EDITOR’S LETTER
“"With Evolution, Changes happen in every part of the world every day, every time."”
Welcome to the twenty-second edition of “LAKSHYA”, our monthly supplement designed for people who dare to think above the average and believe in connecting the dots. In an age where technology has taken over every sphere, information is abundant and data is omnipresent, we have planned to bring to you a collection of thoughtfully created and carefully crafted pieces of work by some bright aspiring minds of ICFAI Business School, Hyderabad on the current trends and receiving close review in the field of Operations Management and their relevance in different industries. From the ninth edition, we created a new segment, ‘The Corporate Angle’ where article will be featured from prominent business leaders which will enlighten minds of young managers and business enthusiasts. IBS Hyderabad and Club Kaizen express a sign of gratitude to all corporate leaders for taking out time and scripting their thoughts for our magazine. We have introduced 'Faculties Insight’ from the eighteenth edition, where the articles will be featured from experienced faculties from all over the world that will shed light on the minds of young managers and business enthusiasts. Club Kaizen is grateful to all faculties for taking time out and writing their thoughts for our publication. We look forward to providing you with some valuable insights and inculcate the passion for reading. We hope that you enjoy this issue and do let us know if there are any topics you’d look forward to be covered in upcoming editions. Please write to us and become a part of this discussion. Email ID: kaizenclub.ibs@gmail.com
LVS SAI CHARAN JOINT SECRETARY – KORE Kaizen – IBS Hyderabad Batch 2019-21
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CONTENTS
From the Mentor’s Desk
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Customer Relationship Management | The Key to Sustain Post 2020
04
One Step Formula for Becoming Successful
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Online Classes: A Teachers Perspective
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Descriptive Analytics and Visualization in Today’s Market
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Global Supply Chain Changes with Respect to Covid-19 Supply Chain Risk Management
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From the Mentor’s Desk
In the era of competition, it is imperative for students to be prepared for the ever-changing business environment. Knowledge creation plays an important role to learn to tackle the dynamic nature of business. I appreciate and congratulate the initiative of club KAIZEN for bridging the gap between corporate world and academia through LAKSHYA which is an excellent platform where industry practitioners, academicians and researchers can share their knowledge and experience, acting as a beacon guiding students to reach their goal. My best wishes to club KAIZEN in their endeavour of knowledge creation through LAKSHYA.
Nishit Kumar Srivastava Mentor, Club Kaizen
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The Corporate Angle Customer Relationship Management | The Key to Sustain Post 2020
Mr. Hrushikesh Kulkarni Insights Partner, LitmusWorld
“Customer centred management is the conduct of all marketing activities with a strong belief that the individual customer is the central unit of analysis and action.�
A decade old process to target customer segments (rather than individual customers), calls for a shift especially with the move towards digitalization and a far-reaching internet access. With availability of customer database and the cost of servicing customer going down drastically, an individualised offering of product/ services followed with the post-sales relationship building is imaginable now. This silver lining, has a few challenges as we will see that managing customers post the lockdown will be critical than ever before. Sharing some thoughts related to consumers, market and marketing domain: -
1. Increasing Individualization: The need to define a separate existence or space will encourage highly individualistic lifestyles and behaviours. Markets will feel the impact of such demographic movements in the form of consumer choices, such as outsourcing of some activities due to time constraints, more consumption on demand (24/7), and on the basis of symbolism and social group values. A segment of consumers may also seek out products and services that offer them social and emotional value. This will lead to increased consumer heterogeneity, calling for a further need to look at data driven decision making.
2. Rise of Health and Sustainability Consciousness: Customers are increasingly conscious today towards health and sustainability issues. The belief is stronger today that brands should care about profits, but also operate responsible and address social and environmental issues. However, simply communicating a sustainable goal will not be sufficient, the goal also has to fit to the brand, must be credible, and executed. Consumers furthermore look for fresh, healthy and less processed options while shopping. 4|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
Mobile technologies allow shoppers to scan barcodes, get all the information they need about the product including their sustainability and conduct a price comparison on the go. It will be a new form of transparency, and brands must get habituated to it.
3. Increasing Use of Social Media: Customers will increasingly engage in WOM (Word of Mouth) on different social media platforms with friends, acquaintance and strangers. Brands will realize this fundamental shift in consumer behaviour and will have to change their strategies, especially to take advantage of the new opportunities- learn by listening to consumers online, social media will offer ways to improve the timeliness of customer feedback. This will allow companies to execute new forms of communication strategies and advertising that will enhance the value of data sharing, by engaging with customers.
