma nowadays is not a tightly focussed quality management programme but rather a broad-based, long-term corporate decision-making strategy. Six Sigma of TQM retained the conception that the Quality of products and services provided by the company is the responsibility of all in the organisation. Six Sigma may also be related to TQM by focusing on
customer satisfaction in management choices and by investing heavily in statistical education and training, analysis of the roots, and additional methods for problem-solving.
Overview of Lean Management
The notion of lean management may be traced back to Toyota production systems, a production philosophy developed by Taiichi Ohno and Shigeo Shingo, Japan's engineers (Inman, 1999). TPS is also the birthplace of just-in-time production processes and is a major feature of lean production, which is why TPS continues to be a model of excellence for lean management supporters. The conventional US manufacturing system, by contrast, was founded on the notion of "batch-and-queue." Dell may also tailor each item according to the demands of the customer via a direct sales approach. The lean production objective of waste elimination to produce value for all operations along the value stream.
Key Misconceptions Regarding Lean Management
The common misconception about lean management is that it involves layoffs of workers in a company, if an employee were performing non-value-added activities within their job, management and the employee would work together to find a better way to perform the job to eliminate the non-value-added activities. Therefore, Lean Management is not instrumental for laying off workers unless an absolute must and every effort to reassign or retrain the employee is not made. The other misconception relating to lean is that it is confined only to the country of Japan, because of their unique culture. In fact, most of the companies which have adopted the concept of lean management outside Japan are (Emiliani, 2003). Another major misunderstanding is that lean is exclusively for production. Lean management considers every phase of the process as a service step even in the industrial setting where customer value is provided to the minimum waste level. The processing of insurance claims, the assessment of bank loan applications and the treatment of hospital patients all entail activities consistent with the lean management point of view.
Key Misconceptions Regarding Six Sigma
Six Sigma's most prevalent misunderstanding is that it gives the new flavour of the month that quality advisors are using in a method comparable to what has been achieved in the recent past with Deming Management, TQM, reengineering of business processes (BPR) and ISO 9000. Sadly, consultants will always get in to any car, attend a conference and become specialists in a programme. In terms of quality management, however, Six Sigma should be shown to be up-todate by taking on earlier programmes, in particular Deming's management theories and the focus of TQM is on the customer and adds additional feature like an extensive training framework, a wide definition of value, not only quality, but service and delivery, from the customer's perspective. It is safe to state that though Six Sigma's name can change in future, the basic characteristics will be transferred to future projects and new and improved versions will arise.
The Intersection of Lean Management and Six Sigma
Complex interactions of individuals, materials, equipment and resources inside the programme managing such interactions will define the performances of a firm. It is safe to state that operating system management theory still develops. Each of the systems provides attention to various aspects of organizational performance, but both Six Sigma and Lean Management constitute state of the art. Therefore, reduced profits might
happen if either programme has been executed in isolation, in a highly competitive setting. A detailed investigation of these two programmes is likely to lead to a lack of complete perfection for these programmes alone. The horizontal axis reflects value, quality and performance for the client. The vertical axis is the cost of providing the consumer with the product/service. Advances will be made under both systems but those improvements will start to level off at some point. Alone with Six Sigma the concentrate on optimise quantifiable quality and delivery measurements can lead to the development of improvements, but the modifications in basic operational systems to eliminate unproductive processes can be ignored.
Conclusion
A lean, Six Sigma's (LSS) would build on both Lean Management's and Six Sigma's capabilities. The three basic principles of lean management would be included in an LSS organisation: • An overall concept which aims to maximise the added value content of all processes would be integrated. • All incentive mechanisms in place would be regularly evaluated to ensure their results are global optimisation, not local optimisation. The management decision-making process would be integrated that would base each choice on the client's proportionate effect. The three main principles of Six Sigma should be included in an LSS organisation: • In all decision-making, it would emphasis data-driven techniques to make adjustments based on scientific rather than ad hoc investigations. • It would support approaches designed to minimise quality variation. • The development and implementation of a highly organised and enterprise-wide education and training system.
