Pravaha
COVER STORY
VOLUME 2
Cold Chain Logistics
From the editors desk Dear Readers, Heartiest welcome to the spring season with the chill receding, it is an apt time to break the shackles of hibernation and walk up to a new promising season of freshness and bounty that’s awaiting us ahead. It’s time we refurbish ourselves with the latest that has taken place in and around us. As the great Albert Einstein once mentioned “‘Wisdom is not a product of schooling but of the lifelong attempt to acquire it”, Operations club IIM Shillong stays committed to the same and has taken yet another conscious attempt at broadening the horizon of operations with its Bi-annual magazine “Pravaha”. After a successful first edition, Pravaha launches its second edition which focuses on the different aspects of Supply Chain and Logistics. Supply Chain has been one challenging field that has demanded cognizance. Current operational efficiency is defined by a risk free resilient supply chain. The current version of Pravaha aims at dwelling into the intricacies of Supply Chain Management, with focus on in vogue and challenging topics like, Cold Supply Chain, Sustainable Sourcing and resilient supply chain. Logistics has also been an important ingredient of the issue, with special focus on transport management system. Besides, the magazine has focused on an in depth analysis of DHL, that envisages the success story of DHL and its dream run in China. Special attention has also been laid on learnings from the stalwarts in the field, both in terms of strategy and conceptual frameworks. The Robaroo section shall serve as a potential guideline to operations enthusiasts and professional who want to make it big in the long run, with insights from the best in the business. Robaroo aims at mapping the experienced to the youth. An ideal platform to learn and understand the business. Pravaha aims at going beyond the four walls of the classroom and understanding the nuances of operations from a practical perspective. Often books and models may not speak as much as interactive learning can do, team Op-era, IIM Shillong has been committed to making the experience enjoyable and a bountiful one. Enriched with a huge gamut of learning to take home. The second edition of Pravaha has aimed at a more detailed spectrum of understanding. Hope this magazine helps you traverse through a path fortified with practical insights and at the same time makes your reading enjoyable and enriching.
Happy reading!!
Please feel free to get back to us with your feedback, your feedback keeps us alive.
Table of Contents INSIGHT 2 5 8 11 13 15 17
Supply chain visibility - A case on reliance fresh Sustainable Sourcing Reverse Logistics - Towards Recovering Lost Profit Transport Management System Managing Risk With Resilient Supply Chain Minimize The Waste Risk Management
BLAZE-A-TRAIL 20 22
DHL – A Dream run Learning from the leaders
ROOBAROO 24 25
Mr. K. Vaidyanathan - Challenges and uncertainties in field of operations Mr. Vishwadeep Khatri - A simplified view of Six Sigma Practices
COVER STORY 26
India-The Food Basket Of World
VIRTUOSOS 29 30
Father of Statistical Quality Control - Walter Andrew Shewhart The Man of Fishbone - Kaoru Ishikawa
RENDEZVOUS 31 32
Optimus 3.0 - The most creative brain takes it all Oper8 - Operations Week, IIM Shillong
IIM Shillong • Pravha • 1
Article of the Issue
SUPPLY CHAIN VISIBILITY
VIVEK KUMAR SHROTRYA VIKAS KUMAR SIMS
A CA S E O N R E L I A N C E F R E S H
S
upply chain visibility, a term that like two sides
and ASN (Advanced Shipped Notice, Inventory) accuracy.
of coin brings with it potential for tremendously
Supply Chain Visibility Vectors – A case of Reliance Fresh
improved supply chain performance on one side and
Visibility vectors are basically the factors that affect the visibility
a level of vagueness & uncertainty on other side. The
of products and services across various layers of organization’s
concept of supply chain visibility in late 1990’s and
network. We will take the case of Reliance fresh stores as example
is still new to many organizations. Art Mesher, then
for better understanding of supply chain vectors. There can be
an analyst at Gartner gave the concept of “The 3V’s of supply chain”.
seven major vectors which are as follows:-
The 3 V’s of supply chain stands for velocity, variability and visibility.
(a) Demand Management
Corporates and companies have worked upon the velocity and
(b) Supply Management
variability of supply chain but still have very little understanding
(c) International Sourcing
of visibility.
(d) Domestic Sourcing (e) Inventory
Visibility not only means on-shelf inventory but also means inventory
(f) Distribution and Logistics
piled up at all levels of supply chain including in transit inventory
(g) Risk Management
and inventory piled up across company’s network. Visibility allows concerned people in supply chain to forecast problems before they
Demand Management
occur and taken necessary steps to avoid expense in the real time.
Proper demand management with proper demand forecasting based
Two drivers of this savings through visibility come from PO lifecycle
on time series analysis (Adaptive Smoothing technique) and casual
2 • Pravha • Op-Era
better supply management. Questions
pertaining
to
capacities, capabilities and utilization should be asked in each and every stage of the supply chain starting from
supplier’s
supplier
to customer, logistics and sourcing partners. Emphasis should be laid on better utilization
of
exiting
capacities & capabilities and increasing them slowly with the business. It also depends on the financial conditions and profitability margins in dealing with the products. Supply
Management
is
better done by real time order
status
tracking.
Demand supply mismatch analysis of Point of Sales (POS) data can improve the visibility of
can be reduced by real time
inventory along the entire supply chain of Reliance Fresh. Fruits and
order tracking and increasing the efficiency of the supply chain and
vegetables are seasonal products with very little shelf life which
reducing the bottlenecks in the supply chain.
makes it very difficult to keep a fresh stock of vegetables and fruits according to the actual real time demand. For example on the day
International Sourcing
of festivals there is sudden spurt in consumption of the fruits which
Purchase Order lifecycle / PO lifecycle is an important factor in
makes it very difficult to predict the actual demand. We should use
international sourcing and
double regression causal analysis technique to forecast in such
transportation as it is time
situations. Demand management should take into consideration
consuming. It is easier
the factors affecting each and every individual item. For example
in case of neighboring
the shelf life of Apple is more than Banana so it becomes easier to
countries
manage demand of Apple as compared to Banana.
Bangladesh, Sri Lanka and
especially
Pakistan etc. as in many
visibility not only means on-shelf inventory but also means inventory piled up”
There are qualitative factors relative to demand which affect
cases logistics cost is
demand, some of which are as follows:-
less from these countries
(a) morale of employees, internal factors & schedules
as compared to logistics
(b) relationship and commitment to & from suppliers
cost from other parts
(c) effect of present and future customers along their purchasing
of
patterns
progress
(d) Decision and business interest shown by management etc.
Shipment and container
Problems pertaining to each of the qualitative factors should
details should be put to
be resolved keeping in view the business interest and future
use for speedy sourcing and transportation.
country.
Milestone
and
PO
/
requirements. On shelf availability and presentation of products which in case of
National Sourcing
Reliance Fresh is fruits and vegetables affect the demand of the
In case of national sourcing, emphasis should be laid on better
products. For example if vegetables are scattered then it gives a
integration of farmers, suppliers and all other stakeholders in order
feeling of product being from old stock whereas if vegetables are
to form a holistic environment. Emphasis should be given more on
kept systematically then it increases shelf life and increases the
local products and visibility should be enhanced. Efforts should be
appeal to buy fruits and vegetables.
made to tame the influence of inflation as vegetable and fruits are commodities which are affected most because of inflation. Regional
Supply Management
and local procurement centers should be established for better
Real time capacities, capabilities and utilization from top to bottom
integration of all the facilities. Real time integration of information
(from shipment to each individual product) should be known for
between all the major facilities will result in reducing inventory and
IIM Shillong • INSIGHT • 3
meeting demand. Real time delivery status should be maintained
One another balancing inventory in various inventories is to
and dock door schedule should be introduced in the system.
collaboration between various Reliance Fresh stores in city. CPFR should collectively be done for all stores in a city.
Inventory There are many problems pertaining to inventory in Reliance Fresh
Distribution and Logistics Partners
starting from low levels of inventory to high pilferage ratio to
One major problem because of there is a problem of supply chain
spoiling stocks of some of the products etc. Most of the problems
visibility is distribution and logistics partners. There are different
pertaining to freshness and unavailability are due to inventory
logistics partners even within the same cities. It makes difficult
mismanagement. In the initial days of Reliance fresh high stocks
to estimate the in transit inventory. There is no sharing of data
of vegetables and fruits were visible but now vegetables and
between logistics partners which makes demand and supply
fruits have been reduced to just one corner of the Reliance Fresh.
estimation more difficult.
There are often cases of stock outs on one hand and stocks getting
Earlier Reliance had a dedicated Reliance Logistics as their logistics
spoiled on other hand. Basic techniques such as sprinkling of water
partner but it could not survive for long. There should be uniform
should be introduced in the standard operating procedure (SOP) of
dedicated logistics partner at least on city level as it will increase
Reliance Fresh. New improved products which are most often called
the response time and information can easily be shared about the
BT products should be introduced as they have better shelf life.
demand and supply.
Inventory in the supply chain should be maintained at minimum possible levels and most of inventory of vegetables and fruits
Risk Management
should be made available to customers.
Constant review of risk management and mitigation plan both
Inventories of other trading and logistics partners (In-transit)
at strategic and tactical level should be done depending upon
inventory should be kept at minimum possible levels. Advanced
the degree of risk involved in the business and the nature of the
shipping notices based demand and supply management should
product.
be done.
Based on the above mentioned secondary research, the following supply chain visibility matrix for Reliance Fresh has been suggested.