4. Increasing Use of Apps: Smartphones will be critical as the prime screen (ask yourself are you reading this article on your mobile or on that laptop?) with innovations, better UI/ UX, being connected on the go will all ensure that app usage increases even further in the coming years. Brands will have to ensure ways to build loyalty here, we all are evident to the fact that many apps opened up their “premium services” for free during this lockdown. Can the brands capitalise on this and make it an exclusive experience especially for their high CLV (Customer Lifetime Value) segments, later? Would some customers move up the ladder & subscribe for these premium services, then what should be the communication like?
5. Use of Real Time Data: Brands have focused on customers to stay connected anytime and to receive/ send data, instantaneously. We didn’t wait for the newspaper each morning during the lockdown; rather we simply checked different news pages online/ their apps, enabled with notifications (friends sharing pfd versions of news as well). This will lead to a paradigm shift, with advertisers bidding for space real time. This will assist brands with real time data for better decision making, target the right TG, re-direct web traffic and to justify ROI (Return on Investment).
6. Priority for Convenience and Self-Service Mindfulness: With constrains of being at home, but ordering essentials at finger tips, consumers will seek more and more convenience, which will have impact on all aspects of customer relationship. Convenience will eventually lead to the rise of self-service options. Whenever they can, customers want to take care of their own needs (without hassle). Online banking platforms will give consumers the means to buy more structured and customized products. Companies will have to empower consumers to perform minor services themselves by offering convenient selfservice options, but be always available when customer problems grow more complex and demanding in nature.
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7. Increased Demand for Experience and Authenticity: Amplified adoption of technological advances will make customers more demanding. They will strive for individuality and self-realization. Brands will need to create memorable events and experiences that engage the consumer. Relationship building over a time frame will be a key, rather than a one-time transaction. Offering experiences is one way for brands to position and differentiate themselves when the physical product and service will no longer be sufficient. Another trend will be consumers’ quest for authenticity. The improved information transparency in the digital age will provide consumers with a better understanding of marketers’ persuasion tactics. As a result of all these factors, consumers will become increasingly sceptical towards any form of brand communication. Thus, brands will need to be transparent, honest, and consistent in their communication as well as reflect the brand values. The article is an afterthought having read various articles on internet in public domain and CRM books.
Author Bio: Mr. Hrushikesh Kulkarni, He works as a consultant with the Insights team, LitmusWorld, with more than 15 years’ experience in Marketing domain. He is an author to various research articles & teaches Research Methodology, Market Research, Brand Strategic Management, Digital Marketing, and International Marketing as visiting faculty at leading MBA colleges. A MBA in Marketing & BSc Mathematics is an avid traveller & also writes a blog.
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The Corporate Angle One Step Formula for Becoming Successful
Mr. Lokesh Kumar Lakhotia Life Coach
If you are reading this article, it means you are willing to bring some positive change in your life. This willingness is going to help you a lot as after reading this article till the end you will get to know the most important secret of this universe about being SUCCESSFUL. Let me begin with asking a very simple question to you, why do you do anything in life? Be it buying a mobile phone or purchasing clothes. What is that one common purpose that each human carries with himself? Desire for HAPPINESS! Let’s prove this. Have you observed yourself in a shop when you buy pair of clothes for yourself? Do you simply enter inside the store and buy the first pair that you see first in the store? No way. You see several or at least few options and then take trail of the same. After taking the trail you choose a pair based on two feelings. First, these clothes are quite comfortable and hence I should buy them. Secondly, which is even more important, when I will be wearing these clothes people will tell me that I am looking very smart and immediately I will experience a current from top to the bottom of my body. And that’s HAPPINESS. Let us except the fact that none of us have a goal to have a great job or make money or have a great loving family. Our true GOAL is to be HAPPY. These are just means to achieve the same for a common man. The problem really begins when we fear that something might go wrong and we might fail to achieve HAPPINESS. Let me tell you, we are the real reason behind our non-achievement. Even if you agree or don’t, read this article till the end, you will get your answer. By the end you will also understand that a slight modification in our system can change everything in our life specially the probability of achieving happiness can be increased by 10X.
