Nmims scnext lead story catena aurea 2014

Quarter 3, 2014

CATENA AUREA Automation in Supply Chain Management

Features: Articles Quiz Factoids Expert Speak Knowledge Partner

CATENA AUREA Quarter 3, 2014 Editorial Team Editor Prashant Chaturvedi

Associate Editor Supreet Virk

Optumiz Contributors Pratik Nandekar Omkar Joshi Pallavi Kale

Design and Creatives Nishant Singh

Senior Team Aditya Anand Chegu Shivakumar Krishnamurthy Ravi Singh Achint Jain Ravinder Kumar

Dear Readers, Welcome to yet another issue of Catena Aurea, The operations and supply chain magazine of NMIMS, Mumbai. The world is changing at rapid pace and in order to adapt to the continuous changing environment companies are looking to innovate. Supply chain which is considered as backbone of any successful business organization has seen considerable changes the way it functions. Automation is introduced at various points in the supply chain to increase its effectiveness and efficiency.

The theme for this issue revolves around how automation in supply chain can help in increasing system speed and accuracy. The articles in the issue talks about how automation employed in supply chain can increase the net value for the customer. The articles cover the new trends which have emerged over a period of time such as anticipatory shipping, 3-D printing and RFID technology. You can gain insights how organization are implementing these technology to gain competitive advantage.

To bridge the gap between the academia and industry, this time we have added a new section to our magazine - the Expert Speak, where we interview a senior executive of some of the best companies of the industry to learn about their operations management practices.

As always I hope you enjoy this issue! Let us know how you feel about the content. Feel free to contact anyone from Team Optumiz regarding any aspect of the magazine and I promise we will get back to you. Critics, suggestions, requests, all are welcome.

So until we meet again next time and while you wait to see what is in store for the next issue, take care and enjoy reading!

-Prashant Chaturvedi

*All views presented are of the individual writers’. Optumiz does not bear any responsibility whatsoever.

Contents

CATENA AUREA Quarter 3, 2014

SCNext-The youth of supply chain

Page 04

Anticipatory shipping-The game changer in e-commerce

Page 07

RFID- The lifeline of future SCM and Logistic systems

Page 10

Factoids

Page 13

Will 3D Printing Transform The Supply Chain?

Page 14

Quiz

Page 16

How will Driverless Technology impact the Supply Chain?

Page 17

Expert Speak

Page 21

SCNext- The youth of supply chain

I N F O C U S

Mr. Nikhil Oswal heads SCNext India as EVP and has extended its reach to elite 25+ B-Schools and numerous corporate entities. Nikhil is actively associated as India Advisor – Port of Baltimore / State of Maryland USA and World Trade Center Pune.

He has a career background in international trade and Supply Chain Management, successfully steering large infrastructure business development initiatives of Free Trade Zones, Inland Container Depots and Container Freight Stations.

us to support full paid student summer trips /exchange programs with SCNext partner universities /corporates.

Our mission is • Helping students gain real world supply chain and logistics skills to better prepare them for the transition from student to corporate and increase their employer desirability.

• Helping young industry professionals connect and learn from each other, sharing their knowledge while also eleIn an interview with Optumiz he talks vating the supply chain skillsets and possibilities globally. about SCNext and its activities in India.

• Connecting these two tiers to the seasoned supply 1) What are the objectives of SCNext chain professionals in a mentor/mentee relationship as a chance to groom the next-gen leaders of supply chain.

Globally and in India?

SCNext is an organization founded and managed by Young Professionals for Young Professionals. SCNEXT - THE YOUNG PROFESSIONAL ARM OF INTERNATIONAL SUPPLY CHAIN EDUCATION ALLIANCE (ISCEA), both based out of USA provide its members with an opportunity to develop professional relationships with an international community of peers and mentors, expand their knowledge of the supply chain industry, and apply their knowledge and skills in real world situations.

SCNext India is the Indian arm of SCNext and the Young Professionals arm of International Supply Chain Education Alliance (ISCEA), both based out of USA. 2) What are the benefits of SCNext Membership to Students?

Students become an integral part of a global knowledge sharing platform to :

• Access fellow professionals in local area and spark discussions with them in SCNext closed/invitation only There are no boundaries on what SC- groups- A vibrant forum Next will eventually evolve - take a moment to imagine an international group • Internship and Job opportunities through SCNext corof talented and driven young profession- porate partners for hiring fresh talent als, all working together to push the status quo on what is possible within the • Summer exchange and study abroad programs. As a Operations and Supply Chain domain. global organization present in multiple countries allows

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3) What are the benefits to campus ambassador?

Campus Ambassadors are the local torch bear• Free Access to SCNext online webinars and ers for SCNext and its vision / events in your own knowledge sharing sessions and recorded ver- campus. They get: sions.

• Leadership role as SCNext Coordinator for SC• Huge discounts on ISCEA certifications for the Next events at B-School designated as Campus world renowned Certified Supply Chain Analyst Ambassador ( CSCA) and Certified Supply Chain Manager • Leadership opportunities and resume building (CSCM) programs.

