VOLUME 2 ISSUE 2 FEBRUARY 2013
COVER STORY
EMERGING AREAS COLLABORATIVE PLANNING, FORECASTING AND REPLENISHMENT 1
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. http://opepiimraipur.blogspot.in/
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E-COMMERCE AND LOGISTICS 17
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INTERVIEW WITH PRAVEEN SINHA 24
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HUB AND SPOKE MODEL 10 & HUB
IT AND LEAGILE SUPPLY CHAIN 13
TRENDS IN AUTOMOTIVE INDUSTRY 20
ENTERPRISE ASSET MANAGEMENT 6
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SPECIAL
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RFID IN INDIAN RETAIL 28
WORK EXPERIENCE IMPLEMENTATION OF CORE BANKING IN SBI 31 ROLE OF IT IN OPERATIONS
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REGULAR GURUMANTRA 37 CROSSWORD 39
MODEL
ON THE COVER The dispersion of light in the cover page shows the fast paced growth that every sector is experiencing in their operations & supply chains with the support of Information Technology. The blue-colored gear in the cover marks the strong and much required presence of Information Technology in Operations. In the background we have binary digits "1" & "0" to indicate digitization in the corporate world PHOTOGRAPH COURTESY: TEJIT MITTAL
DESIGN: MANOJ H
EDITORIAL In today's dynamic business world, organizations are changing their way of functioning by relying more on information technology - information systems and operations management are critical to every organization's success. IT infrastructure and operations leaders are facing new and unforeseen challenges everyday and hence are required to keep themselves updated so as to convert these challenges into opportunities. The need to develop and manage a flexible infrastructure has emerged as a top priority. OPEP, the Operations and Supply Chain Club of IIM Raipur, through its e-magazine 'Strive', serves as a platform for the Students, Faculty Members and Industry Practitioners for sharing their knowledge in the field of Operations and Supply Chain Management. This issue of Strive magazine focuses on the role of Information Technology in Operations. The magazine begins with an article by Mr. S Srinivasan, the CIO of TVS Infotech, who has given his insights about the role that IT has played in automotive sector operations right from the time it was introduced to its contemporary issues. Mr. Praveen Sinha, Cofounder and Managing Director, Jabong.com, through an interview, presents his outlook about the use of IT in the online retail industry. In the academia section, Dr. Sumeet Gupta, a faculty member of Indian Institute of Management
Raipur has listed down the potential benefits of RFID technology in retail sector and the issues limiting its implementation. The students have also written articles about some of the contemporary issues including– ‘Collaborative Planning, Forecasting and Replenishment (CPFR)’. This article explores the various advantages which an organization can gain from it and the challenges in implementing it. We have continued the column 'Gurumantra' from Strive Issue 3 and Issue 2. Two 1st year PGP students of IIM Raipur have shared their work experiences in role of IT in varied fields. We are thankful to Prof. B. S. Sahay, Prof. Vinita Sahay and Prof. Ajit Prasad for their motivation and immense support & to Prof. OmkarprasadVaidya and Prof. Sumeet Gupta for teaching us the relevant subjects in the field of Operations and Supply Chain. We also thank all our authors for taking out time from their schedule and contributing to the magazine. My editorial would be incomplete without acknowledging the support of Manoj, Sujitha, and Thousif in bringing out this issue and the whole Team OPEP for their commitment and dedication towards the club activities.
Akshay Agarwal, Editor Strive
DIRECTOR’S MESSAGE From a humble beginning in 2010, Indian Institute of Management Raipur has seen its pioneer batch graduating and joining reputed corporate houses across the country as well as abroad. Student-run initiatives play a major role in the process of achieving such feats.
Prof . B.S. Sahay
OPEP, the Operations and Supply Chain Club of IIM Raipur, has played a significant part in setting up this platform. The biannual e-magazine ‘Strive’ started by our students has been successful since its launch last year. Three issues of Strive have already been released. In the current issue, the focus is on role of information technology in managing operations and supply chain. This has brought efficiency and transparency in the entire value chain with significant impact on the bottom-line. I wish OPEP a great success in their endeavor and hope that you enjoy reading this publication.
Prof. B.S. Sahay Director, IIM Raipur
EMERGING AREAS
COLLABORATIVE PLANNING, FORECASTING AND REPLENISHMENT (CPFR) Functioning, Advantages and Challenges of Implementing CFPR
[BIR BAHADUR SINGH] The purpose of this article is to explain the functioning of the CPFR (Collaborative Planning, Forecasting and Replenishment) technique in supply chain management system. The article also focuses on the various advantages which an organization can gain from it and what are the challenges of implementing it. Finally the article ends by citing some real life examples of how companies are using this technique. After winning the 2010 FIFA World cup when Casillas was asked, what was their winning mantra the answer was a single word “Collaboration”. The point which I want to stress here is that be it in business, football or anything the success of the team depends how better they collaborate? In 80’s there was a huge cry for green sustainable environment as a result Volvo launched green cars but the market’s response was opposite as a result Volvo had a green inventory. To reduce this campaign was initiated which proved successful. The increase in sales was wrongly interpreted and production department and started producing more green cars. As a result the company again had a growing inventory and hence the whole motive behind the campaign failed. This shows how important it is for different entities in a corporation to collaborate. In a football match it may result to a game loss but in business houses it costs million FEBRUARY 2013
of rupees hence the business houses are continuously trying to increase the degree of collaboration as much as possible in order to minimize the losses. In the pasts we have seen many great initiatives in the field of supply chain like JIT (Just-in-time), ECR (Efficient Customer Response) and VMI (Vendor Managed Inventory).
“It is a business practice which combines the acumen of various trading partners in the planning and fulfillment of customer demand” Collaborative Planning, Forecasting and Replenishment (CPFR) is the most recent concept which came into existence from 1995 that “aims to enhance supply 1
chain integration by supporting and assisting joint practices. It is a business practice which combines the acumen of various trading partners in the planning and fulfillment of customer demand.� The basic idea is to create an environment in which the trading partners share the information which results in benefit of both the parties. Also we can see the added advantage in CPFR is that it answers all the aspects of supply chain problems unlike the earlier approaches where one approach only answers one aspect. CPFR is nine step processes which can be represented by a picture and is summarized below
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Phase-I Strategy & Planning The initial step is to Develop Front End Agreement - this step mainly concern with the creation of the unstructured documents that define the agreement. The Business modules allow partners to define and measure specific Key Performance Indicators. Planning through the use of Information Technology ensures that all partners will have access to the information simultaneously, while the Portal makes all the data and information visible across the whole supply chain. The next step is to Create the Joint Business Plan, after making the agreement it is obvious that a lot of information will start flowing between
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the partners, but the answers to the all critical questions like who will get what? When? Where? How? How much? will be given by the joint business plan which was created by the consent of both the parties. Joint Business Plan also defines the roles and workgroups.
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• STRATEGY & PLANNING • DEMAND & SUPPLY MANAGEMENT
existing forecast or import their own forecast based on the most up-to-date information. Multiple forecasts can be prepared to allow using a dominant algorithm that takes into report the historical accuracy of different forecast contributors. Exceptions are easily identified and when these exceptions are identified, messages are sent to reconcile unusual items. Each provider (partner, supplier, and customer) is a very important part of the real-time collaborative process.
Phase-III Execution Sixth step of the process of creating
• EXECUTION • ANALYSIS
Phase-II Demand and Supply Management The third step is to create the sales forecast; Collaborative forecasting is the engine which drives the success of the whole CPFR if suppliers have better understanding into the retailers’ sales forecast they can plan their operation better. In the subsequent steps again the same procedure is followed for order what was followed for sales. If the suppliers have better understanding into the retailers’ order forecast they can plan their replenishment better. By the same token, retailers can lower the frequency of their OOS conditions and mitigate their consequences by getting continuous information about the replenishment position. The next steps of identifying the exception and the resolution begins with order Forecasting’s statistical forecast, companies can create changes to an FEBRUARY 2013
“CPFR provides an ample of opportunity for the managers to remove the inefficiencies of the supply chain.” order forecast is mainly dependent on causal information POS data and inventory strategies in order to forecast which supports the shared sales forecast. Seventh step is of identifying exceptions, actual results very rarely matches with the forecast so to determine what is the reason and why there is a deviation this step is must. The output of this step is a list of exception things that are recognized using the criteria framed in the front-end agreement. After determining the exception we need to 3
sort out the issue in the eighth step of resolving exceptions by querying pooled data and submitting results to change in the order forecast.
Phase-IV Analysis Fourth and final phase mainly concerns with the order generation and delivery. To maintain or to increase the customer base, the very important thing is to timely delivery which means that the company should stand on their promise of delivery it will not only generate trust in the minds of customer but also sets the benchmark for the company itself. There are lots of benefits of this system if properly implemented some of them are a) Improved responsiveness to consumer demand because of reduction of out-ofstocks and shorter cycle time. b) Greater forecast accuracy - sharing a single forecast throughout the supply chain enables participants to benefit from synergies. Also increased forecast accuracy facilitates decrease in safety stock as a result inventory reduces which further helps in cost production. CPFR provides an ample of opportunity for the managers to remove the inefficiencies of the supply chain. Europe and other western countries have already realized its potential and are exploiting this system to its full. However, there is certain area which poses challenge for implementation of this technique. One of them is the selection of trading partner with whom the information sharing because the confidentiality has to be maintained and the collaboration must be at
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the lowest data level. Also, while sharing the data any weak link in one partner can be fully exploited by the other which again calls for a great trust between the parties before going to the agreement. Below we will show how some companies implemented CPFR system.
