Management Development Institute

Volume. I 2013-14 IN FOCUS

EDWARD DEMMING

An Operations Magazine by OPSESSION

TETE E TETE
The biggest operational challenge in E-Commerce is to marry Human Behaviour & Technology - Rahul Dash
COO, Purplle.com

OPSTAKES
Volume I
Dear Reader,

The Editorial Team

Anubhav Bajpai Arun Ahlawat Ankit Aggarwal Amar Verma Mohit Batra Pankaj Singla Shashank Shukla Teetas Banerjee Vaibhav Dash Zaid Ali

Warm Greetings!

We welcome you to the first edition of Opstakes: Annual

Operations Magazine of MDI, Gurgaon. The editorial team has new blood altogether and we bring this edition to you with lot of enthusiasm and hope that it helps build new perspectives and insights to add to your knowledge. In this world of cut throat competition, operational effectiveness is a must have for establishing a clear monopoly. Rapid evolution in operational trends and increasing importance of supply chain have not only rendered Operations management as being a subject of prime importance but have also evoked interest among the intellectual class. Companies are investing in latest technologies, implementing latest systems and integrating process strategies to establish a competitive edge. In this edition we have received an overwhelming number of articles from students of top B-schools and had a really tough time selecting the best amongst them. The articles included provide interesting analysis of latest in the world of Operations ranging from customization through 3D printing to the latest buzz word of Internet of things. The magazine also throws light on the challenges and hurdles faced in Operations of a nascent e-commerce business via an interview with the COO. The puzzles and interesting news facts from the year throw in the attractive punches of the Operations industry. On behalf of the entire Opsession Team, we would like to express our gratitude towards Prof. Manoj K. Srivastava who accepted our requests to judge article entries received for Opstakes. We are also thankful to all who had submitted their articles entries for Opstakes. Happy Reading! Editorial Team

For any information/feedback please feel free to contact us at opsession@mandevian.com Follow us on facebook Opsession - MDI for all latest updates on the field of operations.

An analysis of implementation of third party logistics

Current Scenario | Critical Problems | Potential Solutions

Exciting pointers to critical Operations Terms

Get abreast with the latest in Supply Chain Management

Supply chain opportunity for mass customized Donuts

A comprehensive & detailed analysis of 3D Printing & Supply Chain

The weak link optimization in food Processing

Exploring the challenges of Supply chain and Operational exigencies of a growing e-commerce business

A sneak peek into the year of 2013 from the perspective of Operations

Understanding Quality from the one who helped define it

3 Ws (What, When, Why) of 3PL

Ankit Verma, IIM Kozikode Chandan Bharambe, IIM Kozikode

Have you ever wondered when you walk in big retail stores for shopping, that why the same product is priced at different rates in different retail stores? Why big retail stores are able to provide huge and daily discounts to its consumers? Well, as a consumer you should not really worry about it but yes, as a manager you should!
If you think economies of scale are the sole factor for this then probably you are mistaken! Numerous supply chain strategies are being employed by the firms in a competitive world of free economy. Logistics has been a key part of operation for any firm. For large manufacturers it has been always a source of dilemma whether to outsource the logistics and focus on their core competencies or involve in vertical integration to own the logistics system as well. Innovation has become necessity in this industry and even shippers are ready to invest in innovation of these outsourced companies. 3PLs could able to demonstrate innovation by introducing process improvements, improving execution, offering new services and adding technology. But shippers do not see these activities as truly innovative; instead they seek disruptive innovation in 3PL industry like a new product or service idea which when implemented significantly disrupts the market and/or value chain by simplifying, automating, generating value, or reducing costs. Further, role of these outsourcing companies is increasing day by day. Initially, companies used to only ship the goods but then it further added the value with inventory management, warehouse management, order acceptance and processing, pick-and-pack operations, order fulfillment, assembly, packaging, and other value-added activities, credit card verification, invoicing, credit, and collection, pre-sort capabilities, and returns handling. Thus, Utility of third party Logistics (3PL) has increased drastically. Global Supply Chain Management is the new trend in big manufacturers which requires sourcing and dispatching from different locations around the world to counter, by using different approaches such as Hub and Spoke, Cross Docking utilize their

economies of scale and expertise in moving products efficiently along the global supply chain.

and 3PL as a part of logistics. Growth of revenue in 3PL business for North America is sluggish with compared to Asia Pacific and Latin America which shows maturity stage of 3PL market whereas for Europe growth has been declining which is due to economic challenges faced by Europe.

Evolution of 3PL:
Pre 1980s, it started with companies with strong logistics and who could store big inventory gave their services to retailers and manufacturers In the early 1990s, Express networks and experience came in picture with the rise of companies such as DHL, TNT, and UPS with the rise of Global Supply Chain In the late 1990s, their value proposition changed from service provider to solutions provider. Many companies emerged with extensive knowledge in information technology, consultancy, and financial services such as Accenture, GE Capital Services, and IBM. With the change in value delivery the 3PL market witnessed phenomenal growth. As a result many organizations spun off their logistics businesses to focus on their core business. Table 1 shows global 3PL market
Region Global 3PL Revenues (US $ Billions) 2010 149.10 165.1 157.6 27.5 42.3 Global 3PL Revenues (US $ Billions) 2011 159.90 160.4 191.1 39.5 65.2

3PL companies have huge presence in Europe and North America so the logistics costs average 8.9 percent GDP, while the percentage of logistics costs to GDP is higher in the rest of the world.
The figure1 (on next page) indicates types of logistics service providers depending upon their functions. This matrix can also be viewed as solutions by these companies from standard services to highly customized services.

% change 2010 to 2011 7.20% -2.80% 21.20% 43.60% 54.00%

Logistics as a % of GDP 2011 8.90% 8.90% 12.80% 12.30% 11.30%

North America Europe Asia-Pacific Latin America Other Regions

3PL (as a % logistics cost) 2011 10.00% 10.20% 7.80% 7.70% 3.70%

Source: Armstrong & Associates (2013) and apics.org

Table 1

 The service developer offers advanced value-added services such as forming specific packaging, cross-docking, track & trace, and special security systems. The standard 3PL provider supplies typical 3PL services including warehousing, distribution, and pick and pack. handling efficiency The customer developer is the most advanced form and involves high integration with the customer, taking over its whole logistics operations. This is similar to what is now known as fourth-party logistics (4PL). Then the core question arises how companies should decide whether they should go for 3PL or not? What can be possible criteria to judge the performance of 3PL Company? Here are some of them. If shipper thinks that any of the following tangible or intangible benefits are associated with adopting 3PL to its operations then thought for it. it should give deep

Lead Time Reduction: If company is able to reduce its Lead time to replenish inventory, by efficient and close coordination of goods movement, especially when changing from one

mode to another; hassle free official work and clearances in movement of goods. Reduction in Bull-whip effect: By proper time management and economies of scale 3PL Company should be able to utilize its big network to minimize interruptions and delays. This Reduction in variability helps in better inventory management and much improved productivity and building of trust between partners More focus on core Business: AirtelIBM joint venture in management of operations has provided fillip to Airtel to expand in other regions as well because Logistics management in extended supply chains is itself a very complex process which has been reduced and eliminated and Airtel is now focusing on its primary business functions. Increased supply chain flexibility: The customer shall have a better bargaining power over its suppliers. Access to big network of suppliers and leveraging that could be one point of differentiation in business. 3PL facilitates sourcing from different locations just like Apple, Walmart extract majority of revenues and small portion of revenue goes to their suppliers. In this way, supply chain is flexible and adaptable to market forces. Market development and Market entry vehicle: There is certain demand for some products in different locations but due to unavailability of raw materials

market is unexplored. 3PL providers can solve this problem through their huge network and help customers explore new market opportunities and assisting with marketing in new territories by triggering demand in those regions by sharing of information, expertise and network. Expertise in Logistics: 3PL integrates various supplies from different customers, hence have access to huge information. This information can help to identify potential growth areas and help in introduction of new products, new processes, trends in business climates in foreign countries, trends in transportation modes, and more. Over the years there are major changes in the reasons for not employing the 3PL strategies for the operations. Figure 2 shows these changes in the reasons over the time. Other than IT compatibility all other issues has observed drastic decline. Even those who considered logistics as their core competencies do not think it the same over the years. Decline in cost reductions indicates modern technology has reduced the cost for total logistics for the shippers.

Challenges in 3PL Implementation:

Incompetent suppliers with variable supplies: In global supply chain scenario, a company has its suppliers spread all over the world. It is highly unlikely that all of your suppliers are able to keep the same pace throughout the operations.

This poses a great challenge for 3PL implementation. Lack of integrated Solution provider: There are few players in 3PL industry which offer full range of services needed, and their services might not be suited to the supply chain. Figure 3 shows different kinds of services provided by the 3PL player and use of the services in different regions Less autonomy: Any incompetency in supply and logistics can lead to huge amount of shortage costs or nonutilization of assets leading to business failure. In a way, this creates variety and hence uncertainty in supply chain. So

competent and qualified human resource is required Thorough tangible and non-tangible value analysis: Customers shall be able to carry out cost-benefit analysis with outsourcing. The value from outsourcing should offset the value by internal management of logistics

Checklist for 3PL outsourcing:

1) 2) 3) 4) 5) Compatibility with supply chain Cost, delivery time quality of service Performance measurement Mechanism Hassle free paper work Management of service provider and organization 6) Information sharing and mutual trust

7) Operational performance and use of modern technology 8) Size and quality of fixed assets 9) Experience in specific industry 10) Financial performance, Market share of the company 11) Geographical spread, range of services provided and network 12) Risk management and reduction in variability/uncertainty 13) Quasi rents management and effective remuneration system 14) Cost of delivery and solutions 15) Financial Stability
References: Daugherty, P.J, Sabath, R.E. and Rogers, D.S. (1992), "Competitive advantage through

customer responsiveness", The Logistics and Transportation Review, Vol. 28 No. 3, pp. 257-72 Lieb, R.C., Millen, A. and van Wassenhove, L.N. (1993), ''Third-party logistics services: a comparison of experienced American and European manufacturers", International Journal of Physical Distribution & Logistics Management, Vol. 23 No. 6, pp. 35-43 Zeng, A. Z. and Rossetti, C. (2003), "Developing a framework for evaluating the logistics costs in global sourcing process: an implementation and insights" International Journal of Physical Distribution & Logistics Management, 9, 785-803. Gilmore, D. (2002), "Achieving transportation excellence", World Trade, 11, 36-38 Results and Findings of the 17th Annual -Party Logistics Study: The

Cooper, M.C., Lambert, D.M., Mason, R.E. and Pagh, J.D. (1998), "What should be the transportation provider's role in supply chain management?" in Proceedings of the 8th

World Conference on Transportation Research, Antwerp, WCTR-S Gilmore, J.H. and Pine, B.J. (1997), "The four faces of mass customization", Harvard Business Review, Vol. 75, January-February, pp. 91-101.