4 • Pravha • Op-Era
SUSTAINABLE SOURCING
HEENA MOTWANI
T H E E F F I C I E N T P RO C U R E M E N T T E C H N I Q U E I N S C M
IIM SHILLONG
ustainable Sourcing is a process of buying goods
is to make sure that the selected strategy should support company’s
and services that takes into account the long
core business strategy. The second step is the selection of minimum
term impact on people, profits and the planet.
criteria for sustainable sourcing and that is done by selection
The practice of sustainable sourcing demands
among the environmental, social or economic issues for the raw
full transparency of the supply chain, insights
material. That is effectually done by building the Input Issues
into the sustainable competences of the vendors,
matrix that holds the company-relevant agricultural raw materials
knowledge of the commodities used, and co-operation with
as one dimension and criteria (ecological, social, business) as the
other companies, governments and NGOs to secure the supply
second dimension.
of sustainable commodities. This is quite different to traditional
The third step is prioritization of raw material selected, by the
approach that focused on quantity, quality, price, lead times and
company while implementing the sustainable sourcing strategy. It
vendors. Organizations that excel in sustainable sourcing typically
can be done by choosing the raw material that:
have an integrated business model, which recognizes the integral
• Has high quantitative and qualitative importance for the company
connection between sustainability and the supply chain. Sustainable
• Are difficult to replace
sourcing considers how products are made, where and how they are
• With which noteworthy social and ecological issues are attached
S
transported, and are disposed of. Post that the company should effectively build upon the program How is it performed?
goals that should be based on:
The first and the basic step towards sustainable sourcing decision
• High impact issues targeted by external stakeholders
IIM Shillong • INSIGHT • 5
• Improvement prospects 1. The Value Chain: It depicts all the activities a company engages
• Sustainable sourcing trepidations Next parameter that should be considered
in while doing business, and is used to identify the positive and
while forming the sustainable sourcing model
negative impacts of those activities. By doing this, the company
is Sustainability standard and more specifically
creates a set of problems and opportunities that should be
for it to be some external established standard
investigated, prioritized and addressed. Sustainable sourcing is
Sustainable sourcing considers how products are made, where and how they are transported, and are disposed of.”
or
internal
sustainability criteria that
company
used as a tool to decrease the companies’ negative impacts and offers opportunities for strategic distinction.
has
formed and has been
2. Company’s competitive context: It shows how the conditions at
following.
a company’s locations affect its ability to compete. The competitive
Somewhere between
context can be divided in four areas:
these two options
1. The Quantity and Quality of available business inputs, such as
lies an alternative
human resources or transportation
– adopting a set of
2. The Rules and Incentives that govern competition, such as policies
guidelines developed and used by a group of companies, such as
SAI
Principles
Platform’s and
Practices (P&Ps) for specific commodities. Within that organization, food and drink companies jointly develop P&Ps for the sustainable production of several crops on a pre-competitive basis. Verification, certification, continuous improvement and direct investment are certain sustainable practices that a firm can follow for resource conservation and sustainability, considering the uniqueness and geographic location of each priority.
that ensure transparency 3. The Size and Sophistication of local demand, which is influenced
Porter and Kramer’s Model
by consumer rights and fairness in government purchasing
Porter and Kramer developed an interesting framework to analyze
4. The Availability of supporting industries such as service providers
the interdependence between business, environment and society.
and machinery producers.
This framework helps companies to set their sustainability agenda
These aspects can be opportunities for sustainability initiatives and
in line with their core business choices, and analyses the potential
serve as a framework for sustainable sourcing
of sustainability activities from two perspectives:
Porter and Kramer’s Model 6 • Pravha • Op-Era
IKEA’s Model of Sustainable Sourcing: Low Price, but not any price
wood supply chain audits for closer evaluation. The IKEA wood
IKEA has a very active approach to sustainability. It follows the
procurement group works to secure future price reductions and
following technique to achieve sustainability:
access to wood from sustainable sources. It has also established
• IKEA puts considerable effort in their ‘IKEA goes renewable’
co-operation with the pulp and paper industry and has long-term
programme which aims to have all of their products recyclable
agreements with governments, forest owners, and forestry-related
within the next two years
associations. Suppliers of wood are compliant with the IKEA
• It has estimated their entire carbon footprint to identify the full
minimum requirements and preferably be certified by the Forest
extent of their climate impact – from the extraction of raw materials
Stewardship Council (FSC), including the Forest Management (FM)
to customer transportation and the use of products
and Chain of Custody (CoC) standards
• The firm co-operates with companies, trade unions, and
Cotton: The long-term goal is for all cotton used in IKEA products
organizations to develop and reinforce the impact of their work
to be ‘better cotton’. The availability of sufficient volumes of ‘better
within the social and environmental field
cotton’ will affect how quickly IKEA can reach their goal. IKEA is one
• IKEA has taken considerable steps to engage in water conservation
of the founding members of the Better cotton initiative (BCI). This
projects and raise the awareness of their suppliers
global organisation aims to make cotton production effective for the surroundings it grows in, for the people who produce it, and for
Raising the usage of sustainable raw materials
the future of this sector.
Wood and Cotton are the basic raw materials used by IKEA. Let’s take a look at the sustainable sourcing techniques used in acquiring
Conclusion
them:
Like IKEA, every organization should use management practices
Wood: Wood is both renewable and recyclable and hence a sound
focused on sustainable sourcing technique that can align well
environmental choice. Documentation of wood usage by the
with the core values of their firm. This would not only serve as
suppliers is done in an annual basis that acts as a basis for a wood
an organization wide differentiating strategy but would also be
supply chain audit. Information collection from the questionnaire
beneficial to all the stakeholders in the supply chain ranging from
and risk assessment methods are used to choose a number of
supplier to the end consumer.
DID YOU KNOW?
• 7-Eleven, Inc. is the world’s largest convenience store chain with
and bread from the ice dock. Soon, the convenience store was born and
close to 51,600 stores in 16 countries, of which more than 10,200 are
became known as 7-Eleven to reflect the 7 a.m. to 11 p.m. hours of
in North America, and the company has more outlets than any other
operation
retailer or food service provider
• For more than 15 years, 7-Eleven has been listed among Hispanic
• July 11 (7/11) is the official birthday of the 7-Eleven convenience
Magazine’s Corporate 100, the top companies providing the most
store chain. The company celebrates its 87th birthday this year
opportunities to Hispanics
• In 1927, convenience retailing began simply enough when an
• 7-Eleven adds another store to its worldwide operations every 2 hours
employee of Southland Ice Company in Dallas started selling milk, eggs
IIM Shillong • INSIGHT • 7
REVERSE LOGISTICS
NISHANT KUMAR IIM SHILLONG
TO WA R D S R E COV E R I N G LO S T P RO F I T
R
everse logistic is not a new concept but it found
market
its place in greater canvas when industries faced
green product
changing economies and stiff global competition
and
also
which helped them in reducing waste and resulted
way
to
in improved profit. It is well known that almost every
material which
company looks for ways to increase revenue and
were going for
reduce risk and costs involved.
with a use
landfilling, for refurbished
Apart from this, most of company is trying to carve there path in field
product which
of greener supply chain and key to start supply chain sustainability
is
can be found in reverse logistic. By implementing reverse logistics
good as a new
strategies which mainly includes return management; repair and
one,
refurbishment; recycling of goods; and proper disposal of materials
manufacturing
from unwanted goods, companies are trying to move more toward
cost go down
sustainability along with cost cutting cost and making product of
and making a
longer shelf-life.
green image in
Reverse logistics has been around for long time but it was used after
market. So we can say that a properly executed reverse supply chain
usually asked question-“what we do with the material?” Now it is a
can yield both public image and monetary benefits.
forethought because it give companies a competitive edge of going
8 • Pravha • Op-Era
just
as
making
Reverse Logistic Pipeline Key Areas where companies can impact revenue with reverse logistics activities a) Returned Revenue: By means of repackaging and reselling of parts, reclamation and recycling of returned products, company can earn more from returned product because secondary discount market for products is continuing to grow. If company ensure timely delivery and processing of return company can save also. b) Protecting Profits by avoiding risk of regulation: By proper handling return and tracking all activities, a company can avoid fines and penalties from various government regulatory agencies such as Now there are many industries which are reaping benefits from this, but electronic industry was the first and most successful one of all. Thanks to growth in high tech gadgets and over changing technologies many devices like cameras, mobile phones, video games, television, computers etc. become obsolete in few years leaving manufacturers with mountain of unwanted products. According to a survey by Aberdeen Group, Aerospace and defence firms represent the highest proportion of respondents that consider reverse logistics extremely important to overall company
the Consumer Product Safety Commission, FDA and other state and federal agencies. c) Customer Loyalty: According to a survey conducted in USA, 95% of customers will not buy from a company if they have a bad returns experience. That’s why companies considered best-inclass in reverse logistics enjoy a 12% advantage in total customer satisfaction over their competition. d) Disposal Benefits: A company who knows what is returned and
performance.
where it end up makes it easier for companies evaluate returned
Key activities in the reverse logistics ecosystem
regulatory issues. It also creates other benefits like by-products,
stock for possible secondary sales channels and to deal with avoiding excess inventory carrying costs, minimizing taxes. Profit generated by Reverse Logistic in High Tech Industry Electronic industry spends annually over $14 billion on return. Without a well-managed reverse logistics process, a high tech manufacture could lose over 50% of the returned inventory value since the majority of returned products can be sold in secondary channels. As per Best Buy CMO Barry Judge secondary market electronics sales represent an estimated $15 billion market in the United States. a) Reselling in secondary Market One of the best example of secondary market opportunity is mobile phone industry. Every year about 1.2 billion cell phones sold
IIM Shillong • INSIGHT • 9
worldwide. In 2011, return rates of mobile phones was 8% which is
IT strategy. Apart from IT, other investments are
96 million in count. The average retail value for refurbished mobile
people and process and both decisions (IT, people
phones is approximately $150 from which manufacturer would
and process) are cohesive in nature and must
recover $82.50 per phone. By this, a manufacturer can easily reduce
be timed together because neither can succeed
the cost of production, increase revenue and improve customer service at the same time. b) Rare Materials Reclamation Large chuck of cost in manufacturing electronic goes to procure rare earth metals, parts and subcomponents. Manufacture can take advantage from reusing such parts, components and metals from the millions of discarded units. For example, mobile phone manufacturers could extract and reclaim the gold, silver, palladium and copper from discarded units. According to the Environmental
without the other.
....every company looks for ways to increase revenue and reduce risk and costs involved.”