Warner-Lambert & Wal-Mart Warner-Lambert was a American pharmaceutical company which was later on acquired by Pfizer faced a problem in the demand fluctuation of its products. The demand fluctuation was mainly the result of Wal-mart’s promotion. The only solution to the problem was collaboration. The partners shared the weekly forecast and worked together to resolve any variation which occurs. Optimal application of CPFR aroused when other retailers joined Walmart in sharing their weekly forecast. This helped Wal-mart to keep effective inventory levels. Also it helped Warner-Lambert to gauge market demands more effectively.
Kraft food & J. Sainsbury Plc Kraft is a worldwide famous food manufacturer and J. Sainsbury Plc is world’s leading retailers. Both the companies were facing a major problem of out of stock inventory which resulted in loss of sales and high inventory level across Kraft and J. Sainsbury Plc’s supply chain. Both these companies adopted CPFR as a pilot project and the results were breath taking on-shelf availability increased by 20%.
Super Drug & Johnson and Johnson Superdrug operates more than 700 stores throughout the United Kingdom. J&J is a global American Pharmaceutical company.
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Superdrug faced a major challenge of trimming the inventory as per sales also; they wanted to improve forecast accuracy so they started a pilot project with J&J with the use of CPFR due to similar culture of two companies. As a result of the implementation many future issues were avoided due to proper highlighting of the issues. Superdrug’s also got the access for the first time to a range of data which were unavailable to them earlier. Superdrug also saw a heavy reduction of 23% in RDC Cover (Present Stock on hand/Last week’s sales).
Godrej Consumer Products Limited Godrej implemented CPFR as a part of its IT initiative which included Customer Relationship Management and Business-toemployee portal. Godrej implemented the project with a name “Sampark”. The company appointed Accenture to design the IT roadmap for the project. It addressed various issues like overstocked distributors who were looking to reduce service levels, out of stock scenario due to unexpected demand. All these issues were solved to a very greater extent with the implementation of CPFR and one of the remarkable outcomes was the better integration between the distributor & C&F (Clearing & Forwarding) agents. Company also achieved a reduction in working capital of the distributors.
Thus, we can see how CPFR is helpful in achieving the desired results in the supply chain of organizations. Though, west has adopted it but it is not being practiced in India on a large scale. The advantages are unmatchable. With the increasing IT power in India we can say that sooner all supply chain managers in India will also be enjoying the wonderful technique.
REFERENCES:1. http://www.decisioncraft.com /dmdirect/cpfr.htm accessed on 01.01.2013 2. http://web.mit.edu/sheffi/ww w/documents/genMedia.theVa lueOfCPFR.pdf accessed on 31.12.2012 3. http://www.ecr.no/data/f/0/7 0/62/2_2401_0/2001_a_guide_ to_cpfr_implementation.pdf accessed on 02.01.2013 4. http://www.sccori.com/SCM/ COLLABORATIVEPLANNINGFO RECASTING.pdf accessed on 30.12.2012 5. https://committees.vics.org/co mmittees/cpfr accessed on 01.01.2013 6. http://en.wikipedia.org/wiki/ Collaborative_planning,_foreca sting,_and_replenishment accessed on 01.01.2013
BIR BAHADUR SINGH is a B.Tech in Electrical Engineering from NIT Silchar, after a brief stint at Schneider Electric Infrastructure Limited he took admission in IIM Raipur as a Post graduate student. His academic interest includes areas of Operations and Marketing. He can be reached at pgp12014.birbahadur@iimraipur.ac.in
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EMERGING AREAS
ENTERPRISE ASSET MANAGEMENT Integrating & Improving with EAM
[ANAND SIVAKUMAR J]
This article briefly looks into how Enterprise asset management integrates all the principal interface of an organization namely, physical, financial, human, intangible and information assets to strategically reduce the operational costs and improving both the value of the organization and value provided by the organization. It also analyses how the emerging technology can also be integrated with the existing systems to improve the efficiency.
Industries like utilities, manufacturing, and real estate are capital intensive and physical assets like equipments, buildings form a considerable proportion of their total assets. They operate in highly competitive markets and they know the harsh realities of operating in such markets. They deal with high value assets and equipments and whenever there is a failure of these assets it costs them a lot and also disrupts their business. As downtimes and idle time become more and more expensive, both in terms of loss in production and revenue loss, it becomes imperative for the organizations to maximize the productive life cycles of assets via optimized operations management. Enterprise Asset Management emerged in the 1980's in Europe as Terotechnology. BS 3811 defines Terotechnology as, Now, the companies are focusing on profits rather
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than costs. The standard practice of Terotechnology is concerned with focusing on the reliability and maintainability of physical assets of an organization like machinery, equipment, plant, buildings with their selection, installation, testing, commissioning, maintenance and repair with compilation of information on design, performance and costs. Based on the data, it also involved feedback to the original manufacturer to improve equipment design and development. As the companies were very much interested
"a combination of management, financial, engineering, and other practices applied to physical assets in pursuit of economic life-cycle costs ".
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in achieving high reliability of operational assets it became imperative to replace the word 'Terotechnology' with the more acceptable term ‘Enterprise Asset Management' or EAM. The phrase 'Enterprise Asset Management' implied that the achievement is a result of involvement of the entire company. An organization’s strategic plan will be to increase the profit which involves low operational costs and better customer service. The principal interfaces of an organization namely, physical assets, financial assets, human assets, intangible assets and information assets have to be managed holistically. These interfaces build the important relationships between those who work on these assets and those who ensure their availability. Any organization will face the challenges like provision of high asset availability without increasing the costs of procurement, identifying the critical assets and an optimizing the asset maintenance strategy, improving asset efficiency, reducing reactive maintenance costs and finally to decrease the Total Cost of Ownership (TCO). A well planned strategy along with implementing appropriate solutions will ensure high availability of assets at low maintenance costs, improved efficiency and low Total Cost of Ownership (TCO) of assets. To build an effective system, asset management system and quality management system have to be combined to focus on the process of continual improvement by following Plan – Do – Check – Act methodology of Deming. The concepts and duties of finance, engineering, operations and maintenance must not be seen in isolation. A good asset
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management system has to be seen in the context of getting the most out of assets of an organization at lower operational costs. This can be achieved only when Finance, Engineering, Operations and Maintenance are working together across the life cycle. Operational Excellence can be achieved when there is improved asset reliability and performance. By whatever name it can be called Terotechnology, Enterprise Asset
“An organization’s strategic plan will be to increase the profit which involves low operational costs and better customer service.” Management or Operational Excellence- it can be achieved only by a significant change in thinking and attitude at all levels. Now a days, accounting, HR and manufacturing information functions are standardized and consolidated by most companies using enterprise resource planning systems, but very few companies have integrated their calibration and equipment management systems. The integration of systems involves various dimensions, like integrating the systems horizontally over time axis, vertically between lifecycle functions or integrating the systems across the enterprise. But achieving this level of integration involves implementing a very comprehensive solution. Real time analysis of data and reporting across different systems connect individual asset performance with the entire business performance by enabling the users to find
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out the 10 assets out of 10000 assets which require immediate attention. This information provides an understanding and some valuable insights to make quality decisions about where the employees are spending more time and which resources are being used at what level. This system also provides the option of notifications, through which the concerned operator or shop floor manager will be informed automatically about the preventive maintenance activities, warranty services etc. Based on this, staff can identify more efficient ways to operate the equipment, utilize and manage the assets to get the best business outcomes. Retrieving data from different computerized management systems used in different business modules will take long time which will not help us much in taking real time decisions. Using an integrated information system will make the data from different business modules like physical assets to finance easily available and analyzable. A common language is particularly important in modern enterprise systems wherein the user will be empowered to inquire on and make selected updates to his equipment and machinery data. The technical solution is straight forward-simply define a common set of tracking attributes and establish validation tables and logic to enforce the values. EAM provides us a single database where even Vendor details, previous transaction details can also be included. We can design our own customized approval system through workflow management where routing the workflow through the application is enough to approve the task.
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Workflow can be approved, rejected, escalated to high level, can be paused until a specific job is done. And remember this workflow management can be applied to all modules like finance, human resources, and operations in a single application without going for different ERP solutions. Asset descriptive attributes have to be standardized and structured in consistent formats and values. Equipment Cataloging serves the purpose. Equipment cataloging enhances the asset management process by
“An integrated information system will make the data from different business modules like physical assets to finance easily available and analyzable�
automatically combining attribute data into useful management information. In any database, we can easily search for equipment by attributes such as model number, manufacturer using modern search algorithms like SQL. However, unless the data is structured very well in the database, searches are going to be slow, unreliable, particularly as the data volume grows beyond a few thousand items. Structured cataloging methodology will solve this problem. Now, mobility technology also becomes a part of EAM. Companies are implementing mobility solutions as a part of EAM, to enable their technicians to access and refer data on-site. This helps the employees to
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capture more data which can be easily entered into the system, which can be accessed by anyone who is using the system in the organization. Dubai municipality’s public transport system, manages the maintenance and procurement of components and to monitor all processes relating to periodic preventive and corrective maintenance, spare parts and equipment for its fleet of 2000 light and heavy vehicles using EAM solution. EAM maximizes the value of critical business and assets over their complete lifecycles with workflows by providing best practices that yield benefits for all types of assets, including transportation, delivery, facilities, production, communications and IT. Industry-tailored EAM solutions are available for nuclear power, transportation, utilities, life sciences, government,
telecommunications and oil & gas. Now, Organizations like TCS, Mahindra Satyam, Genpact, IBM are offering these solutions as Integrated Asset Management (IAM) solutions.