Emerging Managers
Effective Product Design
The only step towards the success of an organization is customer satisfaction and delight. This customer satisfaction is achieved through development of product and services which fit to all the attributes a consumer is looking for. To term the product or service as a successful one, it not only needs to have an attractive package design, but it should also provide robust performance.
Product Design
A good product must have some basic features, those are
1. Differentiable – To stand out from the other products and create a new identity of its own is a must in today's world. This helps in creating a different identity from its competitors and can be achieved through an attractive packaging or by providing an additional service.
2. Utility – There are a set of expectations and wants that a customer wants in the product. The product design should stand as per the customers expectations and should provide steady performance throughout its life cycle.
3. Profitability – Not anything and everything one makes can be offered to the customer. It should deliver value to the customer and sustainability to the organization.
Objective
The goal or essence of a product design is to satisfy the customers and provide them with maximum value addition at a minimum cost. Meeting the primary needs and desire id also one of the biggest and the basic criteria which needs to be looked into. Not always one needs to develop a new product in this case but can also enhance the existing product or services according to the demand of the situation.
Stages of Product Design
Designing the product is a creative process which takes into consideration all the available options and beyond. The process is segregated into 3 stages:
1. First stage – This is the most important stage
when in the brainstorming takes place. All the ideas and analysis from the customers are looked into and then the further process is looked upon.
2. Second stage – With the help of the available resources and technology the ideas which are procured from the customers in the first stage are converted into feasible solutions to satisfy the customers expectations.
3. Third stage – After the product is invented it must be brought to the market. This is done in the third and the final stage of the process.
Factors affecting product design
To be a successful product design it must have some factors associated with it.These factors are:
1. Selection of the correct team – It is important that to design a product the team must be carefully selected with all the experts designers who are well aware of the recent market trends and demands as well as have a hands on experience with the technology being used.
2. Involvement of customers – To check whether the project is in the correct direction or not, customer involvement is a must. Testing and recommendations can help in planning out a successful product design.
3. Prototyping and testing – Since designing a product is a huge investment both in terms of manpower and capital, it is necessary that proper prototyping and extensive testing is done with the customers and the market. 4. Raw material – Quality is of utmost importance throughout the designing of the product. It cannot happen that at the beginning stage the quality of the raw material used is different or of an inferior quality as that at the ending stage. Furthermore, procurement systems need to be in place to ensure continuous, cost effective supply.
5. External factors – Government as well as environmental regulations play an important part in product design. Also, these norms keep on getting updated from time to time so in order to avoid any losses, the product design should be flexible enough to adapt to the changes.
The product selection process is the last step when the product is approved after looking into all the various aspects. Financial analysis, Risk analysis, Existing product portfolio, raw material supply and pre-determined product criteria a positive combination of all these gives a green signal for the product to step into the market.
Emerging Managers
Production Management: That’s on our Roadmap
Introduction
The basic module of any business includes to cater the needs of the customer by dispensing services and goods, and in-process create value for its customers and solve their problems. Production and Operations management includes the process of applying business and management concepts in the creation of products and services.
Production
Production could be explained as a scientific process that involves the remodelling of raw material (input) into desired product or service (output) by adding value. Production can broadly categorize into the following supported technique: • Production through separation: In this method, the desired output is attained through separation or extraction from raw materials. A classic example of production through separation or extraction is oil into various fuel products. • Production by modification or improvement: In this method, a change in the chemical and mechanical parameters of the raw material is done without altering the physical attributes of the same. The annealing process (heating at high temperatures then cooling), is an example of production by modification or improvement.
Production Management
Every organization has management principles. And the implementation of that principle pertaining to the production process is termed “production management.” This management concept involves planning, scheduling, supervising and control of the activities that concern the production of products to satisfy the requirements of consumers and also generate profit for the business. In this process, raw materials are being modified and remodeled into value-added products efficiently. The production manager is additionally responsible for this area of the business. In other words, decisions like quantity, quality, price, design, packaging style and material for the merchandise, among others, are made by the assembly manager. The manager
also assures that the output matches the specifications.
