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.
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OUR KNOWLEDGE PARTNER
Club Kaizen is privileged to have The International Supply Chain Education Alliance (ISCEA, USA) as the Knowledge Partner from Lakshya’s 25th 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 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 include1. 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.
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EDITOR’S LETTER
“If you have knowledge, let others light their candles in it."
Welcome to the 50th edition of “LAKSHYA”, our monthly supplement designed for people who take that one extra step to reach perfection. To rise above the norm, one must strive for excellence. That is exactly what we are aiming for here. Club Kaizen has been preaching continuous improvement since its inception, and this magazine provides a platform for young writers to learn, grow, and re-learn new things every day. A magazine is a tool that allows students and professional managers to get deeper insights into the current trends and events happenings around the world. Lakshya is a collection of articles presented by corporate leaders, professors, and students from reputable organizations and institutions around the world. The articles published by Lakshya are intended to provide hands-on experience from great minds and business leaders who want to instill theoretical concepts and strategies with practical implementation. We all want to bring in the best, organic, and new ideas from the young pool of aspiring managers. The most significant part of a magazine is that it provides a platform for students to enhance and improve their writing skills, as well as an environment in which they can enrich their thought process by researching and writing 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
SWAGAT PATTNAIK JOINT SECRETARY – INTERNAL AFFAIRS & ADMIN Club Kaizen – IBS Hyderabad Batch 2021-23
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CONTENTS S.No
TITLE
PAGE NO.
1
From the Mentor’s Desk
5
2
Green Transportation
7
3
Hindustan Zinc Limited – A Need for Scalability and Integration
9
4
Operation Management for Business Excellence
15
5
Importance of ERP Software for FMCG Sector
18
6
International Production and Operations Management (IPOM)
21
7
SCOR Model
25
8
Start-ups operation management struggles during covid-19
28
9
Inventory management and optimisation
31
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From the Mentor’s Desk 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 endeavour of knowledge creation through LAKSHYA. In the era of competition, students must be prepared for the everchanging business environment. Knowledge creation plays an important role to learn to tackle the dynamic nature of business.
Dr. Nishit Kumar Srivastava Mentor, Club Kaizen
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CORPORATE ANGLE
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Ms. Aaratrika Lahiri Associate Consultant-Wipro
Green Transportation
In layman’s terms transportation means the process of taking people or goods from one point to another. Traditional modes of transportation depend primarily on the usage of fossil fuels which contributes to 27% of carbon emission. Hasty usage of fossil fuels results in the rapid depletion of these resources and price inflation as well. Not to forget the amount of pollution that these noxious gases cause and in turn cause harm to the environment and human health issues. Given the condition that the world is currently in, it is pivotal for mankind to move to conserve energy and reduce carbon emissions. Despite, talking about these issues for the last several years, these issues have not been gravely addressed or taken an action. Now, this has become the responsibility of the international community to work on these to make sure that environmental issues are taken into consideration. One such case was during the year 2010 where the Taiwan government planned a four-year plan or project with a whopping 300 million US dollars budget called: “The Penghu Low Carbon Island Development Project.” Here, the objective was to use the island in concern and use it as a test platform to evaluate newer and more effective and efficient methods of conserving energy and reducing carbon emissions. They wanted to test this method before implementing the same in the whole of the country of Taiwan. Now there are multiple options when it comes to green transportation, here is a look across the types: 1. Bicycles: Traditional bikes and electric bicycles are here to stay. A small electrical engine does all the work of supplying power which comes from just a light peddling. The advantages are that it is faster than a traditional bicycle and does not emit any gases that cause pollution. Now, traditional bikes are never going out of fashion because, in the end, that is what they call it, old is gold. Although, the disadvantages of this type are its complexity which denotes that this kind of bicycle comprises many parts which make its repair process a little harder when the engine malfunctions.
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2. Electric Cars: These cars are simple in the terms of their functionality; a battery is included in the car and it stores electricity once the car works. The engine can be charged once a day. However, the main disadvantage of this car in this limited range is that most of the cars have a low range and on the other hand, it is very cheap and affordable, the recharging of the battery doesn’t take time. 3. Green Trains: Now these are something that has made the buzz around the world. With most of the governments are now supporting the movement towards eco-friendly transportation, electrical trains are posing as the new necessity. These trains work with hanging wires and electrified rails and can go up to 200 MPH which saves a lot of time and provides more efficiency in reducing the distance between destinations. The only disadvantage here is that any electrical failure will lead to the malfunction of this whole spectacle. 4. Hybrid Cars: Hybrid cars can move without fuel or electricity. The main advantage of this method of transportation is that it becomes automatically recharged while the car is at the braking stage. The major disadvantage of this mode is that the main source of power that runs the engine is fuel. Hence, the emission is not clean. Let’s quickly browse through the advantages of green transportation:
Limitation of gas emission: The major aim of this transportation is to reduce or to bring down the amount of gas emission which leads to a decrease in pollution rates. Lower cost: The majority of the green transportation modes are made from low-cost materials and they use low-cost energy. Building a sustainable economy: Going green will, in turn, lead to a huge investment in the sector of transportation as the less operating cost will lead to creating many jobs because more industries will lead to growth and prosperity.