REFERENCES [1]. Ricky Smith, CMRP, Ivara Corporation. (n.d.). Connecting reliability to EAM. [2]. Kennedy, S. (n.d.). Innovations in CMMS and EAM are making life easier for the plant maintenance department. [3]. Philip M. Parker, P. (n.d.). The 20092014 Outlook for Enterprise Asset Management Systems (EAM) in The Middle East.
ANAND SIVAKUMAR J is a graduate in Production Engineering from Madras Institute of Technology, Anna University. He worked in Engineering and Industrial Services of TCS for 3o months. He is currently pursuing post graduate from IIM Raipur. His areas of interest include Operations. He can be contacted at pgp12007.anand@iimraipur.ac.in
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EMERGING AREAS
HUB AND SPOKE MODEL In IT-BPO with INDIA as “HUB”
[SINDHUJA A] India has a major share of IT-BPO. With the strong base it can now leverage the position to turn into a “Hub” of global delivery. Hub and Spoke Model is new to IT-BPO but it has been put in practice in many industries. Indian IT can analyze the cases of Hub and Spoke in other industries, develop some necessary skills, put all its strengths to work and attain the position of “Hub”. The Hub and Spoke Model has many advantages over other outsourcing model. Though it is not completely without disadvantages, implementation of this model would give a strategic advantage to our country.
Tertiary sector in India is the fast growing and most contributing of all the sectors. More specifically, in this sector, Information Technology- Business Process Outsourcing (IT-BPO) has grown remarkably in the past decade and acted as a catalyst for the growth of the country. The phenomenon growth in this industry can be attributed to the perceived cost advantage of outsourcing to India. Demographics, geography and availability of skill led to this IT revolution. Though initially outsourcing to India was seen as a way to cut costs, over years the customers are realising that it is turning to be a strategic driver. The vendors now are not just providing services at low cost but also providing high quality services by building strong expertise in technology, operations, business-knowhow and management capabilities. India has emerged as the leader in IT offshore outsourcing with a share of 55 percent in global offshore
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market for IT. India can leverage all these to move from an offshore site to a global “Hub” for IT. The outsourcing in IT has evolved over time. It has changed from onsite in 1980s to offshore in 1990s to near-shore in 2000s. Each one of this has a special purpose to serve. Onsite is best when the desired customer interaction is high. Offshore reduces cost to a great extent. Nearshoring moderately reduces the cost while still being close to the customers. Each has advantages and disadvantages. The new model that is emerging in the field of outsourcing of ITBPO is the Hub and Spoke Model. It is a multi-tier operating model with a standardized governance structure. In the Hub and Spoke model, “Hub” provides a single face to customers with each “Spoke” as an extension to it. “Spokes” are distributed across various
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regions and provide services to the customers. The Hub and Scope Model is not a new model to experiment with. It has already been successfully implemented in various industries like automobiles,
the Hub integrates all the services and provides to the customers.
electronics, consumer goods and aerospace.
training and development, man-power management and regulatory compliance. On the other hand “Spoke” has to meet the performance expectations, manage local projects and support the “Hub” on legal and tax compliance.
In aircraft industry, this model helped to cut down the production timelines. Also it helped the companies to concentrate on their core competencies like aircraft design and assembling while outsourcing the component manufacturing. Few major players in Consulting and Technology also use this model. They split the process outsourced into various components like voice, data, etc and routes these processes to locations that serve them the best. Finally, FEBRUARY 2013
“Hub” in the Hub and Spoke Model is responsible for customer management, quality and performance management,
Initially it is good to keep management activities at “Spoke” minimal with a “Spoke” working under only one “Hub”. But as time passes, there would be “Spokes” addressing multiple “Hubs” by developing a management layer and finally the evolution 11
would lead to a closely knit Hub and Spoke Model of operation. Hub and Spoke Model mitigates of risk by locating in different locations. It takes advantage of favourable tax and legal structures of various countries, cost advantage arising because of emergence of Tier-II and Tier-III cities and the high quality talent available at these locations. Above all it helps to be close to customers so that their needs are well understood. Also the cultural affinity helps the vendor offer a better customer experience. Centralized training coordinated by “Hub” ensures a consistent employee quality. The model however faces some challenges like ensuring data security, addressing tax issues, integrating services and managing the difference in regulatory environment, culture and time zone. The companies that are planning to employ this model for their business need to concentrate of few aspects before the actual implementation. They must build a globally consistent brand, advanced technology, proactive location strategy, flexible governance
structures and harmonized and standardized delivery system. They must ensure compliance with global information security standards. With good base in IT-BPO, increasing quality regulations, emergence of Tier-II and Tier-III cities, government initiatives (like tax benefits for IT-BPO), developing infrastructure, India has every chance of being a global “Hub” for IT services. Many leading MNCs of the world are considering India as a “Hub” in their global delivery strategy and developing spokes in other countries like Philippines, China, Uruguay and Mexico.
References [1]. Greenbaum, J. (2010, May). Inside the Hub and Spoke Model. Managing Automation , 25 (4), p. 14. [2]. KPMG, NASSCOM. (2012). Hub and Spoke Model: A new Paradigm for Indian IT-BPO Industry.
SINDHUJA A is a graduate in Electronics and Communication Engineering from University College of Engineering, Osmania University. She is interested in corporate banking. She can be reached at pgp12001.sindhuja@iimraipur.ac.in
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SPECIALS
IT AND LEAGILE SUPPLY CHAIN Emerging IT Trends in the Application of Leagile Technology
[PULAK JAIN] The article deals with the application of the Leagile system in companies and the role IT in aiding this system. It talks about the emerging IT trends in the application of leagile technology to gain competitive advantage.
Adding value to the shareholder by generating higher revenue is the main objective of any firm that can be achieved by providing service or product that fulfils the customer requirements. Therefore the objective of the supply chain of any organisation would be to ensure that it satisfies the consumer requirements. Going through the history of supply chain, craft shop was the first supply chain that delivered exactly what the customer wanted, but it was done at a very high price. Henry ford introduced assembly line for mass production of model T at low cost, but no choice was given to consumers. In the recent times in order to gain competitive advantage the companies are focusing on mass customization and flexible manufacturing. In the light of this requirement, lean and agile supply chain management are heavily studied and adopted across the organisations. Lean supply chain management, first created at Toyota, focussed on reducing cost by eliminating wastes (muda). Leanness means “developing a value stream to eliminate all
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waste, including time, and to enable a level schedule.” On the other hand Agility means using market knowledge and a virtual corporation to exploit profitable opportunities in a volatile marketplace. In short lean is ‘supply what, when needed, but do this perfectly’, whereas agile aims at ‘be first, fast and best’. High level of product quality as well as the lead time is an important requirement for both the lean and agile supply chain system in order to satisfy the consumer demands. In lean system the lead time has to be small because the time is considered as waste and should be removed, while in agile system shorter lead time is required to fulfill the volatile customer demand as quickly as possible to gain competitive advantage. The following matrix shows that the key order winner for the agile system is the availability of the product to the customer whereas in lean system it is the minimization of the cost. Leanness and agility in a supply chain do not have to exclude each other. Combination
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of these two concepts within the scope of one firm or a single supply chain can be called as ‘‘leagility’. Naylor et al. defined leagility as “the combination of the lean and agile paradigm within a total supply chain strategy by positioning the decoupling point so as to best suit the need for responding to a volatile demand downstream yet providing level scheduling upstream from the decoupling point.” The decoupling point separates the part of the supply chain geared towards directly satisfying customer orders from the part of the supply chain based on planning. The decoupling point is also the point at which strategic stock is held as a buffer between fluctuating customer orders and/or product variety and smooth production output. On the downstream side of the decoupling point is a highly variable demand with a large variety of products, where as upstream from the decoupling point the demand is smoothed with the variety reduced. As shown in the diagram below, the lean paradigm can therefore be applied to the supply chain upstream of the decoupling point and thereafter the agile paradigm can be applied downstream from the decoupling point as demand is variable and the product variety per value stream has increased. Stalk and Hout in 1990 warned of the dangers arising from slow information leadtimes in supply chains stating that “the underlying problem here is that once information ages, it loses value... old data causes amplifications, delay and overhead...the only way out... is to compress information time''. Overcoming these problems leads naturally to the concept of the ``Information Enriched'' supply chain
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(Mason-Jones and To will, 1997) wherein the visibility of demand; by means of timely information sharing reduces complexity of control. Harrison and Van Hoek presented an integrated model for enabling the agile supply chain in 2005. It consists of four elements: 1. Market sensitive (or customer responsive) 2. Virtual (or IT-based sharing of information) 3. Process integration (of business processes) 4. Networked-based (partners with a common goal).
Market winners and market qualifiers for agile vs lean system, source: mason-jones et al.
Effective supply chain strategies combine a range of approaches from operational flexibility(e.g., postponement, assemble-toorder (ATO), make-to-order (MTO), and lead time (LT) reduction), channel alignment (e.g., contracts, vendor-managed inventories (VMI), and efficient consumer response initiatives (ECR)), and joint decision making through information 14
deployment (e.g., point of sale (POS) data, collaborative planning forecasting and replenishment (CPFR), and schedule sharing). The partners are cross-linked and are all contributing to the value generated for the final customer. Examples of IT that enhance supply chain capability are: ďƒź Mobile and wireless technologies for real-time data collection ďƒź Integration technologies (Web services) for real-time monitoring of events through Portals ďƒź Business process re-engineering and management tools for business process automation and redesign of supply chain system or enterprise system.