(SCNext will give a certificate felicitating their • Free global conference passes, networking lun- contribution to SCNext). cheons with SCNext corporate partner at supply • Free CSCA certification (On achieving minimum chain events globally. target like membership and certifications at the B• Complete supply chain research through ac- School). cess to thousands of journals and scholarly papers courtesy of the ISCEA. All available online through • Opportunity to meet and network with Supply Chain and Operations industry thought leaders.

SCNext website.

• Attend multiple events/conferences / trade fairs • Opportunity to get promoted to the SCNext Leadership Council and to work with counterparts around the world for FREE. from US, KSA and Egypt, other countries as added • Access the ISCEA Venture Capital funds total- to contribute to a global forum of supply chain enling US $ 1 million for a viable business idea in thusiasts SCNext Start Up Day program. Additionally all ISCEA global resources will be at student disposal We currently have SCNext Campus Ambassadors at : for growing the start-up company.

IBS Business School, Pune ; IIT Kharagpur - Vinod Gupta School of Management ; IIM Shillong (RGIIM); IIM Ahmedabad ; IIM Indore; National Institute of Industrial Engineering (NITIE), Mumbai; IIM Calcutta; Symbiosis Institute of Business Management, Bengaluru ; XLRI Xavier School of • Work with major corporations in your region to Management, Jamshedpur; Symbiosis Institute co-develop the SCNext as the premier source for of Management Studies, Kirkee, Pune; Symbiosis Institute of Operations Management, Nashik; IIM new employees.

Tiruchirappali; • Resume building opportunities / Summer In- IIM Udaipur. At other B-Schools pan-India the ternships / Offsite and onsite live projects at cor- selection process of Campus Ambassadors has been initiated and will fructify in a few weeks. porate world.

• Participate in SCNext annual global case competitions via Ptak Prize for SCNext members and resolve complex supply chain issues while getting an opportunity to win 1000 USD and free CSCA certification.

• Have fun, make new friends, and change the world

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4) How will partnership which SCNext Help B-Schools?

I N F O C U S

Our MoU partnership with B-Schools and Operations – Supply Chain Club at various institutes in India and overseas are aimed to mutually support opportunities & event / share resources to conduct knowledge sharing events and act as a platform for an ongoing arrangement within a robust framework.

I N F O C U S

buying / virtual marketing/ selling / e-payment is now becoming a reality in India too. With an enhanced outreach program at diverse B-Schools across India and a very successful membership enrolment and acceptance to the certification programs has boosted our activities manifold within a year of presence in India.

5) With which all institutions SCNext has Making the students industry-ready, creating established partnership with ? training and job opportunities at corporate, crossblending of talent and job opportunities is an ongoOur MoU partners include Amaethon & OPTIMA ing mission. The requirement for skilled – trained – The Agri Business and Ops Club at IIM Ahmed- managerial workforce to streamline supply chain abad. MoUs in advance stage of finalisation include is the need of the hour and SCNext is seized of the other prestigious B-Schools and or their Supply opportunities and challenges considering its globChain Clubs like SIOM, Nashik, IIM Udaipur and al exposure and expertise in supply chain network.

AXIOM - XLRI Jamshedpur, SIBM Bangalore, Improving reach across organisations / employIBS Business School, Pune, Vinod Gupta School of ers with a focus on supply chain and operations Management at IIT Kharagpur to mention a few. domain is underway.

6) What are the activities/events that you have planned to be conducted across BSchool Campuses?

Anticipatory shippingThe game changer in e-commerce Rahul Tiwari, Saumitr Rai IMI Delhi

In Ecommerce there is always a trade off between control and convenience. On one hand customers are gaining convenience by way of not having to go out for shopping, browsing through multiple websites and comparing the products on various parameters. On the other hand customers are also letting go of the control that they enjoy. For example, when we visit a brick and mortar store we can actually touch and feel the product, we can use the product on trial basis. These kinds of features are not available with online shopping. According to the theory of loss aversion, any loss has a far greater negative impact than a comparably sized gain has a positive impact. Lack of control over the shopping is the loss in Ecommerce and the comparable gain is convenience. To compensate for

Internship programmes at corporates for IBS Business School, Pune; Symbiosis Institute of Management Studies; Balaji Institute of International Business; Symbiosis Institute of Computer Studies & Research, Pune; Balaji Institute of Modern Management.

the negative impact due to loss of control, companies need to increase the convenience level for customers and this is what companies like Amazon, Alibaba and Flipkart are trying to do by substantially reducing the delivery time with the help of various futuristic technologies and concepts.

Several ecommerce companies are trying various process and supply chain innovations to increase their business by increasing customer satisfaction and developing customer loyalty among their customers. Flipkart, for example, has recently launched Flipkart marketplace which will eliminate the need for Flipkart to have its own inventory and buyers can directly deal with sellers. Flipkart will only act as a delivering agent. Also to pull more customers, Flipkart has started same day guaran-

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Events like Case Competitions, paper submissions, guest lectures, webinars as conducted last year will be continued and expanded in scope and participation at all institutes including Symbiosis Institute of International Business, Pune ; IIMs @ Ahmedabad / Calcutta / Trichy / Shillong / Lucknow / Indore ; SJMSOM - IIT Mumbai ; NITIE, Mumbai ; IIM and Supply Chain Operations Clubs / Fests including Op-Era Club ; Avenues 2014 ; C2X Club ; Operations Interest Group to name a few.