Did You Know???

Paradigm Shift Communication: Period for The business benefit metric of the solution was a reduction in message transmission time from 10 days to only a few minutes. The project ultimately took over 18 years to complete when US president James Buchanan finally conversed with Queen Victoria over the transatlantic cable, hence demonstrating the first business benefit.

In the 1840s Samuel Finley Breese Morse, the American co-inventor of Morse code, envisioned laying cable across the Atlantic to enable telephonic communication from US to Europe.

Perspective on Indias Agriculture Supply Chain

Name: Pratheek Hegde Campus: Indian School of Business Email ID: Pratheek_Hegde2014@pgp.isb.edu Mobile Phone: 8288095354
Photograph

Current scenario | Problems | Potential solutions

Background:
India is a land of contrasts and paradoxes. One such extreme example is that every day some 300 Million Indians go hungry and around 3000 children die from illnesses related to malnutrition1. Yet India today holds record stocks of wheat and other food grains that rot in Government store houses. The green revolution ensured in increasing the yields of our land considerably and India drastically reduced its dependency on imported food grains. Today, India is the vegetables and the second largest producer of wheat & rice. Despite such abundant supply of food, very little trickles down to the population. This has resulted in shortages, high inflation and rampant malnutrition. This extraordinary situation is created by a complex regime of subsidies to farmers, lack of adequate grain storage facilities, inefficient procurement process and a corrupt public distribution service. Worse, around 40% of the food is wasted at various stages of the supply chain even before it reaches the consumers2. The agriculture supply chain in India can be broadly divided into two categories: one which is highly regulated by the government and the other run by private sector. The private sector usually handles fruits and vegetables at a local level. This segment is dominated by small players and is highly fragmented. It is

1. As crops rot, millions go hungry in India (http://uk.reuters.com/article/2012/07/01/uk-india-wheatidUKBRE8600KB20120701) 2. Global Food Losses and Food Waste Jenny Gustavsson Christel Cederberg Ulf Sonesson Swedish Institute for Food and Biotechnology) Gothenburg, Sweden

unregulated and disorganized without any national or pan state players. This segment is of less significance in terms of economic value and food security. The government run supply chain was created in 1960s by passing key regulation on the movement of agricultural produce such as wheat, rice, edible oils, pulses and sugar. Thus, from hence forth this article focuses on the highly regulated government supply chain. The focus is on current scenario, pressing problems and possible solutions to them.

Second, the supply chain and logistics is highly fragmented at the downstream (transport companies, wholesalers and traders). Often, the fragmentation of land holding is discussed and debated upon and the supply chain does not get enough attention. The critical issue is that any efficiency improvements in the sector will largely benefit farmer community compared to agricultural companies. Thus there is no or very little private investment from private sector and farmers do not have access to technology or the means to raise the necessary capital. Another unique aspect is that most of the food is wasted from farm to market place unlike in developed countries where most of the food is wasted at the consumer end. Remarkably, in India once the produce reaches the market there is very little that is wasted. Even damaged fruits and vegetable have uses and are not thrown away. The above issues make this supply chain a complex problem to solve. The current scenario and problems with various elements in the supply chain is elucidated in the following pages.

Current scenario and problems:

Most developing countries struggle with investments in rural infrastructure. This leads to poor quality of roads, unreliable and expensive energy access (electricity), lack of primary health services etc. This has a direct effect on agriculture sector in terms of storage and logistics which leads to high losses of the produce from farm to consumer. In addition to the above, India has the following unique problems: The magnitude of food wastage is colossal (16 Million tons wasted in 2010: enough to feed around 120 Million people3). In addition the production and consumption patterns in India have significant impact on world food security and prices. Even a marginal improvement can have huge impact on the lives of people by stabilizing prices and reducing malnutrition.
3. Food waste as a global issue

Commissioning Agents:
Commission agents are the first point of contact to farmers when they bring their produce from the field to local markets. These markets tend to be just a few kilometers from the farms. The transactions are handled by the

International Solid Waste Association Report

commission agents who negotiate and come to a deal with the farmers. Interestingly the commission agents do not take ownership of the produce throughout the process. They just tend to find a suitable buyer for the product and broker the deal. Their revenue comes from 6-10% commission that they make from the value of the deal4. Another important role of the commission agents is that of a financer. Typically farmers tend to get a maximum amount equal to the value of the next harvest from the agents. This gives enormous power to the commission agent against the farmer. Typically the agent aggregates similar produce into one and finds a buyer. Quality of produce and grading is of little consequence as it has no major impact on his commission revenue. Thus the incentive to the agent is to trade more and more produce to increase his income. Thus in turn farmer loses out with low income and there is no incentive for improving quality of the produce. The farmer realization would be higher if quality of the produce were marketed well. Here is the first of many mismatched incentive structure in this whole supply chain.

support price that is pre-set. The Food Corporation of India (FCI) is the largest buyer of wheat and other crops and transacts with the commission agent. These grains are then distributed to below poverty line families (who are given a ration card) at affordable prices through the Public Distribution System (PDS). Due to the level of fragmentation in the supply chain form farm to the consumer, India faces tremendous challenges in its ability to plan and make quick supply adjustments to the system. In addition to this, the need to feed 1.2 billion people made government intervention and regulation necessary in agriculture sector. This has both positive and negative effects. On one hand government provides food to millions of people below poverty line. But this comes at a tremendous cost in terms of wastage, public spending and inefficiencies. Even though agriculture was the main stay of the Indian economy, the first ever integrated policy framework on agriculture was laid out in July of 2000!5 Till then many departments, commissions and five year plans laid out independent policies and vision for agriculture. Like most aspects of the government they were not in sync with one another. Thus many cooks were stirring the pot leading to inconsistent policies. To complicate matters, successive governments made changes to the policies without allowing time for the policy to show its impact. Result was an incredible number of policy

Role of government:
After the commission agents buy the produce, they sell it either to private sector or the government. If the crop being traded is a regulated one, then the government purchases it at a minimum

4. Marketing of Fruits and Vegetables in India: A Study Covering the Ahmedabad, Chennai and Kolkata Markets - Vasant P. Gandhi and N. V. Namboodiri 5. Policy dynamics and competitive advantage: quiet revolution in Indian agriculture - C.S. Sundaresan

shifts and many populist measures were undertake such as Minimum Support Prices (MSP), fertilizer subsidies, free electricity etc. which have bankrupted state exchequers and have had detrimental ecological effects. The government still has the last say in exports of agricultural produce, listing of commodity futures, trading in food grains and heavily regulates these businesses. Recent ban on sugar export and trading of commodities are few examples of government interventions in the sector. There is also a lack of consensus between Ministry of Agriculture and Ministry of commerce on policies regarding food processing sector. The images that follow provide a visual detail of a typical journey of the farm produce.

Starting from the left hand side first image, the journey of farm output is traced. From the farm it is harvested, packed and transported to local markets. In the second image the collection agents are striking deals and produce exchanges hands. If the Govt. purchases the produce, they are most likely stored in temporary warehouses which leads to huge losses due to rotting. If the produce is sold to private agents then they are either exported or sold at retailers or sent to restaurants. As seen in image five, the damaged produced is loaded n carts to be sold at low cost. Very little produce is wasted at the markets as seen in image six*

arise when leasing land for agricultural purposes. Corporates and contractors can aggregate vast amount of land by leasing and exploit economies of scale in farming. The current regulations on land makes owners vary to leasing options. Thus city dwelling individuals with agriculture land are forced to leave the land barren and this also prevents small farmers from focusing on urban job opportunities.

Infrastructure:
As described earlier, the FCI buys the bulk of the wheat produced in the country to distribute it through the PDS. A part of this is stored as a buffer stock (Some 17 Million tons). The irony of the situation is

The Image below Illustrates agriculture supply chain in a typical Indian farm to consumer scenario

Another failure on the government part is to address the legal uncertainties that

that FCI has no grain silos to store these grains. Instead, the grains are stored in

unmaintained warehouses and outdoor depots. Both these do not have basic structures such as roofing to protect the produce from environmental elements. The result is approximately 20% of the grain that was stored is lost6. The total economic loss is higher considering the minimum support price paid to the farmers to procure the grain. Even the private owned ware house capacities are woefully inadequate. Government is unable to attract investment to build modern grain silos since operating these silos would mean working with FCI that is notorious for its late payments.

maximum amount of grains. In other areas such a huge investment cannot be justified. Instead innovative solutions to storing such as using polymer storage bags (this eliminate rotting of grains), equipped regional warehouses, etc. can be built. A hub and a spoke model would be ideal in this case where in the regional warehouses would feed the silos as and when stocks are depleted. A revenue sharing model or ton basis storage revenue agreements can lure the MNCs. On policy front the government must allow market to decide the prices of the produce and must do away with minimum support price mechanisms. This would result in farmers producing only those crops that would be economically viable. In addition, the traditional role of the commission agents must be altered. The agents can be trained to provide farmers with information about the crops, best farming practices, prevalent prices etc. Also commission agents can be made loan officers of banks since they have a deep understanding of the business and have established contacts with farmers. The FCI has to be made more accountable and its transactions transparent. Another measure could be to privatize the FCI to align incentives of the entire supply chain to reduce wastage and boost productivity. Export policy regarding agriculture produce needs to be relooked to allow farmers to export their produce. This has two significant advantages: Farmers would realize the importance of quality of their produce. Second, it would raise their

Instability:
Usually farmers tend to choose those crops to grow that have been profitable in the past seasons. This logic is flawed since most farmers tend to do the same leading to a herd mentality. This leads to oversupply of the commodity that result in steep drops in prices that in turn leads to wastage. Thus farmer incomes become uncertain and hence they cannot avail long term loans. This is currently limiting much needed investments in the agriculture sector.

Potential Solutions:
From the above description of the supply chain it is clear that the root cause for the wastage lies in improper packing, storing and poor policy framework. Potential solutions should address all the three factors. The government must partner with MNCs to construct grain silos in areas such as Punjab and Haryana which produce the

income. Thus, the policy if framed right 98% of the total fruit and vegetables produced in India are consumed fresh7. This results in extreme fluctuations in price to both the consumers and growers. When supply is in excess during the harvest season, prices plummet leading to severe losses. One tried and tested method to avoid this is to process the produce. This would add value to the farm output thus raising the monetary value of the products. These can be then exported under brand names or sold in urban areas. This would tilt the bargaining power in favor of the farmers. Currently once the produce is brought to market it has to be sold. Farmers would incur a loss if this is carried back. Traders knowing this exploit the situation and offer below market prices. The above recommendations are only a few possible initiatives that could reduce food wastage and make the entire supply chain efficient. In short, there is no magic chain.
6. Indian Wheat Market Western Australia Trade Office India 7. IPC Seminar- Challenges facing the Doha Development Round Trade Negotiations on Agriculture

Did You Know???