2. Logistics Operations (Realizing 3PL as a solution) One of the problem even
faced
by
companies with best in class supply chain function and global
Protection Agency, from every million cell phones recycled, 35,274
network, is lack of
pounds of copper, 772 pounds of silver, 75 pounds of gold, and 33
expertise within their management ranks to run the backward
pounds of palladium can be recovered which would be worth of
supply chain. In current scenario also manufacturers often dedicate
over $2.8 million at 2011 metal prices.
their top talent to run manufacturing plants, working with customers or managing imports, marketing — not focusing on returns.
KEY CHALLENGES 1. People, Process and Technology Strategy in Reverse Logistic
Reverse logistics is often outsourced to 3PL providers. The core
Many companies are leaders and superior in forward supply chain
reasons for outsourcing are: obtaining expertise quickly, achieving
and have well established processes and practices, it is not same
flexibility and speed to market and creating a shielding against
in reverse logistics. Most of the company continue to manage
outside forces to limit potential liabilities.
return and AMS services without incorporating people, process and IT component in an efficient manner. The problem of most
With help of 3PL provider, manufacturer receives the motivation,
of companies is broken link between “customer contact” and
experience, technological knowledge and resources like capital and
“resolution of issue”. It is evident that a reverse supply chain requires
staff to hit ground running. Many companies have seen immediate
critical combination of people, process and technology to drive
and significant positive impact, when hired a professional and
value because poorly managed transactions can cost you money.
qualified 3PL simply because of its experience in developing start
To resolve this problem, companies are adopting company-wide
us process and operations.
10 • Pravha • Op-Era
TRANSPORT MANAGEMENT SYSTEM
ANKIT NARSARIA
K E Y TO F U T U R E I N S U P P LY C H A I N M A N A G E M E N T
I
IIM SHILLONG
nventory Management is the lifeline of the supply chain
provided by the ERP, TMS selects the least costing service provider
management. It varies with the demand. If not managed
and the optimum path for the delivery. These helps in improving
properly, piling up of inventory will take place which will
reliability, reducing crashing time, improving transit on-time arrival
lead to increase in cost. Thus, organizations are moving
and increases customer satisfaction.
towards JIT model looking for ways to better manage the inventory. With these arises the question of ‘What is
Today, almost all the companies are turning their attention to
Cross Docking?’ It is the process of basically synchronizing inbound
logistics, which has led to the double digit growth
material movement with outbound deliveries, seamlessly through
of TMS sector. According to the Steve Banker, ARC’s
distribution facility to retailers thus eliminating storage. It helps
service director of Supply chain management,
in significant reduction of the inventory carrying cost and holding
TMS saves money by lowering their freight spend
cost.
because
it
provides system In recent times, lifeline or a critical part of the supply chain
for
freight
management is the Transport Management System (TMS) because
moves involving
it bridges ERP and inventory/distribution model. What ERP does is,
carriers as well
it integrates both internal and external information that flows in
as for freight
the organization, thus helping in managing various functions of an
moves involving
organization such as planning, inventory/materials management,
transportation
accounting, marketing, sales etc. With the help of the solutions
assets
TMS bridges the gap between ERP and inventory/distribution model”
(fleet
IIM Shillong • INSIGHT • 11
management). The key processes handled by Transport Management System are: o Identifying the most feasible and optimum transport patterns according to the parameters like lead time, transport cost, order quantity etc. o Helping in administrative operations like traceability of the transport, recording and predicting unforeseen events, invoicing and documenting bills etc. o Assisting in identifying the KPI of logistics necessary for smooth and seamless operations of any organizations like productivity w.r.t shipping units/order, $/shipping unit, percentage
•
of on-time delivery etc.
logistics? Why more and more logistics specialist are putting their efforts
into
making
TMS work? The answers to these questions are: • OMNI - CHANNEL DISTRIBUTION – Retailers need support: Bringing all types
of
businesses
like brick and mortar, click and mortar, click and click , catalogue etc. under a single umbrella faces lots of logistics problems. To run the operations seamlessly and smoothly, the streamlining of transportation plays an important role, and this is where TMS comes into play. TMS helps in creating transportation efficiencies, providing real-time data, helps in making better decisions and handling innumerable other tasks that cannot be addressed using fax, telephones or even spreadsheets. • TRANSPORT MANAGEMENT – Everyone is looking for: Because of increased TMS use, its footprint has increased globally and across industries. Major software markets are looking toward this as a business opportunity, as a robust technology system in complex business environment which can address the needs of large number of exporters and importers. Continuous innovation by software vendors, increased optimization needs by suppliers and improving economy are the key factors that are leading to the growth of TMS. • STRATEGIZE AND PLAN TACTICALLY - The need for best deliver demands for the products can be addressed by other supply chain tools, but an overall planning to avoid unplanned accidents or impact of small things on overall business can be successfully
12 • Pravha • Op-Era
FREIGHT
FORECASTING
WITH
TRANSPORTATION MANAGEMENT - Unavailability of transport,
So, what are the trends that are making the TMS – the future of
addressed by TMS.
ACCURATE
empty carriers, and wrong shipments add a lot of dismay for the companies. With the help of TMS freight forecasting can be done. TMS promises to deliver accurate prediction of demand, optimizing the inventory as well as transportation forecasting to reduce the impact of market volatility. • DEMAND OF ANALYTICS - Meaning patterns in data needs to be identified for TMS to work accurately. Companies are flooded with terabytes of data daily, but to identify the most important information which can help in best transportation decisions is like finding a needle in a haystack. And, this is where TMS comes to rescue which helps in identifying important KPIs and utilize the data in the daily operation. • HOW TO UTILIZE BACKHAULS - Once the goods are delivered to the respective retailers, hauling empty trucks to distribution centres are not profitable. Utilizing the networks efficiently, tying carrier contracts, can help shippers get through these hurdles and ultimately enjoy a lot of savings and that is why they are looking towards TMS. • HOLISTIC TMS - Cloud based solutions requiring minimal IT infrastructure with end-to-end support and out-and-out fleet management tasks are what is termed as Holistic TMS and is still in the growing phase. In fact, rising fuel cost, importance of logistics, demand variability, market volatility, capacity crunch, increasing competition, makes the TMS supremacy as the backbone in Supply chain management and planning.
MANAGING RISK WITH RESILIENT SUPPLY CHAIN
SHAILENDRA KUMAR SIOM
R E S I L I E N C E T H E D R I V E R F O R O P E RAT I O N S E XC E L L E N C E
R
ecent years have witnessed an increase in mergers
supply chain network. Few reasons behind the inability to handle
and acquisition, more of globalisation which has
disruptions in supply chain are lack of clear contingency plan, roles
resulted supply chain to be longer and complex,
of an individual department.
meanwhile increasing the risk of disruptions in supply chain, operational activities. A research
FORMING A RESILIENT SUPPLY CHAIN
conducted by World Economic Forum along with
Theoretically resilience is the property of a material that enables
Accenture shows industries that are affected by supply chain
it to recover its original shape after it has been stretched or
disruptions experience a 7% average drop in share price. Recent
compressed. A resilient supply chain is an ability of a supply chain to
studies conducted across the globe have shown that 75% of
resume its original shape after disruption, this however is measured
industries faced supply chain disruption. Hendricks and Singhal
how quickly a firm bounce back post disruptions. Disruptions could
(2003) have figured out the effects of supply chain disruptions in
be internal or external. Reasons for disruptions could be:
terms of operating income, sales growth and long term effect on
• Natural disaster
firm performance. Few years down the timeline, there has been an
• International conflicts
increase in natural disaster across the globe which has a positive
• Political unrest
correlation to supply chain disruptions, and this is having a severe
• Crimes
impact on economic conditions.
• Incomplete information
Recent Japan tragedy (2011) had a severe impact on global supply
• Service failures from third party or outsourcers
chain network, which has raised eyebrows amongst the supply
• Lack of commitment from top management level
chain analysts across the globe to rethink and re-strategise the
• Tradeoffs between countries
IIM Shillong • INSIGHT • 13
FLEXIBILITY It is possible to minimize these disruptions and develop resilience by
A flexible supply chain responds quickly to disruptions. Flexible
building flexibility and increasing redundancy. However increasing
supply chain has an added advantage of meeting up with the
redundancy varies from firm to firm and adds an extra cost to to the
sudden spikes or fluctuations in demand curve. For a flexible supply
organisation. With industries following Japanese philosophy, single
chain more collaboration with suppliers is needed. Standardization
sourcing has become a cult. It has its advantage over multiple
of production, concurrent process, identical or similar parts, cross
sourcing in just in time manufacturing, lower inventory level, cost
training of employees are some of the measures which a firm
and quality consideration. Meanwhile single sourcing carries a
could adapt. These measures will also help a firm to meet sudden
highest risk. For a supply chain to be resilient it has to increase
fluctuations in demand.
redundancy to mitigate the risk factor. For this a firm has to hold • INFORMATION TECHNOLOGY is another crucial step for a firm
extra inventory, multiple sourcing.
towards flexibility. Information, data sharing can increase resilience REDUNDANCY
in supply chain. Information technology helps gather data which
Increasing redundancy is very effective in increasing strength of a
can further be used to analyse to form a pre programmed responses.
weakest link. A model for redundancy and how it increases strength
Data and information sharing forms a basis for flexible supply chain
of the weakest link is shown below. Reliability of different levels is
hence a basis for mitigating disruptions in supply chain network. • REAL TIME VISIBILITY of an organization helps a firm to form
Level 1
Level 3
Level 2
R1=0.99
R3=0.99
R2=0.95
a flexible supply chain. Addition of real time visibility and event
Level 4
processing system along with automated decision making helps in
R4=0.99
counteracting disruptions rather than following a historical method.
denoted by R.