Of all the methods of transportation we are aware of, most harm is done by road transport as far as the air contamination and traffic noise are concerned. With a head start, governments mostly take general measures to lower the construction of normal streets. In places, bringing in vogue versatility streets are planned to prompt a concurrent reduction of noise pollution and also air contamination. Secondly, they are taking particular measures for specialized changes in the vehicle framework. Transport represents 26% of worldwide carbon emission and is one of the only mechanical areas where emission is as yet developing. Therefore, it’s time we bring forth a change. Green is the way to go. And, let’s make these small efforts, till we see each other on the greener side. About Author: Ms. Aaratrika Lahiri is currently working as Associate Consultant at Wipro in IDEAS- CBU.She has also worked with Amazon as a member of the selling partner support team. She has Completed MBA from IBS Hyderabad in 2022.
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Ms. Swati Vijayyergiya Finance Manager- Hindustan Zinc Limited (Vedanta) Hindustan Zinc Limited – A need for scalability and integration Hindustan Zinc is India’s largest and the world’s second-largest producer of Zinc-lead, with around 50 years of legacy. We are a subsidiary of Vedanta Limited which owns a 64.9% stake in the Company while the Government of India retains a 29.5% stake. The company has operations in lead-zinc mines, hydrometallurgical zinc smelters, lead smelters, pyro metallurgical lead-zinc smelters as well as sulphuric acid and captive power plants in northwest India. The total metal production capacity is 890,000 MT of zinc and 205,000 MT of lead. The company has been facing challenges that were coming from different directions – the speed and the scale of growth both are a challenge for us. The company wanted the entire value chain including our suppliers and customers integrated into our system. The systems we had were not capable of scale-up; the way we interacted with suppliers via SRM (Suppliers Relation Management) system was not user-friendly and collaborative. It was not able to run processes in a way that was scalable, there were also many issues regarding timely payment to the vendors, delays on part of vendors on account of no timely updates, and less transparency in terms of vendor quotations being conveyed and their successful conversion. These factors lead to a review with the key focus being the need for a new system that will support our ambition of collaboration and integration with our suppliers bringing more transparency on both the suppliers and our end. Ariba provided us with the hope and opportunity in terms of working with our suppliers on a B2B model which will drive the collaboration and which will also ensure transparency which will help in cost savings because the speed of decision-making will be improved significantly. Also from a strategic point of view, this is a step in the right direction because the world is moving towards cloud computing and Ariba is the perfect amalgamation of procurement with futuristic cloud-based supply chain operations. Ariba was rolled out in 2017 and after one and a half years it was successfully implemented from end to end, accruing more than 150 million of savings. We are looking forward to the supplier on boarding which is very smooth and fast.
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What is Ariba Network? Why should a company be part of it? The Ariba Network is a dynamic digital marketplace where buyers and suppliers collaborate in sourcing and supply chain transactions.
Why do you need to include your company?
Principle of network effect: The more connections a network has, the more valuable it provides. Ariba Network is the world's largest B2B network, connecting millions of companies around the world. Scope of Operation: It is constantly growing, with additional buyers and suppliers buying and selling trillions of dollars of goods and services in bulk each year. That is, millions of dollars are traded every hour every day. Valuable Data and Intelligence: All of this transaction data is enhanced by the Ariba Network with other data such as supply risk factors, injecting information into each transaction to inform and streamline B2B commerce. Knowledge and Information Sharing: Ariba provides the right platform for sharing information with your trading partners while fostering lasting relationships. With a large number of members, it offers more opportunities than any other network to help connect your business with new partners and ideas and survive difficult times. Innovation and Inspiration: Innovation is on track to drive faster recovery and resilience and keep the supply chain intact. With the right connections, you can transform everything from product development and manufacturing to global expansion.
Procurement is at the heart of all business. Ariba goes one step further by integrating all procurement capabilities into a single tool, including finance and suppliers.