Zookal started worlds first deliveryby-drone service in Sydney: Zookal, a textbook rental startup, is sick of relying on slow trucks and traditional delivery systems to get its textbooks to people. Now, this Sydney, Australia-based company has decided on a fresh approach to deliver the textbooks via drones. It has announced that by using unmanned aerial vehicles to ferry textbooks to renters it will cut delivery times from 2 to 3 days down to a matter of minutes, while saving shipping costs down to a tenth of their normal prices. The drones are big enough to carry the weight of a textbook and delivery it to a specific GPS point at an outdoor location, where the renter can collect the package at his or her convenience.

 Crossword: Mind @ work

15

8 10 7 9

CLUES : Across : 1. A data-driven approach and a measure of quality striving for near perfection by eliminating defects. 3. Scheduling system to control the logistical chain from the production point of view. 5. A phenomenon in supply chain causing serious inefficiencies borne out of improper ordering. 7. Recognized as industry leader in manufacturing and (2) is one of the principles described in philosophy. 10. A statistical tool involving probabilistic analysis in project management. 11. Right A business management software allowing an organization to use a system of integrated application. 11 Left An optimal quantity that minimizes inventory holding cost. 13. Developed by Dr. Yoji Akao, helps transform user needs into engineering characteristics.

11

12

14

13

Down: 2. First implemented in several Japanese businesses after the Second World War. 4. Alternative to project management, responds through incremental iterative work cadences known as sprints. 6. A technique that identifies top portion of causes that need to be resolved. 8. A production strategy that strives to reduce in - process inventory and associated carrying costs. 9. Highly successful product development strategy adapted by Intel. 12. Used to record real time operational transaction. 15. A simulation game conceptualized by a group of MIT professors.

Up: 14. A combined pool of tangible products and intangible service designed to fulfill specific customer needs. 15. Most popular way of introducing (4) and empasizes empirical feedback throught its 3 roles.

INTERNET OF THINGS IN SCM

Anubha Taneja, SPJIMR Prabhash Sharma, SPJIMR
processes but no real time information is available which could help analyze them and the inefficiencies associated with it deeply. This is where Internet of Things can be extremely useful. It is how materials can interact using internet/web. In SCM this can be used to obtain real time information regarding the materials right after procurement to the distribution of materials. This technology not only helps to track the materials but also through real time analysis helps to remove inefficiencies in the system real time eventually assisting us in taking and implementing decisions.

INTRODUCTION Supply Chain Management encompasses a series of activities which involves procuring raw materials from suppliers, transporting them to manufacturing units, transforming the raw materials into finished goods and distributing them to the customer. Since the entire process comprises of complex network of suppliers, factories, distribution cells and customers, the system has to be efficient, effective and robust. This was the traditional SCM Model. It had some limitations, such as, in most of the cases it had fixed designs that could not be changed according to the real time environment. Also the model used to be cost oriented and not revenue oriented. To save upon the recurring cost, a generalized Supply Chain System was implemented. For this process to work in the desired manner flow of material and information becomes pivotal. But the flow of information is often outpaced by the flow of materials in the SCM. Information technology is used passively to study the

Visibility structure of Internet of Things based on Supply Chain

The above diagram depicts the business layers at various levels of back end, distribution to retailers and eventually to users, and usage of internet to get real time information on the input provided. This layer gets the data, processes it, and transmits the output to the application layer. STUDY SO FAR IOT is a system where the physical objects are connected to sensors making the objects omnipresent. The sensors use the RFID technology to communicate among the materials.
THE TECHNOLOGY ROADMAP: INTERNET OF THINGS

and more efficient. There are 2 types of SCM: Planning applications Execution applications

Planning applications include different algorithms to make and fill an order. Whereas Execution applications include all the intermediate steps in delivering of the order like, flow of finances, tracking the current location of dispatched material and cost computation of reaching the warehouse. The technology used in making Internet of Things practical is Electronic Product Code (EPC), Radio Frequency Identification (RFID) and EPC global Networks. EPC is a unique number on every item, which becomes the identity of the item. It is like a barcode on every item, only difference being that it is associated with dynamic data of the item. Unlike the barcode, which has only the product category, EPC holds the identity of the item through the unique features of the item, like date of production or independent serial number. This makes the item equipped enough to be tracked throughout its journey, from the manufacturer to the buyer. RFID is a wireless technology, used to store and process information, modulate radio frequency signal and transmit and receive signals. EPC, along with the RFID chip is stored on an RFID tag. The RFID chip transmits the information of EPC through EPC global Network. The EPC global Network comprises of the devices

Source: SRI Consulting Business Intelligence

SCM being a network of suppliers with factories and distributors, eventually connecting to the consumer, IOT would contribute in making the process simpler

and services used for automatic identification and immediate transfer of information on the items (EPC). These devices include the EPC Readers and EPC tags, EPC Middleware and EPC Services, for smooth and undisruptive transmission of information.

of the object. This information passed through the network is read by the wireless RFID reader, passing on the data, thus displaying the item. CISCO defines the Internet of Everything as a connection of people, data, information, devices and things which will be more valuable than processing and transferring of signals from one item to market can be depicted by the following experiences: 1. High profitability by involving the customer- Internet of Everything will help not only the business in a sector, but will even improve the customer experience, hospitality, and service. This will in turn give more profits to the business and a convenient experience to the customers.

IOT in SCM has currently also moved to

offers on the spot information to the customers. As soon as a customer picks up a hanger, a screen displays the clothes giving a visual experience to the user. This helps in making the customer make

the purchase decision. The RFID chip inside the RFID tag on the clothes allows the automatic identification

2. Maximising value of retail space- the space in a mall can be utilized by putting up devices with IOT given real time information of type of items, sale, available stock, price and other related information in a store. This will reduce the requirement of excess or untrained staff in the mall.

3. Location based services- this service can help the retailer detect if their valued customer is in the vicinity; they mobile phone. This message can be about latest collection, new stock, or discounts within a limited duration.

5. Assisting customers- Sometimes due to time constraints or various other reasons, customers are not able to try on the clothes of their choice before buying them. In that case, a customer can just put a particular piece of dress in front of him/her and check the fitting, colour and other colours available in different sizes of that particular piece of cloth. Also, to know real time information, the customer can ask for further help through the interactive machine present in the store. This provides fast access of information to the customer, increasing sales and thus increasing profitability

4. Optimize inventory- RFID sensors on the items available at an outlet can help the shopkeeper to detect the sales in surrounding region. The retailer can check the sales of other stores on some parameters like season, inventory sold and also the colour sold maximum number of times. This would provide the information regarding sudden increase in sale of a particular item. The retailer can then increase the inventory in his/her store accordingly, based on weather, popularity and so on.

6. Connecting customers- this can help in connecting customer to different sales outlets of the same brand. The customer can look into his phone to know which all stores have the same

clothes, in the required size colour, in a particular locality.

and

Logistics has always been an area wherein all the departments have to have complete transparency for IOT in SCM to be functional. This might necessitate some changes and amendments to the Standard Operation Procedures. Cost With unexplored areas still persisting in IOT, there is an inevitable need for in depth research of IOT in SCM. Operations, research and procurement of materials for the implementation of IOT and maintenance will make it highly expensive to execute in everyday life. Efficiency All the machines and sensors in IOT are interconnected to each other therefore even a smallest problem in any of the machines or services in the system can lead to the failure of the entire IOT system. This can only be prevented by implementing an efficient system and reliable materials. BENEFIT Improved Inventory Management Inventories are kept as a buffer to meet the demand. Businesses usually hold stock to meet the demands of the customer because supplier might not be able to produce that much and meet the demand immediately; it might take supplier many

These features help in reducing confusion among different stores, create a level of consistency among them and provide flawless information to the customers having different needs and requirements. Also it would reduce significant amount of staff in the stores creating a clearer and greater level of understanding among the customers. This creates not only a network among people and material, but also creates value for this network. Thus in a typical term given by CISCO. CHALLENGES Current Research The research has to be done more extensively as the technology with the required efficiency and security is currently insufficient. Transparency in Logistics

days to produce and deliver so as to meet the demand. Moreover holding stock for businesses is very expensive as it requires infrastructure to hold the inventories. This is where IOT helps, using IOT real time information is available to the supplier about the stock available and decisions can be taken regarding production in advance which reduces the number of days it takes to supply goods from supplier to businesses and hence helps the businesses to reduce the stock stored. Process Optimization IOT has a great impact in optimizing the processes and hence increasing production. IOT uses the combination of sensors and actuators to enhance productivity. During the process sensors collect data and this data is sent to the computers and analyzed. This is used in turn to send signals to actuators that alter the process based on the feedback given by analyzed data. For example in paper and pulp industry where the temperature of kilns is important for the productivity, this technology helps to reduce the variance in temperature and increase the productivity. Resource Optimization IOT can help in changing the usage pattern of scarce resources like water, power etc. by providing the real time automated feedback for the same. For example some energy companies are

providing real time information to their customer like power usage and the real time pricing for the same. Based on this information customer can make the decision to shut down a particular device and this helps immensely in saving energy. Increased Logistic Transparency IOT helps to make information pervasive across the entire supply chain rather than in the hands of only logistic operator. For example while transportation of goods if the conditions are not favorable for the goods driver is informed by the automated system and he can take steps to prevent the damage of good. This also increases accountability on the part of everyone involved in SCM. It also helps to reduce the number of damaged goods and hence losses to the business and enhances customer satisfaction. CONCLUSION The Internet of things will help in evolving new business models going in future. Following can be the potential businesses opportunities: Data Storage and Analysis With the increased use of IOT vast amount of data will be available and that data can be analyzed to make important business decisions like pricing decisions. This data and analysis can expand the business of data analytics manifold.

