Cover Story X-Ops annual Business Conclave “Ashwamedh-16� Around the World with Operations Management ____
Rolls Royce Supply Chain Management ____
Opsession
Reliance Jio A Disruptive Innovation
September Issue This is the second issue from Volume three of Opsession, the monthly newsletter of X-Ops. The newsletter was introduced two years ago by X-Ops with the intention of covering all the activities and events that took place during the span of a month.
Xavier Institute of Management, Bhubaneswar Volume#3
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Events by X-Ops In this rapidly changing world of business, industry exposure is a must to gain necessary and valuable insights into the real world business scenarios. Bschools have these days left no stones unturned by providing students opportunity to interact with the corporate world by having various corporate collaborations like internships, live projects and corporate competitions as an integral part of the course curriculum. Every year at XIMB, the students gear up to be a part of a series of such conclaves in several functional domains that brings together eminent personalities from diverse backgrounds like academia, corporate as well as government sector to discuss and present insights into the new developments and trends that are shaping up the landscape of business today. This year X-Ops, the Operations Management Committee of XIMB conducted its annual national seminar “Ashwamedh-16” on 28th August with the theme of “Disruptive Innovations – In Operations Scenario” which was quite in harmony with the highly competitive nature of business today. Ashwamedh, now in its 12th year has always been a promising engagement for the students for stimulating their young minds. This year the stage was set for another round of enriching discussion with many reputed stalwarts from various walks of the corporate as well as medical industry world joining the panel to share their experience in the field of Operations Management. The eminent speakers for the event were – Mr. Manoranjan Ram, Associate Vice President, Paul Wurth India Pvt. Ltd., Mr. Ramesh Chembath, Entrepreneur and Start-up Consultant, Mrs. Sujata Das, MS, FRCS (Glasg.), MAMS, Director & Taraprasad Das Chair of Ophthalmology, Medical Director, Drushti Daan Eye Bank, L V Prasad Eye Institute, Mr. Rajib Kumar Jena, DGM MIS, Bajaj Auto Limited.
The entire event was moderated by the esteemed faculty of XIMB, Mr. Bikram Kumar Bahinipati, Associate Professor of Operations Management. Our Annual Magazine Ashwamedh-16 was then formally launched by the guests to a huge round of applause from the audience. Prof Bahinipati set the stage for the discussion by emphasizing the role of Operations Management in business. Our first speaker for the day was Mr. Manoranjan Ram who shared his experience on how to operationalize disruptive innovation knowledge in the Mining sector and process industries. He also gave valuable insights on the differences between Disruptive Innovation and Sustaining Innovation. He focused on the fact that Disruptive Innovation is not a breakthrough innovation that makes a good product a lot better rather it transforms the product and makes the product available to masses.
Our next speaker was Dr. Sujata Das who began her talk by sharing the 29 years of journey of innovation and product development in the medical industry. She explained how the tools of Operation Management are used in the Healthcare sector for identifying the gaps in meeting the customer requirements and how innovation is important in the eye-care industry.
Our third speaker Mr. Ramesh Chembath who is currently helping budding start-ups achieve greater successes explained how important it is to understand the underlying meaning of disruptive innovation and in effective utilization of business opportunities. He stated that that an innovation which is able to take new sets of customer in its fold is only a disruptive innovation by sharing the success story of “ChotuKool” which is superb innovation in the rural as well semi-urban sectors. He has also shared the importance of disruption for survival of start-ups in the industry by giving numerous real-life examples.
Carrying the discussion ahead, Mr. Rajib Kumar Jena, Alumni from XIMB, representing the automobile industry delivered his insights on Disruptive Innovation. He reiterated the philosophy that Disruptive Innovation is a rule and not an exception. He explained how Lean and Six Sigma principles can be integrated with technological advancements for better industry optimization. He also quoted that “Big innovation starts by improving process, products and technology. Mementos were presented to the panelists and the conclave ended with a huge round of applause and vote of thanks by our Coordinator.
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Around the World with Operations Management How Robotics can change Indian Warehouses? In today’s cut throat competition among companies an efficient logistics network is a necessity. The major touch point for a logistics service provider is warehouse operations, which account for about 25% of the total supply chain costs. So reducing this cost without compromising efficiency has always been a challenge. But many Indian logistics providers are having a tough time because of high costs and inaccurate documentation. Many experts are working on autonomous systems which can scan the barcode on samples coming to the warehouse, sort them and store them according to location to which they have to be sent. These systems will save large amount of time spent in sorting and will also reduce the manpower required in a warehouse. It will reduce the warehousing costs.
On demand Logistics provider GoPigeon gets $1.5mn from Nexus Venture GoPigeon a logistics aggregator based in Bangalore get a $1.5mn funding from Nexus Venture. It operates similar to Uber and Ola. GoPigeon connects all the logistics providers with the orders. It uses an algorithm to allocate the order to a logistics provider in an area. The operators are also valuated by the software for their performance. They claim to cover 20000 pin codes and deliver 20000 orders daily. Tech based dashboards allow clients to upload orders, track shipments and manage orders. Hanjin failure and the insights from industry The failure of Hanjin a leading operator has raised serious question about the health of the industry. The industry is facing a serious supply versus demand problem. As a part of expanding the capacity and also to reduce the carrying cost, most of the companies had introduced large containerships with huge capacities. But the growth in trade volumes has been very laggard. Most of these mega ships can carry 20000 containers of 20 foot. But the Chinese slowdown had actually slowed down the economy and as a result a major portion of the capacity is underutilised. So the transportation prices have fallen as a
result the companies are making losses. Is automotive changing?
supply
chain
The automobile industry is moving towards automation with major player planning to release automatic cars by 2020. When cars become autonomous the passenger will focus more on the facilities in the car and not the performance alone. This will change the supply chain network All automobile manufacturers now focus on the supply pf pars for cars. But this is changing. With the focus of customer changing to technology and features, the new supply chain offered by different payers. The customers will on an average use 5 hours of his time in a car. He will be looking forwards to great entertainment in this 5 hours.