CHANGE IN ORGANIZATIONAL CULTURE
Reliability of the supply chain can be calculated by:
If an organization faces a disruption and if there is no transparency
R(supply chain)= R1*R2*R3*R4
between departments and different levels then this organization
R(supply chain)= 0.99*0.95*0.99*0.99 = 0.9217
will face maximum hindrance in resilience. A traditional culture
In the above model level 2 is acting as the weakest link, if we add
needs to be changed, communication information sharing among
an extra level in parallel to level 2 the strength of this link will
the employees should be enhanced and transparency throughout
be transformed and during disruptions or unwanted conditions
the supply chain network should be enhanced. Distribution of power amongst different levels of management and individual so that they are empowered to act accordingly to situations if a disruption occurs. Steps for the formation of resilient supply chain: • Real time visibility of supply chain network • Information sharing throughout the supply chain network • Diversification in supplier, distributor
redundancy will mitigate the risk. The new model is shown below.
• Risk sharing between supplier, distributor, players of supply chain
Reliability of the supply chain can be calculated by:
network
R(supply chain)= R1* (1 - (1-R2) * (1- R2’) * (1- R2”)) * R3 * R4
• Removal of bottlenecks
R(supply chain)= 0.99*0.99*0.99*0.99 = 0.9605
• Change in culture • Adaptability and agility throughout the supply chain network
Due to redundancy the reliability of supply chain has increased from 0.9217 to 0.9605, though this extra chain makes it complex
Resilient supply chain enhances competitiveness. Firms that accept
and adds an extra cost, but if disruption is there in level 2 then
and adapt resilient supply chain are substantially better in shape
sourcing can be done through level2’ and level2” which will not
and posses a competitive advantage over other firms. Overlooking
disrupt supply chain operations. Hence a simple supply chain
resilience can have a severe impact on economic condition of a
network with redundancy will look like this.
firm. Study reveals firms performances are enhanced by adapting
Supplier1
C 1
Transporters Supplier
Manufacture r
Supplier2
Distributor
C 1
Transporters
supply chain will incur cost but has a long term benefit and a competitive advantage over other firms. However redundancy offers mitigating risk by sharing risk among the different levels of supply chain network but at the same time a firm should be able to part with the profit amidst the risk sharing firm.
C
14 • Pravha • Op-Era
resilient supply chain. Adding redundancy and flexibility to your
MINIMIZE THE WASTE
HARSHA DEEPAK RVS IIM SHILLONG
B U T WA S T E I S A L S O U S E F U L
n the Indian Subcontinent, on the soils of Andhra
India’s diverse climate enables the production of a wide variety
Pradesh there lived a farmer called Kotaiah whose
of fresh fruits & vegetables. The sub-continent stands second in
occupation was farming. He harvested the tomato crop
fruits and vegetables production after China producing 45.5 Million
and sold at ₹ 8 per kilo to the distributors. One day
tonnes and 90.8 Million tonnes, contributing 10.23% and 14.45% of
farmer visited his relatives in the capital city, he went
the total world production respectively. Mushrooms, Potatoes, Bitter
to market to buy fruits and vegetables and there to his
gourd, green chillies, Pomegranates, Mangoes, Walnuts, Grapes,
surprise the farmer found tomato being sold at ₹ 25 per kilo to the
Bananas, Onions and Green Peas constitute to form the majority of
customers. Farmer started scratching his head as he was unable
export basket. Major importers of Indian fruit and vegetable exports
to understand this price variation. What is the reason behind this
are Bangladesh, Malaysia, Nepal, Netherland, Pakistan, Saudi Arabia,
disparity in prices? The answer is below.
Sri Lanka and UK.
Fruits & Vegetables in India
Logistics network in India
A major drawback for low export for fruits and vegetables from
A lot of produce every year is wasted in India. As a consequence,
India is due to the poor post-harvest logistics framework. As Dr.
despite the production quantities, prices sour high in markets and
M. L. Choudhury, former Horticulture Commissioner in the Indian
making farmers further poorer due to wastage.
Ministry of Agriculture once commented, “It is unfortunate that
Logistics adds the value to the goods by making them available
in India, policy makers and planners set targets for increased
at the right place and at the right time to the right consumers.
production without making any effort to reduce postharvest losses.”
In fact possessing a logistic network is a core competency.
I
IIM Shillong • INSIGHT • 15
Logistics is most commonly misconceived as only transportation
fibre board (CFB) and moulded trays or partitions reduces damage.
of goods, which is just a part of it. It also constitutes integration
Finally, a better coordination among supply chain partners will be
of information, transportation, inventory, warehousing, material-
possible with better infrastructure and better skills, training and
handling, packaging and clearing. Logistics is usually misinterpreted
information sharing.
as only transportation of goods, which is just a part of the logistics. It involves the integration of information, transportation, inventory,
Waste management
warehousing, material handling, and packaging and clearing.
India wastes about Rs 13,300 crore worth fruits and vegetables per year, according to a report by US-based technology firm Emerson.
Post- Harvest Problems in Fruits and Vegetable Logistics
When fruits and vegetables are processed employing various post-
Despite 11% contribution to GDP the high cost of logistics in India
harvest technologies, they yield bio-degradable wastes. As per
when compared to developed nations may be attributed to poor
FAO report, 2011 40% of fruits and vegetable wastes are obtained
quality of infrastructure and inadequate service quality than in its
at Post harvest and processing levels. Most popular technique of
counterparts such as US and Europe. Logistics in India is dominated
processing into concentrates, syrups and canned foods constitutes
by the unorganised segment -the organised segment accounts for
about 89% of fruits and vegetables. Hence these post processed
less than 10% of the total logistics in India. If this problem can be
wastes can be used as the raw material in the production and
successfully addressed, a vast amount of additional food can be
manufacture of Animal feed, Alcohols, Ethanol and biogas.
brought to market with no increase in production output.
Largest amount of waste produced in food processing industry is
As per estimates, a third and a half of food is lost postharvest,
waste water from skin, washing and rinsing vegetables that can be
between farmer and consumer in developing
treated and used for gardening and watering trees and agriculture
countries like India. Most fresh produce is
which is reverse supply chain. Wastes from apple pomace, peaches,
transported in an unpackaged form which
potatoes, Citrus, pine apples and other fruits and vegetables are
reduces its shelf life of the produce dramatically.
rich in cellulose, fibre and low protein. So these can be used as
Another major reason behind the wastage is the
animal feed by properly processing them for enriching proteins
complex system involving
and good digestive elements. Fermented potatoes can be used as
traders,
middlemen
and Wholesalers, which leads
to
enormous
inefficiencies. Improvising Logistics By
improving
infrastructure
the building
a robust road network, an essential element in transporting to
market,
products Investment
in India, policy makers and planners set targets for increased production without making any effort to reduce postharvest losses.�
animal feed either. Alcoholic beverages like Cider, beer, rum and brandy are produced from fruit wastes. Cider and brandy are made from fermenting dried, milled apple pulp, oranges. Similarly wastes are pre-treated to remove lignin and other inhibitory materials. When these lignin free bio-degradable wastes when subjected to microbial fermentation result in ethanol formation. Apple, Cherry ad Apple wastes are most commonly used processed wastes for ethanol production. The wastes of fruits and vegetable processing industries are subjected to anaerobic treatment for bio-gas production. These wastes include waste water as well. This process of re-using of wastes by recycling or re-processing of
in better trucks would
materials to produce useful finished products forms an important
improve the condition resulting in better logistics. Improvising cold
sustainable operational practice in the reverse supply chain
storage facilities which are still rare in India is necessary. Shelf life
management. This reverse supply chain management can be
of produce properly cooled can be extended from 3 days at room
achieved even at the lowest level like in a house-hold kitchen in
temperature to 90 days.
the form of an organic compost pit for plant manure formation over
In India, most produce are transported loose, the use of corrugated
a few days to formation of black gold i.e. coal over a few centuries.
16 • Pravha • Op-Era
A top- down approach of risk assessment wouldn’t work efficiently alone, until it is complimented by a bot-tom up assessment process”
RISK MANAGEMENT
ACHINTYA XIMB
A S T RAT E G Y L E A D I N G TO B U S I N E S S T RA N S F O R M AT I O N
T
here is a very popular saying “ No risk No gain”. This
should be minimized . In recent years , after the involvement of
saying is very apt for today’s dynamic world, where
shareholders in the business process, many organizations are
it is unpredictable, volatile and full of the enigmatic
forced to expend their resources to address the issue of risk.As a
situations. Still the organiza-tion thriving for profit
result of this, risk assessment has become increasingly important to
and excellence are taking the risk- a calculated one.
the com-petitive advantage for any business.
Nowadays organiza-tions which are trying to elevate
their strategies for sustainability through green field expansion or
Let us first see the process for capturing and analyzing risks. Risk
brown field expansion or by some other means, calculate the risks
assessment basically depends on two factors
they may face in order to find the solution of the problems before
•
Nature of the organization
they happen.Businesses have viewed risk as a neces-sary evil- that
•
Types of possible risks
IIM Shillong • INSIGHT • 17
Considering
the
organization-wide
Strategic, operational and compliance requirements, objec-tives may be broad or narrow. In the same way possible risks may cover many areas like mar-ket, credit, product, liquidity, accounting etc. So it depends on the nature of business and scope of discussion whether it is enterprise-wide or limited to a business unit or a small start up organ-ization. Risk assessment provides clarity in the perception of the management regarding the events that could have an impact on the target achievement of the organization. A top- down approach of risk assessment wouldn’t work efficiently alone, until it is complimented by a bottom up assessment process. Boards of directors, executive bodies and different head of the de-partments first analyze the risks through enterprise-wide risk assessments to ensure that the key risks are identified and that the back up plans for that risk are designed well in advance. Once the scope is defined , our discussion of possible risks likely to occur will be rated in terms of severity and probability. The organization then will be able to visualize the impact of the possible risks . This enables them to develop their response and take critical decisions on differ-ent related aspects like resource allocation. Risk management discipline will ensure that in an ongoing process of risk assessment, objectives, risks, risk, response, measures and controls are regularly re-evaluated. Although there is a big difference between knowing the risk management and implementing it. In the recent past, it has been the good learning experience for the people like Chief risk offic-ers and board members from the recent turmoil in the business. However, there are very few companies,who tend to use risk assessment as a source of their
competitive
organisations,
instead
advantage.These of
taking
a
defensive stance , go very aggressively to risk assessment. They know that their risk management approach can be leveraged as a source of competitive advantage. They are not in a mood to just stick to compliances and cost controlling and
18 • Pravha • Op-Era
thus jeopardizing their risk management capabilities. Here are
Let us see some of the ways where a company’s risk management
some ways through which risk man-agement approach can be a
capability can be a source of com-petitive advantage.
competitive advantage to those organisations:
1. Search for the opportunity in the uncertainty: There are times
1. The objectivity in view
when there is natural dis-aster, economic slow down,government
2. Supply Chain Management
policies,etc.So instead of being defensive, one should analyze the
3. Risk management
risk factor and try to handle the disruptions and thrive to get the market share.They should treat the uncertainities as an opportunity
Let us see the example where the risk management approach
where their risk management capabilities would be tested and if
of some companies has proven to be a source of competitive
they pass they will be the winner
advantage. The famous case of Nokia vs. Ericsson, two major cell phone manufacturers at the beginning of the new millennium.