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In reality we are the ones who actually becomes the biggest hurdle in our success pathway. The good news is, it can be changed to our favour. To understand this, I would like to ask you a simple question. What do you focus most when doing anything? Yes, you guessed it right, results. So, we can say that for all of us in whatever we do, it is the result which is most crucial. For example, if you are a student, exam scores are important. If you have given an interview, the result is important i.e. if you will be selected or not. Likewise, in each and every sphere of our life we value results the most. Now my next question to you is, how do you get results? Think about it. Yes, your action gets you result. If you take action you get results and if you don’t then you don’t get results. So now tell me what is more important, result or action? Obviously, action is more important. Again, I have an interesting question for you, who can take action? Now this might require some brainstorming at your end. Yes, it’s potential of a person that allows him/ her to take action. Those with potential will take action and get results and those without potential will fail to take action and hence will not get results. Now it’s worth doing an analysis to check what is more important? Result, action or potential. Undoubtedly, potential is more important as without potential action and results are not possible. My last question to you is, how does someone get or generates potential? Is it available in super markets? No. It has to be developed within. How does someone develop potential within? Think about yourself when you learnt something new, for example riding bike or may be cooking food. When you started learning anything which was interesting or important for you, probably throughout the day and night knowingly or unknowingly you were thinking about that subject only. In your imaginations you identified different possibilities and their possible outcomes. This continuous churning in your mind is the process of building potential within yourself. Remember this doesn’t happen every time. There are few subjects where this happens and there are few where this does not happen. Do you know why in some cases we build potential and some cases we don’t? It’s because of our belief. If your belief is, “I can’t do it” then you will not be thinking about that matter at all and on the contrary if you have a belief, “I CAN” then by natural reasons you will keep thinking about the subject and you will develop potential within.
Let Me Share My Real-Life Example: I was in 5th standard and my P.T. teacher called me one day and informed that I have been selected for volleyball team of our school due to my fitness and height. In reality I was never interested to join in and due to the pressure from my teacher I had to join in and with great confidence I told my teacher I will not get selected in the final team after practice sessions are over. On the other hand, one close friend of mine who was short in height and bit bulky was eagerly willing to join this team and was not selected. He literally begged in front of the teacher to allow him and after consistent requests he was allowed with some conditions.
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Now you must understand the situation. One person, myself, with all resources but with a mindset of “I CAN’T” and on the other hand my friend with poor resources was with a mind-set of “I CAN”. Naturally, I never thought throughout the day about volleyball and my friends was doing so even in the dreams. During practice session I use to stand with crossed hands and telling myself I will hit the ball only if comes to me and I am not going to jump at all whereas my friend was even jumping in a situation where the ball was quite away from him. The final result was not surprising. My friend got selected and I was not. I was super happy and went to my teacher and told him, “Sir, I told you I can’t”. He nodded his head with a weird smile and told yes you are right, you can’t. Although that day I was super happy that I proved my teacher wrong but when I grew up and learnt about this subject, I realised my mistake. On that day in school, I was wrong not my teacher. It was my belief which made me not to get selected and vice versa for my friend to get in. In reality more than any resource, your mindset does matter. “I CAN” attitude have the power to bring in all the required resources for you to achieve your goal. I am sure by now you are already thinking about the situations you are not getting great results and you can evidently see that either your belief is not positive or it’s quite weak. The solution to this is also very simple; just with a smile turn this belief to the direction in which it can help you achieve HAPPINESS.
Authors Bio: Mr. Lokesh Kumar Lakhotia He has more than 12 years of experience in training & coaching domain. A management graduate by education and Master Practitioner of Neuro Linguistic Programming, he has worked with industry leaders like Bharti Axa and Bajaj Capital Group. His experience spreads from setting up training function to Life Coaching and Quality Education. He has worked closely with HR function in his capacity as a Life Coach with many organisations. He currently works as a Life Coach helping people managing their challenges related to their life by means of training programs & individual counselling. He also owns a portal which conducts world class psychometric tests for personality analysis and career guidance at www.lifecoachlokesh.com.