Synchronizing all the essential IT activities to achieve supply chain agility is crucial. IT enables a supply chain with a high degree of visibility, connectivity, responsiveness, and flexibility. Among different IT competencies, IT integration and IT flexibility are deemed to provide the most obvious contributions to supply chain agility. IT integration is defined as the extent to which information systems are linked and information is shared among different functions and supply chain parties, thereby effectively creating a virtual supply chain (Knapp et al., 2006; Lin et al., 2006). IT integration helps coordinate supply chain functions and partners through the sharing of information related to demand forecasts, production schedules, inventory, and production quality that dictate supply chain activities (Li et al., 2009). IT integration also includes the exchange of knowledge with partners up and down the supply chain, allowing them to collaborate and to create synchronized replenishment plans. IT flexibility is defined as the ability of IT infrastructure to adapt to both incremental and revolutionary changes in the business or business process with minimal penalty to current time, effort, cost, or performance (Conboy, 2009; Nelson et al., 1997). It is characterized by
Flow diagram linking Lean, Agile and Leagile
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(1) Connectivity, which refers to the ability of the information technology component to attach to other components within the organization or with other organizations (2) Compatibility, which pertains to the ability to share information across any 15
information technology component within the organization or with other organizations (3) Modularity, which denotes the ability to add, modify, and remove information technology components with ease and without negative effect on performance (Byrd and Turner, 2000; Fink and Neumann, 2009)
Moderated by the effect of firm scale, IT competence acts as the foundation of supply chain competence, in which IT integration supports a better supply chain integration and flexibility, whereas IT flexibility supports better supply chain advancement. Moreover, inter-organizational collaboration is important in achieving a complete IT integration along the whole supply chain, which, in turn, supports supply chain integration and flexibility. IT has facilitated the formation of global supply chain markets; changed the relationships among customers, manufacturer, and suppliers; and accelerated and visualized the product,
financial, and information flows that need to be accurately and promptly delivered to reflect the status in the supply chain.
REFERENCES 1. Mason-Jones et al. (2000), Lean, agile or leagile? Matching your supply chain to the marketplace, International Journal of Production research 2. Martin Christopher et al. (2000 vol. 5), Supply chain migration from lean and functional to agile and customised 3. Mason-Jones et al. (2000), Engineering the leagile supply chain 4. Childerstone and Towel (2000), Engineering supply chains to match customer requirements 5. Moron, Haan (2011), Improving supply chain performance to satisfy final customers: ‘‘Leagile’’ experiences of a polish distributor 6. Eric W.T. Ngai et al. (2011), Information technology, operational, and management competencies for supply chain agility: Findings from case studies 7. A. White et al. (2005), The role of emergent information technologies and systems in enabling supply chain agility 8. Cheri Speier et al. ,The Role of Information Integration in st Facilitating 21 Century Supply Chains: A Theory-Based Perspective
PULAK JAIN has done B.Tech in Electronic and Communication Engineering from IGIT, GGSIPU Delhi. She is an avid reader of philosophy and fiction. She can be reached at pgp12113.pulak@iimraipur.ac.in
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SPECIALS
E-COMMERCE AND LOGISTICS Wind of change in the field of logistics
[POUSALI CHAKRABARTI] One of the interesting definitions describes logistics as “having the right item at the right time at the right place in the right quantity to the right customer� (Susan Mallik, 2010). The allinclusive definition talks about the holistic nature of the traditional business logistics – right from production, procurement, distribution, inventory management and of course delivery across the entire supply chain. Logistics industry used to rely heavily on individual skill and dexterity of the employees. Efficiency used to be thought as an outcome of practice. However, with invent of technology, especially with information technology, revolution is happening across the business sectors. Logistics industry also has become equipped with new ways of doing things. In many instances, manual labour has become eliminated or has been reduced significantly. Skill requirement has enhanced as well, in terms of grasp and capability around the new methodology. The new skill set required includes efficiency in using new technologies; the faster one gets hold of the FEBRUARY 2013
technology and starts using to its full potential, the stronger it makes it presence felt in the industry. ITOperations integration paved way for a faster and smoother logistics industry by reducing the frequent errors and glitches. With the advent of e-commerce, nature of business is undergoing changes. Along with it, the conventional logistics problems are also changing. Earlier the process used to be supplier driven, whereas now the drive comes from the customer. It is more of order fulfillment rather than stocking. The good old logistics is getting changed. Typically, in Indian e-commerce industry, the back-end operation is often outsourced to some logistics firm who would take care of the physical supply-chain process with the ecommerce sites providing the user-interface with the front end operations. However, there are a few players who do manage their own distribution network partially. In a conventional supply chain, there are two distinct players in between the manufacturers and the customers. In the e-
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commerce business, the middle two layers are becoming more and more overlapping. In the conventional structure, the warehouses used to be located in the distribution level of supply chain across various places including both rural and urban locations. However, in e-commerce, the warehouses are often integrated with the manufacturing stage and are located in outskirts of a medium to big city. According to the order placed online, the goods are moved to the exact locations in smaller truckloads. The transportation has become more frequent and less bulky. At the same time, the transportation need has become more intensive because of the B2C (Business-to-Customer) outlook. This shift in the logistics eventually has impacted the whole supply chain. Since there is no physical presence of retailers in ecommerce, the retailing objective has been changed entirely. Instead of making a good physically available to the customer through the intelligently planned retail layout, the retailers are attracting customers online through pages. There too, competition is on for giving the customer more and more real life look and feel of a product. Order-todelivery time is also increasingly becoming a competitive feature for the various eretailers. As a result, the onus is often on these retailers so far the stocking or inventory management is concerned for a particular product. For instance, let us take the example of e-retailing of a novel by Chetan Bhagat just before the launch of the movie made on it. It is expected that there would be huge demand for the book. Since publishing rights would be restricted, there would be a limit over the number of prints
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available of the book. So, the various eretailers would eventually be competing for the share of an almost fixed pie. The more the stock, the more profit a company would make. The more profit a company foresees, the more discount it can offer. The more discount is on, the more is the chance of a money transaction by the customer. More and more e-commerce sites are now investing in strengthening their logistics. They are cutting on the outsourcing. One prominent example would be Flipkart. As a start-up, it started in 2007 in the Amazon model. Becoming the most popular choice for online book-retailers, Flipkart has ventured into FMCG, apparels and small and medium sized electronics as well. It has now 7 warehouses across 25 cities to cater to the customers. However, building your own logistics does not necessarily mean that you have to cut down on outsourcing. Specially, in a country like India, where distribution has always been an issue for some and also the competitive advantage for some others, it does make sense to reach as many customers as you can by all means. Naaptol has been following the same strategy of a mixed distribution. They are continuing to follow a mixed model where they are outsourcing, as well as banking on the self owned delivery mechanism for the last mile delivery. According to Naaptol, in Indian e-commerce context, the mix-model will rule for at least a while as to have a fully self owned logistics will need money and the revenue – investment only manages to provide a slow but steady support in the entire process.
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As far as the challenges are concerned, one major challenge in e-commerce lies in the geographically and demographically dispersed traffic these sites cater to. In a conventional retail based supply-chain system, it is comparatively easier to understand your customers, their needs and also to trace their purchase patterns. However, in case of an e-commerce site, the trend analysis could be difficult. Here comes the demand of better analysis procedure. Often, the information provided by an online shopper is so minimal in nature, it is practically impossible to trace any sort of correlation between his or her background and purchase pattern. This problem qualifies to be a two-way sword as it puts you in a dilemma whether to ask your customer about personal information or to make the process as hassle free as possible for the customer. Bombarding the customer with questions makes you lose to your competitors and otherwise you end up losing the factor which connects your customer to you. We must also acknowledge the dynamic nature of e-commerce in contrast to the traditional business. Here, the customers are from varied background. Since, there is no geographical boundary; the customer base is also continually changing. Challenge remains in correct prediction of the demand. One solution to mitigate the risk of faulty prediction could be to switch to a dynamic business model altogether. This model will ideally have zero or negligible inventory and
also a supporting strong distribution so as to minimize the order fulfillment gap. It is true that e-commerce rejects many of the facets which were crucial for conventional logistics problems. For instance you no more need to worry about your physical shelf space, physical layout design. But, at the same time, e-commerce also introduces many newer aspects to the logistics problems. E-commerce calls for a more dynamic, more versatile framework of logistics. In order to achieve that, we need to have an efficient data-collection and analysis methodology. This, together with a dynamic and flexible implementation, will help us integrate the e-commerce and logistics.
References: [1]. Susan Mallik (2010). Hossein Bidgoil. ed. The Handbook of Technology Management: Supply Chain Management, Marketing and Advertising, and Global Management, vol 2 (1 ed.). Hoboken, New Jersey: John Wiley @ Sons, Inc.. p. 104 [2]. E-commerce matures, players invest in logistics, warehouses, Business Standard [3]. Anshoo Sharma, AEmerging Trends In Indian E-Commerce: On Logistics, No Poach, Payment Gateways & More, http://www.medianama.com/2012/05/22 3-emerging-trends-in-indian-ecommerce-on-logistics-no-poachpayment-gateways-more/
POUSALI CHAKARBATHI is an Electronics and Instrumentation Engineer from Heritage Institute of Technology. Her interest areas are Operations and Supply Chain. She can be reached at pgp12032.pousali@iimraipur.ac.in
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FROM THE INDUSTRY
TRENDS IN THE AUTOMOTIVE INDUSTRY The Journey of Automotive Industry with Information Technology
[S SRINIVASAN]
Mr. Srinivasan S (Chief Information officer – TVS InfoTech) has over 38 years of experience in materials management, corporate planning, manufacturing planning, logistics and information technology in leading organisations in India and Oman. In his tenure at Sundram Fasteners Ltd., he implemented SAP at a dozen plants of various types and sizes and also handled all aspects of IT, ranging from hardware and software to connectivity and special applications. Srinivasan is a B Tech from IIT Madras and an MBA from IIM Calcutta. He was nominated by the Automotive Component Manufacturers Association (ACMA) to discuss the methodology of data exchange with vehicle manufacturers and was deputed by the Ministry of Commerce to UN-ESCAP for understanding EDI and data exchange issues.