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Challenges faced in the implementation of Ariba network at HZL The implementation of a new procurement process came as a challenging prospect for the upper management and essentially at the managerial level. This was mainly due to the year-old practice of using SRM for implementation of procurement on SAP at HZL, vendor on boarding, training staff in integration with existing SAP modules, and training vendors on post procurement on their side. The major challenge was vendor on boarding since SRM was more of a physical process having documents to be uploaded by our HZL SRM team regarding the whole procurement process. In contrast, Ariba made sure the vendors apply for quotations, get the purchase orders and upload the invoice on the portal making it a bit difficult for suppliers and vendors who were not that tech-savvy and new to the entire Ariba network. The next challenge was regarding the business process integration i.e. implementing the Ariba network and synergizing it with various SAP modules and practices implemented at Hindustan Zinc Limited. We successfully pulled it off by conducting a series of training sessions for all the vendors and suppliers on how to receive purchase-order and upload the invoice after the sales for payment. Also, how to apply for quotations and vendor on boarding on the Ariba network. Training on how to work on the new cloud-based procurement system was also given to the internal staff for the smooth sailing of Ariba integration with SAP at HZL. SAP ARIBA – The other face of the coin Although Ariba provides the perfect platform for vendors across the globe, this comes at the cost of loss in customizability. SRM had an attribute which was customizability when it came to our company, but Ariba on the other hand is a global network we can’t customise some aspects to our requirement since its scale of operation is large and may affect vendors and companies across the globe. However the scalability, transparency, and ease of operations it provides outweigh its shortcomings and it provides much more value to the firm and our procurement process at HZL. Hindustan Zinc Limited – A need for scalability and integration Hindustan Zinc is India’s largest and the world’s second-largest producer of Zinc-lead, with around 50 years of legacy. We are a subsidiary of Vedanta Limited which owns a 64.9% stake in the Company while the Government of India retains a 29.5% stake. The company has operations in lead-zinc mines, hydrometallurgical zinc smelters, lead smelters, pyro metallurgical lead-zinc smelters as well as sulphuric acid and captive power plants in northwest India. The total metal production capacity is 890,000 MT of zinc and 205,000 MT of lead. The systems we had were not capable of scale-up; the way we interacted with suppliers via SRM (Suppliers Relation Management) system was not user-friendly and collaborative. It was not able to run processes in a way that was scalable, there were also many issues regarding timely payment to the
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vendors, delays on part of vendors on account of no timely updates, and less transparency in terms of vendor quotations being conveyed and their successful conversion. These factors lead to a review with the key focus being the need for a new system that will support our ambition of collaboration and integration with our suppliers bringing more transparency on both the suppliers and our end. Ariba provided us with the hope and opportunity in terms of working with our suppliers on a B2B model which will drive the collaboration and which will also ensure transparency which will help in cost savings because the speed of decision-making will be improved significantly. Also from a strategic point of view, this is a step in the right direction because the world is moving towards cloud computing and Ariba is the perfect amalgamation of procurement with futuristic cloud-based supply chain operations. Ariba was rolled out in 2017 and after one and a half years it was successfully implemented from end to end, accruing more than 150 million of savings. We are looking forward to the supplier onboarding which is very smooth and fast. What is the Ariba Network? Why should a company be part of it? The Ariba Network is a dynamic digital marketplace where buyers and suppliers collaborate in sourcing and supply chain transactions. SAP Ariba integrates planning aspects, pre-procurement aspects, and post-procurement order status from buyers and sellers through the cloud to final payments under one roof. It takes the world of procurement to a whole new level. Increases transparency and simplifies the process. About Author: Miss Swati Vijayvergiya is currently working as Finance Manager at Hindustan Zinc Limited (Vedanta). She has Completed PGDBA from Symbiosis in 2011 and M.Com from DAVV University in 2007.
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EMERGING MANAGERS
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Mr. Shubham Tyagi MBA, 2021-2023, IMS Unison University, Dehradun
Operation Management for Business Excellence
Any business enterprise must have an effective operations management system in place. It is essential to a company's achievement. An enterprise's production of goods or services falls under the purview of the operation function. The area of operations is important and difficult for all kinds of businesses, from manufacturers to sellers of goods and services. Operations management is a process that involves effectively controlling the methods and resources used to produce goods and services for sale by a business. This style of management is concerned with how the business uses its resources (such as personnel, raw materials, and information systems) to produce its products (the product or service that the company sells). The management of the resources, technologies, people, and products that keep a business running may also fall under the purview of operations. An operations manager is in charge of the business decisions and procedures that enable a company to utilize its resources in the fastest and least expensive way possible. To make sure that an organization's operations contribute to its bottom line and provide customer satisfaction, effective operations managers will use a variety of management tools (as well as their innate problem-solving abilities). Importance of Operations Management:
Workplace uniformity: Operations cover all tasks necessary to produce and provide goods and services. The tasks span from distribution to procurement. A company needs to perform three essential tasks: finance, operations, and marketing. As it relates to the creation of a good or service, proper operations management is essential. In a typical manufacturing setup, operation activities for developing a product or service might include managing purchases, inventory control, quality assurance, storage facility management, and logistics. Customer service, data storage, IT support, and security are all activities that take place in a service delivery environment. A business that provides inexpensive package delivery is an illustration of a standardized service.
Coordinating and Planning: The management of the business' operations complements the suggestions made by the sections on finance and marketing. Research and development create products that are tailored to the needs of the market. Cost projections
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and considerations are made by the finance department. The hiring of qualified individuals is handled by human resources. Research, finance, and human resource functions are combined by the operations department. Therefore, operation management is the process of producing a good or service under detailed specifications, within the allocated budget, and by utilizing the best labour, machinery, and skills. Operations, therefore, determine a company's ability to compete by giving it a chance to increase productivity, which leads to profitability.