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Faculties Insight Online Classes: A Teachers Perspective
Dr. Vidya Krishnamoorthy Assistant Professor, Stella Maris College (Autonomous), Chennai
The National School of Drama is taking 30% of its classes online. Most universities even after reopening are going to teach at least 50 % of their syllabus by online mode. Kendriya Vidyalaya are talking to experts on online training. With such news doing the rounds and the constant thought of seeing my stressed students at least through an online platform paved way to my doing an online class despite my initial apprehensions. The first online class went off successfully and it brought with it the joy of seeing the students after a gap of one month. It was probably an eye-opener because after class the satisfaction level was pretty high though the nodding heads, wrinkled forehead, furiously scribbling fingers were missing. These classes helped in training students in multiple ways and could combine writing, reading, interactions, assignments which could be done at their own pace. A logical sequence of following the course module would help them understand the course and also have a bird's eye view of what the course has to offer. The varied strength of each student could be explored and the unique methods of delivering the course would keep the student interest high. With the availability of online platform, the student can delve into and probe the subject matter of their interest leading to robust analytical reasoning and writing and maybe development of a research attitude. Even though the personal touch and the face to face interaction that a classroom has were missing, it was startling that it did not alter the learning process. The doubts that got clarified during the session and the test performance validated this speculation. As the generation of today are comfortable with handling technology, it was also apparent that the students could very comfortably get accustomed to the new learning method. They were able to develop their own personalities, were probably more spontaneous and could come out with unique solutions
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and answers. It was comforting to see them relaxed and bring in their own styles of arguments, conversations and communication of ideas without trepidation. Yet such classes require a high measure of discipline, motivation and dedication from both the teacher and the student. An extra supplement of time and energy would pay rich dividends in the form of extensive learning and research. The success of the online classes depends on such commitment and singlemindedness in all those involved. This will work towards the rectification of the deficiencies and imperfections of this system of learning. There is lack of accreditation and there have been reports of malpractice in the exams conduced online the world over. The quality of teaching may also be low as the teacher would be stressed about the lack of technological knowledge. The concentration may be on the means of teaching rather than the teaching itself. The teacher needs to be trained well before taking up such assignments. There is greater need for self-direction for both the teacher and student and learning must be the focus. This method also lacks the social interaction which is an important aspect of classroom teaching. Both teacher-student and student-student interaction is amiss. Such little or no face to face interaction brings in lot of psychological stress. Especially during the times of such pandemic, the mindset of the student should be addressed and it is the responsibility of the teacher to relieve their stress with respect to academics. Both the teacher and the student have to put in extra effort to cultivate an environment to take care of the lack of connection and reciprocal action in online classes. There is also a need to equip all the students and teachers with the necessary gadgets and learning for the success of online teaching. The digital gap needs to be bridged in order to provide equal learning opportunities. The absence of digital infrastructure is another big problem that we have to fight. Only 11 % of households own gadgets that facilitate online learning. This system goes against the right to education and so lot of ground work needs to be done. Overall, this is an opportunity to use technology to facilitate the learning process and empower as many individuals as possible with knowledge. The advantages of lifelong learning, flexibility in schedules and more importantly a chance to meet the student need make this system attractive. The limitations are many but as discussed, we will need to work towards minimizing them. As for me, I shall always miss the nodding of the satisfied heads as I leave my class with hands filled with chalk dust.
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Descriptive Analytics and Visualization in Today’s Market Aman Goel ICFAI Business School, Hyderabad (MBA 2019-21)
In today’s rapid growing technologically advanced world, we always come across the story of how data is changing the face of any industry, from predicting crop harvest for a small farmer in India to helping Apple Inc. in USA boost its revenue. Over the past few years, development of technology such as machine learning, Artificial Intelligence and Internet of things (IOT) have been set up on the basis of data availability to turn the raw data into insights and eventually into actions. However, as we talk about the rapid and ever-growing data, it is not only growing in size, but also quality and richness. In the current scenario, the physical world is connected to the digital world through use of digitalisation which is able to generate diverse data as well. Data can however can be only useful when it speaks for itself and generate some insights helpful in decision making. To achieve this, data alone is not sufficient. It needs to be supported by the following: 1. Data itself – Clean, content rich, obtained from real world activities. 2. Analytics – Methods and techniques required to extract insights from the data. 3. IT – Technology capability to store and process the data computation. 4. People – Human resource capable of applying the different analytic techniques and translate data into business implications and actions. We observe 2 trends in the field of analytics organizations today work in. Companies like Google provide free access to their analytics libraries, but secure on their data tightly itself as the bet of today’s market is: all value is in the data. As per experts of the matter, the one having the most diverse and insightful data will be the one surviving in the end.