2. No risk- no gain attitude: There are higher potential profits in
When their common supplier, Royal Philips Electronics, disrupted
riskier venues. There are chances where the competitors hesitate
by a fire on 17th March 2000, the two different approach of
to enter into the riskier ventures, that time the one who handles
these two companies towards the same realized risk resulted in
the risks better than his competitors, can enter riskier ventures
different outcomes. After both of thecompanies were notified of
with higher potential profits. Risk management capabilities justify
the disruption, Ericsson trusted the words of Royal Philips and
taking the extra risk and that can be a great differentiator.The best
believe that the supply would be resumed within a week. Nokia,
example is the movie Avatar-the most suc-cessful movie ever made
however, took this disrup-tion much more seriously and jumped into action. The company proactively started to closely monitor the development of the recovery process in Royal Philips. It realized that the damage is not a small one and the supply would not be resumed within a month too. Nokia took the deci-sion and quickly booked all the available capacities of other potential suppliers. Ericsson alt-hough found out the real magnitude of the disruption, but it was too late.Ericsson faced a sec-ond-quarter operating loss of $200 million in its cell phone division. The vow of the company continued and in 2001 Ericsson merged its cell phone division with Sony. On the other hand, the proactive response of Nokia to this realized risk not only protected the company from any damage, but also resulted in an increase in its market share. While Nokia’s market share increased to 30% up from 27% a year earlier, Ericsson’s
in terms of its box-office revenue was very risky investment initially
market share dropped to 9% down from 12% a year earlier. This
with high cost of $237 million.
case exemplifies how faster response of any organiza-tion to the
3. Brand the risk management capabilities: When a company
realized risk can turn the disruption into an opportunity to increase
gains others’ trust in having strong risk management capabilities,
their market share. Bain & Company analyzed the performance of
and hence being dominant and adaptable during the situation
more than 250 companies from 2001-2009 . They showed that with
of volatilities and disruption, it can play more competitively in
the same amount of risk, the number of organizations with best
the marketplace. It will be able to attract more business as many
performance quartile increased by 24% during the 2001 recession
corporate entities will be judgmental of its brand and will be more
as compared to the stable period of economic growth. Thus it can
confident that it will deliver in the crisis.
be inferred that downturns present not only risk factor but also the strategic opportunities. This result emphasizes when there is
In today’s competitive world where there is a cut throat competition,
a downturn, those or-ganizations who can manage the risks and
the volatility in the busi-ness due to more uncertainties have placed
uncertainties better than the others can use this as an opportunity
the risk management in the top of the priorities in the organization.
to improve their market position, which seems to be much difficult
When the business leaders look at their risk management
during stable conditions.
capabilities, they should be objective to gain the competitive advantage.But before an organization can use the risk assessment
The need for implementing risk management in a company and the
as a source of competitive advantage,it should make sure that it is
level of its involvement de-pends on uncertainties the organization
capable to analyze and manage the risk effectively and align them
faces. As the level of uncertainties and their impacts on our business
with its strategies.
increases, our need for managing them and the level of attention they require rises as well. Today’s business world is facing the challenge of more uncertainties and thus risky. Now, the question is how risk management could be a source of competitive advantage.
IIM Shillong • INSIGHT • 19
DHL A DREAM RUN TA RG E T C H I N A
D
ANSUMAN MISRA IIM SHILLONG
HL has been aptly conversant and capable enough
value of 1.15 litres alcohol/ person annually. However with the
to encash upon opportunities that have come its
increasing appetite for luxury wines Hong Kong has become a
way. This stalwart company has identified a booming
luxury wine hub and caters to near about 60% of the wine market.
market in China. DHL has pioneered in storing and handling of wine bottles. The DHL has aimed at the Chinese wine market which
numerical dealt with are enormously handsome. DHL wine hub in
stands untapped yet. The Chinese population is
Hong Kong stores about 230,000 wine bottles of which 180,000
a major boost to the fact that this market is on
wine bottles are used annually. 2008 witnessed the slashing of
the verge of witnessing a tremendous growth.
taxes on wine which saw its demand escalating.
The Chinese population is still contained at a DHL, the logistics experts claim to have a trained pool of workers who
DHL wine hub in Hong Kong stores about 230,000 wine bottles of which 180,000 wine bottles are used annually.”
have been instrumental in facilitating the wine logistics business in Hong Kong. Wine bottles have two important aspects to delve into; the first being packaging and the second being temperature and DHL has been aptly catering to the above mentioned parameters. Wine merchants, wholesale dealers/distributors and bulk buyers are not the only interested parties who want to buy from DHL, but DHL has been successful in bagging loads of private orders where customers do not feel the need to maintain their own wine
20 • Pravha • Op-Era
cellars, instead order their requirements from DHL, who are more
shareholders.
than happy to serve the best at the right time and at just about the perfect temperature.
Now the transition from 2011 to 2012 saw some handsome improvements in the financials. Talking about basic reflective
Similarly the Dairy Packaging industry has also been something
parameters like Operational profit margin and net profit margin saw
worth interest. Consumption of liquid milk products as estimated
significant escalation of 9.4% and 40.6% respectively. This rise can
shall increase from 144.5 billion litres in 2011 to 165.3 billion
be attributed to the innovative encashment of opportunities and
litres in 2014. China being one prominent hub for this demand.
efficient practices DHL has incorporated into its system. Significant
According to the Chinese Academy Of Social Sciences, 230 million
impact has been recorded from the activities taken up by DHL in
people near about 37% of the total urban population constitute
China and Southeast Asia in specific.
the middle class whose inclination towards sophisticated and well packaged food items has increased. Hence the packaging industry
Some interesting, involving and positive news for the shareholders
in China has been under tremendous amount of pressure. Talking
has been the increment in earnings per share which has been
specifically of the milk packaging industry where the daily demand
handsome at 42.7%. Dwelling into the intricacies of the income
is enormous and variable.
statement the company registers a very handsome current ratio and
In this context the Tetrapak and DHL story is worth taking a note.
acid test ratio. The current assets outweighed the current liability
Tetrapak has been globally recognized since 1950 for their famous
by 1.04 times in 2011 and to the utmost happiness and satisfaction
hygienic four layered packing, often associated with liquid food
of potential and interested investors who plan to invest in this
products and other perishables. However rising demand in China
logistics giant the current ratio in 2012 has shot upto 1.12 with
and beyond everything rapid demand variability has been a huge
a YOY increment of 7.57 %. Similarly acid test ratio significantly
impediment. The major problem being availability of spare parts to
increased YOY from 2011 to 2012 by 6.44%. An outweighing current
the packaging machines. Thus this is when Tetrapak decided to take
assets is indicative of excellent liquidity conditions owing to an
the help of DHL as its third party logistics provider. DHL entered
excellent cash management cycle.
the Chinese market in 1980 and is the only express provider. DHL is licenced to store both bonded and non-bonded goods. Moreover
The company certainly promises a handful to interested and
of late Tetrapak instead of ordering for the Asian warehouses
existing shareholders. They have been absolutely spot on in
from Europe now sends directly from Shanghai through DHL to
terms of identifying market opportunities and encashing upon
the consumers. Centralizing the entire Supply Chain in China has
them. This goes without doubt that DHL as a logistics company is
been a profitable ordeal for Tetrapak. With DHL’s help Shanghai is
certainly having a dream run and the years ahead do hold excellent
Tetrapak’s best performing delivery centre and number one in terms
opportunities for logistics companies to maximize grow and benefit.
of end customer deliverance. DHL’s innovative practices have infact brought happiness to its shareholders. Let’s understand where and how this company has encashed upon its opportunities to reach out to its stake/
IIM Shillong • BLAZE-A-TRAIL • 21
LEARNING FROM TH
The world’s largest online retailer has been continually using its The brainchild of the visionary Steve Jobs, Apple has consistently supply chain to set the benchmark for delivering great customer been ranked No 1 by Gartner in the list of best supply chains experiences. Its service embodies the key components of its DNA; systems for the last three years. Apple was named the most admired customer focus, frugality and innovation. So what is it that Amazon firm in the world from 2008 to 2012, by Forbes. Revealing its supply does differently? •
•
•
chain secrets:
Amazon engages with only the superior suppliers who are •
The first secret is the model of vertical integration embedded
willing to accept and adhere to Amazon’s Supplier Code of
in the firm with Apple itself designing hardware, software and
Standards and Responsibilities which enlists various do’s and
other services rather than relying on third-party manufacturers
don’ts that the firm expects from its vendors
for design
They stock their inventory keeping in mind the customer •
Apple has come up with a standardized list of expectations from
preferences rather than stocking any and every product
its suppliers to ensure that they comply with the requirements
possible.