7) What are the future plans SCNext in India?

Supply Chain is the backbone of all manufacturing and trading operations considering that internet

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teed delivery across 10 major cities in India. Similarly Amazon.com is planning to have an autonomous flying delivery drone system for shipment of goods. These all efforts are basically targeted to reduce the delivery time and to pull customers from the traditional brick and mortar model.

Although companies like Amazon can deliver goods in 2 days time and can deliver in a day by charging some premium from customers, these methods are constrained by high costs to be paid by customers and dissuade customers to buy online. This is where a concept called anticipatory shipping comes into picture for which Amazon recently got a patent.

Amazon’s anticipatory shipping is a shipping system that will deliver the goods to an area or to the right door even before the goods have been ordered. The system is expected to cut delivery time of shipping the goods by predicting the general patterns of what buyers will buy even before they buy. Based on previous buying patterns of customers of a particular area, Amazon is planning to ship products to that area where the goods will wait at shipper’s hub or on trucks until the order arrives. On receiving the order the product will be shipped in no time to the customer’s house.

Let’s get an understanding of some terminologies related to the process: Fulfillment Center: Location where orders are received, stored, packaged and shipped to end consumers. These stores receive incoming orders from affiliated stores or suppliers.

Common Carrier Network: The network for transporting goods from one Hub to another or from a Hub to final delivery location.

Hub: These are the shipping facilities where goods or packages arrive from different locations. These packages are sorted here and then sent for distribution. These are established to service a geographical region which is in proximity.

Expedited Services: Medium of transporting goods such as Aviation which provides fast travel from one location to other.

Non-Expedited Services: Medium of transporting goods such as road transport which is usually slow compared to expedited services.

be gifted to a random customer in that region.

Delivery Location: The final location where the goods are to be delivered viz. the Customer address.

It is not mandatory that all activities related to packaging and shipping happen at one location (Fulfillment centers), different functions may be carried at separate locations. Usually fulfillment centers have a supporting warehouse which is used to replenish inventories whenever deemed necessary. Thus, in Anticipatory shipping goods will be dispatched through company’s common transport network to different hubs. In-transit Package addressing would be used to complete the delivery of items to customer location. This order fulfillment mechanism differs from the conventional method in terms that it doesn’t need a specific address for shipping of items. Products are shipped to a geographical location or hub without specifying the complete address. The address of delivery could be finalized during the transit of the product.

In the above diagram, the orders are shipped using anticipatory shipping (observing buying behaviour of users at a particular geographical location) from the fulfilment centres using common carriers. These carriers transport goods to hubs (1a, 1b, 1c) strategically established near those geographical locations. The common carriers could be a part of expedited or Non-expedited services based on the distance between fulfilment centres and the hubs to which it caters or based on the time limit under which the delivery has to be done. When the products arrive at hub, they are sorted and final delivery addresses are given to these packages which till now had only partial addresses. Once, the delivery location is known, packages are transported to these customers using local transports.

It is possible that packages arrived at a hub may not find a customer in the geographical location to which it caters. Thus, these goods could be further transported to hub where there is demand or back to the fulfillment center only if the cost of return is less than product cost. Else, the product could

Anticipatory shipping mechanism would consider several factors before deciding the products and quantity which would be shipped to an area.

E-Commerce companies like Amazon store huge data related to customer buying patterns which could be analyzed and utilized for demand forecasting in an area. Some of the important data points which could be used for this patented mechanism are: 1) Previous Orders: Past orders placed by a customer through the website.

2) Product Search: The products a customer searches while surfing the website.

3) Wish List: Customers wish list maintained in his account on the website where he puts the products he/she would like to be placed for sale on the portal.

4) Shopping Cart Items: The items present in the shopping cart of the user.

5) Cursor Hovering: The time duration for which the cursor of the system hovers over a particular product.

6) Return: The history of the products returned by the consumer to the portal.

Predicting about customers orders would not only reduce the shipping time but will also help in cutting inventories and supply chain costs. “Supply chain and logistics optimization is neither easy nor cheap, but it is the biggest opportunity for most companies to significantly reduce their cost and improve their performance,” wrote H. Donald Ratliff, Ph.D., executive director of the Supply Chain and Logistics Institute.

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Factors Affecting Anticipatory Shipping

By using predictive analysis, Amazon feels that

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they would be able to better predict the customer buying behaviour of a particular region. They are even willing to give the customers some incentives in order to make the customers give orders.

It is easier to determine that a customer who is a regular reader of a particular author will order the upcoming book of that author. This deduction can be made by going through the past purchases and searches of the customer. But a much more riskier and rewarding scenario is that when the ecommerce companies can predict the changing views and tastes of the reader by using business intelligence software and can ship a book based on that prediction before the customer makes the order for this kind of alternative purchase.