Continuous Development: Because it controls a larger proportion of the company's assets, operation management is an expensive function, but the results are excellent. The creation of operations management, which aids in the standardization of work processes, is crucial for the ongoing development of a business. If a system is poorly planned, it cannot be useful. No matter their size, businesses need to be effective and efficient in their product and service delivery. Through collaboration with other managers, operation specialists develop a long-term planning strategy that supports the company's objectives. Managers of operations guide achieving particular goals. When the company's goals are not being achieved in a way that is consistent with the policies, they take action and make changes
How operations managers can boost your company's profitability:
They enhance the organizational design in one way: An operations manager incorporates the CEO's vision. Understanding a company's direction, the people needed to get there, and the responsibilities of each position on the team are all part of organizational design. The more streamlined the company is, the more business functions like project management, IT management, and sales processes are designed and documented.
Possessing project management expertise: Being an effective operations manager requires strong organizational abilities because all projects must be completed on time and within budget. Having an experienced operations manager on your team will aid in a project's timely completion because numerous steps must be taken and numerous moving parts to coordinate.
Keeping track of important performance indicators: Operations managers must track important KPIs to monitor productivity, sales cycle metrics, efficiency, and other factors. It will help your business grow and advance if you are aware of the key performance indicators that are crucial to monitor and have a plan in place to keep them operating at maximum efficiency.
Possessing sound financial judgment: An operations manager needs to be familiar with the financial side of managing a company. This involves keeping an eye on a company's financial information, including budgets. A company's projects must be profitable, and managing that profitability is crucial.
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The bottom line is that a capable operations manager and director of operations who effectively and efficiently manages back-office activity is a valuable asset to the company. By tightening up processes and procedures and effectively managing workflows, they reduce waste. A vital team player who will boost your company's profitability and facilitate smooth operations. Operations management affects a company's overall productivity and profitability. It accelerates the development of both individuals and businesses by measuring the effectiveness of managers and other employees. Operations management is the heart of the business, where wise choices and strategies are made. Failures in product design and delivery can result from improper operations management. A well-designed operations plan is the cornerstone of any business and increases the likelihood that orders will be filled and shipped on time, delighting customers and ensuring the company's success.
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Ms. Amruta Chavan MBA, 2021-2023, IBS Hyderabad
Importance of ERP Software for FMCG Sector Fast-moving consumer goods (FMCG) is one of the industries where it is possible to scale up quickly. Most of these businesses, though, would struggle to exist without innovation and the necessary tools. To retain power and compete with expanding competition, an Enterprise Resource Planning (ERP) Software to manage an organisation's numerous businesses is required to achieve this growth. Why is an ERP system mandatory in FMCG? The reason for this is that profit margins in FMCG companies can be quite low, thus businesses in this sector cannot afford to miss out on any sales chances. This necessitates the use of ERP software, which serves as a foundational platform and improves the organization's chances of success by providing real-time data tracking for all of the company's business partners. 1. Automated Business Processes: Automating the business processes is integral in today’s world. Automation simplifies processes like procurement, finance, sales, delivery, and more which allows businesses to eliminate various gaps in the business process.
Top automation benefits are: Workers on the ground who have little technical understanding are prone to making mistakes. For example, an untrained technician may replace a specific inventory, resulting in system disparities. This will have a direct influence on inventory management and will result in delays. Human errors can be greatly minimised by using ERP. For business to move forward, open and honest communication is essential. Businesses can keep all of their data in a centralised area and make it easily accessible to functional departments through automation. 2. Customization: This is regarded as a key aspect of any excellent ERP system. Oracle NetSuite provides highly customizable modules that are tailored to your company's needs. The software can handle FIFO (First in First Out) and LIFO (Last In First Out) operations, as well as logistical needs and promotions.
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3. Real-time Data: Businesses will benefit from real-time data provided by cloud-based ERP software. This is critical since organisations are increasingly relying on real-time data to track their operations and make data-driven choices. Consider a scenario in which your competition is able to provide customers with real-time order status but you are battling a legacy system that is unable to do so. As a result, having real-time data on business operations is critical for an agile company. 4. Intelligent Dashboards: Dashboards can be customised to fit a company's operations. By looking at the KPIs, C-level executives and other senior management professionals can have a thorough picture of the complete company process. Dashboards can be adjusted according to roles, ensuring that information is only available to those that require it for their jobs. So what are the Advantages of a good ERP System?
Advanced Inventory Management: Maintaining stock levels is a critical function. Organisations will gain better control over inventory management and maintain inventory availability by installing an ERP system. This can be accomplished by establishing notifications in the inventory system whenever the stock level falls below a specified threshold. Prompt Delivery: Customer happiness is the main goal of organisations in the FMCG industry. ERP systems can aid in the removal of operational bottlenecks and the improved delivery of products to customers. This is accomplished by simplifying all of the processes involved, resulting in precise production. This guarantees on-time delivery and a complete picture of the entire procedure. Improved Customer Experience: The saying “Customer is King” is of utmost importance in the FMCG market space. Personalized marketing tactics are becoming increasingly popular in practically every business, and this is especially true in FMCG. By evaluating client buying habits, ERPs are capable of keeping all critical data and turning it into actionable data. As a result, the customer experience will vastly improve, resulting in a beneficial influence on the company's ROI. Industry Workflow: In the FMCG sector, having a centralised platform to store and analyse data is essential. There are several levels and divisions, implying that there is a significant amount of data from various processes and departments. Oracle NetSuite, for example, can serve as a single source of information and improve accessibility throughout the organisation. This will result in increased ground control and planning capabilities inside the business process.
