srrnkhala issue2

1

Message from Faculty Advisor

Message from the Editor

EXCLUSIVEPower Talk by Dr. Devdutt Patta-naik

COVER STORYDanone – The One to look out for

INDUSTRYProject Golden Eye by P&GSupply Chain – A changing per-spective

FIRST PRIZE ARTICLEHedging: A Powerful Tool in Sup-ply Chain Manager’s Arsenal

SECOND PRIZE ARTICLEStrategic Planning Innovations: The Edge in Best Practices

STUDENT OPINIONE-Commerce Operations Mind-mapA Mobile Supply Chain - The Fu-ture is hereElectricity Infrastructure: where Demand exceeds the Supply - Challenges and the Way ForwardCollaborations and Teamwork In Logistics And Supply Chain Man-agementE-Tailing in India - A Leap Ahead

EXPERT OPINIONLeveraging Supply Chain for Busi-ness Excellence -The Amul Story

INDUSTRIAL VISITManagement Tips at TATA Motors

VGSoM EXCLUSIVEENTRE’PACT 2012 - The Enterprise Connect

CONTENTS

2 • Designfreebies Magazine • www.designfreebies.org

It gives me immense pleasure to write the foreword for the second edition of Srrnkhala - The official magazine of the Supply chain & Operations club of VGSOM, IIT Kharagpur. This magazine that you are going through right now is the culmination of several factors - the hard work & detailed planning put in by the editors, co-ordinators, members of ScOpe and the enthusiastic par-ticipation of management students from many leading B schools in India.

ScOpe, the youngest among the all the clubs of VGSOM, has grown manifold to be recognised as one of the sig-nificant initiatives from VGSOM. The same is evident in the overwhelming participations that we received for all activities of ScOpe.

With plenty of activities in the pipeline and an exuber-ant team of student coordinators with plenty of zeal, it promises to be an excellent year for ScOpe. I would like to see the current academic year as an important mile-stone for ScOpe when it makes its transition from being a Business School club to a one more widely recognised and acknowledged by the management community as a whole.

PROF. ASHUTOSH SARKAR,Ph.D. (IIT Kharagpur)Assitant Professor & ScOpe Faculty-in-charge,Vinod Gupta School of ManagementIIT Kharagpur

MESSAGE FROM FACULTY ADVISOR“This magazine is the culmination of several factors - the hard work & detailed planning put in by the editors, co-ordinators and members of ScOpe, the enthusiastic partici-pation and feedback of students from the leading B schools in India and the ever-excellent support of entire VGSOM community.”

2

3

4

4

66

1010

12

14

14

17

17

20

20

22

25

2830

32

32

3535

36

36

Designfreebies Magazine • www.designfreebies.org • 3

Editor-in-Chief Partha Pratim Associate EditorsAbhishek AwasthiAshish MehtaAshish KhattryBharathi ChellakkannanLokendra GayakwadPritam Datta

Layout & DesignPartha Pratim

Faculty AdvisorProf. Ashutosh Sarkar

ScOpe TeamAbhishek AwasthiAshish MehtaAshish KhattryBharathi ChellakkannanLokendra GayakwadPartha PratimPritam DattaSanjay Kumar

MESSAGE FROM THE EDITOREvery now and then there emerges a company that redefines the rules of the game and becomes the cynosure of all in the industry. Such companies are only studied or talked about retrospectively when one fully comprehends what they did differently that got them on the road to ‘El Dorado’. One such company quietly mak-ing its progress is Danone. The cover story on Danone India is an attempt to recognize the potential of the company which has the capability to rejig the Indian diary market over the long run.

The special attraction of this edition of Srrnkhala is the exclusive interview of Mr. Devdutt Pattanaik, the world’s only Chief Belief Officer from Future Group, one of the largest retailers in India. Mr. Pattanaik shares his much sought-after thoughts on modern day supply chain management, India’s need for FDI and much more. The interview shall help the budding managers to get an insight on how leading managers think.