In today’s age, the customer is very demanding and will provide his loyalty to the company from which he can reap maximum benefits. Drastically reduced delivery times and policies like gifting the package in case it doesn’t find any customer, will definitely enhance the company reputation and image.

In 1999, Amazon received a patent for one click ordering in which customers can order goods by a single click with payment information already entered by the user previously. Because it was a mega hit, other companies like apple had to take license from Amazon to use that service. Now if anticipatory shipping could also prove to be a mega hit, various ecommerce companies have to pay Amazon royalty to use this service. With adoption of anticipatory shipping by various ecommerce companies, one of the biggest drawbacks of online purchase i.e. large waiting/delivery time would be substantially mitigated. This would possibly sway a large number of customers from the brick and mortar model to ecommerce model.

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RFID- The lifeline of future SCM and Logistic systems Saurabh Deshpande, Vibhu Vatsala Sood NMIMS Mumbai

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Radio frequency identification (RFID) is a new wave in the technology environment. Anything that communicates using radio waves is able to identify and differentiate itself from other things – this is the core of this technology. Its usage goes back to the 1940s when it was used by allies to differentiate between the military aircrafts of friends and foes. Today RFID usage has gone beyond the military regime and found ubiquitous applications in various commercial spheres. The keys to open your car doors, automatic payment passage used at the toll gates, building access systems, payment cards, computers and mobile phones trackers, tracking products in inventories, etc. are some of the areas using this technology.

Working Concept of RFID technology The RFID technology consists of three major components • RFID tags or transponders that carry objectidentifying data.

• RFID readers or transceivers that read and write tag data.

• Databases that cross check arbitrary records with tag identifying data

tial to make siwgnificant impacts in the processes and working in the industries using supply chain Every tag has a unique identification number given management and logistics. by the manufacturer. The chip can also store other information like product code, product price, etc.

An RFID reader transmits an encoded radio signal to enquiry with the tag. The RFID tag receives the message and responds with its identification and other information.

Reader: RFID readers communicate with the tags through the radio frequency waves and depending on the type of the tag receive a single ping or a more complex protocol. Readers generally have an anti-collision protocol to avoid conflicts. This enables the reader to communicate with multiple tags rapidly.

RFID Applications Database: The database contains the arbitrary records, which are associated with tag identifying data. These records primarily contain product information, expiration dates, sales data, etc. The databases can be mined using analytics or simpler logic (depending on the information to be mined) and hence information about the products can be

What it really is?

RFID consists of tiny transponders (called tags) which are attached to the physical objects. When RFID trans-receivers (readers) interrogate wirelessly with the tags, they get some identifying information (already there in the data records).

Similar to optical bar codes, these are also automatic identification systems. However, they are a step ahead of the bar codes as they do not require line of sight to identify items and can differentiate between the products rather than just the product classes.

frequency waves.

Tags: Tags are attached to all objects to be identified in an RFID system. The major components of the tag are antenna or coupling element and an integrated circuitry. Some RFID tags have a power source while the other receives energy for radio determined and used accordingly.

RFID thus provides a unique wireless identification for objects, as it serves as the conduit between the physical world and the digital world by its ability to identify and differentiate between the objects by computers. The size of an RFID chip is about the size of rice grain, which makes it very easy to use as a tag on a product of any size. RFID tags might become the most pervasive microchips in the industry. This technology has a great poten-

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In the supply chain management systems, it’s very important to get a product from its manufacturer to its point of sale. RFID, significantly increases the efficiency of this process chain. RFID tags are affixed on boxes and pallets at the production place.

Readers fixed at various points in sorting and picking processes, register the electronic product codes the moment products come into range. This data is then sent to the centralized Merchandize Management System, where goods can be compared and analysed for any discrepancy in the order and supply numbers.

As RFID differentiates between the products also, its usage is crucial in the pharmaceuticals industry, where there is a need to track a vast variety of finished products and also minimize human error. While bar codes can be used to determine the shipment in batches, once the drug shipment reaches the retail store, RFID becomes the only reliable and accurate mode to track the individual bottles (especially if the bottle is broken up into individual capsules, then serialization is the solution).

Besides this, the RFID technology finds its applications in big retail outlets where chips on various products can be read all at once, and data can be utilized to determine the stock of a particular item,

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formation in the databases on the whereabouts of the trucks, hence the fleet provider has an exact idea about a truck’s current location, the speed at which it is travelling, etc. thus helping him make better predictions about the when the cargo will reach its intended destination. This helps in better fleet management, knows risks or accidents in time and hence, improved customer satisfaction.

find use in Banking where secure access to lockers can be made only if the RFID of the owner matches with that of the locker. As technology with progress, the days are not far when instead of protecting the money, passwords and codes people will be protecting their unique RFIDs sewn in their bodies.