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Having data in terabytes might be good to have for any organization. But just throwing in the data to fill up the spaces is not a very good idea, unless it is properly stacked and stored in systematic manner, a technique commonly known as layering. This not only helps to generate insights in a better and meaningful way, but also helps to retrieve data in a faster way. Descriptive Analysis would play an important role in this part as it focuses on gathering and summarizing the relevant data into easily readable, understandable and interpretable manner. This type of analysis is used across range of industries. It serves as a base to processes such as business intelligence and machine learning which further create a foundation for further analysis and understanding of the environment and human actions. Descriptive Analysis is usually the easier way to seek answers to questions such as: 1. What happened? 2. Why it happened? 3. What were the reasons that it happened? After answering the above questions in quantitative aspects, the resultant information can be further used for visualizations such as pie charts, line graphs, bar charts, scatter plots etc. Is it need of the hour to use Descriptive Analysis and Visualization in today’s dynamic market? Even without knowing it, most businesses and organizations use both the tools in most of their operations on a daily basis. Ranging from store manager to keep a track of the inventory to Clevel executives taking important strategic decisions for the growth and profit of an organization, everyone needs to analyse and visualize data. As a common saying goes, data is to business what blood is to human body. As this blood (data) circulates through different techniques and processes in an organization, it becomes the backbone of every decision that a company makes and it what it does in the market to grow or sustain. For example, Google Maps, one of the most popular map and positioning software in the industry uses both Descriptive Analysis and Visualisation. If the user wants to find a restaurant nearby, using Descriptive Analysis, the backend algorithms will generate a list of restaurants in the area of user and filter out the closest ones (as per his/her preference). The data would be visually displayed on the screen in the form of highest to lowest ratings places or simply on a map showing the distance required to cover to reach any filtered place. While generating data and extracting it from various sources is getting easier day by day, no one would certainly like huge spreadsheets filled with plain numbers and statistics. The clutter is often hard to read, interpret and often meaningless. Descriptive Analysis helps to organize all the mess and clutter converting the data into meaningful and readable format. This is a very crucial process which forms the basis for the data visualisation. 13|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
With these vital pieces, businesses suddenly become much more versatile than before. With data being visually displayed for everyone to understand, companies can identify untapped markets where their products or services might flourish. They can determine which functions of a company’s operations can be made more efficient, thus cutting down on costs and optimizing overall performance. They may also identify ways to improve the customer experience by getting real time feedback. Businesses can even prepare for future growth or possible downturns, keeping organizations ahead of the curve and ready to handle all the opportunities and challenges that await them. “When it comes to data visualization and descriptive statistics, these are extremely useful to companies of all sizes. Both can help the companies prepare for all sorts of situations, from bad ones to good ones and they can make the decision-making process a lot easier,” says Jim Scott, a marketing writer at Draftbeyond.com and Researchpapersuk.com
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Global Supply Chain Changes with Respect to Covid-19 Sumedha Nuthi ICFAI Business School, Hyderabad (MBA 2019-21)
Covid-19 took the world by complete surprise as a typical black swan. It forced many companies, and entire industries to refurbish and transform their supply chain model. Corona virus was first witnessed in Wuhan, the capital of central China’s Hubei province, on 31-Dec2019. By the end of February 2020, almost 90000 people have been infected by this virus, leading to 3000 reported death cases. Despite the travel ban from eight cities to Hubei province, Covid-19 has already spread globally across the world. There are 95 countries which are now reporting positive cases with a significant growth trend. With this pandemic across the world, and daily increasing number it had put other communities, ecosystems, and supply chains at risk. It also made global movement of people; containment exceptionally difficult. With the extended closures and delays in getting workers back to the plants due to health quarantines and travel restrictions, production across industries is starting at a much lower pace. As per reports from local government, only 70% of large industry enterprises had started with operations across different locations with much less than full capacity. This also reduced consumer demand in China and many high-profile consumer companies downgrade their earnings expectations due to COVID-19. In contrast to this, supply the impact on manufacturing has become relatively less and limited to certain constraints. Covid-19 mainly influenced supply chain obstructions and difficulty in recovering the production due to lack of workforces, lack of personnel mobility and traffic restrictions. The impact of these disruptions increase as recovery time of this pandemic lengthens. The spread of virus can affect other key industries other than China. Manufacturing industry has to get back on track in long term. There are three types of approaches that companies uses to respond to this pandemic outbreak. In first type, companies are better prepared to mitigate the impact of the pandemic. For this these companies have developed and implemented supply chain risk management and business continuity strategies. Companies diversified their supply chain from global perspective to reduce the supply-side risks from one country. These companies have multi-sourced key commodities or strategic components which enables them to reduce their reliance on only one supplier. They might also consider for inventory strategy to buffer against supply chain 15|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
disruption. In second type, companies are better prepared to respond to the impact of the pandemic. In this type, companies built strong relations with key suppliers and made them visible across the extended supply chain network. This can help them to understand the risks and drive for specific actions. These companies start to develop agility within their production and distribution networks to so that they can quickly reconfigure and maintain supply to global demand. They invest in Supply Chain Planning and get solutions for better sensing, responding and even predicting supply chain issues. In third type, companies are scrambling and they depend only on a single supplier or geography for key products. These companies don’t have enough visibility across the supply chain, don’t have robust systems to understand inventory status which can be used for prediction of stock-outs of direct materials & finished goods and don’t have flexible logistics networks that can enable flow of goods in profitable manner.