The deluge of good quality articles from students gave us a real hard time in selecting the two best articles as all articles proved to be worthy winners. The issue also includes few articles from industry professionals who are willing to share their knowledge and ideas with the student community. This issue also includes a report on EntrePact, a new pioneering initiative by VGSoM that will help VGSOM build a strong and deep rooted relationship with the industry and one that goes well with the signage in the main building of IIT Kharagpur – “Dedicated to the service of the nation”.

One of the key activities of ScOpe has been the industrial visits for the students of VGSoM to help them gain an insight on the actual industrial problems faced by todays operations managers and an exposure to the real world of process management in plants. This issue includes a report on the recent industrial visit by ScOpe to the Jamshedpur plant of TATA Motors Ltd.

Release of the magazine is the time when we, as editors look forward to the most. We, the entire team of ScOpe hereby take immense pride in presenting to you the second edition of Srrnkhala - The official operations magazine of ScOpe. Hope you enjoy reading it as much as we enjoyed in getting it published.Feel free to give us your valuable feedbacks.

Best Regards,Editorial team,Srrnkhala Magazine,ScOpe

EXCLUSIVE


POWER TALK BY DR. DEVDUTT PATTANAIKauthor, speaker, illustrator, mythologist, CBO (Future Group)

Dr. Devdutt Pattanaik is the Chief Belief Officer of the Future Group who draws attention to the invisible cultural discourses that shape business decision-making. Trained in medicine, he worked for 14 years in pharma and healthcare industry, with a brief stint at Ernst&Young before Kishore Biyani of the Future Group encouraged him to turn his passion for mythology into his profession. He has over 16 books to his credit and writes regularly in Times of India and Economic Times. His recent show Business Sutra on CNBC won both critical and popular acclaim. Dr. Pattanaik delivered this enriching talk with Supply Chain & Operations Club, VGSoM where he talks about the sensitiv-ity one should have while running a business and tries to solve the existing supply chain problems by his mythological bend of mind.

ScOpe: Sir, how would you explain Supply Chain Management as an industry in terms of mythology?

Dr. Pattanaik: SCM industry is like building the bridge that gets the monkey army to Lanka, in time, with minimum loss and lowest cost

ScOpe: As the Chief Belief Officer of Future Group, what are your roles and how does that influence the group’s operations?

Dr. Pattanaik: I regularly do sessions that make people under-stand how different people believe in different things and it is foolhardy to assume that everyone believes in the same thing. Modern (Western) Management focuses more on ‘converting’ people into a single belief system.

ScOpe: What are qualities an aspiring entrepreneur in the supply chain industry would be looking for?

Dr. Pattanaik: It is the same as in other industries – people management. More apparently it is the ability to get people to work enthusiastically.

ScOpe: How can a budding careerist build an effective suc-cession plan in tomorrow’s world? Can Karma and Dharma work hand in hand?

Dr. Pattanaik: Anyone who wants to grow in his career needs to always begin by considering the expiry date (when do I move to the next job) and replacement (who does my job when

“Supply Chain is the bloodline of India. Good logistics creates new markets. We need more markets.”

EXCLUSIVE


I am gone). Karma and Dharma are loaded words with many meanings.

ScOpe: What according to you are the aspects of market dynamics in Supply chain industry that are different in India as compared to the other parts of the world? Is there an Indian way of doing business?

Dr. Pattanaik: Most people in the supply-chain (drivers, cleaners, security guards, delivery boys, loaders), especially downstream, and often customer facing, are either unedu-cated or belong to a social strata that is very different from those who prepare the Excel sheets and strategy documents in air-conditioned offices. Across India, there is so much diversity that to get them all to align to a single process is a herculean task. Never forget, US dollar bill has only one language; Euro has only two; Indian Rupee note has 17 that is indicative of our diversity, hence complexity. So along with communication, and compliance, we have to have more empathy, to succeed in India.

ScOpe: What are the present core problems in the sup-ply chain industry whose solution can be traced from our own ancient mythology?