In the Indian context, while computers made their mark in operations as much as half a century ago, there has been a profound shift in their role in business. Earlier they were confined largely to processing data in commercial areas such as payroll and purchase where their utility was seen in number crunching operations. On the other hand, today they are integrated to such an extent into the operation that the line separating business and Information Technology, is fast disappearing.
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If we were to broadly analyze the impact of Information Technology on business in the automotive industry, we would see the following phases. In the opening phase, the role of IT was almost exclusively to save clerical effort. This was marked by applications such as payroll and billing in large organisations, where large mainframe systems could compress the time for such documentation and bring high levels of accuracy in mass scale work. The style of doing business was however, completely
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unaffected. Next, with the advent of desktop systems in the eighties, the emphasis shifted to empowering individual users to create their own local applications, which would bring relief to the user. This was based more on individual creativity and hence users developed applications more from the viewpoints of their interest and ability. Typical applications revolved around information that had to be submitted periodically to some authority such as daily material receipt or cash collection data. Some relief was available to individual users but again, these were in pockets and did not materially alter the business scenario or the overall working environment in any significant way.
"Information Technology is a very powerful tool and the ultimate benefit can be extracted only when the application directly impacts business" In the nineties, the emphasis shifted to the use of IT over a wider horizon, marked by the introduction of larger applications such as Enterprise Resource Planning and the use of advanced software in technical areas such as planning, design, quality and manufacturing. These helped to tackle some of the chronic issues such as, suboptimal decision through the use of inappropriate local applications, or, difficulty in churning out drawings and developments expeditiously, with changing customer requirements. In addition, with the shift to larger servers with wide area connectivity, it became possible to give access to large
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number of users at different locations and all could share information from the same database. Real time systems became the norm and across the organization, the integrity and consistency of information were enhanced substantially. It is significant to note that through all these transformations, several areas were being addressed such as cost reduction, information reliability, rapid developments, quicker processing and enterprise wide participation. However a key aspect was still missing. Information Technology is a very powerful tool and the ultimate benefit can be extracted only when the application directly impacts business. One index is that final end customers, outside parties, agencies and institutions with whom the business enterprise has a relationship should perceive the benefit of technology and two, business itself needed to go through a change, in order to be relevant in the changing world. From these viewpoints, several changes are occurring in the business environment that can be traced to the powers of technology. Having seen the various phases of IT applications in the industry, it would be useful to examine in depth, some of the developments taking place as of now. The business process starts logically from the customer and it would be interesting to see the developments taking place here. Customers demand immediate and complete information. In the automotive industry unlike the old days, this takes the shape of enormous choice of models, variants, colours and products, each of which is processed appropriately so that the customer gets delivery on time. This backward
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scheduling of customer deliveries is facilitated by complex dealer software that absorbs inputs in the form of customer preferences and translates these into shipping schedules from the manufacturers. In turn these are exploded further into part requirements from various suppliers so that they get a schedule for delivery of parts in a seamless manner. Engineering and design software play a key role in product development and in ensuring rapid turnaround of new products to gain competitive position in the market place. In addition to providing a design platform, such tools are performing a range of comprehensive functions. These include a) Search mechanisms for locating similar products or tools to avoid reinventing the wheel during a new product development, b) Providing a framework for traceability so that the complete history of design changes, their impact on the inventory of products, remedial action taken and final resolution of inventory are all preserved, to enable future investigation. Collaboration between suppliers and vehicle manufacturers is the name of the game and increasingly business processes are becoming collaborative in nature. Areas include design and development where customer and supplier cooperate over the web electronically for product design and development, submission of product data, display by manufacturers of supplier performance parameters and conducting transactions through portals. Being the heart of an automotive enterprise, manufacturing has evolved significantly in the use of technology. Use of shop floor
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automation through either hand held devices or through SCADA and similar technologies help to control groups of machines and their outputs, as also to report production. Also machine performances, downtimes and reasons are being captured through such avenues. Vehicle manufacturers insist on systematic documentation of production through well defined processes and IT plays a part in the generation of such documents.
“Vehicle manufacturers insist on systematic documentation of production through well defined processes and IT plays a part in the generation of such documents.� An area that is well addressed is planning at the shop floor level as well as the enterprise level through advanced planning software and Manufacturing Resources Planning software. At the shop floor level, the challenge is to optimize a deliverable such as customer satisfaction and to arrive at the best manufacturing plan for the week, month, quarter or the year. Complexity arises since the best plan to maximize sales may not maximize other parameters such as profits or customer deliveries or satisfaction. While scheduling looks at these issues, MRP goes beyond, to generate or regulate orders for supply of materials and requirements for all the inputs necessary to make the final product. Other developments that are helping to bring sophistication in shop floor operations include a) Supplier portals that assist in interaction with suppliers through electronic mode for all transactions 22
b) Quality control tools such as in- process gauging, calibration software to monitor the quality of gauges and statistical quality control software for real time quality analysis. Shop floor material management and control is a crucial area since day to day shop floor scheduling has to be based on the position of material availability. Demands by various agencies such as auditors, excise authorities and customers are compelling organisations to have clear data on material movement between manufacturing organisations and their subcontractors and customers, as also accounting of rejections, scrap, reconversions and dispatches. With large volumes of transactions involved, stock status and monitoring has become a concern area and this is a focal point for every commercial and enterprise software. With customers demanding Just in time (JIT) based deliveries, there is a major need to build complete transparency in the final delivery. This is required to empower field personnel who interact with customers, to apprise them of delivery position. This calls for total integration of data between manufacturing, transport and warehousing organisations. A well executed integration facilitates the tracking of consignments with clear geographical location, from the moment they leave the manufacturing unit, till the time the customer accepts the
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material. To enable tracking of products with high level of accuracy, several aids such as barcodes and RFID tags are being employed in the dispatch and warehousing process. Finally we come to current developments where technology and products have started to merge. With a view to vastly enhance the reliability of vehicles, developments are taking place wherein software will reside in the vehicle and operate, to close a vital need. The simpler examples are where vehicle controls can be made to respond to individual drivers based on say fingerprints or biometrics and everything from seat to mirrors can be automatically adjusted based on the driver. The more advanced involve applications using software embedded in components such as engines or brakes so that the component behavior can be transmitted directly to say service centers, which can diagnose faults and prescribe remedies. Thus, the impact of information technology in automotive organisations spreads not only into the management of its operations but on to the end product itself. Success of organisations depends on their ability to foresee customer preferences, emerging business processes and other changing requirements and adopt technology to suitably close the gaps.
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FROM THE INDUSTRY
INTERVIEW WITH PRAVEEN SINHA Co-founder and Managing Director at Jabong Founding Jabong.com in the autumn of 2011, Praveen Sinha envisions an online E-commerce portal that delivers the trendiest and the fastest, while inducing a memorable customer experience. The present sees him as MD and Co-founder of Jabong.com, however, his past achievements bring to light someone who is considered a maven in start-ups and a turnaround specialist. Having worked in companies like Microsoft, Maruti and Mckinsey, he has also played a pivotal role in effectuating energy conservation initiative across the span of Asia. In addition, known for a keen interest in new business initiatives, like establishing Aquabrim, he exhibits an immense passion for entrepreneurship that is highlighted in his frequent sharing of work experiences and insights at various institutes like IIMs, XLRI, Great Lakes to name a few.
ENTREPRENEURSHIP 1. What were the reasons behind taking up an entrepreneurship route when you had the safety of a corporate life? The idea to start business was there since my College days, during my MBA in IIM C I started my first venture Aquabrim.com which is still active and present in NCR and has plan to go to national level. However finally, I left Mckinsey and got full time into start ups with Jabong.com as opportunity was huge and I was prepared to take the required risks and challenges 2. What are the factors that you would look into while investing in a start-up? I think investing in a start-up is about believing in the quality of the team, the size of the opportunity and the scalability of the idea. While the idea can be worked upon or pivoted, the core team cannot be changed; hence
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investing in a start-up is a huge bet on the team. 3. Could you please tell us about the idea that resulted in establishment of Jabong.com? After assessing the utility and popularity of e-commerce in electronics market, I realised that there was a huge scope in the arena of fashion and lifestyle. Given the economies of changing lifestyle patterns, e-commerce is the future of retail and Jabong.com was established to capitalize on this huge opportunity as I had a firm belief that India was ready for it.
“One of the major challenges that we faced was scaling up really quickly while maintaining the high service levels.�
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WORK EXPERIENCE 4. Could you please explain the work culture at Maruti and McKinsey? Also, what was your most important learning from your experience in these companies?
Maruti as an organization takes pride in some of the best practices prevalent in the industry. The operational excellence and 5S processes are the way of life at Maruti. Working with large teams under stiff timelines and disciplined execution are the key learnings for me. Mckinsey, on the other hand, gave me an opportunity to work on a varied set of assignments across industries. The challenge was to walk into a company, understand the problem and turnaround quickly with workable solutions. Developing the ability to add value and create a significant impact was the key takeaway for me. 5. What were the major supply chain challenges faced by you while working in Maruti Suzuki Limited? Maruti’s operations thrive on efficiently run supply chain. One of the major challenges was to maintain the service level, given the involvement of multiple stake holders and operational complexities. 6. Could you please give us some examples on how IT is leveraged by Maruti Suzuki to solve their issues in Operations and Supply Chain?
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The scale of operations cannot be managed without strong IT backbone. Maruti has a strong IT system to support all its operations. In fact, IT has helped in multiple froms by not only bringing in efficiency in operations but also reducing overall cost of operations.