New Supply Chain Model: For many companies Supply chains have become highly sophisticated and plays an important role. With their global interlinks, it is made to be vulnerable for wide range of risks, and more potential points of failure and less margin of error for absorbing delays and disruptions. With a decades-long focus on supply chain optimization that minimizes cost, reduced inventory helped to reduce buffers and flexibility to absorb delays and disruptions. But with this pandemic outbreak, many companies are not vulnerable to global shocks through supply chain relationships. New supply chain technologies are being developed which can improve visibility across end-to-end supply chain which also helps to support more supply chain agility and resiliency, without traditional “overhead” which is associated with risk management techniques. Traditional view of linear supply chain is now transforming into Digital Supply Networks (DSN’s). functional silos are broken down within the organization and now it is connected to full supply network to enable end-to-end visibility, collaboration, responsiveness, agility, and optimization. These Digital Supply Networks are being designed to anticipate disruptions and reconfigure themselves appropriately to mitigate the respective impacts.
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With the advancements in Information & Communication Technology they are helping global supply chains to evolve irrespective of the pandemic effect. Advanced Technologies such as IoT, Cloud Computing, 5G, Artificial Intelligence, 3D printing, and robotics are all critical in enabling the digital supply network for future. Planning for a volatile business environment is necessary irrespective of the global situations like Covid-19, a trade war, an act of war or terrorism, regulatory change, labour dispute, a spike in demand for a particular product in a specific region, or supplier bankruptcy. Companies should be prepared for the unexpected and design their networks accordingly. A Digital Supply Network can vary across different industries, sectors, and even companies. DSN should not only align with business strategy but should be integral with respect to the formulation. Overall business strategy should focus on business continuity and risk management. Under risk management perspective, the main focus will be to build a “resilient� supply chain that not only reduce risks but is prepared to quickly adjust and recover from unanticipated disruptions.
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Supply Chain Risk Management
Rahul Gupta ICFAI Business School, Hyderabad (MBA 2019-21)
Even though it has existed since long back but gained more popularity and importance after the 2008 recession and is one of the important aspects taken into consideration due to the present coronavirus pandemic. Supply chain risk management (SCRM) is an integrated sub-process of a company-wide risk management process of taking strategic steps to identify, assess, and mitigate the risk in your end-to-end supply chain. It coordinates efforts of an organization to help identity, monitor, detect, and mitigate threats to supply chain continuity and profitability.
Types of Supply Chain Risks: Financial Risk: The suppliers will encounter a business scenario that threatens their financial health. Reputational Risk: This is defined as that a supplier will engage in activity that negatively affects their brand perception. Natural Disaster Risk: It is referred to as that the supply chain is disrupted by a hurricane, earthquake, or another natural hazard. Geopolitical Risk: Geopolitical risk is stated as that the supply chain is disrupted by global political events. Cyber Risk: The possibility that a business is harmed by your suppliers’ use of technology.