Future Scope

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inventory levels and timely stock clearance in case of perishable items. It also reduces the danger of theft and shoplifting by mischievous employees or customers. This process is significantly faster than the manual counting and recording adopted earlier. It also enables the retailers to expand their offering and control the costs at the same time.

on a signal, the reader senses it and records the information in the database. The database holding the universal identification numbers of all trains is updated immediately. This information can be mined and the new location of the train can be determined. If it is determined from the data that the distance between the trains is less than two consecutive readers then the train is automatically Another application of RFID is in the library man- stopped. agement system, where books, records, journals shelves are all tagged with ids. Hence, placing, In order to identify the problems on the track the accessing, searching books becomes as easy as a readers are fitted with FLIR (Forward-looking inclick on a mouse. In case of misplaced books, the frared) camera. The camera captures the images reader tells the exact location in the library and its of the track ahead and sends it to the image prointended shelf. cessing unit. If any fault is detected on the tracks the train is stopped.

RFID has also found immense used in the logistics. This technology is been currently used in the Railways have effectively used RFID technology Mumbai Metro networks. The BJP government for making robust Anti Collision System. Railways has allocated a total sum of INR 13,000 crores for currently use anti-collision system using GPS. The implementing this technology along all the major problem with the current system is that it does railway routes. not take into account the environmental factors; mishaps pertaining to breakage of tracks and rail- Similar to railways, another logistic use of the ways crossing errors cannot be avoided complete- RFID technology is in the Road transport as Vehily. However, an RFID based anti-collision system cle tracking system. Radio frequency tags are fitted can significantly minimize these errors and help to on each truck which stores crucial information like avoid any such accidents. the speed of the truck, the destination of the truck, the material it is carrying, etc. The RFID readers The working mechanism is very simple and effec- are installed at entry/exit points of all major hightive. RFID readers are fitted at all the railway sig- ways, toll booths, hubs and major turning points. nals. Every train is fitted with a RFID tag which System distributors companies also have tie ups has a unique identification number. As a train is with many petrol pumps where these readers are about 100m away from the RFID reader installed installed. These readers continuously store the in-

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RFID being a low cost and easily scalable technology is going to be very disruptive in the near future in various areas. In future the whole attendance system at work places and in educational institutions can be made using it, thus minimizing the efforts and money organizations spend to collect this information. It has already found use in the big poultry and cattle breeding farms where owners track the animals using the RFID tags chipped in their bodies or on their harnesses. It may also

FACTOIDS-The term “logistics” was used as far back as 1898.

-According to Wikipedia barcodes were first used to label railroad cars. It wasn’t until a pack of Wrigley’s gum was first scanned in a supermarket in 1974, that the efficiency of barcodes was realized for retailers, in particular large grocer chains.

-Ford’s “Model A Car” Production in 1927 demonstrates the first example of mass production.

-The mastermind behind MRP (material requirements planning) was IBM’s Gene Thomas who later founded the company, Emeritus.

-According to the Council of Supply Chain Management Professionals (CSCMP), it is estimated that it costs approximately .37 to deliver a box of cereal to the U.S. consumer’s breakfast table.

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F A C T O I D S

Will 3D Printing Transform The Supply?

Apoorva Dev GIM Goa

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Introduction 3D printing has been in existence since 1980’s.

Chuck Hull of 3D System Corp., in 1984, pioneered the 3D printing technology. Later on many new players started joining in this market. Today it is considered as a technology with a potential to change the entire manufacturing industry. Before we start looking into the impact 3D printing is having on the global supply chain, let us understand a little about what 3D printing is all about.

In its nascent stage, the 3D printing was restricted to only rapid prototyping and small run productions. In most of the instances 3D printing was used to produce objects by using resins, polymers and plastics as raw materials. With R&D and advancement in this field, 3D printers are now capable of printing with a variety of other materials like metal powder, ceramic powder, wood pulp, sandstone and wax.

melted and rebound at a molecular level tests have to be carried out to check for appropriate density, strength, accuracy of internal structural complexities etc.

Industry Implications Currently, the industry works on a design-builddeliver model. The methods of production, amount of customization and the structure& participants in supply chains are restricted by various constraints. With the advent of 3D printers we may witness a surge in small clusters of supply chains being built around the world.

A simple example for such change is Project ARA undertaken by Google Inc. Although it is still in the R&D phase, this project once launched will allow people to select each componentof their mobile device. E.g. battery, camera, memory etc. These desired The Process components will be printed via 3D technolIn this technique,a ogy, assembled, loaded 3D printable file (STL with OS and shipped file) is prepared with the help of CAD and is fed to the customer, practically making each mobile into the machine. Once the print command is giv- a unique device. The industrygiants in mobile en, the 3 dimensional physical object is printedby manufacturing will have to rethink their business laying down many successive thin layers of the strategies to sustain in the market. material. In a nutshell, the process involves the material being melted with the help of a laser, laid If similar concepts start cropping up in other indown layer by layer into the required shape by the dustries it will be a revolution in itself. Economies moving printing head and fused together with the of scale will become less relevant and customizahelp of a suitable binder. The slower the printing tion will preside. Those organizations which can process is carried out the better if the quality of the make 3D printing cost efficient will be able to reap finished product. the profits of such customization. Business models Once printed the objects require varied degrees and strategies will be realigned to match this techof finishing. Some of the more structurally com- nological advancement. plex products require more elaborate finishing procedures then others. As the raw materials are The organizations will not be required to outsource

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manufacturing processes to third world countries to achieve cost efficiency. Thus logistics will become localized as opposed to the global chains seen today. Companies will change their shipping model. In turn, the need for keeping large warehouses will vanish and manufacturing units will shift their focus from design-build-deliver model to additive manufacturing model.