of Apple products. Moreover, the employees spend a lot of time
Another differentiating strategy is that they maintain and
with their suppliers to ensure the quality of Apple’s cutting
manage not only their own inventory but also of other retailers
edge products
such as Eddie Bauer and Target, giving it an economy of scale. • •
•
•
•
Amazon with its real-time links to manufacturers manifests
The firm believes in establishing strategic alliances and exclusivity agreements with manufacturers and suppliers that
drop shipping at its best
enable Apple to scale its operations as and when required
Considerable investment in back-end infrastructure like
according to customer demand
warehousing facilities that are nearest to the largest customer •
The firm places high volume pre-orders with suppliers, which
hubs, maintaining thousands of store-fronts etc. ensure cost-
not only ensures that it has enough production capacity but
effective and smooth operations
also sometimes leads to its main rivals losing access to same
The firm spends about $200 million a year on business
manufacturing resources
technology and has utilized technology to such an extent that •
Due to owning its own retails stores, It becomes easier for the
if a customer orders a book, the order-management system
firm to forecast demand and hence decreasing the average
itself interacts with the inventory and warehouse management
level of inventory does not pose a threat to availability
systems to find the best possible distribution centre to fulfil •
Use of air freight instead of ship serves as a cost cutting
the order, thus intimating the user about the shipment details
solution and renting the entire fleet space yet again compels
in no time
the competitors to take the back seat
It
has
pioneered
technologies
like
Radio
Frequency
Identification (RFID), Electronic Data Interchange (EDI), data warehousing etc. thus giving it a leading edge over its rivals
22 • Pravha • Op-Era
HE LEADERS
PRIYAM FMS DELHI
McDonald’s is the name that has become synonymous with fast The world’s third-largest consumer goods company by revenue, food today. It is world’s leading global foodservice retailer operating Unilever, is also one of the most trusted brands worldwide. Often at more than 33000 locations in 119 countries serving almost 64 adjudged to possess the best supply management system in Europe, million customers each day. Though the firm upholds its mission of the FMCG giant has consistently remained in Gartner’s global top “One World, One burger” everywhere keeping the quality and cost ten list. Here are some of practices that justify the competitive consistent throughout, it develops a different supply chain in each advantages that Unilever has over its competitors: country. Here is an example of how it does it in India: • •
It sources all the raw materials from India only and promotes
from the countries offering low-cost thereby using its global
small businesses for long term to meet its requirements with quality products and at affordable cost •
•
•
scale to achieve cost-efficiency •
The firm adapts to differentiated supply chains in different
It has adopted a supply chain system with an unbroken
markets thus being locally agile and serving more than 160,000
and uninterrupted series of steps including procurement,
points of sale. In India, for example, it is equally convenient
warehousing, transportation and retailing, all maintaining
and hassle-free to get Unilever products in a supermarket and
the temperature of products within a stipulated range. This
other modern trade outlets as it is in traditional kirana and
kind of supply chain named as the ‘cold-chain” enhances
mom & pop stores even in semi-urban and rural areas
the shelf-life and longevity of the products by retaining the •
The organization has incorporated lean manufacturing
desired nutritional value and moisture content and benefits
strategies and has been successfully able to optimize demand
both farmers and consumers. It enables McDonald’s to ensure
forecasting and decrease in inventory levels with simultaneously
freshness, reduce wastage and hence save a lot during the
accomplishing better shelf-availability of products. It has
process
redesigned and revamped some of its transportation processes
The firm has put to use both push and pull strategies to create
to cut down on shipping and handling expenses
and instigate demand and has invests a lot of effort in its •
The FMCG market leader forms strategic alliances and
demand forecasting, budget finalizing and accordingly, supply
partnerships with suppliers to form a long term relationship.
chain planning
An apt example would be that it has linked many small farmers
A lot of automation has been integrated with the existing system to cater to burgeoning demand
•
The firm has adopted the policy to procure materials globally
in India with its value chain •
The firm has embraced the concept of sustainability and
McDonald has adopted a highly sustainable supply chain which
incorporated it in its value chain. To cite a recent example, the
rests on three primary pillars namely ethics, environment and
firm has launched a rail service called the ‘Green Express’ in
economics
Italy to procure ice-cream from its factory in Maples that has environmental advantages over using roadways and moreover, it leads a 6% cost reduction for Unilever
IIM Shillong • BLAZE-A-TRAIL • 23
ROOBAROO Mr. K. Vaidyanathan, B. Tech serves as the Chief Operating Officer of HEG Ltd., and served as its Executive Vice President since March 2009. Mr. Vaidyanathan served as Vice President of SRF Ltd., for 3 years. He also served at Grasim Industries. He holds BE-Chemical Engineering. His areas of expertise are TQM, Supply chain management, Six Sigma and Lean Manufacturing. Pravaha team: Sir, what have been the most formidable challenges
Mr. Vaidyanathan: Managers are required for decision making.
you have faced in your field of interest, please share your experience/
Decision is a choice made in a grey area. When things are black or
experiences.
white, manager is not required as choice is automatic. A manager
Mr. Vaidyanathan: When I started working the Indian Industry was
has a choice to act or not to act. And then where and how much to
different. Manufacturing was licenced. Licenses were released
act when. The biggest problem in Indian managers is that they look
based on perceived demand by the government. That time Indian
for quick fixes. Managing a gradual, slow cultural change is the real
manufacturing units focus was on production and cost. A huge
requirement. Another issue is that many Indian managers attach
change started in 1990’s when the supply outstripped demand and
their prestige to a decision. They find pride in saying ‘I’ did this. They
imports were freed. In every Indian industry the focus changed.
are not comfortable saying I am managing this. And that this has
Many managements desperately changed. That phase was I think
many choices I have made. I hope you are prepared to say this.
the most challenging period for Indian Industry and the people working in them. The change in focus to making a marketable
Pravaha team: Sir, please shed some light on the different methods
product instead of produce more at all costs was a formidable one
adopted by your company to risk hedge the uncertainty in supply and
and the most traumatic for all in Indian manufacturing industry.
demand? Mr. Vaidyanathan: You cannot hedge against any uncertainty. As the
Pravaha team: What is the current role of MIS (Management Info.
cost of hedging will reduce competitiveness. Doing business is like
System) in enhancing operational efficiency and effectiveness?
being in a race. You have to stay ahead of competition. More the gap,
Mr. Vaidyanathan: While working day to day, we are moving from
safer you are. More ‘hedged’ you are. It is like when you run away
problem to problem. There is little scope for future thinking. A good
from a tiger, you only have to run faster than your mates, you are
management information system report allows the manager to
safe. Trying to outrun the tiger will weaken your capability for a long
think back and try to answer why, what, when and how. A good
run. You have to keep improving your competitiveness compared to
MIS report focuses on the actionable points. It is important to
competition all the time. When you have more resources than what
remember that you don’t act everywhere and a decision ‘not to act’
you need to outrun, add business.
is as important. Pravaha team: Reverse logistics has been an emerging trend, what is Pravaha team: Speaking about changes in the Indian context, with
your take on the same, in days to commence is reverse logistics going
employees resistant to change, how much of a role does HR play in
to bring about radical changes in the domain of operations?
implementation of operational changes/efficiency in a system?
Mr. Vaidyanathan: Reverse logistics works on the principle that
Mr. Vaidyanathan: Any change is a challenge. It is important to
there is competition to providing you services. If there is, it will
know that a large part of an organisational working insists that
work. There will be competition if your business is attractive to your
you don’t change. The line between what you can change and what
potential service provider. Obviously the supplier should be able to
you cannot is vital. Employees normally give both the problems
competitively do something of value. Whether it will be a radical
changing where they should not; and not changing where they
change has to be seen.
should. Unfortunately there are no rules/guidelines specifying where all you must act and where you must not. It is experience.
Pravaha team: What is your view on the future of graphite industry?
More than HR it is the capability of the manager. As the ‘need’ to
Mr. Vaidyanathan: Graphite is an industry going through a flux
change also shifts. Sometimes you must change and sometimes you
where it was cartelised to a free market dynamic industry where
must not.
some shakeout is likely. It will come out as a consolidated strong industry.
Pravaha team: As budding managers, how should we prepare for the future challenges?
24 • Pravha • Op-Era
Mr. Vishwadeep Khatri is the CEO & Principal Consultant at Benchmark Six Sigma. Mr. Khatri has been into business improvement roles as a consultant, auditor and trainer for manufacturing and service industry for over 15 years. He has been driving consulting assignments with leading organizations like France Telecom, Airtel, Syngenta, NIIT, William Hare, Siemens, Schneider Electric, and American Express. Mr. Khatri is a B.Tech, M.B.A, Certified Lead Auditor (IRCA, UK), RLA (RABQSA, Australia), Lean Six Sigma Master Black Belt (AMT, USA).Six Sigma Black Belt (Moresteam University USA), Senior Member of ASQ. Team Op-Era through its interaction with Mr. Khatri explores a simplified view of the six sigma practices and how they could be implemented into businesses as well as day to day activities in our respective organizations Pravaha team: How should we, the MBA students, prepare ourselves by
delivery and meeting the customer expectations and requirements.
being well-versed with the concept of six sigma and its practices to suit
The process is so complicated that efforts to improve one aspect
the industry requirements and move up the career ladder?
leads to the inevitable degradation of the other. This is what is
Mr. Khatri: Focus on three things: problem solving, data driven
called primary metric and secondary metric in six sigma. So the idea
decision making and extra ordinary process building. For example
is when you are improving your primary metric you don’t want your
Google adwords is a very powerful advertising tool where an
secondary metric to go bad. In addition, the Mumbai Dabbawalas are
advertiser may like to test numerous hypotheses and he would
not a complete entity in itself. They use an excellent transportation
like to know which parameters, if controlled well, would lead to
that the Mumbai locals are renowned for. They have a 125 years of
more clicks. This, therefore makes much sense to a marketer. Even
tried and tested methodology that has helped them reach this level.
in HR, you would like to check whether the psychometric testing
They are not the only one for that matter. If you take the example of
is correlated well with the on-the-job performance. So when you
the Indian Army they are said to have the best pay-roll mechanisms
are selecting a candidate you would like to really check whether
in place. And this has been the same even during the 1971 war.
that testing makes sense and you may like to therefore use some statistical tools usage and data driven decision making. Basically
Pravaha team: How can a start-up which hasn’t established its
for the senior management roles, you would like to use it for sense
processes in a concrete use lean six sigma methods to transform its
making followed by decision making and subsequently by policy
processes from the beginning?
making. So that’s how it would work for any B-school graduate.