Dr. Pattanaik: If Ram could get monkeys and vultures and bears to build a bridge across the sea, surely we can get the best out of human beings even if they speak different languages and belong to different socio-economic groups.

ScOpe: Do you see governance conflict as a positive sign or it could be detrimental in specific industries like sup-ply chain where co-ordination is the key?

Dr. Pattanaik: Rules are good but they have to consider ground reality (corruption at borders, timeline issues due to bad roads, quality of vehicles and warehouses). Often governance rules are idealistic and not taking the ground reality into consideration. Often things at ground reality cannot be documented and talked about, so one has to be matured about things, without being unethical or immoral. This requires a great deal of trust.

ScOpe: How you foresee the scope of supply chain for Indian entrepreneurs in coming days?

Dr. Pattanaik: It is the bloodline of India. Good logistics creates new markets. We need more markets.

ScOpe: Do the westernization of corporate structure a bane or a boon for Indian industries?

Dr. Pattanaik: Everything in India is contextual. Nothing is inherently good or bad.

ScOpe: How you see the web internet and social media influencing the present race of industries in supply chain?

Dr. Pattanaik: No, the web and the social media cannot influence the supply chain industry today unless your driver and your doorman start using internet and are able to read English sites.

ScOpe: How you see FDI in retail? Do you feel it’s a progressive mind set to approach business?

Dr. Pattanaik: India needs investments. There is no ques-tion about it. If we have enough money internally, we do not need funds from abroad. Unfortunately we do not. We have 17% of the world’s population and only 4% of world’s income (% GDP) while USA has 17% of the world’s GDP and 4% of the world’s population. We are a very poor country.

ScOpe: “India needs good governance not middlemen”. How closely you agree with the statement ?

Dr. Pattanaik: It’s a very naïve statement. More strict teachers will create good students. No they won’t; they will increase school dropouts. We have middlemen because we have too many laws and we have too many laws because there are too many diverse contexts, issues and commu-nities in our country. And it is a reality which we cannot escape or wish away.

ScOpe: Do you believe retail is the sector where rela-tions are created, cared and nurtured?

Dr. Pattanaik: Relations can be created, cared and nurtured in any transaction, not just retail.

ScOpe: What advice would you like to give to the bud-ding managers who aspire to be players of supply chain industry?

Dr. Pattanaik: Work in warehouses, take a road trip with a truck driver and see the real India. It is not on your laptop.

“One has to be matured about things, without being unethical or immoral. This requires a great deal of trust.”

COVER STORY


THE ONE TO LOOK OUT FOR

Author:

Hima VarshaMBA 2012-14VGSoMIIT Kharagpur

Danone Food and Beverages India Pvt Ltd, the two and half year old Indian subsidiary of the French parent group Dannon SA that split with Nusli-Wadia controlled Britannia Industries Ltd is now making its presence felt in the Indian market by the competitors. Although a relatively a lesser known name in India, Danone is the global leader in fresh dairy products, marketed under its corporate name. Its entry into the world’s largest milk producing nation may have been late but with its unique strategies in market research, joint ventures, business models and supply chain management, it makes for a strong case as one of the fastest emerging companies in India food industry today. The French food company also has a strong penchant to develop local communities, one of the major reasons for its success worldwide.

THE DANONE INDIA STORYDanone is a global market leader in fresh dairy products, baby nutrition products, water based products and medical nutrition products with a revenue of $25billion, 7.8% organ-ic growth and more than 1,00,000 employees. Its mission is to expand business through promotion of health & social progress.

Realizing huge opportunity for its products in India, Danone has started expanding by making strategic joint ventures with locally established companies and is trying to pen-etrate into the market. Danone believes in delivering what the people really need, so understanding India with its enormously diverse food habits, culture and sociology is one of the biggest challenges that Danone faces. Hence it is leaving no stone unturned for

“Yakult Danone India

was also awarded

the Frost & Sullivan

Emerging Company of

the Year award recent-

ly; a testament to the

company’s approach to

identify solutions with

long term sustainabil-

ity as its final objective.”