In-house productions will become a norm. Mass customization to the finest details will be easily possible without incurring any extra costs.Same physical space could be used to manufacture a wide variety of products with least lead times by just changing the type of printing material and STL files used.Local manufacturers will start returning to the trade. Goods will become drastically cheaper as cost of manufacturing, overseas distributing and packaging reduces.It will also reduce the amount of waste generated due to scrap material and other waste at the time of production.

Such production and distribution techniques will result in reduction of carbon footprint and increased resource productivity. Countries which currently pay heavily to on import duties and taxes will breathe a sigh of relief as they will be able to produce at least some of the imported commodities domestically.Consumers will prefer manufacturing their own products at home as and when needed rather than buying them.

Besides the large number of advantages mentioned above, there are some major disadvantages which will be faced by the industry if this technology becomes affordable in near future.Countries like China, India and Brazil which have established their economy on the sheer abundance of cheap labour will have to find different means of survival. Countries with higher proportion of working population will suffer due to automation of manufacturing processes, but those countries with more senior population and stable economy will be able to benefit from this revolution. The printer manufacturers and suppliers of printing materials will become the deciding factors for finished products’ cost and quality.

Compatibility issues will start showing up. Just

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like in the PC world some software may be highly compatible with certain machines while others may not. Similarly some raw material “cartridges” may fit in only certain models of printers. As newer versions are developed compatibility options between older and newer technology (both hardware and software) will become a challenge.

Currently the items manufactured on disposal can be recycled and/or up-cycled in scrap and recycling units around the world. But we haven’t yet found any methods to do the same with 3D printing. The material once used cannot be recycled to form the “cartridge” again. With more and more products printed every day, and none recycled, this will lead to serious environmental issues.

Of course it is needless to say that it will add a lot of work for governments and policy makers.

New rules and regulations for patents, copyrights, trademarks and anti-piracy will have to be formed to protect the innovators interest. It will also have serious implications on national security. Illegal manufacturing of arms and ammunitions will be very difficult to track. Weapons may get manufactured in a disguised form at the place of use.

According to the studies conducted in this field it is said that 3D printing will act as a supplementary supply for objects to major manufacturing processes for the next decade. Thus traditional manufacturing processes will still form the major chunk of supply chains.

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How will Driverless Technology impact the Supply Chain?

OPS-Quiz 1) According to TOC Method where should the buffer for unplanned delays be added? a) After each activity b) End of the chain c) End of project 2) What does Drum represent in an process according to TOC? a) Speed at which all processes must run b) The reserve capacity of each process c) The reserve capacity of the system

Q U I Z

3) What would be your last alternative when faced with capacity shortfall? a) Overtime b) Subcontracting c) Contract labour hiring d) New machinery or labour hiring 4) KAIZEN is a system targeted at….? a) Continuous improvement b) Safety improvement c) Profitability d) Cost cutting 5) Which of the following is not a key parameter in TOC evaluation of a process? a) Throughput b) Inventory c) Operational Expenses d) Capacity

Ashmita Sengupta, Suresh Bommisetti NMIMS Mumbai

d) Rate of consumption 8) By regulations how much overtime can be offered to workmen? a) 20% b) 25% c) 15% d) 30%

In today’s age, every economy is growing at such a rapid rate that infrastructure of major cities are facing issues of congestion. At this point, transcending into new modes of cost and time efficient transportation is the need of the hour.

entered the public view and reinforced the industrial view that driverless technology like drones and autonomous vehicles would become the next big technological revolution to solve everyone’s transportation woes.

For most product based companies, the last leg of the supply chain, i.e. delivery, usually emerges to be the most inefficient. Various delivery disruptions lead to dissatisfaction among customers, and

Driverless Technology: From an Industry Perspective

adversely affect the bottom line. This aggressively increasing problem created a void for alternate ways of transportation.

reinventing itself. So it came as no surprise when in December 2013, Jeff Bezos announced Amazon’s intention to invest in drones which would make deliveries within 30 minutes of placing an order. This signaled the arrival of commercial drones into our lives. Today every e-commerce, retail and distribution based company is considering acquiring drones to better their logistics. But the reservations remain the same – How viable is it, for a driverless technology like drones, to replace an important arm of their business entity?

The Industry has always been in the risky habit of

9) When performing manpower planning is absenteeism considered? a) Yes b) No 10) Six sigma : Quality as LEAN:……… a) Efficiency b) Delivery c) Cost d) Safety

6) Which of the following problems is not created by excess inventory? a) Working capital increase b) Hiding process inefficiencies c) Process delays d) Loss of flexibility

Let us look at two important incidents in the recent past which brought driverless technology into limelight. The first was in June 2013, when Dominos Pizza UK delivered a pizza using a commercial drone; while the second occurred when Google’s prototype driverless car made its debut.