Mr. Khatri: Let me give you an example of a Father Daughter company dealing in a product category called Plasticizers. Plasticizers is a
Pravaha team: Having handled consulting assignments both in India
product which is used in a tyre for bonding of rubber with the metal
and abroad, how would you differentiate the nature of problems faced
mesh, so it’s a chemical. This specialty chemical was developed by
in these assignments?
them using six sigma methods, and not by using DMAIC, but by
Mr. Khatri: They are very similar in certain industries for example the
using DMADV, which is a product development approach (Define,
knowledge industry like BPO, KPO and IT, you will see challenges
Measure, Analyze, Design, Validate) and is another very powerful
like pressure to be on lowest cost or the highest speed provider
format by which even a small company or start-up can beat a
or both, and that is applicable for all the global companies. If
well-established company using latest technology and some
we consider specific industries for example, the textile industry
unconventional designs.
where India has a distinct advantage of cheaper labor, but if along with cheaper labor you don’t create extraordinary processes then
Pravaha team: Which is the real thrust area today where lean six
you will have tougher times in future. There is a myth, that if you
sigma is contributing, or the area which is going to revolutionize the
are working with considerable amount of labor you can’t use six
way people work?
sigma, which is completely untrue. In fact if you are working with
Mr. Khatri: The DFSS or DMADV approach which is about developing
more manual processes you must have increasingly extraordinary
new products so that they function in a defect-free manner is the
processes.
thrust area, in services as well as manufacturing. It all started with DMAIC, but the way change has become faster now, industries are
Pravaha team: The Mumbai Dabbawalas have been well known for
changing fast, for e.g. if a mobile phone is launched, within days,
having error free processes even though they claim of not having
you know whether it is a flop or a hit. It’s become like a movie
implemented lean six sigma into their organization. So what do you
now. Things are so fast that companies have to focus more on
think differentiates them and how have they been able to achieve such
better designs rather than only improving existing processes,
results?
which means their process change is getting faster and faster, new
Mr. Khatri: There are some unique things happening with the
products are getting introduced. In service sector, this is even more
Dabbawalas. One is that they don’t have any serious competition
dynamic. Because you have the ability to change processes faster.
because they are unique in themselves and no one has been able
In manufacturing you get stuck with your plant and machinery
to build the kind of infrastructure they have. Also their processes
for some time. In services, this is not the case since most of the
do not have that kind of complexity like the one that emerging
architecture of systems are open-ended. You can connect with
e-commerce organizations have. There will be complexity in the
newer things, anytime.
processes in the e-commerce companies, from order picking to
IIM Shillong • ROOBAROO • 25
Cover Story
INDIA-THE FOOD BASKET OF WORLD
NISHANT KUMAR IIM SHILLONG
I S I T P O S S I B L E TO AC H I E V E T H RO U G H CO L D S U P P LY C H A I N?
I
ndia is an agricultural-based economy. More than 50
Current State of Indian Agricultural and Food Retail Industry
percent of India’s land is cultivable, compared to the
Each year, India produces around 79 million tons of fruits which
worldwide average of 11 percent. It has the cultivable
includes 15 million tons of mangoes, 29 million tons of bananas
land, good climatic conditions for production of all
along with 160 million tons of vegetables. India produces
varieties of fruits and vegetables, an agribusiness
approx.6.5 million tons of meat and poultry, largest exporter of beef
system that works though it is ineffective and need
(1.52 million tons), as well as 8.3 million tons of fish a year. India
vast improvement. The single most important problem facing the
is also the largest producer of milk (135 million
Indian agricultural industry is the highly inefficient supply chain
metric tons per year). The perishable products
(cold supply chain). Because of lack of cold chain infrastructure and
transaction volume is estimated to be around 230
also a food processing industry about 20% of all foods produced in
million metric tons.
India (Rs.500 billion) are wasted. There is a major shift happening in Indian agricultural sector from traditional farming to horticulture, dairy products and meat, poultry all of which are perishables. Due to this increase in demand because of growing population, value addition and diversification are the key words in the Indian agriculture today. Because of this, Foreign Direct Investment are looking for opportunities in the domestic food industry, which includes the cold chain sector as one of the lucrative industry to grow.
26 • Pravha • Op-Era
India has 6500 cold storage facilities, with a cumulative combined capacity of 30 million metric tons that can store approx. 11% of what is produced.”
refrigerated
transport
vehicles are available for all other commodities. According to
industry
estimations,
approximately 104 million metric tons of perishable produced
is
transported
each year. Of this figure, only 4 million metric tons of goods are transported by reefer. When compared with world standards for cargo movement
through
cold
chain, India is still far behind. In U.S., the percentage of movement vegetables
of
fruits
through
and cold
chain is around 80 to 85 percent, for Thailand, it is around 30 to 40 percent and The Indian food retail market has witness very strong, double
India is negligible.
digit growth in recent years. This is predicted to continue at an
More than 25% of cold storage unit (approx. 10 million tons) have
accelerated rate in the forecast period. The Indian food retail market
been built past 2004. Number of cold storages increased at the
generated total revenues of $363.7 billion in 2012, representing a
CAGR of 3.57% from 2004-2012 and capacity at CAGR (2004-2012)
compound annual growth rate (CAGR) of 10.2% between 2008 and
of 5.19%. The total value of the cold chain industry is estimated
2012. Sales generated through convenience stores and gas stations
to be as high as USD 3 billion and growing at 20-25 per cent a
are expected to be the most lucrative for the Indian food retail
year. The total value is expected to reach USD 8 billion by 2015
market in 2012, with total revenues of $227.1 billion, equivalent
through increased investments, establishment of new ventures
to 62.4% of the market’s overall value. Also sales through food and
via private and government partnerships and modernization of
drinks specialists generated revenues of $126.8 billion in 2012,
existing facilities.
equating to 34.9% of the market’s aggregate revenues. Drivers and Challenges in implementing Cold Supply Chain Current Scenario of Cold Chain in India
DRIVERS:
According to government estimates, India has 6500 cold storage
Growth in organized food retail sector: The Indian food retail market
facilities, with a cumulative combined capacity of 30 million metric
generated total revenues of $363.7 billion in 2012, representing a
tons that can store approx. 11% of what is produced. The majority
compound annual growth rate (CAGR) of 10.2% between 2008 and
of cold storage facilities are utilized for a single commodity, such
2012. The market is forecasted to accelerate, with an anticipated
as potatoes and fruits and vegetables. Most of these facilities are
CAGR of 11.1% for the four-year period 2013 - 2017, which is
located in the states of Uttar Pradesh, Uttaranchal, Maharashtra,
projected to a value of $616.1 billion by the end of 2017.
Punjab, and West Bengal. Below are the list of commodities which are
Shift toward horticulture crops: Due to increasing risk and
majorly stored:
investment in grain crops, farmers are cultivating horticulture
India has about
crops. As horticulture crops need refrigerated storage, demand of
250
cold chain is likely to increase.
reefer
t r a n s p o r t
Demand
operators
pharmaceutical
including
sector: As most
independent
of biotech drugs
players
and
which
from
vaccines
t r a n s p o r t
are temperature
perishable
sensitive
p r o d u c t s
depends on cold
all
over
the
and
chain
network
country. Of the estimated 25,000 vehicles in use, 80% are being
for
storage,
used for transporting dairy products (wet milk) and only 5,000
thus
Indian
IIM Shillong • COVER STORY• 27
pharmaceutical companies are
increasingly
seeking
opportunity in cold chain. Also demand of these drugs are
increasing
globally,
cold chain management is playing an important role. At present, cold storage capacity
is
leading
to
integrated
inadequate, urgent
need
cold
chain
facilities. Growth in processed food sector: Because of changing consumption pattern and trend
towards
processed
food items, there is future for greater storage capacity. Changing lifestyle has led to
consumers
spending
less time in cooking and as
which is leading to continuous power shortage.
result demand of packaged food is rising. GOVERNMENT INITIATIVES CHALLENGES:
The Government of India now recognizes that development of cold
Lack of Infrastructure: Procurement system has failed to cover the
chain is an essential next step in upgrading India’s food processing
entire country evenly. On an average a farmer needs to travel 12
industry. Some of the incentives taken by Indian government are:
km to reach the nearest mandi and more than 50 km in NE India
1. In 2011-12 budget, government provided infrastructure status to
while according to the recommendations by National Farmers
the cold chain sector. The budget exempted equipment used in cold
Commission, availability of markets should be within a 5 km radius.
chain infrastructure like air-conditioning, refrigeration panels, and
A study revealed that the time taken for a hypothetical one-way trip
conveyor belts from excise duty which are mainly used in mandis
covering 300 km in India was between 24 to 36 hours. But the same
and cold storage warehouses.
in China would take less than 18 hours and in EU between 8 to 10
2. In Budget of 2010-2011, government proposed a concessional
hours. While trucks in India log an average of 200 km a day, those in
import duty of 5% with full exemption from service tax to set up and
China and Japan cover 600 km and 800 km, respectively. The major
develop cold chains to preserve perishable goods. It also included
problem is still poor supply chain (logistic and storage system)
duty-free import of refrigeration unit, which is used in refrigerated
which is causing wastage of 20% of all foods. The estimated gap
vans and trucks. It also exempted trailers and semi-trailers used in
between Agri-warehousing supply and demand is about 35 million
agriculture from excise duty.
MT. Currently, public sector agencies like the FCI, CWC and the
3. In 2009-2010, Government of India introduced tax benefits for
various State Warehousing Corporations have a storage capacity of
companies who are making investments in setting up cold chain
71 million MT, while the private sector has close to 25 million MT.
facilities.