ONE OF WORLD’S FASTEST GROWING FOOD COMPANIES

COVER STORY


exhaustive research in association with schools, villages, cities, research agen-cies, trying to learn about the market, and develop an understanding of the food habits and nutritional deficiencies, particularly among its target segments. Milk in India is considered to be holy and a daily need making it a category that needs to be developed almost from scratch. The company is presently marketing Yoghurt, Smoothies, Set Curd, Lassi and nutritious drinks and is mainly focusing on Bangalore, Mumbai, Pune, Hyderabad and northern India. Danone recently launched Lassi in three flavors – masala, sweetened and mango in joint venture with Dynamix with its operat-ing plant in Maharastra. All the Danone products are manufactured in India with local sourcing of milk and other raw materials which it believes, is the key to fresh dairy business.

Yogurt –a bacterial fermentation of milk, is classified under health and wellness (H&W) food segment in India. While the Indian market for yoghurt is around 2-3 million tonnes in a year, over 90 per cent of this is home made. Packaged yoghurt is still at its nascent stage, constituting a marginal 7-8 per cent of the overall H&W food market and growing at a CAGR of 18-20 per cent. This is a big opportunity since the Indian per capita consumption of packaged yoghurt is only around 0.1 kg as compared to around 25 kg for developed European nations like France and Germany. According to published reports, the Indian H&W food segment clocked sales of $2 billion in 2011. It is expected to grow at a compound annual growth rate (CAGR) of 25percent to attain a size of $5 bil-lion by 2015.

Danone said its new business unit in India which is dedicated for developing products for the masses, will be rolled out to other cities by next year. The dedicated Danone unit here is called Danone BOP (bottom of the pyramid) and makes the Fundooz brand of yoghurts and was set up last year.

“The experiment is great and we hope to scale it up nationally by 2013. Right now it is only in the North. It will be in big cities where we are currently operat-ing by early next year,” Danone BOP director Eric Soubeiran told reporters at the Ficci event recently. Danone BOP focuses on developing and marketing products that will primarily targeted at smaller towns, where disposable incomes are low.

COVER STORY


“The BOP experiment is continuing. We are present in Delhi now. We are developing our long shelf life. The real trigger in this business is how do you manage to get down to the base of the pyramid with a shelf life that is sufficient for you to have the time to reach to the consumers. Two weeks of shelf life is not enough as you cannot go to small villages.

“For us it is a development process to find the right balance between nutrition, price and shelf life so that we can reach the maximum number of people. So this is our first step and we are pretty happy with the development so far. The brand has been very well accepted. Fundooz is well known now,” he added.

India is the first country where Danone has launched such a dedicated unit for the bottom of the pyramid. Danone, is currently present in Mumbai, Delhi, Hyderabad, Pune and Bangalore, and Soubeiran said the penetration of diary products here is low due to cold chain and logistic issues.

“The per capita consumption of dairy products is very low here. It is 0.76 kg, while in Europe it is 26 kg. India is the larg-est producer of milk in the world, so there is a demand and

need for milk-based products here,” he added.

Danone announced in July that it has successfully entered into an agreement with Wockhardt for 12.8 billion rupees to acquire its nutrition business and brands as well as its industrial operations from Carol Info Service in Punjab. The new entity named as Nutricia International Private Limited marks the entry of Danone in the Indian baby food and medical nutrition market where Swiss foods giant Nestle is the market leader. The deal will give Danone the ownership of the brands Farex, Dexolac, Nusobee and Protinex. The brands Farex and Dexolac have a national footprint and a 7% market share in India, where Nestle has over 90% value market share and brands like Cerelac and Nan. It is believed that Danone will utilize its global expertise in R&D and inno-vation to further enhance the investment in the brands and develop products catering to the rising needs of the Indian nutrition market.Danone is also very socially conscious and in this effort it is also planning on a huge range of Bottom-of-Pyramid products to promote health and nutrition in the low income category. In this category, Danone launched the first dairy brand for kids - Fundooz after carefully studying the food habits and nutritional deficiencies of the young children in India for close to three years. All the products of the brand are milk-based and are rich in nutrients. It also launched the product Danette smoothie - a chocolate milk cereal snack targeting the Indian teenager and mainly sold in college canteens. Even though the margins aren’t huge in the area of business, Danone is very optimistic of reaching higher profits in due course of time as they reach out into the mar-ket of almost 600 million people in India.