Overnight, the idea of using driverless technology

7) When deciding inventory management systems which parameters are not considered? a) Cost b) Criticality c) Volume

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S T U D E N T C O R N E R

Firstly, these drones have access to areas where roads do not. Their air travel takes market penetration to a deeper level, especially in emerging economies. Secondly, in most cities, traffic congestion would lead drones to making time and energy efficient deliveries in comparison to the usual road vehicular ones. Finally, companies will now be able to control their deliveries without accounting for unforeseen disruptions with the help of commercial drones.

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by drones which will help solve the issue of urban gridlock.

Regulations in India are clear that drones can fly only at an altitude of 200ft - 400ft. This altitude of flight could put the safety of drones and its package in jeopardy, in the hands of an uninformed civilian. Such a situation can also arrive in the case of a driverless truck stuck in a location with a weak road transportation systems and uninformed public. These situations could be avoided by educating Autonomous vehicles like driverless cars or trucks civilians about driverless technologies, and bringcan also be used for delivery systems. It is a strong ing in stringent civilian laws. possibility that autonomous trucks will arrive before cars to solve the problem of supply chain. While improving on current limitations of comIn the US alone, 68.5% of all goods shipped are mercial drones- your machines weigh as little as transported using trucks; which employs 1.7 mil- 1 kg, use battery power, and eventually should be lion drivers. This data signals that driverless tech- able to power themselves through solar, like titan nology is going to be helpful in significant reduc- aerospace has demonstrated; limitations of aution in time of delivery due to reduction on human tonomous cars can be addressed through better dependency. Owing to the exceptional expecta- navigation routes backed with a robust road intions from this technology, economies are work- frastructure support. Like any new technology it is ing towards developing this technology into a sus- just a few years away to use them as a new transtainable reality. Driverless truck experiments are portation medium. already underway in Japan and Europe, and now testing of semi-autonomous trucks has begun in Driverless Technology: From the Public Nevada. This technology has the capacity to work Viewpoint by itself, or as an entity along with drones. If their operation is made to work in a tandem with the The emergence of driverless technology has drone systems, it would create a phenomenally ro- amazed the global audience. But how does the pubbust and time sensitive delivery leg. lic respond to this technology when introduced as However, this isn’t the end-all to the situation. a part of its daily life?

Many critical real-time issues from the industry standpoint still need to be addressed.

Firstly, dealing with delivery issues after a hasslefree online shopping experience is a grievance A brief overview of the above table says that most most buyers have these days, especially during industrial reservations can be met by stringent peak hours or sale months. Usage of autonomous laws and regulations and technological advances, trucks or commercial drones for deliveries would such as using 3D street maps for better navigation be the best solution to this since their use implies

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quick delivery time. Secondly, in the mindset of a buyer – a drone delivering their product might speak “premium” to them since it would mean no transportation damage, no possibility of theft and round the clock deliveries. Finally, in the case of commercial drones, the integration of UAVs into our industries will create a job market supporting it and reduce our dependence on fossil fuels. According to a study done by the Association for Unmanned Vehicle Systems International (AUVSI), UAV integration into the US economy will create more than 34,000 manufacturing jobs and more

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than 70,000 new jobs within the next three years in the US alone.

In spite of the public wanting to be bullish about driverless technologies, some serious concerns keep them at bay.

Like with the industrial reservations, most public reservations are also met with the same solution of stringent aviation laws and regulations. Today China and USA are on the brink of legalizing shipping by drones. FAA regulations on the same are

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expected to be issued by 2015 for the latter. Both the economies are working on making infallible document to regulate drones, ensuring safety and privacy of the public is not breached.

Driverless Technology: Fad or Formidable?

S T U D E N T C O R N E R

Many might say that the path to successful integration of driverless technology into any economy is too long and difficult a road to tread down to fruition. Would technology like autonomous cars and commercial drones become nothing more than a technological fad turned into an industrial cautionary tale?

“The idea of putting flight into the hands of the masses is one that has sparked the imagination of many, and is unlikely to die out as a fad.” says Tanuj Bhojwani, co-founder of Quidich. Quidich is a Delhi based company that builds drones loaded with cameras. “As with any new technology, the drones are only as good as the applications we can come up with, which in my opinion, are far from exhausted.”

He mentions that since their inception, not only have people approached them for aerial photography using drones for weddings, film making, and

journalism but farmers have also approached them for monitoring their farms. This gives us a spark as to the many more avenues drones could be used in – like humanitarian and disaster relief purposes and for surveillance in field based industries. When asked about drones emerging as a new transportation mode, he says “Drones require almost no infrastructure costs, being able to reach highly inaccessible regions at no differential costs. As battery and sensor tech improves, replacing transportation modes with drones will become a viable step.”

Any technology at a nascent stage has difficulties with reach and public opinion. For technology, where security is an issue, the backlash is even greater. Today, driverless technologies are at the receiving end of this backlash. Despite this, all of us can agree that we’re bearing witness to the birth of a new transportation mode.