The Function of Production Management
The role of Production Management is quite elaborate. But the only aim is to make sure the business produces quality products that will satisfy the requirements of consumers daily. Below are the functions of production management. Production Control: In this, the manager supervises and directs the assembly process. It is the manager's responsibility to determine and make sure the right production plan is followed during the assembly process. If there are deviations, the assembly manager has got to take the proper steps to correct them.
Scheduling: Scheduling is a vital function in every organization. It has to collude with planning when the particular production process would begin and ends.
Cost and internal control: Every company knows how essential internal control and price are. Customers aren't just trying to find the simplest products. But they also want to possess them at a rock bottom possible price. Quality control is an important duty the assembly manager has got to perform. It entails multiple checks performed on the merchandise to make sure quality is unbroken. Maintenance of Machines: Production management also necessitates ensuring that instruments used are in good working condition. And that means replacing those that are underperforming or changing damaged parts to enable the machine to function optimally.
Importance of Production Management
Production management has relevance to the firm’s success in some ways. Used efficiently, it can cause numerous accomplishments which can take the business to an excellent height. Below is the importance of production management.
Helps the Firm to Accomplish its Objectives
Production management helps the firm to realize its sales and business objectives by producing goods and services that meet the necessity of consumers. Sales and profit will increase if the merchandise produced satisfies the customers’ needs.
Boost Business Reputation and Goodwill
A satisfied customer will unquestionably want to replicate patronage. That’s why businesses should make sure that quality products are delivered continuously. Making sure that your customers are always happy also can boost business reputation and goodwill.
Reduces the Cost of Production
Production management assures that raw materials and other resources are used judiciously, without compromising on quality. In other words, the business will still deliver quality products and sell at a convenient price to customers. But this will only be possible during a situation where the input and output are maximized.
Operations Management
As to deliver value for patrons in products and services, the corporate needs to try the following: • Identify the customer needs and convert that into a selected product or service (numbers of products required for a specific period) • Based on product requirement do back-ward working to spot staple requirements • Engage internal and external vendors to make a supply chain for staple and finished goods between vendor → production facility → customers.
Production Management v/s Operations Management
A high-level comparison which distinct production and operations management is often done on the following characteristics: • Output: Production management is concerned only with the manufacturing of products in particular while Operations management covers both products and services. • Usage of Output: Products like computer/car are utilized over a while and the utilisation time
can be delayed whereas services need to be consumed immediately. • Classification of work: To manufacture and distribute products like computer/car more capital equipment and less labour is required while services require more labour and lesser capital equipment. • Customer Contact: There is no participation of the customer during the production process whereas for services a continuing contact with the customer is required. Conclusion: Production management and Operations management both are very vital in fulfilling the objective of an organization. The optimum mixture makes the production process of any organisation as per the schedule and enables the organisation to meet the demand of the customers.
Emerging Managers
Mr. G Sai Srivatsa MBA , Batch 2020 – 2022, IBS Hyderabad.
Supply Chain Management in E-commerce
Supply chain management in e-commerce emphases on procurement of raw material, manufacturing, and distribution of the right product at the right time. It incorporates overseeing market interest, warehousing, stock following, request section, request the executives, conveyance and conveyance to the client.
Why is it used?
The main objective of Supply chain management software is to expand the supply chain performance. Appropriate and precise supply chain information allows manufacturers to make and ship only as much product as can be sold. Effective supply chain systems benefits both manufacturers and retailers decrease excess inventory. This reduces the cost of manufacturing, shipping, protecting, and storing product that cannot be sold.
The major components of SCM are:
1. Planning 2. Sourcing 3. Making 4. Delivering 5. Returning 6. Enabling
Why is supply chain management important?