DNB: THE BEVERAGE HALF OF DANONE INDIAMuch like its entry into the India food and beverage indus-try, Danone entered into a joint venture with Narang group in July, 2010 to set up the Danone Narang Beverages Pvt Ltd. DNB soon launched a new segment in the beverage industry with the launch of B’lue, a water-based restorative drink available in Apple, Peach and Guava flavours and cus-tomised specifically for the Indian market. Danone produces and markets various nutritional drinks targeting north-ern markets and has recently expanded into Hyderabad, Bangalore, Pune & Mumbai. Its popular product portfolio includes ‘B’lue’, AQUA - natural water from the Himalayan foothills that delivers organic minerals easily absorbed by the body and AQUA Plus- vitamin water.

COVER STORY


The Indian youth is now becoming very health conscious and sports has become a household affair. Danone has planned to capitalize on this recent shift of ideals and is all Set to launch its successful ‘Mizone’ brand in 2012 –a formu-lated sports water to keep sportsman active.

PROBIOTIC LEADERSAlthough relatively new in the Indian Food & Beverage market, Danone has been in India since 2005 when it set up the 50:50 joint venture Yakult Danone India along with the Yakult Honsha, Japan. The JV between the global leaders in probiotics was formed to manufacture and sell probiotic products in the Indian market. Yakult Danone India is also working actively to build awareness about probiotics and

thereby contribute to a healthier society. Yakult, a probiotic health drink that contains beneficial bacteria which keeps the digestive system healthy was launched in India in 2007, and is presently available in Delhi, NCR, Chandigarh, Punjab, Jaipur, Mumbai, Pune and Bangalore.

Yakult Danone India was also awarded the Frost & Sullivan Emerging Company of the Year award recently. The award is a testament to the company’s approach to identify solutions with long term sustainability as its final objective. It also cor-roborates the success it plans to achieve with its business strategy.

The company follows a lean organizational structure and also effectively operates its state-of-the-art dairy plant in Sonepat, Haryana almost three to five times cheaper than the average cost of a normal dairy plant. Its marketing plans focus on high impact and minimal spills and envision delivering only the best quality products at the point of sale. Danone puts more effort in Cold chains with trucks deliver-ing products right from the warehouse to the shop. Raw

material viz. Milk is being sourced from local milk farmers in north India and from Schreiber Dynamix Dairy –a business partner company.

BONDING WITH PEOPLE AND ENVIRONMENT:Objectives : protecting natural resources, offsetting CO2 emissions and boosting local economies• “Fund for Nature - the Araku project“: to restore natural

ecosystems by co-financing carbon offset initiatives through the Livelihoods Fund. This project is aimed at effecting 60000 people & 3million trees plantation thus also removing carbon footprints.

• “Grameen Danone Foods “: Aimed at improving local dairy infrastructures with Ecosystem Fund

• Ganges Delta Project: Aimed to restore 6,000-hectare area of mangroves by planting trees.

• Partnered with Naandi Foundation to provide water for nearly 500 villages.

• Company also focuses on reduction of energy and reduction of water consumption.

India being the largest producer as well as consumer of milk in the world, is the perfect place for Danone to be in right now. Danone with its innovative, quality products and humanistic approach can definitely gain the love of Indian people and position itself strongly in people’s heart. With its growth already in triple digits it is already emerging as the one to look out for. A few more joints and expansion of business in more cities while eliminating hurdles in milk procurement, processing & cold chain will ensure it is only a matter of time before it expands big enough to rub its shoulder with the likes of Amul and Nestle in India.