Data Security With so much of data available, it will open new opportunities for data security vendors to protect the confidential data from potential cyber-attack. Carbon Footprint IOT could be used to capture the carbon footprint per product and vast databases will be used for the same. Moreover when the environmental issues assume pivotal importance businesses will thrive using this data to cut down significantly on carbon footprint of different products,

5. http://www.journals.elsevier.com/internati onal-journal-of-productioneconomics/call-for-papers/supply-chainmanagement-era-internet-things/ 6. http://link.springer.com/chapter/10.1007 %2F978-3-642-27287-5_74 7. http://searchmanufacturingerp.techtarget. com/definition/supply-chainmanagement 8. http://www.digi.com/blog/community/the -internet-of-things-and-retail-what-toexpect-on-black-fridays-to-come/ 9. http://internetofeverything.cisco.com/see /ioe-work-retail-0 10. http://link.springer.com/chapter/10.1007 %2F978-3-642-17578-7_26#page-1 11. http://www.zebra.com/us/en/solutions/g etting-started/rfid-printingencoding/epc-rfid-technology.html 12. http://www.stephensonstrategies.com/iot -will-streamline-supply-chain-reduceenvironmental-impact/

IOT has started shaping the way things interact with each other and open plethora of opportunities for businesses. It has immense potential in improving SCM as discussed above. Companies in future will expand using IOT and new businesses will emerge based on IOT.
REFERENCES 1. http://www.mckinsey.com/insights/high_t ech_telecoms_internet/the_internet_of_thi ngs 2. http://cmuscm.blogspot.in/2013/03/inter net-of-things.html 3. http://referaat.cs.utwente.nl/conference/1 7/paper/7328/the-impact-of-theinternet-of-things-on-revenue-insupply-chains.pdf 4. http://ieeexplore.ieee.org/xpl/login.jsp?tp =&arnumber=5998314&url=http%3A%2F% 2Fieeexplore.ieee.org%2Fxpls%2Fabs_all.js p%3Farnumber%3D5998314

IOT Trolled

 Did You Know???

An army of robot baristas could be the end of Starbucks as we know it

competitor. The technological marvel, the Briggo Coffee Kiosk can be used by the people to create their ideal coffee experience. It needs just 50 square feets (4.6 sq m) of floor space, and it can be dropped anywhere an airport, a hospital, a company campus, a cafe with tables and chairs and WiFi just like

Barcelona Startup lets you print your own dinner Natural Machines, based in the Barcelona Activa Centre is working on a 3-D printer that will produce not just chocolates, but pasta, breads in fact, anything that starts life as a dough, paste or stiff liquid. Apart from making things like pasta, other uses include decorating cakes or adding complicated designs to foods. Unlike other 3-D printers, which typically print in can use six capsules, allowing much more complicated foods to be made. It also has a heater built in to keep the food warm during the printing process. The device will be Internetenabled so Natural Machines can use the full panoply of social tools to build up a user community.

Make your own Donut !!!

Swati Aggarwal, NMIMS Aditya Aggarwal, NMIMS

Supply chain opportunity for mass customized Donuts

INTRODUCTION

gourmet donut brand which serves donuts. Its current positioning is as very own donut chain serving wide variety of fresh and tasty donuts. Its target group is kids and youth who would like to have donut for Breakfast, lunch, dinner, desert or snacks. Currently in India, it has 47 stores out of which 20 are in Mumbai. It is currently present in Delhi-NCR, Mumbai, Pune, and Bangalore. We will talk about the supply chain opportunity that we identified for Mad Over Donuts in the further sections of this article. In Section I, we will talk about the current supply chain model of MOD, their current offerings. Based on our analysis, we will discuss about the identified supply chain opportunities i.e. Mass Customization, reducing mismatch costs, consolidating distribution which we may Your Own Section

III we will talk about the implementation details of our new service. CURRENT SUPPLY CHAIN FOR MOD The donuts are made at one centralized kitchen in the city as per the donut making process explained in Field Visit Report: Exhibit 1. The current supply chain of MOD works on a Hub-and-Spoke

model. The model has one big centralized kitchen catering to rest of the smaller retail outlets. The detailed supply chain flowchart is stated in Exhibit 2. The centralized kitchen and retail stores are owned by the MOD, thus leading to a vertically integrated supply chain. These donuts are then transported to the various retail stores where the icing is done as per the fixed options available i.e. 18 types of donuts available for sale. Replenishment Frequency: The donuts are supplied at the stores twice in a day in special boxes through the MOD owned supply vans (as per field visit data done in Mumbai). If in any case, the donuts of particular type are finished and there is a demand for that donut, then it is prepared on-thespot at the store depending on the demand by customer. The filled donuts take more time than the plain ring type donuts at the stores. The donuts left after the day is over are waste and everyday fresh donuts are received at the store. We observed that sometimes there were stock-outs of the most selling donuts. M.O.D has been conventionally serving donuts from its retail outlets that facilitate delayed differentiation. We observe from the study conducted on

also reduce the mismatch costs simultaneously. It would reduce the chances of my stock-outs too. Donuts can be coated with specific icing and filled with a specific filling based on the demand for variety within the retail outlet. Less time, efforts and costs associated with customizing the donuts make them ideal for mass customization. Moreover, the retail outlets throughout a city are served with un-customized donut bases (donuts without icing) by a centralized kitchen. In the event of a new channel opening up, it would be connected to the centralized kitchen for its donut base supplies. In addition to that, new demand because of emergence of a parallel selling channel would be serviced through the existing network of retail outlets and the centralized kitchen; Thus, creating way for effective consolidation of distribution. M.O.D has been very recently delivering donuts for orders placed over the phone by customers. However, the opportunity lies in delivering mass customized freshly prepared donuts to customers at their door-step within a specific time. This is achievable with the onset of a donut delivery service linked to mass customization of donuts through the online portal. M.O.D, to a good extent, already has a vertically integrated supply chain. The production of donut bases, stocking of

with the consumers at present. This has great opportunity to differentiate your service in the competitive scenario and

topping/icing material, transportation and logistics, and the retail outlets are all owned by M.O.D. To implement the donut delivery service M.O.D will need to go one step ahead and achieve forward integration by creating a unit for making deliveries. On the other end of the supply chain, (customized donuts) order collection will be done through the online portal. Demand forecasts will now account for the existing demand from the retail outlets and the orders placed online through the portal. We will discuss more opportunity design implementation in the sections. about this and its subsequent

Pine in his book Mass Customization The New Frontier in Business Competition. Eg. mi-adidas mass customization initiative was launched in April 2000 by Adidas to provide consumers with the chance to create unique athletic footwear produced to their personal specifications. Traditionally customization and low cost have been mutually exclusive. Mass production provided low cost but at the expense of uniformity. Customization was the product of designers and craftsman. Its expense generally made it the preserve of the rich. Today, new interactive technologies, like the Internet, allow customers to interact with a company and specify their unique requirements which are then manufactured by various means, some may be automated. Mass customization can be described as "enabling a customer to decide the exact specification of a product or service, and have that product or service supplied to them at a price close to that for an ordinary mass produced alternative". Whereas increased product variety is sometimes cited to support descriptions of mass customization, it is also argued that the customer must be involved in specifying the product for true mass customization to take place. This type of mass customization is sometimes known as 'collaborative customization', a term which was coined in a 1997 Harvard Business Review article 'The Four Faces of

SUPPLY CHAIN OPPORTUNITIES AT MAD OVER DONUTS: DESIGN Opportunities identified here are: Mass Customization of donuts to cater to end customer needs Donut delivery SERVICE to deliver fresh doorstep (a) Introduction to Mass Customization: It is the customization and personalization of products and services for individual customers at a mass production price. The concept was first conceived by Stan Davis in Future Perfect. It was then further developed by Joseph

Mass Customization', by B. Joseph Pine and James H. Gilmore . The second part of the definition refers to the price, which must be 'close to that for an ordinary mass produced alternative'. This addresses the 'mass' in mass customization. This separates mass customization from the traditional 'made to order' approach, which by nature involves high cost, for example in tailored suits. An issue relevant to achieving customization at or near mass production cost is the need to avoid creating inventories of finished stock. The use of build-to-order methods, where an item is not constructed until an order is received, is an important factor in minimizing the cost of a customized product. To avoid build- up of finished stock, the producer must have in place a system that can quickly produce an item only when an order is received. Variants of Mass Customization: Collaborative customization (also considered co-creation) firms talk to individual customers to determine the precise product offering that best serves the customer's needs. This information is then used to specify and manufacture a product that suits that specific customer. For example, some clothing companies will manufacture blue jeans to fit an individual customer.

Adaptive customization firms produce a standardized product, but this product is customizable in the hands of the end-user (the customers alter the product themselves) Transparent customization firms provide individual customers with unique products, without explicitly telling them that the products are customized. In this case there is a need to accurately assess customer needs. Cosmetic customization firms produce a standardized physical product, but market it to different customers in unique ways.

Fig 1. Variants of Mass Customization

For our service MYOD : Using this mass customization concept, we propose to start a new donut chain, say called lacking in current MOD process, we can use this to gain competitive differentiation and provide value added service to customers at almost the same prices. We plan to use Collaborative customization where customers will be given the freedom to customize the donut they

want. It would involve customization at 3 levels: donut base, donut dressing and extra topping. Mass Customization model necessitates that the exact customer demand be known beforehand as it draws a direct line between the end consumer and the manufacturer. A direct benefit of such a model is that it would reduce mismatch costs. One of the most effective means of interacting with customers (and thus knowing exact demand) is through online portals which would facilitate mass customization of donut orders. Such orders can be collected and consolidated to determine demand at a retail outlet level which would serve the end customers. Consolidation of demand would also be done at the centralized kitchen to determine production outputs. (b) Donut delivery service design: Doorstep delivery of donuts exists for M.O.D but there are no parameters to measure and rate it as a service. The existing service is arbitrary and not Pizza is benchmarked for its pizza delivery service. Such may not be the exact case with donuts but service parameters welldefined and communicated as value to the customers would bring in more sales. Delivery of donuts within 45 minutes Delivery to any area within 5km of the retail store

(c) Supply Chain Implementation for MYOD Before detailing the design and implementation of the supply chain, it is important to understand the deliverables of the MYOD supply chain in terms of service to the end customer. The deliverables of the supply chain in order will be: Availability of mass customization options and ordering facility to the end customer through the website Quick and correct flow of order information to the entity making delivery Delivery of mass customized donuts to the customer in a stipulated time

Supply chain elements for MYOD are discussed subsequently. Mass Customization Process Mass customization of donuts will be available to the end customer on the website (http://www.makeyourowndonuts.com). To facilitate personalization of service, the website would allow the customer to create his/her profile and then customize and place orders. Three levels of donut customization will be available to the customer as shown in Exhibit 3. Mass customization is facilitated in MYOD supply chain by the kitchens at retail outlets, distribution centers and

centralized kitchens. Broadly there are three main elements to the mass customization process:

Identification of customers through their past orders would serve to create a personalized experience for them. Four

Facilities Online Portal is the key to delivering mass customized donuts to the end customers. MYOD will enable customers to customize and order donuts online through the website (www.makeyourowndonuts.com).