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Oracle NetSuite ERP for FMCG businesses Oracle NetSuite is a cloud ERP solution that provides real-time visibility into all aspects of the FMCG industry, including manufacturing, distribution, and customer support. It's also possible to keep track of other operations with NetSuite, such as financial reporting, warehouse management, and other in-store services. Oracle ERP has a number of advantages, including:
Cross-Channel Functionality in NetSuite: The customer experience can be improved with NetSuite's cross-channel workflows. Customers can buy a product online and pick it up in the store, or buy a product online and return it to the store from anywhere using this functionality. NetSuite makes it simple to connect all of your channels and fix any gaps in the customer experience. Personalize Customer Service: To improve the whole purchasing experience, NetSuite delivers an in-depth understanding of each customer. The system displays each customer's purchase history and previous records, allowing discounts and other promotions to be tailored to them depending on their demographics. World-class eCommerce Experience: NetSuite's easy-to-use capabilities allow to create a dynamic website from the ground up. It allows a single platform to integrate Ecommerce store with existing business system. This allows Ecommerce stores to display real-time inventory data. Marketing Campaigns: With NetSuite's powerful marketing tools, finding potential consumers has never been easier. Improve customer retention with tailored email messages, and keep track of all marketing efforts in one place. Also, ROI can be measured in real-time to analyse revenue streams and assess the performance of the business. NetSuite makes it simple to apply promotions and discounts because it provides a variety of discounting options as well as customer-specific discounts. Drive ROI through Metrics: Businesses in the FMCG industry can use metrics to make real-time choices. For inventory, sales, and marketing ROI, NetSuite provides customisable dashboards and analytics. KPIs, trend graphs, and graphical reports are used to reveal metrics.
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Mr. Bhargav Jotva MBA, 2021-2023, IBS Hyderabad
International Production and Operations Management (IPOM) Production of goods and services in foreign places and markets is the focus of international production and operations management. It entails a management approach that must consider the needs of foreign customers and the local labor and capital markets for manufacturing. Nature of IPOM International production and operations management have the same fundamentals as domestic production and operations management. However, there are some factors that can make an organization struggle with global exposure. The very first difference is the need to uphold international quality standards as well as economics in the context of a worldwide business environment. The second factor is that the company becomes more competitive due to its global experience since it is more aware of its surroundings. Because IPOM is dynamic, organizations must develop strategic goals that address the following areas:
meeting the highest requirements of quality Demand and production planning forecasts Profitability The minimum cost of production the adoption of current technology
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International operation management process
Domestic POM and IPOM An organization must clearly define the obstacles it will likely encounter in a global setting. The following categories apply to such difficulties: Culture: Domestic POM has to deal with a homogenous culture whereas IPOM needs to deal with multi-cultural multi-ethnicity scenarios. Business Environment: Domestic POM must take into account regional and national economic and social variables, whereas IPOM must deal with global economic and social factors. Quality Standards: Domestic POM must address a single local market, therefore there is little variety in standards of quality, whereas IPOM must take into account several foreign markets with various requirements for standards of quality. Pricing: Due to competitors operating in the same market, pricing for domestic POM may not be a problem. The customer's purchasing power must be taken into account by IPOM, which can differ from industrialized to poor countries.
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Technology: Technology innovation and use are significantly more competitively comparable in a residential setting. Investment in technology is crucial for IPOM because of the various quality and cost requirements. Economies of Scale: Domestic POM must deal with a small local market, which restricts the potential for economies of scale, while IPOM has access to a broader market, which increases the possibility of reaching greater economies of scale. Market Segmentation: Local markets are the focus of domestic POM, but a developed and diverse market exists for IPOM. Usage of resources: While IPOM has the advantage of transferring resources from high cost markets to low cost markets, domestic POM must contend with the inflexibility of moving resources inside a single region.