OPERATIONS AND SCM 7. What have been the major issues in the Operations and Supply Chain of Jabong.com and how have you resolved them?
One of the major challenges that we faced was scaling up really quickly while maintaining the high service levels. From day one, we were clear that whatever we build has to be scalable. To achieve this, we adopted modular approach so that processes could be replicated and scaled easily. We designed the capacity on base load but developed flexibility in the system to take care of peak demand situations. We leveraged technology wherever possible to automate or semi-automate the processes. We also made adequate checks and took measures through detailed and intelligent MIS reports which helped us in identifying our areas of improvement.
“We have also built strong, cross-functional teams to ideate and improve processes.�
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8. Jabong.com claims to deliver products in top 10 cities within 48 hours and to other places within 1-3 days, while it is delivering products on the same day in metros like Delhi. Could you please explain how Jabong.com has achieved this remarkable feat within one year of its inception? We have actually revolutionized the industry by offering same day delivery in Delhi NCR and next day delivery in metros. It has been a team effort and has been achieved by strong co-ordination across functions like; customer care for order confirmation, warehouse for order processing and logistics for delivery. We have also built strong, cross-functional teams to ideate and improve processes. 9. Flipkart has started its own courier service, perhaps to reduce their dependence on third party courier services. Does Jabong.com have any such plans? JaVAS, which stands for Jabong Value Added Services has been operational for almost as long as Jabong.com has been taking orders from customers. It is currently present in close to 50 cities. The same day and next day deliveries mentioned have been achieved through JaVAS. 10. Could you please let us know how Information Technology is leveraged by Jabong.com in its Operations and Supply Chain? Information & technology is the backbone of our warehousing, customer care and logistics operations. We have implemented ERP at warehouse and built CRM and
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logistics management systems for in-house operations. In addition, we have introduced Mswipe facility at the point of delivery and developed content management system for production. 11. Wal-Mart has the largest information technology infrastructure of any private company in the world.It helps Wal-Mart to accurately forecast demand, track and predict inventory levels and create highly efficient transportation routes. Is Jabong.com using any Demand forecasting tools so that it can reduce inventory levels and forecast demands effectively? Being in the e-commerce industry, we have access to consolidated data involving clicks and page views on our website. We have also gone granular in our customer segmentation. We have a dedicated forecasting team which uses state-of-the-art methodologies and tools to predict the demand based on the huge chunk of data as well as industry trends.
JABONG.COM 12. Jabong.com is now the most trafficked e-commerce site in India. What are the steps taken by Jabong.com to achieve this? We always believed in big bang approach to enter the market and went for online advertising aggressively at the start of last year, which was complemented by presence in traditional advertising channels like television and radio. We have strong focus on organic growth through Google and Facebook which helps in driving hits to our web shop. Aligning all our operations with these steps, we ensure customer delight
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which is a result of high standards in service and product quality to help spread the customer base and loyalty. 13. How do you see the future of online retailing in India, given the tough competition and thin profit margins? E-commerce is still evolving in India and the current players are focusing on expanding the market i.e. getting more and more end users to transact online. This is a long drawn process as it involves changing habits. In this quest for new customers, companies are offering free shipping, returns, COD, etc which are impacting the margins. In our view, after a few years, there will only be a few large players and a set of few niche players who would successfully maintain profitability. 14. How does Jabong.com differentiate from other players in the e-retail segment? The DNA of Jabong.com is all about widest assortment, speed, efficiency and process excellence. We differentiate ourselves in being the first to get new styles and options on our website, first to get the products shipped to the customers and the first to refund customer’s money in case of returns. In the process, we have redefined the market by introducing options like instant returns (open delivery), same day delivery in NCR and next day delivery in metros, instant refunds, etc. And we have done it on a large scale. 15. Does Jabong.com have plans to enter into Brick and Mortar models of retail?
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Jabong.com believes that in the long run, ecommerce is a scalable and cost efficient way to reach out to maximum customers. We do not plan to enter into offline retail. However, we have and may continue to have some strategic, located touch points to create awareness, establish customer connect and build trust.
“E-commerce is still evolving in India and the current players are focusing on expanding the market - getting more and more end users to transact online.� GENERAL 16. What is the one advice that you would give to young managers aspiring to join the supply chain management sector? Supply chain is about continuous improvement and operational excellence. In order to bring in significant improvements, it is important to get into the details of each process, understand the involvement of stakeholders and work on incremental improvements. It is very easy to fail in this sector; however, to be successful, one needs to work diligently and have strong checks and balances. This sector gives huge opportunity to create next level of service experience.
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ACADEMIA
RFID IN INDIAN RETAIL SECTOR
[PROF. SUMEET GUPTA & AKSHAY AGARWAL]
Prof Sumeet Gupta is a professor in the area of Information and Technology Systems. His areas of research includes Management Information Systems (Technology Adoption), Virtual Communities, Supply Chain Management. He Is a member of Association of Information Systems, USA. He has numerous paper and publications in the field to his name.
It was in the year 2005 that Wal-Mart made it mandatory for its suppliers to use RFID. In 2008, the Future Group incorporated this technology in their operations through a tieup with Cisco Systems. Given that the technology isn’t new, and has huge potential to tackle many issues in modern retail sector, its penetration has been rather slow. RFID tags were first used commercially in 1960s by Sensormatic, Knogo and Checkpoint which developed systems to counter the theft of merchandise. At that time, they could only detect the presence or absence of tags; however the tags could be made inexpensively and hence were quite effective in reducing pilferage. These systems were known as Electronic Article Surveillance (EAS).Over half a century later, widespread application of this technology is still in its nascent stage.
1. Collision: RFID tag readers face problems when they 'collide' with each other. The signals from one reader may interfere with those from another, especially when their physical coverage overlaps. 2. Lack of allotted frequency band: RFID works on radio waves, which are regulated by the governments all over the world. There exists no international agreement on the frequency band to be allotted for RFID. Given that this technology can heavily change the face of supply chains globally, this is a huge hindrance in the way of its global adoption. 3. Signal detection and interference: The RFID tags also have a tendency to interfere with each other's signals, thus making it difficult for the tag readers to detect them. Adding to the difficulty, the signals are partially blocked by certain types of packaging materials, metals and liquids.
Issues The various hurdles on the way of wide acceptance of RFID systems can be categorized as either technical or managerial. The major technical issues are FEBRUARY 2013
On the other hand, the following are the managerial issues:
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1. Lack of Technology Standards: Many organizations prefer to have their own proprietary RFID systems because of the fear that their RFID tags could be read by their competitor, leading to a serious leak of sensitive information. Thus it has been very difficult to reach a consensus on a universal technology standard for RFID.
on pellet-level, box-level or container-level in such cases, thus limiting its capabilities.
2. Lack of Acceptance by Supply Chain Partners: Even a giant like Wal-Mart had faced some difficulties in implementing RFID in its supply chain due to resistance from some of its supply chain partners. RFID might not make sense to everybody, especially given the high initial costs of implementation.
1. Out-of-stock Warning: Stock out is a bigger evil than excess inventory in retail. RFID tag readers can detect the number of units of each SKU on the shelf in a retail store in real time. This enables the implementation of an out-of-stock early warning system. This system can also be integrated into a vendor-managed inventory platform. The same concept would work in warehouses, thus benefitting the whole retail supply chain.
3. Returns on Investment: Implementation of RFID usually costs a lot and the breakeven period and returns on investment might not be acceptable for every retail business. 4. Customer Privacy: Some of the applications of RFID come with a baggage – customer privacy issues. Hence a lot of contemplation has to be done on these aspects. 5. Data Management Problems: RFID systems generate a lot of data in real time. Managing this data would require major changes in the data structures of master files to maintain consistency across the firm and its value chain participants. 6. Expensive for Low-Value Merchandise: The cost of RFID tags varies from Rs.5/- to Rs.100/-, largely depending on the type – passive (not self-powered, derives power from the signals of the tag reader), Active (completely self-powered) and Semipassive. Even the cheapest RFID tags would not justify their item-level application on low-value merchandise like small toys, chocolates etc. Currently, the tags are used FEBRUARY 2013
APPLICATIONS Now let’s have a look at some well-known applications of RFID in retail sector:
2. Shoplifting: Shrinkage, i.e. unaccounted losses in retail, is perhaps the most daunting reality for retail businesses, and its major cause is shoplifting. It should also be noted that the RFID usage mostly seen around us relates to security of the merchandise, which shows that the benefits of RFID in this aspect already exceed the investments. 3. Supply Chain Visibility: The ability to detect each unit or pellet of each SKU in retail setup as well as warehouses and even during transportation (RFID readers can be placed in the vehicles and connected to the GPS) can be translated into very high visibility across the supply chain. This helps in combating the dreaded bullwhip effect, making better forecasts and avoiding shrinkage and other losses in the supply chain. 4. Rapid Inventory Counting: Inventory counting is an essential exercise in any retail business to avoid or at least detect shrinkage. It is executed very frequently in 29
high-value retail businesses, eg. once every 24 hours in some jewelry retail outlets. But even in FMCG retail, it is done once every few months. Needless to say, inventory counting is heavy on both manpower and time. RFID can make this process very quick and easy. 5. Rapid Check-out: Though shopping in an organized retail setup has become a means of social interaction and recreation for many consumers, it also has some tradeoffs, and the worst, undoubtedly, is waiting in a queue for checking out. The currently popular UPC (Universal Product Code) barcode system makes a particular alignment of the barcode with the barcode reader necessary for proper detection and reading. This, and the fact that each item in the shopping cart must be read individually, constitute a major part of the waiting time of the customers. RFID system would allow almost immediate check-out and virtually zero waiting time by reading all the items in the shopping cart instantaneously and in one go.