So these companies have started entering into collaborations with software firms to develop these products. The automobile industry is undergoing a drastic change.
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Operations Management – Clothing Industry The insatiable appetite for cheap clothing among all sort of consumers has led prominent garment labels to go for cost cutting throughout their supply chain. Along with this the need for fast fashion industry, which changes its stock in a matter of few weeks in a response to changing market trends, adds fuel to the fire. The consumption statistics is quite staggering: 80 billion pieces of clothing are purchased worldwide each year, 400% higher than a decade ago. Most of these purchases are driven by the desire to fill up the shelves and feel good factor, instead of the true requirements. The consumers are used to seeing trendy new styles through the glass windows of shiny stores at heavily discounted prices. But these cheap prices have a cost attached which is often missed from a consumer standpoint.
Now, we need to look at the possible factors that have made the heavily discounted cheap clothing feasible for the labels. This success of reducing costs can be attributed to outsourcing bulk of the work to the low wage, less regulated countries such as China, Bangladesh, Cambodia. Easy availability of cheapest labour, apathy towards working conditions of the labours, usage of underage workers, systematic exploitation of the workforce, make it possible for the well-known clothing brands to reduce the cost and stay profitable. Less economic opportunities in these developing countries force unskilled people to join the workforce even after knowing the consequences in many cases.
Recent fires in the last few years have exposed the true conditions of the factories that cater the need of clothing brands like Walmart, Gap, Zara. In a deadly fire on 24th November, 2012 at the Tazreen
Fashions factory, 1,100 workers lost their lives. In 2013, another factory collapse killed over 1,000. Still, the safety measures are being introduced, if at all, in a painfully slow pace. Even after all this, safety is still taking a back seat over profit. Few months back Walmart decided to reject proposals designed to stop blazing fires in the factories. Also, the brands often distance themselves from the 3rd party vendors who run these production operations on behalf of those brands through legal paperwork. Does it mean that the operations of these brands are unquestionable if one can’t readily link them back to the disasters. As part of operations management, we need to critically analyse these business areas and find out the sustainable business practices in these scenarios.
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Rolls Royce – Supply Chain Management One of the largest and perhaps most critical aircraft engine provider today is Rolls-Royce. Over the last few decades, GE Aviation (General Electric) has been the biggest competitor to Rolls-Royce mainly because GE offers engines of equal specifications of Rolls Royce at a lower price by outsourcing all its manufacturing operations. RollsRoyce initially was reluctant in outsourcing its manufacturing operations as they were feeling uncertain about meeting the quality standards which RollsRoyce has built over the years. To increase revenue, customer base market share Rolls-Royce decided to outsource its manufacturing operations by streamlining its supply chain portfolio operations by introducing regulatory document SABRe (Supplier Advanced Business Relationship) which governs the suppliers in designing the business model and Total Quality Management (TQM) as per Rolls-Royce requirements and has been mandated as part of contractual agreement. SABRe covers on varied topics ranging from Contractual Agreement, Supplier Engagement, Quality standards, Audits and Approvals, Risks and Logistics. Aerospace Standard (AS 9100) which regulates the quality standards of all aerospace industries is amending few standards taken
from SABRe. With implementation of SABRe RollsRoyce has been successful in expanding its supply chain portfolio and today it operates a business with almost 70% activities being outsourced. With its robust ERP system, RollsRoyce has gone an extra mile in improving supplier engagement by conducting SORB (Sales and Operating review board) once in every quarter.
SORB gives an overview to its supplier on the future demands of engines for the upcoming 5 years and lets them make long-term decisions on future capital investments and bidding of high revenue projects. Rolls-Royce follows the concept of dual sourcing for its components being outsourced to avoid risks of delivery failure. On basis of performance, quality standards and cost efficiency the share of business is decided to its supplier.
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Reliance Jio –a Disruptive Innovation The major players in Indian telecom industry lost almost to the worth of Rs. 25000 crores when on 1st September, 2016 Mukesh Ambani announced the advent of Reliance Jio through which he will be providing free voice calls and 4G data at a nominal rate of Rs50/1 GB. In this article we would put some light on how reliance was able to do so and what are the operational and logistics requirement for it. The pan India spectrum for Reliance industries has helped them make voice calls free. Reliance industry owns spectrum in 800 MHz and 1,800 MHz bands in 10 and 6 circles, respectively, of the total 22 circles in the country, and also owns Pan-India licensed 2,300 MHz spectrum. These spectrums are valid till year 2035.
is an extraordinary feat in the Indian telecom industry where most of the telecom operators are dependent on the companies which own fibre optics.
This helps in the seamless transfer of data at a very cheap rate. A survey states that when fully functional, it would cost as low as 10 paisa to transfer 1Mb data through these cables. This The ‘eKYC’ activation technology followed by the company instantly activates the Sim card on purchase which has led to a hustle free supply chain management of the product. Providing only an address proof is enough to facilitate the instantaneous activation of the sim card. There is no doubt that Jio has started a new era in telecom industry in India. It will be really interesting to see how it all turns out in the coming year. During the last 5 years Reliance Jio has made an optical fibre network of 2.5 lakhs kilometres covering 1800 districts in India. More fibres means they will have more bandwidth and more speed.
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