IPOM Strategies Organization needs to consider the following point while developing IPOM strategies: Production/Factory Location: The accessibility of the facility to the market and the cost of production (labor) in that region are key factors in deciding where to locate the manufacturing facility. Factory design, layout, and quality standards: Organizations must unify layout and design across all of their production sites to reduce production planning time and allow for flexible labor and technical knowledge sharing. External vendor and procurement: The organization must choose the vendors who will supply the raw materials and other crucial components needed to finish the finished product. Additionally, the schedule for buying must be determined to avoid harming production. Production management: The location of foreign facilities, international logistics, and international supply chain management are the three concerns that are connected to this process. Supply Chain Management and Vertical Integration: Supply chain management is a collection of procedures and actions that a company use to obtain the numerous resources required to produce its goods and services. Due to its effects on product cost, product quality, and internal capital demands, supply chain management is frequently viewed as a strategic issue. The degree to which a company either provides its own resources or acquires them from other sources is referred to as vertical integration. A multinational organization must choose the best method for structuring its foreign commercial activities in order to enter a foreign market. Different entry strategies are used by companies to enter overseas markets, from franchising and licensing to foreign direct investments (joint ventures, acquisitions, mergers, and wholly owned new ventures). "An institutional arrangement that enables the entry of a company's products, technology, people skills, management, or other
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resources into a foreign country" is how the term "foreign market entry mechanism" is defined. This decision is covered by a number of theoretical streams, including economic factors analysis, transaction cost analysis, the OLI model, and behavioural theory. To sum up, international firms' transformation-related activities are largely what international operations management focuses on.
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Ms. Monalisa Mukherjee MBA, 2021-2023, IBS Hyderabad
SCOR Model
SCOR stands for “supply chain operations reference.” The Supply Chain Council – an independent organization –defines it as a reference model for assessing, analysing, and improving particular value chain processes. In order to maintain the flow of goods from the manufacturer to the customer and to make structural improvements, a supply chain requires ongoing review, adjustment, and improvement. For this reason, the SCOR model was created. Supply chain management decisions are addressed, improved, and communicated with suppliers and customers of a company using the supply chain operations reference model (SCOR), a management tool. The SCOR model classifies and divides the supply chain into ideal business processes and process categories. All information, financial, and product flows within the value chain can be analysed across companies because of this standardised structure. Companies can make long, medium-, and short-term plans, improve the effectiveness and efficiency of their supply chain management, and compare and coordinate the processes between suppliers, manufacturers, and customers based on data analysis. The model outlines the business process necessary to meet customers’ demands. Additionally, it offers a framework for how to enhance those processes and aids in explaining the entire supply chain's processes. The SCOR model was developed by the supply chain council with the help of 70 of the world’s leading manufacturing companies. It is the “most promising model for supply chain strategic decision making" The framework of the model incorporates business concepts such as process re-engineering, benchmarking, and measurement. This following framework focuses on five areas of the supply chain: plan, source, make, deliver, and return. Along the supply chain, these areas keep coming up. This process, according to the supply chain council, extends from "the supplier's supplier to the customer's customer."
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SCOR model: layers of business processes The reference model has three levels that are arranged hierarchically. The supply chain operations reference model can be used in a variety of sectors and industries because of the hierarchical structure of the processes. The model's top level (level 1), which consists of five core processes, is regarded as a strategic level. The fundamental operations of the organization are carried out here. Plan: Planning and managing demand and supply are a part of the first step. Resources and requirements must be balanced, and communication must be established throughout the entire chain, among other things. Establishing business rules to increase and gauge supply chain effectiveness is also part of the plan. These business rules inventory, transportation, assets, and regulatory compliance, among others. The strategy also synchronizes the company’s financial strategy with its supply chain strategy. Source: The acquisition of infrastructure and materials is covered in this step. It covers inventory management, supplier agreements, supplier performance, and supplier network management. It covers when to receive, verify, and transfer product as well as how to handle supplier payments. Make: The focus of this step is manufacturing and production. The make step entails production tasks, packaging, product staging, and release. Managing the production network, facilities, tools, and transportation are also included. Delivery: Order management, warehousing, and transportation are all included in delivery. Additionally, it entails taking customer orders and billing them after receiving the ordered goods. Managing finished inventories, assets, transportation, product life cycles, and importing and exporting requirements are all part of this step. Return: Businesses need to be equipped to deal with the return of containers, packaging, or flawed goods. The management of business policies, return inventory, assets, transportation, and regulatory requirements are all part of the return. Support (ENABLE): Processes in supply chain management, such as business rules, databases, risk management, legal requirements, contractual and business regulations.
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SCOR model: configuration layer The model is divided into three different process types at the tactical level two (level 2). This streamlined framework aims to improve supply chain performance regardless of the organisation and sector to which it belongs. Standardized hierarchies make it possible to create a catalogue of best practises independent of company specialisation and to apply performance metrics to businesses of various sizes. SCOR model: design level The design level is the third operational level (level 3). Here, the input-output-based subprocesses are used to further break down the configuration level processes into smaller, more manageable units. A performance measurement system measures a company's financial success by analysing and evaluating the process components (such as costs, business planning, and capacity checks). The SCOR model's first step toward improving efficiency and supply chain optimization occurs at the design level with the actual definition of process components. Boosting efficiency with the SCOR model The following elements of a value chain can be optimised by implementing a supply chain operations reference model and a KPI system: Through pre-designed business processes, logistical processes are structured and organised. Application of the KPI System to Align Coupled Processes and Performance at Different Process Levels IT solutions and software tools for process configuration and cross-company communication identification, implementation, and standardisation SCOR model example: benefits in e-commerce: Through standardised internet protocols like HTML, HTTPS, and TCP/IP, the digital boom of the 1990s connected domestic and foreign industries and speed up communication and cooperation along the supply chain. Supply chain management was completely redesigned as a result of the digitalization of business processes and e-commerce. Business is no longer conducted only through physical form. Digital supply chains and online retail platforms are decentralized across the world and no longer rely on real presence or one to one communication. In e-commerce, it’s possible to never meet the actual suppliers, customers, and contract partners in person, as long as supply chain management is well-organized and the SCOR model terminates weaknesses and closes gaps in the supply chain. Since a large part of the processes are carried out via digital channels each and everything is already welldocumented, data can be easily analysed in e-commerce – and processes can be better optimized.