It is also technologically possible to identify how customers observe and react to different items on offer in the retail store. For example, for a particular SKU’s trial pack, the number of times it is picked up and placed back on the shelf can be determined. 2. More Efficient After-Sales Services: The ability to uniquely identify a particular product can be used to create a history of its service which is easily accessible. This would be something similar to sharing of a person’s medical history across different hospitals for better diagnosis. Though we have a long way to go before the huge potential of RFID is identified and utilized by the retail industry, the hopes have gone up owing to the recent developments in “FDI in Retail” and the efforts of organizations like EPCglobal Inc. Acknowledgement: The author acknowledges the help and support from Mr. Akshay Agarwal, a student at IIM Raipur. References
There are also some potential applications of RFID that are not so obvious, like: 1. Identifying Consumer Behavior Patterns: This is already being done with the help of membership cards by recording and analyzing the buying patterns of the respective customers (card-holders). To go further, RFID tags can be embedded in the smart shopping cards, and then the presence or absence of the respective customer in the store can be detected. In fact, it is possible to track even the movement of the customer within the store. This data can throw up new, fruitful insights in consumer behavior.
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1.Sumeet Gupta, Sanjib Pal; An Analysis of Issues and Possible Remedies in the Adoption of RFID in Retail Chains of India, in Cases on Supply Chain and Distribution Management, IGI Global, Eds. MitiGarg&Sumeet Gupta, Pgs. 387-400. 2.http://articles.economictimes.indiatimes.co m/2008-03-25/news/28387628_1_retailbiggies-future-group-future-in-hypermarketformat 3.read.pudn.com/downloads165/doc/comm/ 755010/RFID.doc
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WORK EXPERIENCE
IMPLEMENTATION OF CORE BANKING IN STATE BANK OF INDIA
[SHWETA MALLICK]
A graduate in life sciences from Patna University and has an experience of working with both SIDBI -a financial institution and SBI for more than five years. She is presently pursuing her PGPM from IIM Raipur. Her areas of interest are corporate banking and business strategy. The author can be reached at pgp12041.shweta@iimraipur.ac.in
With the advent of private-sector banking, banking sector witnessed implementation of modern centralized core banking systems and electronic delivery channels that allowed introduction of new products and provide greater convenience to customers. Due to which, the private-sector banks attracted the major chunk of middle and upper-class customers at the expense of existing old public-sector banks. Foreign banks such as Standard Chartered Bank and Citigroup used their advanced automation capabilities to gain market share in the corporate and high-net-worth markets. To remain competitive with its private-sector counterparts SBI began the implementation of a centralized core banking system in 2002. The State Bank of India selected Tata Consultancy Services to customize the software and to implement the new core system, and also to provide ongoing operational support for its centralized information technology. The implementation of the Tata Consultancy Services (TCS) BaNCS-24 Core Banking software at the State Bank of India (SBI) and its affiliate banks represents the largest FEBRUARY 2013
centralized core system implementation ever undertaken. It included the conversion of approximately 140 million accounts held at 14,600 domestic branches of SBI and later also at its affiliate banks. Unlike privatesector banks, SBI has a dual role of earning profit and expanding banking services to the population throughout India. This tradition of "banking inclusion" later posed a major challenge to core banking implementation. SBI had undertaken a massive computerization effort in the 1990s to automate all of its branches when it implemented a highly customized version of Kindle Banking Systems' Bank-master core banking system. However due to the extensive use of local processing and the lack of reliable telecommunications in some areas, it deployed a distributed system with operations located at each branch. In 1992, it had just one fully-computerized branch - at Nariman Point. During next ten years, it computerized about 4,000 branches. By 2004, it managed to complete its computerization drive by connecting all of its 9,000 branches (then). The computerization task has often been 31
compared to something like repairing a car engine while it is running. SBI now boasts of 14,000 plus computerized branches, apart from a heavy balance sheet to the tune of Rs 13.35 trillion. It now has about 8.96 million Internet banking customers out of the 154 million savings bank account holders. More than 22,000 SBI ATMs across the country today serve customers. In 2011-12, SBI again topped the charts in terms of growth in operating profits at 24% as against 14-16% recorded by ICICI Bank and HDFC Bank Ltd. In 2002, it approved the KPMGrecommended strategy for a new IT environment that included the implementation of a new centralized core banking system. This then encompassed the biggest 3,300 branches of the bank that were located at major places. The main objectives were: Delivering of new product capabilities To unify the processes across the bank to realize operational efficiencies and improve its customer service Provide for a single customer view of all accounts Ability to merge the affiliate banks into the State Bank of India Support for all SBI existing products and provide for developing new ones Reduced turnaround time and controlling the customer attrition The bank faced several extraordinary challenges in implementing a centralized core processing system. These challenges included finding a new core system that could process approximately 75 million accounts daily — a number greater than any FEBRUARY 2013
bank in the world was processing on a centralized basis. Also, the bank lacked experience in implementing centralized systems, and its huge employee base took great pride in executing complex transactions on local in-branch systems. This practice led to a doubt whether the employees would effectively use the new system or not. Another challenge was meeting SBI's unique product requirements that would require the bank to make extensive modifications to a new core banking system. The products range from gold deposits (by weight), to savings accounts with overdraft privileges, and activities like posting of extraordinary number of passbook savings accounts amongst others. The services it provides vary between extremes from boutique banking to mass banking in rural areas.
“In 2005, the bank suffered a loss of transactions for about three days, when the nation fell prey to the Tsunami as no separate hubs were established and there wasn’t any disaster recovery plan in place.” The migration of existing software Bank Master and Credit Information System for Loan & Advances (CISLA) to single software of BANCS – 24 was a challenge. The branches were migrated from local server to servers situated at CBD, Belapur. It was difficult to manage as now the branch had to deal with the suspense/dummy accounts managed at central as well as local level. There was a lot of duplication of data. 32
ATMs which were initially connected with the local server at branch were now to be connected with the central server and entries pertaining to disputes now to be handled by the central team. The basic transactions of clearing and funds transfer to other branches which initially would have been done through suspense accounts and taken days/months to reconcile were now online and any wrong entry would have created havoc for the customers. Account opening process which was best at the local level as branch was sure about the credentials of the customer, now needed a thorough verification as customer could transact from any part of the country. Overall, the bank was now more vulnerable to mistakes caused by non-reconciliation of entries, any erroneous data entered and the risk of fraud was higher than in the earlier system and could send a panic wave across the organisation and a bad repute among the customers. Apart from this, branches which migrated from manual transactions to computerized environment faced lot more challenges in installation of hardware / software, training of employees and managing network – WAN/Leased Lines were major challenges. As the branches were spread across country ranging from planes to hilly terrain, geographical constraints came across as one of the factors that the bank kept in mind while setting up its branches and ATM network. Constraints ranging from installation of V-SAT to arranging the leased line in interior parts of the country for smooth banking experience to the locals were severe. In 2005, the bank suffered a loss of transactions for about three days, when the nation fell prey to the FEBRUARY 2013
Tsunami as no separate hubs were established and there wasn’t any disaster recovery plan in place. The organisation was midway in the transition between Bankmaster and BaNCS -24 and thus suffered huge loss in business and repute. Also, as the employees were not fully acquainted with the technology, frauds took place in the branches wherein the funds from internal accounts of Bank were misappropriated due to lack of track and supervision of suspense accounts (inter branch funds transfer, charges accounts, interest payable/receivable accounts etc.). The banks were not only supposed to train staff on IT security, but also to educate their customers on compromise of passwords and ATM pins. Phishing, spam attacks and cloning of cards were now the challenges faced by the banks. The contract for the initial project was completed in May 2002 and the target was to complete converting 3,300 branches by mid-2007. TCS then began a gap analysis effort to determine the required software changes to the BaNCS-24. The changes included installing required interfaces with more than 50 other systems as well as making enhancements to support the bank's product requirements. They placed a priority on the needed changes that would allow branches with high-net-worth individuals and then corporate accounts to be converted as soon as possible. The primary data centre was established at Navi Mumbai and a backup centre was established at Chennai. The bank then also decided to extend this core banking implementation to include all of its (then) eight affiliate banks. TCS created a separate processing environment 33
within the Mumbai data centre used to provide support SBI. The conversion effort for each of the affiliate banks spanned 18 to 24 months. The branch conversions overlapped among the banks, allowing all the affiliate banks to be converted in 30 months. No matter what application/technology an organisation adopts, it is the people who will be required to enable the effective implementation and smooth transition of products and services toward new systems. Employees need to gain education and expertise in these systems to enable the banks to leverage on the investments and convert them to returns. It has been observed that large technology initiatives usually face a lot of resistance to change and low acceptance by the employees and therefore become the main reason for the failure of such implementation. Bank needed to focus their efforts on the training and education of employees to enable the successful implementation of their information technology and convert the heavy cost incurred into returns. In SBI, where many of the employees were about 50 + years, adoption of technology and its implementation been a major challenge. Apart from the employees, the bank is still facing an uphill task in convincing its customers to increase the usage of net banking/mobile banking services offered by the Bank.
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Several critical factors contributed to the success of the SBI core banking implementation: • Senior management commitment • Staffing and empowerment of project team • Ownership by business heads The bank has further launched various platforms to reduce human intervention and provide for increased automation to serve anywhere, anytime like mobile banking (though, IMPS (Inter Bank Mobile Payment Services) facility is yet to be fully functional), internet banking, offering several value-added services through their electronic channels such as tax collections, trading, bill payments, and viewing demat accounts, electronic funds transfer etc. The various electronic delivery platforms have helped the bank to reduce the crowding of lobbies, transactional cost of branches and also the stationery cost of vouchers & instruments incurred. The technological advancement has helped in reduction of customer complaints. The new core system has resulted in benefits throughout the bank for both the customers and the employees of SBI. The new core banking system has allowed the bank to redesign processes, establish regional processing centers, and an increase in employee productivity. Implementation of the TCS BaNCS system has provided the bank with the ability to consolidate the affiliate banks into SBI.