levels of customization will be provided to customers along with delivery options home delivery, take away and gift MYOD. Retail outlets in the form of MYOD owned stores and/or franchisees will be the most important part of the supply chain. Such outlets would initially serve the purpose of branding of MYOD donuts and create much required brand visibility. Brand establishment and visibility will be

ensured by selection of prime locations in major cities. Retail stores will be equipped with kitchens that facilitate customization on top of base donuts. Along with selling donuts directly to end walk-in customers, the kitchens would produce mass customized donuts based on the orders received online. Retail stores would also serve the purpose of a distribution center closer to the end delivery location. The existing vendors would cater to same materials requirements easily. In order to save retail space costs, an alternative to exclusive MYOD donut stores could be existing bakery outlets in a city that would customize base donuts (provided by MYOD) and serve them as MYOD branded donuts. However, since the product is MYOD branded, requires customization and emphasis on quality (also consistency) is high; introduction of foreign elements in the supply chain would pose a huge threat. Hence, this alternative seems unviable initially but can be explored later for retail sale of standard assorted MYOD donut packs. Initially a small number of retail stores in each city would build demand for the product. Important parameters for determining location of retail stores are: Cities with established market for the product category donuts Areas with huge populace of kids, teenagers and youth with adequate spending capacity

Locations with high store visibility to serve the purpose of branding. Examples Koramangala in Bangalore, Bandra and Juhu in Mumbai and Connaught Place in Delhi Locations having adjacent catchment areas with high density of young, educated population who would form the major portion of the online customers Store locations at major malls in metro cities to ensure brand visibility. Example Oberoi Mall at Malad in Mumbai, Garuda Mall in Bangalore

Centralized kitchen produces donut bases and supplies them to the retail stores. Centralized kitchen would also be equipped to facilitate delivery of customized donuts to the end customers. Demand at each retail outlet will be predetermined and shared with the centralized kitchen. Demand through online ordering will be distributed between the retail stores based on the ordering patterns from respective stores locations. Thus, a consolidated demand for each store will be shared with the centralized kitchen. The centralized kitchen would plan production by adding the respective demands from retail stores. Extreme fluctuations in demand are not expected. The production facility will be MYOD owned and hence production required due to reactive demand would be serviceable at no additional cost.

Inventory MYOD retail stores will not stock inventory for more than half-aDonuts are perishables and in-order to important that replenishment of fresh donuts is done within the day and no inventory is carried forward. Inventory for the morning slot will be usually fixed and supplied to retail stores in the morning while the second slot delivery will be based on the demand quoted by the retail store managers for the rest of the day. The leftover inventory at the end of the day is disposed off. With the online ordering and delivery service in place, the demand is expected to become more predictable and settling in of demand patterns over a period of time would allow better demand predictions. This will help reduce mismatch costs associated with stocking more or stocking less. More than one delivery of donut bases from the centralized kitchen also ensures responsiveness to change in demand, thus, ensuring lower lost sales and reduce risk of leftovers. Stocking of non-critical inventory icing, fill creams, toppings and packaging boxes at the retail outlet would be done on a weekly basis in a single delivery from the warehouse. Stocking of such non-critical items at the central warehouse would be a function of the combined weekly demand of all retail stores combined. Demand forecast would be assisted by customer insights from the

retail stores and online orders combined. Thus, the central warehouse, that would service the combined demand for all the outlets, will not hold more than two weeks of inventory (considering a week of buffer stock) and will be replenished weekly. Distribution and transportation Closed mini-trucks or vans will deliver to the retail stores the stock of donut bases (from centralized kitchen) and the supply of other material. Larger closed trucks will deliver weekly stock of supplies to the central warehouse from the suppliers. Lead time for procurement of raw material from suppliers will not be more than three days. Hence, orders placed in the middle of the week would be serviced towards the end of the week ensuring a weekly replenishment. On the end customer side, doorstep delivery of orders would require a fleet of delivery vehicles (mopeds) and deliverymen. Nearby orders at a given outlet would be clubbed since the service time will be 45mins. Service parameters for doorstep delivery of donuts service: Delivery of donuts within 45 minutes Delivery to any area within 5km of the retail store Minimum donuts order size should be 4

In case of unavailability of required donut at a particular outlet, the order will be serviced by the next nearest retail outlet No provision of free donuts in offers Discount offers on subsequent deliveries or walk-ins at the store

through the distribution channel is as depicted in Exhibit 4. Sourcing Sourcing of raw material would be done from established suppliers on a weekly basis and it would be stocked at the central warehouse. Raw material would include flour for donut base, oil, icing, cream, toppings and packaging boxes. Shelf life of the raw material is long and hence excess inventory at times won big concern. Product and Pricing MYOD donuts would be priced around Rs.55 per piece. More exotic/customized donuts would be charged at Rs.70 per piece. Donuts ordered online will be priced the same as in-store donuts. Delivery of donuts will be free and any delivery past 45mins will be subsidized by 50% of the price. A minimum order of four donuts makes a case for delivery. Customization can be done on a single donut but such orders will not be delivered. Customers will have to come to the retail store with an allowance of 20mins post ordering to collect their donuts. No free donuts will be given in any of the online promotional offers. However, subsequent purchases can be incentivized offering discounts to ensure repeat purchases and walk-ins.

Information Management All outlets will be connected to the centralized kitchen as well as the central warehouse through a simple IT system that will facilitate communication of daily and weekly orders. Such a system would also allow tracking of inventory at the stores, centralized kitchen and the warehouse. Order information from the website will directly translate into order to one of the retail store (the one closest to the place of delivery). Thus, order processing will be centralized and retail stores will get only the necessary information. The centralized kitchen will track all orders and the consolidated online demand would help keep estimates of production. The final production decisions will be made by the consolidated demand (retail + online) collected from each of the retail stores. Since, retail stores would serve the end customer through their inventories; it becomes important that their demand estimates incorporate online demand though the online ordering is centralized. Flow of product and flow of information

Future Scope for MYOD MYOD has a unique positioning of delivering customized donuts at the supply chain efficiencies, it is important that the focus remain on online ordering and not opening of new retail outlets. The only rationale for opening up a retail outlet or a distribution center should be to facilitate online demand arising in a particular locale. The online portal would be fruitful in developing a loyal customer base that can be leveraged for introducing new product lines.

 Did You Know???

Decline of the U.S. Auto Industry The average age of an automobile in the United States has gone up more than 50% since 1990 and is now sitting at an alltime record of 10.8 years. The average length of a marriage in the United States that ends in divorce is only 8 years. Back in 2000, about 17 million new automobiles were sold in the United States. During 2011, less than 13 million new automobiles were sold in the United States. Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe? Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts with the rest of the world of $110 billion. Gujarats canal-top solar power plant -top 1 MW solar project on Narmada branch canal network in Gujarat was commissioned within 1000 days of conception. The power plant which is located at Chandrasan village near Mehsana, 45Kms from Ahmedabad will generate 1.6 million units of electricity per year. The fact that the panels are built over the canal is meant to ensure that around 9 million litres of water does not evaporate. The Solar plant has been set up at the cost of around Rs. 17.50 crore by the US-based Sun Edison. The entire length of SSNL canal network in Gujarat is around 19000 Kilometres. Even if 10% of it is used for this type of projects it could generate 2400MW of clean energy annually.

The impact of 3D printing on supply chain and operations

Shaurya Gulati, XIMB Vivek Jajodia, XIMB
Disruptive innovation Innovation is the key to success of any business. It enhances their ability to stay longer in the market. But a wave, popularly known as disruptive innovation has always threatened the way in which an industry works and as a result many companies have been forced to either adapt or fizzle out. The wave, frequently creating a new market, struck with a different and unique set of values. From a low cost mass produced Ford Model T, which revolutionized the transportation business to digital photography, disruptive innovation has made its presence felt at unknowing times. We are currently living in an era where technology is changing at a rapid pace. Many companies doing business by the traditional methods are living in the fear of being outpaced and outmatched by companies that readily accept and incorporate such disruptive innovation in their business. 3D printing is yet another classic example of disruptive innovation that has garnered much attention lately. Though used for prototyping in early stages, it has now gained acceptance in the daily business operations. As this technology gains momentum and because of its simpler, smaller and more convenient nature, many industries will be forced to rethink their business strategy and realign with the change.

The impact of 3D printing can be felt in different industries at different levels, biggest being on the supply chain of any industry. IBM has identified 3D printing as one of the leading disruptive innovation which in conjugation with intelligent robots and open source electronics has

the ability to transform the global supply chain. A typical supply chain consists of manufacturing, assembly line, distribution, warehouse and retail. All these departments work in sync with each other to help the product reach its final destination i.e. end customer. Currently, the challenge for the industries is to keep the average costs down while the maintaining high volume of production. This puts a lot of pressure on the supply chain of the company which becomes complex and operates at various levels. Also there are suppliers and subcontractors that take on different roles of raw materials supplier, manufacturer, assembler etc. The production itself is very scattered and distributed. We have factories in different parts of the world with China being the hot favourite at the moment. The traditional methods have been benefitting all those involved in the process and the economies on the whole.

But as seen in the past, new technology demands new rules to be laid down thus changing the economics of the market. With 3D printing a product can directly move from ideation/conceptualization stage to end user bypassing all the intermediate steps as shown in the above diagram. This will change the foundations of a traditional supply chain management. The current model has its roots deeply embedded in standardization, modularization and digitization. Each of these processes has helped productivity reach new heights. Standardization has reduced the production time of a good, modularization has produced assembly of integrated modules and digitization has made the processes simpler. Together these three have impacted global trade, investment opportunities and changed the employment scenario. Standardization has made supply chain big because it supports economies of scale and as each company today wants low cost, efficient

products supply chain has truly turned global.

Localization (Consumption Production at one place) Shortened Development Cycle

and

Change in Manufacturer-WholesalerRetailer relationship

Economies of Scale The economies of scale is very evident as use of 3D printing can help manufactures produce lower volume of goods suited to the needs of particular demography. Though the cost of 3D machines is higher it can be compensated with reduction in transportation costs, cheaper cost of finished goods in that particular area, improved efficiency in production and elimination of other in between processes. The era of small and simple has already begun. As per IBM, the standout result of using the software defined supply chain will be lowering of costs and that too an extent of 23% in ten years.