Over the last few years, the supply chains of producers and vendors have become even more strongly connected. In numerous enterprises, retail deals trigger renewal orders to producers. Makers with a very much tuned, without a moment to spare inventory network can consequently restock retail retires as items are sold. As joint effort has expanded, extra information from production network accomplices has permitted organizations to utilize progressed insightful instrument to additionally improve results. Examples include: • Identifying potential problems before they occur • Optimizing price dynamically • Refining the distribution of available to promise inventory
The e-commerce industry isn't simply restricted to setting up a website and selling items on the web. It incorporates item setup, appropriate
framework, coordination’s, secured payment gateway, and production network the executives. A proficient inventory network speeds up the online business cycles to live up to clients' desires.
Major components forming the Supply Chain and Logistics Processes of E-commerce Industry:
Inventory Management
Inventory is a major component of supply chain management. As per the traditional inventory model, businesses used their individual warehouses to trade the products directly to customers. But, in the current scenario as per the risk-pooling strategy, ecommerce businesses do not hold their own stock and rather re-appropriate their stock to a bigger distributer. It empowers internet business organizations to decrease the danger of keeping their own stock.
Few businesses are adopting the drop-shipping model for inventory. As per this model, a store doesn't hold the item it sells on the site, rather it buys the item from a third-party and delivers it to the client.
Reverse Logistics:
E-commerce industry also have an SCM structure which involves reverse logistics. Reverse logistics is defined as the planning and implementation of the movement of goods from the point of consumption to the point of origin. Nearly, all ecommerce businesses provide the facility of exchange and returns. This upsurges the need for logistics.
Product Availability and Service Level:
The achievement of an e-commerce website depends on customer satisfaction. If customers cannot buy the right product at the right time, they will immediately switch to alternative e-commerce websites. A top-notch service level of products is seamless for any e-commerce success. The slow delivery process surges the risk of losing potential customers and can even cause an adverse impression on the status of the business. From inventory to logistics and procurement to supplier management, processes should be well synchronized and enhanced. Even if a single link of the supply chain doesn’t work, the whole supply chain management will fail, resulting in loss of revenue.
Customer Reviews:
The reputation of an e-commerce business is restrained by customer reviews and experiences. It is one of the major factors that influences the growth of an online store. Price evaluation search engines are the first point of contact for online customers. The search engine standing is also done based on customer reviews. To obtain good reviews, the delivery of the right product at the right time is necessary. E-commerce platforms such as Amazon and eBay use internal key figures to assess the reliability of distributors. These platforms have supply chain key performance indicator (KPI) targets. If the KPI is less than certain minimum values, then penalties in the form of account suspension can be executed.
Excess Inventory Increases Costs:
E-commerce businesses are growing rapidly due to which they reach their boundary on inventory management. With the evolution in business, inventory portfolio, supplier base and increase in returns also grow at a rapid pace. Expanding stock definitely is basic error online business organizations set to meet the expectations of clients. Stock addresses a huge segment of the complete speculation of online business organizations. Overabundance stock can change into old stock (dead capital) which can prompt expanded expenses.
Phases of supply chain management (SCM)
Supply chain management has three phases: In the strategic phase, a company makes longstanding decisions over months and years to enhance and steady the logistics network with the value chain (Example: location planning and expansion, investments, outsourcing, capacities). In the tactical phase, medium-term decisions are synchronized and executed within a quarter or a year (Example: delivery strategies, warehouse logistics, personnel planning). In the operational phase, short-term manufacturing and delivery decisions are made within days or weeks (Example: product sales and storage and order distribution).
ABOUT US
The word “Kaizen”, where “Kai” = change, “Zen” = good, which signifies change for better. In its birth place 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 is applicable 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 the student community for the betterment of the future.
KORE – Kaizen’s Operations and Research Entity, one of our primary wings provides the students 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 Workshop. LAKSHYA, an initiative of KORE focuses on improving the readers 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.
K PAVAN KUMAR REDDY EDITOR IN CHIEF - KORE Kaizen – IBS Hyderabad Batch 2020-22
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