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WORK EXPERIENCE
ROLE OF IT IN OPERATIONS Learning from the IT industry
[VIRINCHI ACHARALU M]
As time passes, it can be observed that a luxury becomes necessity. Telephones for example which once were luxury is a necessity now. Imagine a company which operates millions of transactions and handles terabytes of data every day. You can simply state that there is no choice. Information Technology has a huge role to play in dayto-day operations of such a company so much so that, you have to change your way of operation in accordance with its limitations. Based on my experience in an IT company I would like to share some insights in to how IT plays an important role in day to day Operations of a company like its Business Process, investment on IT infrastructure, negative aspects and new trend that is emerging.
1. IT & Business Process During my tenure in an IT company, I was managing data warehouse system of world’s leading manufacturer of sports goods. It has operations all over the world and all transactions were handled by tailoring systems to the local way of doing business. However, senior management needs reports that integrate data from all over the world in a predetermined format. This was implemented using SAP Business Intelligence. This application used to handle 7-8 terabytes of data. FEBRUARY 2013
Russian data was not integrated in to this application till then. If it is done data size increases up to to 10-11 terabytes. The current application does not have capacity to handle such a huge data. A huge investment is needed to increase its hardware capacity. However, an innovative solution was proposed. The requirement would be fulfilled with a small change in report design. However, this needed a change in Business process. A new way of classifying its retail stores had to be done. This solution reduced data by 85% saving huge amount of money. The company adopted it. The learning is that there can be a situation where Business process of a company was changed to accommodate the limitations of IT, thus illustrating how important its role is in Operations.
2. Investment in IT The same company reduced spending in IT during 2008 recession. A huge IT system was initially not maintained and later managed by only 5 engineers because of lack of budget. The result is that 50% of data was not useful. But when the economy recovered the company had to spend huge amounts of money to make use of it effectively. Today the same system is maintained by 30 engineers. It is used for many activities like replenishment of stores, 35
decision on offering discounts, planning for opening new stores, comparing various stores etc. The conclusion is even though company ignored some of its IT infrastructure in short term, they came back rescuing it as soon as they can emphasizing its importance. IT is also used for very short term purposes. For example this same sports manufacturing company had a huge investment opportunity during 2012 London Olympics. They expected a sudden surge in the sales but for a very short term. To tackle such a situation they developed IT solution for a very short term. The investment proved to be useful. Sales as expected were so high that existing infrastructure would have never supported it. The learning is that IT plays a vital role while trying to exploit an opportunity.
3. Negative effects of IT on operations While working for Energy Utilities Company in US our team was called for an emergency meeting early in the morning. Issue was, Employees had their salary credited one day in advance. Reason was that the newly implemented HR solution was not tested properly. Imagine the impact of it for a multibillion dollar company with more than 10000 employees. The conclusion is if not properly handled in all steps IT implementation will seriously hamper your operations. A government sector company in India once implemented major changes in its system architecture for efficient billing mechanism. They received many complaints about
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inflated bills. The main reason was company did not pay proper attention to data migration from legacy system to new system. There was a script that ran for hours to migrate data which stopped abruptly because of insufficient hardware infrastructure and loaded inconsistent data. So much effort was invested in to load the data while the solution was simply to implement effective code in the script. By the time it was identified junk data was already live in production system. The learning is that you can’t ignore any step of IT development and it is very crucial to identify the underlying reason for a problem.
4. Emerging trends of IT in operations IT product developers have been releasing standard Industry specific packages so that you can just do little customisation and start using it. Today companies are a step ahead wherein they are forming strategic alliances with IT product producers, where even before the product is released it is tested for adaptability for their organisation. Recently I have seen a major manufacturing company, IT product Development Company and IT consulting company all were working together for the release of the new version of the packaged software. The learning is that IT is expanding its role in operations across industries. I would like to conclude that IT has multi dimensional affect on operation of any major player in any Industry across the world
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GURUMANTRA CLOUD SUPPLY CHAIN THE GURU ANSWERS
Q) Sir, the term Cloud Supply Chain has generated a significant interest among supply chain enthusiasts in the recent times. What does it refer to? A) To understand the underlying concepts of Cloud Supply Chain, let’s begin with an introduction of cloud computing. Cloud computing refers to the use of computing resources as a service, that is delivered over a network, usually the internet. Supply chain has emerged as one of the biggest applications of this model, and a supply chain using this model is called a Cloud Supply Chain. Q) Interesting, but can you explain in simpler terms? A) Imagine that you are operating a computer or a mobile handset with an internet connection. You can run a program or store a file on the internet without using the computing power or disk space of your device. For example, any online service that convers a document from one format to another is called as SaaS (Software as a Service). Google Drive allows you to store your files on Google’s servers. It can be categorized as STaaS (STorage as a Service). Both of these are different types of cloud computing services.
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Q) Why is there so much furor around cloud computing? A) Cloud computing offers many advantages over the traditional IT models. Some prominent ones are: 1. Very low initial investment since developing the IT infrastructure and manpower is not required to a large extent. Also, the need of buying expensive software is eliminated. 2. Very flexible model, and hence easy to for expansion and reap the benefits of economies of scale. 3. Very convenient payment options, like one-time-payment and pay-asyou-go. 4. Easy access to the data as well as monitoring of projects on the cloud. 5. Low manpower investments – less training and less number of people required. Q) And where does Supply Chain come in? A) A usual problem in any supply chain is that the different partners – suppliers, manufacturers, distributors and retailers, use different software platforms to collect and analyze various kinds of information and data. This makes the integration of the supply chain data a difficult task. On the other hand, when all the supply chain 37
partners are on the cloud, the relevant data from each other is accessible to them. The improved supply chain visibility makes it more efficient and well-armed against bullwhip effect and other such problems. Q) Please elaborate on the benefits of cloud to a supply chain. A) The data-accessibility and high degree of visibility in a supply chain allows it to 1. Make better forecasts 2. Identify gaps and react quickly to plug them 3. Better and quickly identify the shifts in customer demand 4. Minimize bullwhip effect 5. Work with lesser inventory and higher service rate Besides, as discussed before, the cloud model benefits each partner by rationalizing the IT resources and providing a lot of flexibility. Q) Can you name some companies who are operating on cloud supply chain? A) The list would be huge, but some prominent organizations who have recently moved their supply chains to cloud are Pfizer, Renault and P&G. Nonetheless, there are ample media reports suggesting significant improvements in their supply chains and hence competitive advantages that cloud has brought to them. Q) Who are the major players providing cloud services for supply chains? A) Some well-known players are Oracle, SAP and JDA. Also, since each supply chain is different from another, many companies prefer to use cloud services for some
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specific part of the supply chain. This has worked in favor of some companies who specialize in and are reputed for such services. Some examples are Salesforce (Customer Relationship Management), AMAC Logistics (Transportation Management), Lighthouse Systems (Manufacturing Execution Systems) and eBizNET (Warehouse Management). Q) Is there any pitfall of cloud supply chain? A) There are some concerns regarding the security of the data stored on cloud. Since the leakage of the supply chain data, say through hacking, can be highly detrimental to a company, many organizations are still “on the fence� when it comes to implementing cloud in supply chain. They don’t trust a third party service provider with the sensitive data. Another risk is that any technical fault in the system would do more damage to the entire supply chain than in case of the traditional IT models. High degree of maintenance is required to avoid such problems. References 1. http://finance.yahoo.com/news/renau lt-moves-export-supply-chain110000711.html 2. http://www8.hp.com/uk/en/hpnews/press-release.html?id=1330013 3. http://www.verio.com/resourcecenter/articles/cloud-computingbenefits/ 4. http://mobiledevices.about.com/od/a dditionalresources/a/CloudComputing-Is-It-Really-All-ThatBeneficial.htm 5. http://en.wikipedia.org/wiki/Cloud_c omputing
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REGULARS
CROSS WORD
Across 3. The registering and tracking of parts, processes, and materials used in production, by lot or serial number. 4. This allows you to expand your wireless local area network into an asset tracking system 6. Type of analytics software that tells a manager what's going on in his supply chain now 7. First Indian company to create a hub and spoke distribution model in the express package industry in India 11. A wireless locator device for high-value cargo that provides real-time tracking data for increased security and is the first device of its kind to meet FAA specifications. FEBRUARY 2013
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12. Systems link management functions with engineering, manufacturing, and support operations. 13. A computer software system used in a number of industries for order entry and processing. 16. Type of warehousing which refers to the use of the voice direction and speech recognition software in warehouses and distribution centres. 17. Software system which aims to control the movement and storage of materials within a warehouse and process the associated transactions.
Down 1. The system that allows suppliers to access large amounts of online, real-time, item-level data to help those suppliers improve operations 2. DHL's temperature monitoring technology device piloted to customers from the food and pharmaceutical companies to ensure every shipment is kept at a specific temperature without the need of opening the packages. 5. Management software systems that enable shippers to automate planning and execution, connect electronically with carriers, and reduce freight costs though optimal mode selection and optimal carrier assignment 8. A type of two-dimensional bar code initially introduced in automobile industry. It has become very popular due to its ease of use and storage capacity 9. Type of Analytic software that tells the supply chain managers of the future risk,ExampleAlternatives to be followed when price of oil changes from $50 to $100
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SOLUTION TO CROSSWORD
TEAM STRIVE
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