3D printing has more or less reversed the standardization approach as companies will again turn to customization instead of mass production. Goods can be tailor made to suit personal and demographic needs and need not to be made at an isolated location. 3D printers accustomed with software defined designs have started to redefine the old age hardware driven approach. Listed below are some of the key impacts of 3D printing that will alter the landscape of supply chain management and open new retail opportunities in the coming future. Economies of Scale: Low volume, batches of one, low cost, low carbon footprint Customization On demand production

Customization A 3D printing machine has the capability to produce different models and it will be a big blow to the traditional methods of manufacturing where an assembly line is setup to produce one type of models. Altering the assembly line means long term investments and also stopping the production thus lowering the productivity. But now with a small change in software and computer programs, machine will be able to produce different products on the go. Localization

minimum movement of goods and that too directly to the consumers. Shortened development cycle Big companies usually have various assembly lines for their different products which require huge manpower to operate. 3D printing will eliminate this phase altogether and thus reduce the labour costs and the lead time of new products. New products would be built at a much faster pace. A recent experiment by Akaishi, a Japanese manufacturer who used 3D printing to make footwear and massage devices reported reduction in almost 90% of the production time as opposed to normal methods. 3D printing will also help in reducing redundancy that is present in the supply chain to dispatch some parts in very short span and get machines working again. These expenditures can be avoided by just clicking and downloading the design of that part from internet. Manufacturer Wholesaler Retailer relationship 3D printing involves process called additive manufacturing, which essentially builds solid objects by depositing a layer over the other one at a time. This is a shift from modern day manufacturing which is based on tearing and cutting to make the product. This will lead to less stock of raw materials in the warehouse and also printing will be done on the basis of

models of business are under huge threat as 3D printing expands its wings. Today in a traditional supply chain, point of consumption is geographically isolated form point of manufacturing. This leads to large transportation costs and increased lead time. Any change in the consumers buying pattern generally leads to alteration of the product to reflect the latest trends. In traditional methods a lot of time is wasted in transit which may also lead to spoilage of some products. But with 3D printing as production and consumption takes place at the same place, companies will be in a better position to distribute the goods and serve the customers. The distribution channel will be very short and will involve

demand (made to order). Ideally products saving huge costs on supply chain. Combing these advantages we will be able to remove the need to have warehousing altogether and stocks of inventories will be a thing of past. Manufactures will save money on storage, handling and distribution. In addition to lesser inventory and warehousing cost, the scrap generated by this method of manufacturing will be negligible and companies will be able earn higher profits due to lesser wastage. As 3D printing gains momentum, build to order strategies will be employed by all the manufacturers. This will eliminate the need to have retailers in some sections or they will turn into shop windows for manufacturers. Orders will be directly delivered from manufacture to consumer. These cost benefits will make companies commit for the switch in their approach.

transport, fashion, food, medical, defense, auto and various other industries that rely heavily on supply chain management to carry out their business in an efficient manner, need to rethink their strategies. Auto Spare parts: The automotive spare part industry is large and growing. There are many organized big as well as small players that have built their business in this domain. As 3D printing comes of age, manufactures and end consumers will directly print the parts needed to replace existing ones rather than buying it from these vendors. The after sales service provided by these players will also go down as the accuracy and durability of printed parts improve. This industry which is close to 2.7 Lakh Crores will definitely take a hit and many players will be force to adapt quickly. Defense Industry: Defense Industry is riddled with products like guns, tanks, missiles that have been built using an extensive and very complex manufacturing process. If the machine breaks down in the middle of a training exercise or battlefield, instead of discarding the machine altogether or ordering the part from the manufacturer, it will be possible to replace the defunct part by printing the new one then and there. Food Industry: Though 3D printing started with plastics it has now expanded its portfolio by producing materials like

Industries Example 10 years from now and we will see our markets be flooded with goods made from 3D printers. Consumer Products,

human tissue and food. Many attempts have been by researchers in Universities like Cornell and Exter to produce different food items like chocolates and cheese. This will drastically impact the food supply chain where farm inputs form a major componen Fashion/Garment Industry: 3D printing will have a huge impact in the fashion industry where the product life cycle is low and customization is the key. Artists and designers will be able to work together to make infinite models and come up with a new fashion every other day. The designers will be the new manufactures and distributors. They can then send the design to the customer at a given price who can in turn produce the output at his home. Conclusion 3D printing as seen above is a new wave in engineering. The traditional hardware based design of products is taking a backseat and is slowly giving way to new software based model. A new model of logistics and supply chain will emerge that will feed raw material directly to 3D printers. These printers can be at a

because of the costs and lack of knowledge. At least 70% of leading supply chain leaders are yet to assess the impact of 3D printing on their business. But latest data suggest that the big shift is already in place. The costs are reducing, accuracy of the printers are improving i.e. build quality of products is improving and supported materials are increasing in variety. Though at present, printing very matter of time when this transition picks up pace.
References 1. The new software-defined supply chainIBM Global Business Services Executive Report 2. 3D printing and the future of manufacturing 3. TechCrunch, 1 March 2011. http://techcrunch.com/2011/03/01/printi ng-food-with-3d-printers/ 4. Wohlers Report 2011: Additive Manufacturing and 3D Printing State of the Industry, p. 130. 5. http://www.wohlersassociates.com/2011c ontents.htm 6. 2012. http://www.industryweek.com/articles/ad ditive_manufacturing_goes_mainstream_2 6805.aspx?ShowAll=1

As 3D printers become more affordable, extensive training would be required to make people aware of this technologies full potential. Today, companies are reluctant to absorb this technology

Warehouse Optimization in Food Processing Industry

Sthitaprajnya Samal, XIMB Sayed Atif, XIMB
Introduction Food processing industry in India is a sector that has gained prominence in recent years. Raw materials availability, lifestyle changes and appropriate fiscal policies has given a tremendous positive makes the sector serve as a vital link between the agriculture and industrial segments of the economy. Strengthening the link is of critical importance to reduce waste of agricultural raw materials, improve the value of agricultural produce by increasing shelf-life and by fortifying the nutritive capacity of the food products; ensure remunerative prices to farmers as well as affordable prices to consumers. Adequate focus on this sector could greatly alleviate concerns on food security and food inflation For years, Warehouse Managers were urged to get control of the operations inside their warehouses. That meant moving from paper based manual operations to real-time wireless data collection systems and supply chain execution software systems like warehouse management software (WMS), transportation management software (TMS), yard management systems (YMS), and small parcel manifest systems. Food Processing: Definition According to the ministry of Food Processing Industries, India, items pertaining to the following processes are included: Manufactured Processes: If any raw product of agriculture, fisheries or animal husbandry is transformed through a process (involving employees, machines, power or money) in such a way that its original physical properties undergo a change and if the transformed product is edible and has commercial value, then it falls within the domain of Food Processing Industries. Other Value-Added Processes: If there is a significant value addition (increased

shelf life, shelled and ready for consumption etc.) in any of the processes then such produce also comes under food processing, even if it does not undergo manufacturing processes.

Tools/Techniques used for Warehouse Optimization

Inputs

Procurement & Storage

Secondary Processing

Production

Primary Processing

Retailing

Primary Processing relates to conversion of raw agricultural produce, milk, meat and fish into a commodity that is fit for human consumption. This involves steps such as cleaning, grading, packing, sorting etc. Secondary and Tertiary Processing Industries usually deal with higher levels of processing where new or modified food products are manufactured. Warehousing which is a key requirement in the overall supply chain, is mostly dominated by unorganized players. 20% of warehousing is organized currently with 70% of the organized market controlled by the Government (FICCI-EY Report, 2011).Involvement of more private players will help in the better development of warehousing facilities.

Automated storage and retrieval systems (AS/RS) Automated storage and retrieval systems (AS/RS) can help improve food and beverage warehousing companies by quickly moving high volumes of products and increasing visibility in the warehouse. The benefit of energy efficiency, more strategic use of labour power, and improved supply chain velocity are making the case for AS/RS even more compelling. Streamlining operations using AS/RS: Industry experts have noticed a high turnover rate for employees, particularly in freezer applications. Warehouse employees are also less likely to stay inside of a freezer environment in comparison to a regular warehouse environment due to employees needing to

take periodic breaks in order to warm up. The concept of creating a blended warehouse with manual labour and AS/RS is also gaining traction, especially in the U.S. An enhanced approach can help food and beverage companies address issues that may be occurring in the warehouse while decreasing the initial cost of the automation equipment. Easy to integrate: Automated storage and retrieval systems have become more dependable and better integrated with warehouse management systems and warehouse control systems in recent years. They are becoming more adaptable in traditional warehouses. And, AS/RS provides a quick solution for food and beverage companies and warehouse operators who are looking to free up additional floor space. Using AS/RS saves a tremendous amount of floor space in a building. Accuracy increases as well because once AS/RS takes a load away they will be assigned a position within the storage racks and it was labeled properly. Another advantage of utilizing AS/RS is to gain real time visibility into warehouse inventory is knowing what product is visibility reduces the amount of days-onhand (DOH) inventory. A reduction in DOH helps keep perishables from spoiling

there by keeping costs in check and customers happy. Automatic Guided Vehicle (AGV) Food and beverages like cereals, candy, packaging materials, beer, snack foods, soft drinks, in-process ingredients etc. are handled using automated guided vehicles either in a palletized form or in unit loads when it is used in manufacturing, cross-docking, warehousing, trailer loading etc. The intermediate storage of food products is taken care by AGV. It also organizes warehouse shelves accordingly by taking into account the expiry dates of final products. This ensures optimal food conservation at every point of the workflow. Any intermediate stage of food & beverage supply chains from trailer unloading, raw materials receiving and transport can be successfully implemented with automated guided vehicles. Some specific applications are: Transportation of food in cold storage and freezers (less operator-friendly environments) Fish transportation in tubs mainly in salty and oily areas Cheese storage racks and movement to and from ripening rooms which are controlled by software Automatic handling of beer pallets from automatic warehouse to dock.