This mode might take a few more years, or even a decade, to develop and globally implement itself. But the day it matures, we’ll be at the brink of another industrial breakthrough. •

Quiz-

Answers: 1-(C) End of project 2-(A) Speed at which all processes must run 3-(D) New machinery or labour hiring 4-(A) Continuous improvement 5-(D) Capacity 6-(C) Process Delays 7-(D) Rate of consumption 8-(A) 20% 9-(A) Yes 10-(A) Efficency

Expert Speak

Mr. Krishna Saxena Head, SCM Larsen & Toubro Ltd

Mr. Krishna Saxena has an industry experience of over 33 years. He is currently heading Supply Chain function for Mid & Down Stream Hydrocarbon Projects in Oil & Gas Segment at L&T. He started his career as Management Trainee in Rashtriya Chemicals & Fertilizer Ltd (RCFL) a PSU in 1981. Over the years worked in plant as well as other materials management functions such as stores, transportation & clearance. In the year 2007, he joined Larsen & Toubro Ltd.

ity for timely project delivery. We handle projects in domains including: Gas Processing, Refinery, Petrochemicals, Fertilizers and others. Since each project has its own challenges, I use my personal experience to help improve the productivity of my team.

3. Recently, L&T Hydrocarbon has won a mega EPC project worth Rs. 5076 crore from the Kuwait Oil Company. Do you think that the bidding was too aggressive?

Competition among the players over the bidding is tough. However, today the world is our stage and with increasing globalization, competition is bound to increase. International client alongwith price give importance to an organizations focus on safety, Quality consciousness, delivery performance and adherence to specifications. Though In a candid conversation with Optumiz, he talks we have started entry into the Middle- East marabout his experience, L&T and the supply chain do- ket only few years back, we have been able to demonstrate our strong focus on all above parammain. eters. This has helped us to bag such prestigious 1. Where all is L&T Hydrocarbon presently orders against stiff competition. working in?

4. What are the challenges that you expect L&T Hydrocarbon Mid & Downstream is currently in successfully completing the project that working on many projects in the Middle East in- is stretched out in terms of scale, scope cluding – Oman, Qatar, Abu Dhabi & Saudi Arabia. and time?

Recently, another project has started in Kuwait. In India, we have been working with esteemed part- The biggest challenge when one goes global is to understand the local market and dealing with its ners like IOCL, ONGC, RCF, NFL, Reliance etc. variables. In many contracts it is mandatory to 2. We understand that you job consists of li- give preference to local vendors. Factors like Loaising between multiple organizations. How cal laws, rules and regulations, tax system need do you manage your workflow and ensure to be considered. Movement of cargo under local conditions, routes, condition of site and safety & optimum productivity at the same time? security related issues in the region also affects The organizational structure in L&T is designed in a the entire process. manner to streamline workflow both effectively and efficiently. Apart from managing the overall department, one of my important jobs is not only to appoint competent Project Procurement Managers, a unique and single point of contact for each project but also to support and help them in troubleshooting. The role of my team is to support the Project Organization which has the important responsibil-

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Today, the ecosystem in which L&T operates is very competitive. Project size can vary from midsized to very large size. Adhering to timeline is the critical aspect of the business and the project schedule is considered as very critical by the Project team.

A typical cycle includes – 1) Engineering Efforts

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2) Cycle issuance of RFQ & selecting the right vendors 3) Ordering and Vendor Engineering Cycle 4) Final work at Vendors designated premises. Our proactive involvement in all these stages ensures the best possible result in terms of project progress.

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in supply of material. Therefore, SCM forms the backbone of any organization and has direct impact on its profitability. However, field experience plays a vital role in being a successful Supply Chain functionary. One needs to spend quality time at sites to have a better understanding of 5. How would you describe the organiza- how the projects work. Practical knowledge of any tional culture of L&T? product or process can only be gained through experience of working in the field.

L&T as an organization has a very professional work culture. Each individual is valued and given The person aspiring to be successful in this field his due importance. Everyone is encouraged to should have knowledge of local laws, have artful perform at their optimum level. Continuous Train- negotiation skills, self confidence and persevering & Development is our core competency. The ance. personalised training programs are designed after assessing individual’s area of improvement. The company believes that human capital is its biggest asset. Because of the size and complexities involved in execution, L&T has a robust Risk Management process. There are regular reviews and continuous course corrections. System and processes have been put in place to execute projects within a framework which is constantly monitored.

6. What are the various tools and methods that you employ to manage the project efficiently?

Send your comments and feedback at optumiz@nmims.edu.in

It sound clichĂŠd, but let me say it - This is the era of Information Technology. All the internal processes in L&T are automated. We make use of various IT tools for seamless communication and data management. We are pioneer in the use of ERP systems for our projects.

For more information Visit us at: http://www.facebook.com/optumiz

L&T has an internal knowledge portal. We also have fortnightly knowledge sharing session where any team or individual is welcome to share work experience with the rest of members of the team.

7. How do you think are the current career prospects in Supply Chain management and what would you expect from an MBA Operations graduate fresh out of B School?

The field of Supply Chain management is complex and highly regarded. Major cost of any project is

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