INDUSTRY


For long, Hindustan Lever’s famed distribution system was the only benchmark available in the Indian FMCG industry. In other words, increased reach meant increased volumes which in essence meant the more number of outlets you could bring under your distribu-tion coverage, the better chances you had of making a sale and hitting critical mass. So almost every year, every FMCG company prided itself on setting itself ambitious targets to expand distribution cover, appoint new distributors and plumb for volume growth. For almost a decade, P&G too, strained every sinew to match the Lever juggernaut. It pushed for growth not just in urban markets, but also tried very hard to establish direct coverage of rural markets.But each and every FMCG major has got its own product dynamics and blindly follow-ing the strategies of the industry leader may not work well for all. Same was the case for P&G. It raised fundamental questions about channel design and network strategy issues which were agitating the minds of a great many FMCG companies. Within the next couple of years at the end of last millennium P&G established itself as the first breakout organization from the Unilever line by taking up a mind-bogglingly massive supply chain optimization operation, famously known as the Project Golden Eye. And why exactly should we talk about it? It reduced P&G’s no of distributor from a whopping 319 to 18 in a span of 2 years.P&G raised two clear issues. One, is a large direct distribution cover necessarily strength for every marketer? Two, Can an alternate model emerge in India which results in large cost savings and yet, is also effective in meeting marketing objectives? With these lines in mind it started crunching their numbers. In no time, two revelations popped up. One, 85 per cent of its sales came from the top 30 towns. Two, its current volumes did not justify a large distributor network. Even in a market like Mumbai, there were close to six distributors.P&G said, a large distributor network meant that no single distributor had large enough volumes to achieve an attractive return on investment. This resulted in each distributor trying to extend its reach to push up volumes. But with P&G’s portfolio of high-margin, low volume products, merely extending reach only increased the cost of servicing, not the off-take per outlet.

PROJECT GOLDEN EYE BY

“P&G downsized their

stockists at every region

to one tenth of what it

used to be in effect giv-

ing birth to the concept of

Superstockists”

Author:

Amitava PalPlant Manager - DIAGEOProcter & Gamble 2008-2009NITIE 2008 Batch

INDUSTRY


“My marketing objectives tell me that our brands are over-distributed, If sales analysis shows 95 per cent of Ariel or Whisper sales comes from 70 per cent of the outlets, then it counts for very little if distribution cover is actually reduced and that’s a given” explained a P&G manager. The underline message was clear which is in its quest for reach, P&G, like many other FMCG companies, overlooked one critical factor: the cost of extending distribution cover. Apart from reducing costs by knocking down direct cover-age, rationalizing distributor network was the other part of the story. They downsized their stockists at every region to one tenth of what it used to be in effect giving birth to the concept of Superstockists, so much so that the sells depart-ments at each region went under the superstockists. The sells operation started getting looked after by the superstockist’s own personnel. “In Madhya Pradesh, for instance, P&G will now have just one distributor, who will operate like a super-stockist. So if 5 distributors were handling Rs 6 crore of busi-ness, now that entire business will be consolidated under one distributor,” said a sales manager.Let us look at the operation from a very basic academic point of view called inventory turnover. Earlier, since each distribu-tor was working with small volumes, it wasn’t economical for P&G to replenish them frequently. As a result, the average inventories lying with the distributor used to be significantly high, forcing them to tread on the company’s margins. That is a dangerous loop for any distribution system. Typically, channel design in any FMCG system is driven by distributor’s economics. The key issue is: How effectively can you leverage your distributor? “For most companies, managing distributor inventory is not seen as critical to channel design. Primary sales is where companies hand off,” explained a senior consul-tant. He added “So as long as the company has sold enough to the distributor, it is not interested”.