Automatic storage applications with AGVs also include: Pallets, containers, racks, boxes and tubs which are stored in blocks Warehouse racks pallet storage Storage of reels which are mainly vertical Storage of reels in cradles which are mainly horizontal

Better inventory management- reduces the inventory level Better accuracy for stocking inventory Reduces time needed to receive, pick and replenish inventory Improvement of Order fulfillment leading to increase in customer satisfaction Material movement improvement and better space utilization Minimizes errors in stocking, picking, packing and shipping Increases productivity, employee accuracy and efficiency Simplifies cycle counting

Warehouse Management System Warehouse management system (WMS) is a tool which helps manage the control of real-time inventory thereby helping food processing and distribution companies improve their accuracy significantly and reduce inventory levels. This would reduce their costs and give them a competitive edge. From the time raw materials arrive to the plant or the manufacturing facility to the shipping of finished goods, wireless, hand held RF (radio frequency) mobile PCs and bar code scanners are used to track inventory. The inventory information is captured at the receiving dock and then this data is utilized to optimize all facets of your warehousing operations. The various advantages of having a warehouse management system which uses a combination of RF data collection technology, bar code identification, and specialized warehousing software tools are:

Warehouse Slotting Solutions Inventories when placed at the appropriate locations in a warehouse can improve the efficiency of handling inventories drastically. Warehouse slotting is one such process for identifying the most efficient location for each item. This optimizes productivity. The type of product, its movement, storage characteristics, and distribution management needs will result in proper warehouse slotting and productivity optimization. Workers will be able to pick items quicker and more accurately and reduce the risk of injuries if proper warehouse slotting techniques are employed. It will also enhance distribution management. Effective warehouse slotting and productivity

optimization depends on many important factors. Various Warehouse Slotting Softwares, Warehouse Vision Softwares, determine product placement within distribution centers so that safety, operational productivity, and space utilization are significantly improved. Warehouse Vision Software contains sophisticated algorithms and user defined and flexible slotting rules which differentiate it from other warehouse slotting approaches. Warehouse Vision Software is a slotting and warehousing optimization tool currently used by over 1000 food processing centers including many owned by PepsiCo and CVS. Warehouse Space Optimization In order to store more products in a given space we must make better use of the total available space. The various ways by which we can achieve this are: Utilize over-head space By using drive-in rack or pallet flow rack can easily pick up 25% more storage space. Another use of overhead space is to utilize the storage rack over the pick slots to store the extra inventory of the product being picked below. When replenishment is required, it is necessary is to drop the product from above. An added benefit is the elimination of

additional expense.

conveyor

and

mezzanine

Reduce aisle sizes Aisle sizes can be reduced by using narrow aisle fork trucks. At times aisles are kept at a uniformly large distance because it seems to be required by the building's column spacing and fork truck requirements. Deep pallet storage Storing stacked products, more pallets deep, will increase the percentage of space used for storage and eliminate several access aisles. Normally, there is one half aisle for each facing of pallet rack. If the product does not stack well, using portable/removable stacking frames for at least the lower levels can be a good option. It also works well to store stable product on the lower 2 levels with the more fragile products on top. Eliminate empty space above product in individual slots If the average pick slot is 1/3, increasing it to 1/2 full could generate 1/3 more cube. By using a range of pallet and pick slot sizes will allow correct sizing for each individual item based on its carton size and movement. Stack pallets on top of each other

Each rack bar requires a clearance above the floor or lower level product. By having fewer bars, cube lost to the space needed by the bars themselves will be reduced. Each extra bar can mean up to 15 cubic feet lost. If there are 300 bays of pallet rack, eliminating one level of bars could free the equivalent of 9000 cubic feet for pure product storage. Store high cube/high movement products in one reserved area of the warehouse Reserved areas need to be filled with as many pallets as it can hold. This works best for holding product that does not have to be rotated by lot number or date. It can also be used for storing out-ofseason items. Using double deep pallet rack This option requires the purchase of special pallet rack and at least one double reach fork truck, as well as wider aisles to accommodate the fork truck reach assembly. This will allow the pallets to be placed 2 deep and several levels high. It has an additional advantage for replenishment - once the front pallet is depleted, the uncovered rear pallet is immediately available. For this option to be feasible, the WMS needs to be set up to support double deep slot numbering.

Conclusion Advancements in real-time technology are also facilitating the performance-driven warehouse. In fact, the transformation of RF technology from mobile data collection devices into smart, mobile computing devices is really analogous to warehouse optimization: transforming WMS into a new, more powerful tool. Companies that have not yet implemented a real time data network, WMS, and TMS, must do so first. However, if the building blocks are in place, optimization systems can take advantage of the foundational work implemented by the best enterprises. money within warehouse. the four walls of the

An optimization engine is a component of a supply chain execution suite, one of the applications that make things happen. By activities in the warehouse, yard, or transportation department. And while it has visibility into inventory and order chain visibility and event management solution either. Rather, an optimization application is a layer of software that sits atop and communicates with the other supply chain execution solutions, including warehouse, transportation, small parcel manifest, and yard management systems.

References Shook, J., Rother, M., 1999, Learning to See: Value Stream Mapping to Create Value and Eliminate Muda, The Lean Enterprise Institute, Brookline, MA. http://dipp.nic.in http://mospi.nic.in www.apeda.gov.in http://agricoop.nic.in http://www.thomasnet.com/whitepapers/abstract/100527/warehouseoptimization-the-next-step-in-thesupply-chain.html http://2012.modexshow.com/seminars/?i d=594 http://www.raymondcorp.com/industrysolutions-food-processing http://www.foodlogistics.com/article/107 80644/warehousing-sector-reportoptimizing-your-warehouse-with-as-rs http://automation.ssi-schaefer.us/foodlogistics-optimizing-your-warehousewith-asrs-2/ http://konyvtar.unipannon.hu/hjic/HJIC33_105_111.pdf http://en.wikipedia.org/wiki/Food_proces sing

Did You Know???

Googles Project Loon Project Loon is a research and development project being developed by Google with the mission of providing Internet access to rural and remote areas. The project uses high-altitude balloons placed in the stratosphere at an altitude of about 20 km to create an aerial wireless network with up to 3G-like speeds. Because of the project's seemingly outlandish mission goals, Google dubbed it "Project Loon". The balloons are maneuvered by adjusting their altitude to float to a wind layer after identifying the wind layer with the desired speed and direction using wind data from the National Oceanic and Atmospheric Administration (NOAA). Users of the service connect to the balloon network using a special Internet antenna attached to their building. The signal travels through the balloon network from balloon to balloon, then to a ground-based station connected to an Internet service provider (ISP), then onto the global Internet. The system aims to bring Internet access to remote and rural areas poorly served by existing provisions, and to improve communication during natural disasters to affected regions.

 Company Profile

It is a holistic and convenience based portal exclusively dealing in Personal Care and Beauty products. Purplle.com offers products for all beauty enthusiasts ranging from those who follow an ordinary beauty regime to a beauty aficionado or a professional. In addition, it also offers Salon and spa services (www.purplle.com/finder) in Mumbai and NCR region.

Purplle.com completes the experience with personal care experts on board (www.purplle.com/finder/chat) who provide guidance on how to find/compare and use these products and services. One can also see videos and use the virtual makeup studio (http://purplle.com/virtualstudio.html) to make the right beauty choice as well. The portal has products related to men, skin care, make-up, hair care, body-care and beauty appliances. A few famous brands available at purplle.com are Davidoff, Hugo Boss, Elizabeth Arden, It also has tie ups with wide range of spa and salons in Mumbai like Jawed Habib, B Blunt, Jean Cluade Biquine etc. Core Idea, COO says, Provide a complete personal care and grooming experience to

our customers (who are pan India) using technology as a medium. The focus lies from low-end products to Premium products within the brands, in order to attract a larger audience. Founder & CEO Manish Taneja, Has been financial Analyst for Fidelity Growth Partners and prior to that as an Associate in Avendus Capital. Co-Founder & COO Rahul Dash Competition Huge I. VoiletBag, MedPlusBeauty, LadyBlush, etc are few websites that deal with beauty and skincare products. Jabong, Myntra and Infibeam etc also offer beauty and ecommerce products. Velvette a subscription based eCommerce dealing with beauty products has also raised an

II. III.

undisclosed amount of funds from India Quotient. Seed Funding undisclosed) Feb 2012 (Amount

Wellness services: expected to generate more than 3 million jobs. Major Issues: (These are relevant to the wellness services Industry) I. II. III. Lack of skilled manpower Standardization issues across the country Need for skilled development, training centres, accredited and certified courses, consistency in products and services FICCI president and HSBC Country Head Naina Lal Kidwai. Good interest from Private equity and VCs since 2009 Enrich Hair and Skin Solutions, VLCC, YLG, Four fountain spa, trichology chain Richfeel, Healthkart.com and Guardian Lifecare are key players to have received investments from Venture Capitalist firms. E-commerce Sector: Issues: I. II. III. Regulatory Constraints High Costs Less number of companies raising funding. Only successful companies are Flipkart, Myntra, Zovi, Snapdeal etc have managed to raise funds.

Serie A Funding Aug 2013 (Amount undisclosed) from Blume Ventures, Mumbai Angels and Chennai Angels to be invested for increasing merchandising strength from 10,000 stock keeping units to 15,000 stock keeping units and the number of withstanding brands from 400 to 500 plus. It will also invest in supply chain capabilities, technology, and warehousing and consumer experience. Industry Overview: Wellness Industry in India 2012 Estimates: I. Beauty Care Industry - 29,000 Crores II. Fitness and Slimming Market 60,000 Crores III. 60% of market is dominated by products 2015 Projections: Total Industry Size: 1,00,000 Crores (from 70,000 Crores in 2012) at CAGR 15-17% I. Beauty Care Industry 49,000 Crores II. Alternate Therapy 21,000 Crores III. Health and Wellness Food and Beverages 27,000 Crores

QnA 1. When and how did you get associated with e-commerce sector? Ans: once you start a company in the sector Technology and technology enabled businesses have always been a keen inclination. Beauty and grooming clearly lacked a lot of technology and we saw an opportunity. 2. How is the concept of lean applicable to the service industry, especially the e-commerce sector? Ans: Lets just take the case one major cost in any e-commerce business, supply chain. E-commerce with the use of technology works on a pull system from the customer till the time products are delivered to the certain criteria like quality and time to deliver. E-commerce operations need to continuous make sure that anything either removed or modified. The parameters to track might change but

Just to cite an example technology has enabled us at purplle.com to correctly ship 2000 products with the same manpower that was doing 500 in a day. Our systems get integrated with logistics providers to provide exact information to the customer regarding their shipment. Technology is very very important to run a successful and profitable ecommerce setup. 4. What are the major operational challenges in a technology based startup like Purplle.com? Ans: The biggest operational challenge is to marry human behaviour and technology. As the number of people dealing with technology increases the variability of the system goes up manifold. 5. in India. How do You handle the operational challenges of using this system? Ans: I would not put it that strongly. We are still a huge cash economy. Cash on delivery has been a great enabler for e-commerce. There were two distinct issues with CoD as a service: Returns We have best in the industry return rates (<2.5%). With the help of technology we have made sure there

3. How important according to you is technology in improving supply chain of an e-commerce company? Ans: I think its one of the most critical pillar of an e-commerce supply chain.