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Mr. Nishant Mehlawat MBA, 2021-2023, IBS Hyderabad Start-ups operation management struggles during covid-19 Covid has had a significant impact on company operations, and companies have been taking steps to adapt challenges presented by the pandemic. To stay up with the Covid-19-induced challenges of governmental revisions and shifting operational dynamics, startups are innovating at an unprecedented rate. The emphasis has shifted away from incarceration or stringent action toward monetary penalties and compounding possibilities. While enhancing compliance mechanisms is a priority, deterrent penalties and an increase in the cost of non-compliance are also priorities. Another significant shift has occurred in the field of human resources. Work from Home is evolving as the next model of work prominently favoured by employers due to compulsions caused by the pandemic, while the conflict between Work from Office and Work from Home remains at the epicentre. Work from Home is transforming the work culture in the same way that the last recession in 2008-2009 did, when the focus turned to hiring more contract workers rather than keeping permanent staff. Because of the uncertainty surrounding the pandemic, businesses have been pushed to rethink their work cultures and incorporate greater flexibility, empathy, intelligence, transparency, and honesty in order to meet the Work from Home standards. The systems also encourage policies to alter and adapt to the new requirements related to leave management by prescribing a new method of mapping productivity that is appropriate for the Work from Home method and introducing notions such as furlough. Health and safety practises and policies were brought to the forefront, and the requirements set forth by the relevant Ministry of Labour and Employment aided enterprises in providing the required tools and mechanisms to assure employee health and safety while on the job. Companies have moved some focus on contract management as a result of the actual experiences of the last several months, where they either struggled to enforce terms or faced consequences for not having firm contracts. They've also begun to search for ways to reduce reliance on physical presence while still developing an environment with more distant control and consistency. In terms of managing compliance and regulatory steps, digitalization has made things easier by providing online registrations, filings, returns, and certifications, among other things, and this 27| K A I Z E N ’ S O P E R A T I O N S & R E S E A R C H E N T I T Y
trend will continue. The reduction in the number and degree of compliances, combined with digitization, will not only allow for easier access via electronic means, but will also lower compliance costs while boosting transparency. Even regulators took steps to reduce the pandemic's influence on businesses' day-to-day operations. These initiatives have mostly focused on compliance, and they have only served as a stopgap measure. The only key components of the reforms that would have far-reaching repercussions in reshaping the ways corporate operations are structured have been the emphasis on digitization, the reduction in the quantity and degree of compliances, and the consequences for failing to satisfy the compliances. The Securities and Exchange Board of India (SEBI) also granted several exemptions from the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, including the ability to use digital signature certifications for authentication/certification of filings/submissions and the relaxation of timelines.
Actionable measures for start-ups:
Make use of the resources at hand to come up with fresh solutions to old challenges (e.g., creatively combine existing technology and human capital) Turn on network resources (e.g., flexible payment options, joint sales initiatives, flexible staff rotation) Internally, restructure with the goal of focusing resources only on the most recently feasible and value-generating operations. Other activities should be downsized (retain the possibility to upsize again at a later point) Find ways to provide value to the crisis's aftermath by identifying chances for value creation (e.g., developing hygiene or digital work solutions) Engage in broader opportunities that may exist in the aftermath of the crisis (e.g., shifting attitudes and behaviour after the crisis - boost in digitization) in a proactive manner. Using entrepreneurial networks, gather information and best practises (e.g., learn about the application and implementation of support services from similar startups) Support (trade) associations' lobbying efforts to be included in policy decisions and programs.
Road Ahead There is an urge to incorporate more safety, flexibility, and productivity into operations, as well as to use systems thinking in organisational decisions. Finally, businesses would need to increase their investments in digital platforms and cybersecurity. Companies are already employing a variety of cybersecurity and data security measures to provide business partners the confidence they need and to protect data in any area of operation. They're using digital technologies like cloud storage, virtual reality, and artificial intelligence to make complicated activities easier and more cost-effective. 28| K A I Z E N ’ S O P E R A T I O N S & R E S E A R C H E N T I T Y
While the pandemic is far from over, entrepreneurs have learned to cope and devise tactics to make the most of the situation. Some have utilised this opportunity to do some housecleaning, while others have rebuilt their businesses to focus on their core competencies; some have focused on R&D, while others have investigated new elements of their businesses and worked on expansion plans. However, business operations have altered dramatically since the beginning of the year and are no longer what they were. Hopefully, next few months will bring more business experimentation and innovation, as well as improved results.