Types of Strategies: PPPR Management Model: It stands for prevention, preparedness, response, and recovery and a standard risk management strategy implemented by organizations and corporations around the world. 18|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
Prevention: Safeguards implemented to prevent any supply chain disruption. Preparedness: Have a contingency plan in place in case of an emergency. Response: Minimize the effects of the disruption. Recovery: Get back into the market and run at normal capacity as quickly as possible. Manage Environmental Risks: The more important thing than ever considering the current rate of climate change and the impact it is having on shipping and transportation routes around the world. Retailers must be aware of these changes and impacts and have a response to these potential disasters. Solutions could be stockpiling products during known periods of environmental disasters (like hurricane season) or looking to find suppliers and distributors closer to your center of operation and the endpoint of your supply chain. Bolster Cyber Defences – The larger and larger role that IoT and digital technologies have played in optimizing operations has been largely positive, but it also makes retailers vulnerable. SCMR now must reach cybersecurity to guard the flow of products and goods. Some examples of cybersecurity threats in the supply chain include: • • •
Malware installed when network or computer hardware that is delivered. Malware that is inserted into software or hardware. Threats or bugs in software applications and networks within the supply chain that are discovered by malicious hackers.
Create Supplier Financial Stability Visibility: It is a risk-prevention mechanism that can be utilized in response to the external business risks that comes with handling with outside suppliers. All the retailers can use predictive financial stability reporting that is provided by a major credit rating agency on thousands of potential suppliers. While this won’t necessarily help with suppliers or providers already in place, it can help retailers seek out more secure business relationships and in turn lower their vulnerability to supply chain risk. Implement a Business Continuity Plan – Disruptions occur in the supply chain and they are simply unavoidable. While we obviously try to minimize risk and cut out unnecessary risks, there should still be a contingency plan in place in case of supply chain failure. Unfortunately, many companies fail to implement this safeguard. From a report by Accenture, 73% of companies participating within the survey experienced supply chain disruptions within the last five years, while only 17% indicate that all the supply chain risks are formally identified, assessed, quantified, prioritized, and therefore planned for.
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Begin Internal Risk Awareness Training – Management isn’t the only area of the organization that can assist in risk mitigation. Everyone involved in the company can help improve supply chain safety if they are taught what precautions to take and what warning signs to look for. McKinsey calls this “building a risk-aware culture.” This goes for both internal and external risks. Retail employees can be updated on computer and internet best practices to improve cybersecurity. They can also provide first-hand insight on demand, busy seasons, and may feedback on forecasting. Consistently Monitor Risk – this might appear to be like a given, but consistently monitoring risk is the key to best protecting retail operations. Every level of the supply chain should be monitored and tracked for risk indicators. Companies can use scalable retail digital solutions that help monitor and track various aspects of the supply chain. This not only provides security, but also insights into the many facts of operations that can be optimized and streamlined for efficiency. These digital tools provide robust data insights that can be leveraged throughout the retail organization. If you would like to help with your supply chain management, we can help. Hitachi Solutions has been building and implementing custom programs for retailers looking to improve all facets of their operations. Our analytics and data science technologies help organizations identify and monitor their activities, identify weaknesses, and make improvements. Contact our team and we would be happy to help you join the digital transformation of the retail industry.
A Framework Directing Future Research: THE CONCEPT AND ITS BASIC CONSTRUCTS • • • •
Supply chain risk sources. Risk consequences Risk drivers. Risk mitigating strategies.
Supply Chain Risk Sources & Risk Consequences: Risks in the supply chain refer to the possibility and effect of a mismatch between supply and demand. Risk sources can be referred to as the organizational, environmental, or supply chainrelated variables which can’t be predicted with certainty and which impact on the supply chain outcome variables. In a similar way, Risk consequences can be referred to as the focused supply chain outcome variables like i.e., costs or quality - the different forms in which the variance becomes manifest.
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Since competitive pressures are often the drivers of risk, “calculated risks” that a company takes in order to improve competitiveness, reduce costs, and increase or maintain profitability. Risk mitigating strategies, on the other hand, are those strategic moves organizations deliberately undertake to mitigate the uncertainties identified from the various risk sources.
Conclusion: SCRM is an Enterprise Value Driver Continuity in Business: Get into line and run during a risk event. Visibility of Supply Chain: Get a thorough analysis of the supply chain with a view of risk. CSR and Compliance: Monitor the required regulations and compliance throughout your supply chain. Supplier’s Relationship Management (SRM): Manage and create awareness among the suppliers to realize the value and reduce risk.
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