High Cost incurred: operating cost for Indian cold storage is much
4. Developed policies like 100 per cent FDI and provision of up to
higher than that of US. Contribution of electrical expense make up
25 per cent redemption on project costs involved in setting up cold
about 28% of total expense in Indian context compared to 10% in
storage facilities by the Government under the Capital Investment
the west. These factors make setting up cold storage uneconomical
Subsidy Scheme in order to attract huge investment from the
and unviable.
private players in cold chain sector.
Power Supply: the power shortage in the country is significantly
All these initiatives from the Government have been very
impacting
encouraging and boosted the probability of increasing investment
cold
chain
sector
which
depends
upon electricity. India’s
power
deficit is around 10%, with peak deficit of 17%
28 • Pravha • Op-Era
from private players.
VIRTUOSOS JAYARAMAN P IIM SHILLONG
W O R K O F F A M O U S S TA LWA RT S I N T H E F I E L D O F O P E RAT I O N S
W
hen Dr. Shewhart joined Western Electric Company in the year 1918, his job was to separate out the defective items, a modest one. Everything, not just Dr. Shewhart’s life, in the field of statistical methods of quality control changed
when Mr. George Edwards, Dr. Shewhart’s boss, received a one page report from him in 1921. Edwards recalls “About a third of that page was given over to a simple diagram which we would all recognize today as a schematic control chart. That diagram, and the short text which preceded and followed it, set forth all of the essential principles and considerations which are involved in what we know today as process quality control.” Edwards was wise enough to understand that a novel scientific study of process control was born. Encouraged by him, Shewhart created the first statistical chart for manufacturing processes in the same year. He went on to publish the findings on the same in his book Economic Control of Quality of Manufactured Product in 1931. He taught at the universities of Illinois and California and served as the Head of Physics at the Wisconsin Normal School in La Crosse before joining Western Electric Company. Shewhart joined Bell Laboratories in the year 1924, when it was opened and continued to work there till 1954, his year of retirement. He worked in many areas like random sampling techniques, summarizing original data, meaningful predictions from measured data, learning
Walter Andrew Shewhart Father of Statistical Quality Control Life Span - March 18, 1891 – March 11, 1967 Known For – Father of Statistical Quality Control Major Works – Control Charts, Sampling Methods
and improvement cycle and measurement errors in science. His work on measurement errors in science have influenced physicists W. Edwards Deming and Raymond T. Birge and made them write a landmark paper ‘Reviews of modern Physics’. He was also one of the firsts to talk about noise in the measured signal and the importance of separation of true data from the noise. He also emphasized on finding
IIM Shillong • VIRTUOSOS • 29
whether a disturbance has resulted from assignable cause or chance-cause. Because if there is only chance-cause variation, and keeping it in control, is necessary to predict future output and to manage a process economically. He very well understood that data from manufacturing processes do not resemble natural distribution or Gaussian distribution. Deming created Shewhart’s Cycle based on Shewhart’s methodological proposals around scientific inference and was used largely to improve production during World War II. Walter Shewhart visited India in 1947-48 under the sponsorship of P. C. Mahalanobis of the Indian Statistical Institute. Shewhart toured the country, held conferences and stimulated interest in statistical quality control among Indian industrialists. Despite heading many prestigious positions, Shewart remained gentle and soft spoken. He always believed in freedom of speech which was evident from his own public views at variance with his own previous statements. American Society of Quality honored him by awarding ‘Shewhart Medal’ for technical leadership and Shewhart himself was the first recipient.
Kaoru Ishikawa Acclaimed authority on Total Quality Control Life Span - July 13, 1915 - April 16, 1989 Known For – Fishbone Diagram Major Works – Quality Control, Analysis of Industrial Process Major Works – Control Charts, Sampling Methods
D
r. Kaoru Ishikawa is basically a quality guru with phil-
control chart, run chart, histogram, scatter diagram, Pareto chart,
osophical views. He found a vast difference between
and flowchart. With his cause and effect diagram the user can see
the working culture of Japanese system and society.
all possible causes of a result, and hopefully find the root of proc-
He then proposed Quality circle which could be ap-
ess imperfections. The tool is still in practice to perform the root
plied to revitalize the industry and bring about a rev-
cause analysis in many leading houses. Dr. W. Edwards Deming, one
olution in the management. When he first proposed
of Ishikawa’s colleagues, adopted this diagram and used it to teach
quality circle as a faculty from The University of Tokyo, only one
Total Quality Control in Japan as early as World War II. Other areas
company, Nippon Telephone and Telegraph, accepted the system.
of his interests were ‘Bottom-up’ approach and quality control cycle
Not even Ishikawa, at that point of time, envisaged that it would
of new product development. He also did commendable work in the
spread across more than fifty countries in the world, as this was
field of product life cycle.
specifically created keeping Japanese society in mind. He is a recipient of Shewhart Medal and held many responsible He was probable the first few to visualize the service based market-
positions in the domain of quality and standardization. From 1993,
ing – companies do not sell drilling machines, but they sell holes.
American Society of Quality has started awarding Ishikawa Medal
He told that customer would continue receiving service even af-
in his honor to individuals or teams for outstanding leadership in
ter receiving the product and the service would extend across the
improving the human aspects of quality.
company itself in all levels of management, and even beyond the
Juran delivered this Eulogy after his demise in 1989.
company to the everyday lives of those involved. According to him,
“There is so much to be learned by studying how Dr. Ishikawa man-
standards are not the ultimate goals but customer satisfaction is,
aged to accomplish so much during a single lifetime. In my obser-
hence standards are to be revised periodically. He believed that
vation, he did so by applying his natural gifts in an exemplary way.
quality can always be one step further. He stressed that it would
He was dedicated to serving society rather than serving himself. His
take firm commitment from the entire hierarchy of employees to
manner was modest, and this elicited the cooperation of others. He
reach the company’s potential for success.
followed his own teachings by securing facts and subjecting them to rigorous analysis. He was completely sincere, and as a result was
Ishikawa also showed the importance of the seven quality tools:
30 • Pravha • Op-Era
trusted completely. “
RENDEZVOUS B I O S CO P E O F T H E PA S T S I X M O N T H S
Optimus 3.0 Op-Era came up with Op-timus 3.0 in August 2013, an interesting intercollege event in its Optimus series which tested the creativity and conceptual clarity in a few basic Operations and Supply Chain concepts by explaining the topic in a creative way like examples, cartoons and graphs on 1 PowerPoint slide or any other creative ways. The team that won by scoring the maximum through their creativity and Facebook likes is Team Konvicted from IIM Kozhikode.
Optimus 4.0 Op-Era in association with i-Cube, Entrepreneurship Cell of IIM Shillong conducted Opti-mus 4.0 in 4th week of August 2013. The event consisted of two rounds, the first round tested the participants’ knowledge on operations through a thought proving Quiz and the shortlisted teams where given Operations related caselets for analysis. Winners of Optimus 4.0 were Bhanupriya Gupta and Monika Sakkarwal of Team Angelic from IIM Raipur. Optimus 5.0 Op-era conducted Optimus 5.0 in November 2013 which opened up the opportunity for the participants to give wings to their creativity. It gave the Operations enthusiasts a vibrant platform to showcase their skills and talent by coming up with fresh interactive original and creative video, that would best explain few specified operations concepts. Team Galactus from Wellingkar Institute of Management & Studies won the event by coming up with an innovative and creative video on 5S.
Shrinkhala The Operations Club in association with SCNext organised “Shrinkhala” in September and October 2013, a Supply Chain case challenge, as a part of Khlurthma – the Annual B-school fest of IIM Shillong. The domain of Operations was primarily focused on process improvements & tactical issues. The Operations stream gained prominence after organisations recognised the importance
IIM Shillong • RENDEZVOUS • 31
production line. The criteria was to maximize the production by minimizing work in progress Oper8 • Opsview – Online quiz challenging the operational acumen of the participants
including
various
concepts like inventory forecasting, production
designing,
prototype
testing and problem solving abilities • Optimus – Participants were put into their dynamic and competitive environment
where
each
team
exhibited their skills to strategize and allocate monetary resources to basic requisites of manufacturing. • Optronix – Real time simulation of inventory management through forecasting
of integrating key business processes throughout the Value chain. ‘Shrinkhala’ tested the skills of the contestant in the area of Contemporary Supply Chain & Operation issues. The best supply chain minds fought the war and Team North Meets South of NITIE bagged the winner’s title.
demand attainment over a period of six months • Amazing Race – Participants were guided by clues through a maze of operational junctions which had exhilarating games that instilled the participants to bring out their proficiency in optimal route evaluation, risk analysis (through ball-bucket game) , process
Oper8 - Ops Week
design, quality control (through marble game), resource investment,
The Operations Club organized an intra-college eventful week of Operations and fun in February 2014 with many events such as:
location identification, cross integration (through Capitalism game), line balancing, resource optimization, production planning (through prototyping game) Team A-Wingers bagged the Winners title of Oper8 marking the end
Pre- Events • Poster Designing – Testing the creativity quotient of the participants. The best poster was awarded the winner and used for the promotion of Oper8 • Jumbled Word – Participants were asked to find the hidden words from the given set testing their excellence in operations bibliography spread across domains such as SCM, TQM, TPS, OR, etc., • Operations Crossroads – Participants expertise in current trends, time tested operational
demands, production
planning, logistics scheduling and
concepts,
its
practical
implications, industry best practices were gauged by crossword Fun Events • Chaos – The round was open to all participants. Teams combated on an online platform through Counter Strike, testing their planning, strategy and co-ordination • Masti Chef – The event was a spicy test of the operational excellence of the participants in replicating an efficient
32 • Pravha • Op-Era
of the week long Operational Extravaganza.
THE TEAM
Clockwise from the left : Devendra Singh Raghuwanshi, V.M. Sai Murali, Ansuman Mishra, Nishant Kumar, Keshav Sodhi, Harsha Deepak RVS, Jayaraman P, Anish Agarwal, Bhaskar K, Saiprasad Shetye, Aishwarya V.R. , Ankit Kumar Narsaria, Neelav Ratnam, Dipak Bajaj, Poloumi Pal
IIM Shillong • Pravha • 33
34 • Pravha • Op-Era