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Mr. Raghu Bhargav Velimicharla MBA, 2021-2023, IBS Hyderabad
Inventory management and optimisation
Inventory Management Inventory refers to products or supplies that a company intends to resell to customers for a profit. Inventory management relies heavily on tracking goods from manufacturers to warehouses and from these locations to points of sale. Inventory management's goal is to have the appropriate goods available at the appropriate time and location. This necessitates inventory visibility, which necessitates knowledge of the best times, amounts, and locations to store product. Inventory management, as part of your supply chain, entails coordinating and supervising purchases from both suppliers and consumers, maintaining stock storage, managing the quantity of product available for sale, and order fulfilment. The precise definition of inventory management for your business will obviously vary depending on the products you sell and the distribution channels you employ. However, if those fundamental elements are present, you will have a solid foundation from which to grow. Small-to-medium businesses (SMBs) frequently use Excel, Google Sheets, or other manual methods to manage inventory databases and make purchasing decisions. Inventory could be the most valuable asset in a business. Inventory management brings all of the supply chain elements together. Customers may become dissatisfied if goods are unavailable when and where they are required. Having a large inventory, on the other hand, comes with a number of risks, including the cost of storing and insuring it, as well as the risk of spoilage, theft, and damage. Businesses with complex supply and manufacturing networks must strike a delicate balance between holding too much and too little inventory. Future of Inventory Management The way organisations handle inventory is evolving as a result of globalisation, technology, and empowered consumers. Technology will be used by supply chain managers to collect valuable data on how to boost performance. They will be able to identify areas where automation may have a big impact and anticipate abnormalities in logistics costs and performance before they happen.
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Technologies used in future for Inventory Management
Intelligent order management Blockchain Management Quantum Computing Internet of Things Artificial Intelligence
Inventory Management Techniques Inventory management uses a range of strategies to meet customer demand and operate a profitable firm. The procedure becomes extremely challenging when a business has to maintain thousands of stock-keeping units (SKUs) dispersed across numerous warehouses. The following are the techniques:
Economic order quantity (EOQ) method Minimum order quantity (MOQ) method First in, first out (FIFO) method Last in, first out (LIFO) method Just-in-time (JIT) methodology ABC analysis method Safety stock method
Inventory Optimization Inventory optimization is a set of best practises for companies trying to reduce expenses while maintaining the sellability of their inventory. The unpredictable nature of supply and demand is taken into consideration by this crucial element of inventory management. It is a technique for juggling financial restrictions with organisational objectives and fulfilment standards across various inventory stock-keeping divisions. To make sure your customers are happy at all times, figure out how much of each SKU you need to order and when. You may optimise your inventory by doing this. When maximising inventory, seasonality, marketing goals, and lead times and schedules of suppliers are all taken into consideration. By making sure that the proper products are always in the right warehouse, you can prevent overspending on inventory. The Key Concepts of Inventory Optimization are:
Forecasting demand Inventory policies standardizing Keeping track of the product life cycles Monitoring the lead times, delivery patterns and Timetables of suppliers Monitoring shifts in consumer behaviour
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Utilizing the appropriate technologies to optimise inventories in general will benefit your business. Inventory optimization is possible when cutting-edge new technologies such as machine learning, data analytics, artificial intelligence, and cloud computing are used. By utilising tried-and-true inventory management techniques, the supply chain design and planning process aids in inventory optimization. Advantages of inventory optimization Even while inventory optimization is extremely beneficial in the best of circumstances, unanticipated economic ups and downs highlight the need of inventory optimization investments for businesses. The release of stopped cash flow is the main benefit of inventory optimization. Inventory optimization significantly lowers ownership, storage, and management costs for an organization's inventory, especially when it comes to warehouse and overhead expenditures. Shipping prices are increasing along with the price of gasoline. Rent and taxes have the potential to wipe out a sizable amount of corporate revenue. Inventory optimization aids in determining the "just right" level of inventory. Costs decrease, and the store has more control over what new goods to buy and when while predicted demand is reliably met. By anticipating and scheduling inventory purchases beforehand, a large buffer is created against the difficulties of sourcing and shipping. A high-performing inventory with the greatest potential for high financial turnover is produced via inventory optimization, producing a consistent flow of cash for enterprises. Any retail business's ultimate goal is to have a loyal client base that keeps increasing because these are the people that keep the business alive. The ability to streamline other business operations and direct them toward on-time order fulfilment, which in turn increases customer satisfaction, is feasible with an optimised inventory management system. Long-standing supply chains being broken during erratic times might cause core brands to collapse. In unpredictably economic environments, inventory optimization provides a safety net. Until a more consistent demand is developed, industrial and technological infrastructure can operate more efficiently by optimising raw materials, supply, and technology. Forecasting techniques for manufacturing or distribution are being tested by the ambiguity of consumer demand. Keeping inventory low during erratic periods (by selling surplus material or delaying new purchases) is necessary for improved operational efficiency and financial gains when things start to look up.
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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.
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