are enough checks in the system for that to happen. Cash Cycle- There are e-commerce focus logistics players have emerged in the country. The way cash remittance is done has improved significantly over the last year or so. We get our money within hours of product delivery nowadays. 6. Purplle.com has recently received Series A investments from top Angel investors. How do you plan to improve supply chain capabilities using these investments? Ans: You will see a lot more technology coming in, a larger processing center (may be multiple ones) and investment in our inventory management capabilities. We are gearing up for the next phase of growth which should take us to a leadership position amongst beauty & grooming platforms. 7. With a large number of players in ecommerce providing home delivery services, how do you think the concept of collaborative logistics can be utilized in this? Ans: If you mean having your own courier which others can use, then I have a slightly different point of view on this. I do understand that India has unique infrastructural challenges for

last mile delivery for e-commerce and companies have taken the path of setting up their own logistics for the same. However logistics business in itself is a mammoth task. There is no other way but to lease out your spare capacity, or collaborative logistics as you mention, to break even there. I wagging the dog. 8. How are you planning to capture the growing mobile ecommerce market and in what way do you think it will impact your current business model? Ans: We already get 30% of our traffic from out fairly rudimentary but optimized mobile website. We are working on the improving the experience on the mobile and would be launching our app very soon. Purplle.com as combination of product, services and content play would invest heavily on its mobile presence. Lets see the consumer behaviour evolve and we would be ready to quickly iterate. 9. What are some of the future plans of purplle.com and how do you plan to further expand? Ans: Right now you see Purplle.com as a products e-commerce store and a salons and spa services listing platform. We are serving a million beauty enthusiasts a month and have

tied up 2500 salons & spas across Mumbai, Delhi n Gurgaon. Next year would be to consolidate leadership in both segments. You should see us in 8 cities with 10,000 salons and spas serving about 10 million consumers on a monthly basis. 10. The wellness industry seems to suffer from a lack of skilled manpower. How do you think should the industry go about improving this? Ans: I think the organized part of wellness industry is in a nascent stage and it will come with its own set of challenges (one being lack of skilled manpower). As we get more organized, we should see better acceptability of the industry as a career path. Industry needs to evangelize before people start getting attracted to it. You would see a lot more certified training academies coming up. A standardization of required skills and qualification would become the need of the hour. 11. What would be your advice to young entrepreneurs wishing to enter into the world of e-commerce? Ans: Focus on the basics. Have a lot of patience. E-commerce is an amazing roller-coaster and things change very quickly. So you have to be on your toes all the time. And yes, its 24 X 7 X 365

2013: Lookback
Track and Trace Coming to Indias Liquor Industry

a pilot of a 2D bar code system to prevent illegal liquor and impede tax evasion. Starting February 15, each bottle of alcohol will be uniquely identifiable by a bar code, enabling verification that the bottle is legitimate and increasing government revenues. Customers will be able to scan the bar codes themselves. At distilleries, a bar code sequence number is obtained before each lot is scheduled. The bottles are scanned and sent to government warehouses, then to retail outlets. The Delhi government expects the tracking system to curb the sale of illegal liquor and enable real-time reports on inventory, sales, and revenue.

Samsung Looking to Apples Supplier Base Samsung Electronics has overtaken Apple Stretched thin by its efforts, the company

Volvo Trucks to conduct test run on DME Volvo Trucks announced a partnership in California last week to test trucks that run on a fuel called dimethyl ether (DME). DME can be created from various sources and burns so cleanly that engine does not require an exhaust gas circulation, diesel particulate filter, or variable geometry turbocharger. It produces 95% fewer carbon emissions than diesel, and some 70% fewer than natural gas. http://www.youtube.com/watch?v=QqY4e uAix3M

plan could lead to higher costs, production bottlenecks, and disruptions of product launches for Apple as it prepares for expansion of its product portfolio, including a cheaper version of the iPhone intended for emerging markets. -house supply chain is one of its core strengths, and Samsung still sources about 80 percent of its components from these suppliers. However, its recent pushes into both cheaper- and higher-end areas of the marketplace have left the manufacturer looking elsewhere to ensure it is able to meet demand.

High Tech Eyeglasses: The world in your eyes Google has come up with its revolutionary Google Glass, the smart-phone on a headband that Google hopes will lead to a disruptive innovation in the Smartphone industry. Disruptive innovation is that type of innovation which, with the help of technological advancements or changes in the business model is able to create a whole new market and the existing norm

of doing business. There have been at least three other new eyeglass technologies which have the potential to disrupt their respective industries and this are O2AMP, Glasses.com and ADlens. http://www.youtube.com/watch?v=pwP21 NmykDw

who contributes to the production or on time delivery of a product or service.

Product Recall: Yamaha & GM India Yamaha Motor has voluntarily recalled 56082 of its Ray scooters after it detected insufficient strength in the handlebar of some scooters due to inadequate welding. General Motors has announced the callback of 1.14 lakh Chevrolet Taveras manufactured between 2005 and 2013 to address emissions and specification issues. In both the cases the companies principle and did not effectively check for quality at various stages of the production cycle leading to quality issues visible once the products reached to the customer. Quality at the source is a lean manufacturing principle which defines that quality output is not only measured at the end of the production line but at every step of the productive process and being the responsibility of each individual

E-Fulfillment Wars: eBay expands its same day Delivery Service On-line e-commerce and auction platform company eBay announced in August that

another log in the growing e-fulfillment fire. Under the program, eBay features products from brick and mortar retailers, picks up the products in store for those orders, and then delivers them to customers in as little as one hour. Currently, it is partnering with AutoZone, Babies "R" Us, Best Buy, Finish Line, GNC, Guitar Centre, Home Depot, Macy's, Office Depot, Radio Shack, Target, Toys "R" Us, Urban Outfitters and Walgreens. The service was first launched as a test last year in San Francisco, San Jose, and

Manhattan. Last week, the company said it has now expanded the service to the Brooklyn and Queens areas of New York City and to the Bay Area peninsula, between San Francisco and San Jose. The Chicago and Dallas markets will be rolled out later this summer. The eBay strategy is a hybrid in that it will not have any distribution centers, and will exclusively use its retail partners' own physical store inventories in the markets it serves. Customers order from the eBay store and eBay driver pick-up the merchandise and deliver it to customers at whatever location they specify.

than depending on third-party suppliers like other companies, Apple designs the hardware, software and services that set its products apart. Secondly, Apple has built a closed ecosystem of few selected suppliers. Because of its volume and occasional ruthlessness, Apple gets big discounts on parts, manufacturing capacity, and air freight. The company makes third party suppliers compete head-on for prices and quality. Thirdly, Apple comes very hard at its competitors. Apart from its unique value proposition of its products and service, Apple has developed certain strategies making other players uncompetitive. Some of the strategies include buying out inventories of technology components and ordering up all the air freight space so other companies can't compete.

Apples Supply Chain Strategy: The best in the world Apple has been named as having the best supply chain in the world for the year 2013 by Gartner. It is the sixth consecutive year that the maker of the IPhone and IPad has come out at the top of the study. In the recent ti

Genpact Partners with Jaguar Land Rover to optimize procurement Genpact Limited, a global leader in transforming and running business processes and operations, has partnered with Jaguar Land Rover to provide extensive business process management

and analytics services to help optimize the operations. Genpact is already managing analytic projects for JLR in production purchasing. In addition, plans to initiate projects dealing with non-production purchasing also reside with Genpact. Its Smart Enterprise Processes (SEPSM) framework, which employs granular data analysis, ultra-sophisticated diagnostics and cross-functional benchmarks to maximize process effectiveness, will help JLR reduce costs, develop sourcing strategies and minimize the complexity associated with managing the large supply base that encompasses the company's global operations. Foxconn enters supply chain of Mercedes Benz and BMW Foxconn, world's leading manufacturer of computer components and systems, has entered into the supply chains of Mercedes Benz and BMW with its auto parts and components. Foxconn's development in the car product business is not limited to infotainment devices, but also high-technological systems related to car electromechanical, central control security and car electronics, which will generate high profits. Foxconn is trying to expand in China's electric car business also.

AvtoVAZ joins Renault-Nissan alliance for collaborative procurement Renault-Nissan alliance, which overlooks global procurement for Renault and Nissan, has joined hands with Russian car manufacturer AvtoVAZ to setup central purchasing organisation for industrial equipment, powertrains and vehicles. This would attract global companies to the supplier base and help the partners in achieving better supplier prices with increasing volumes leading to large savings on procurement operations.

Kalyani Forge to add high tonnage press lines; focus on lean processes Kalyani Forge Ltd is one of India's oldest and most established manufacturers of precision forged and machined components. They have initiated a transformation in business process management with an emphasis on High Tonnage Press Lines (6000T) and cold forging expertise.

Over the next 3-5 years, Kalyani Forge will deploy a capital expenditure of Rs 200 crore for modernization and value addition of their manufacturing facilities in Pune based on lean principles; continuous evolution of modern systems and cutting-edge processes while enhancing productivity. The Company is exploring several strategic initiatives to meet globally accepted norms on waste management and environment friendliness. The Company is concentrating on process improvements and removal of non-value adding activities through Lean Management Systems as a strategy to grow aggressively. http://www.youtube.com/watch?v=Y2xhc wOzEmc

reshaping the elements of logistics in India in order to support the marketplace created by e commerce websites. Ecom Express serves around 1500 pin codes in India, which is miniscule as compared to 25000 of India Post & 10000 of DTDC.

Reshaping the logistics: Algorithms @ work Each time we buy something from the xyz karts in India, we initiate a parallel marketplace in the virtual world. It's a marketplace where logistics companies big and small, new and old, countrywide and regional bid for the business to ship the purchase to the doorstep. At the helm of all this is an algorithm, which powers it, and it is reshaping the logistics business and is providing new legs to a flagging sector. Ecom Express, a company setup by five former executives of Blue Dart is

However, e-commerce logistics is Rs 600 crore segment growing at approximately 50% a year. Amazon and eBay employ similar algorithms on their platforms. On some e-commerce sites, the algorithm

William Edwards Deming

Being on a wheelchair and tethered to an oxygen tank could not stop him from delivering a week long seminar on his business philosophy, 10 days before he passed away. Deming at that time told his

quixotic effort to bring his lessons of quality control and management excellence to Corporate America. - Do Check him. Trained as a statistician, Deming developed methods that allowed businesses to improve the quality of their manufacturing and other operations by charting the variations in their activities

W. Edwards Deming - the American statistician credited with helping Japan become the global symbol of industrial reliability - persists in his seemingly

and then refining the processes to reduce those differences. He also expanded those methods into a complete management philosophy that stressed the importance of worker involvement, cooperation over competition, and, most critically, the value of continued improvement Deming made a significant contribution to Japan's world class reputation for innovative, high-quality products, and for its economic power. At first when Japan's products started moving to overseas markets during the 1950s and early 1960s, their quality was often a joke. Then Deming taught top business managers how to improve design, product quality, testing, and sales by various means, including the application of

statistical methods, he also urged companies to concentrate on constant improvements, improved efficiency and methods helped Japanese companies a long way in improving their quality. Deming never established an institute or school like other quality gurus, but mostly was in private consulting business. Deming had more influence on Japanese manufacturing and business than any other individual not of Japanese heritage and he influenced than American business much more than almost any other person. His teaching and methodologies are still followed throughout the world.

opsession@mandevian.com

Mohit Batra, Secretary Opsession pg12mohit_b@mandevian.com +91-9717672007

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