But a distributor evaluates a company on how he is faring largely on return on investment (ROI). Simply put, ROI in a working capital intensive business is the number of rotations (or the number of times that the distributor can turnover his investment in stocks) multiplied by the margin per rotation. The consequences of ignoring distributor ROI can be disas-trous. Take the recent example of a leading FMCG company which attempted to benchmark its distributor economics with Hindustan Lever. The findings were startling.The distributor margin for the company was 6 per cent while it was 5 per cent for Levers. Distributor stock levels for this

company was an average of 4 weeks, while for Lever it was 2 weeks. Assuming that the distributors gave no credit to the market, the company’s distributor ended up rotating his stock 13 times (52 weeks over 4 weeks) as against a Lever distributor who rotated his stock 26 times. Now, given that the distributor aimed to hit a return of 30 per cent (the risk-free rate of return was 30 per cent if the distributor invested in the money market), the margin that had to be kept aside to achieve the above ROI was 2.5% ( as 30/13 = 2.5). The corresponding figure for a Lever distributor was 1.2%.This effectively meant that the amount of money that the com-pany distributor could spent on distribution (buying vans, investing in salespeople etc.) was 3.5% (6-2.5), while the Lever distributor could spend 3.8% on distribution.The writing on the wall was clear: it fundamentally did not manage distributor ROI resulting in distributor drop-outs of around 10 per cent. The result? It leaves vacuum in distribu-tion, leading to obvious share losses. The other fall-out is that the distributor will stop extending credit in the market, resulting in retailers not picking up stocks.

Gaps in distribution are then inevitable. Now, for P&G, by moving to a superstockist set-up, it could now replenish its distributors more frequently and hence reduce their average stock-level. Not only it lowered its system complexity, it also helped building stronger relationships with its superstockists by ensuring a better return on Investment.Industry insiders say that the key is to keep the distributor’s ROI in a band of 30 to 40%. The moment it falls below 30 per cent, the distributor is inclined to undercut in a bid to recover his money. On the other hand, if ROI is as high as 60 per cent, the distributor is tempted to aim for a higher turnover by undercutting the distributor in the next territory. Finally P&G ended up with 18 superstockists from more than 300 before that. The result was so massive. That in the next couple of years Levers started off with a similar exercise. In a nutshell it showed Channel strategy and Network design for a FMCG company is so damn important that at times it can topple the industry practices. P&G proved it.

No of distributor in P&G India over the period

Sources: Economic Times / Business Standard / Forbes.com

INDUSTRY


The supply chain we know today has evolved over time to meet with the changing con-sumer needs and increasing business complexity.

The demographics, aspiration levels and competition in the market space has changed and increased many folds. A vast majority of the population is under 30 years of age with high disposable income, look not only for the functional value of the product but also look for a sense of aspirational value from the product. Also, the consumer have more options and thus higher switching power which has been further accentuated by the e-commerce retail space as the switching cost in this channel is nil. The competition is at its peak with the Indian as well as multi-national companies trying to expand and foray into newer product lines and territories. This has made it imperative for the products to be made available at the right time, right place and in the right quantity. This has forced the industry to closely monitor the OOS (out of stock) at various levels and develop better inventory management processes. At the same time the product life cycle has significantly reduced which possesses new challenges in the area of supply chain, espe-cially when referring to “right quantity” above since that inventory levels and responsiveness play a very important role as to how quickly can new products be introduced while not creating market dissonance and lower write-offs. All these factors have made the supply chain more complex which in turn requires the companies to redesign their processes and practices.

The supply chain function used to be con-sidered an execution domain rather than an area of providing strategic advantage to a company. The growth of supply chain function is directly related to the growth of the busi-ness. The focus of the industry predominantly has been restricted to “produce goods for the market” and “serve the customers”. There has been a paradigm shift in how the supply chain function is being looked at today. The days when functions used to work in silos and hence concentrated on optimizing their own leg of the chain has now been replaced by the concept of an integrated supply chain. The companies quite often find themselves stuck in the midst of individual functional goals rather than a collectively chasing a common goal. To exemplify the above point consider a FMCG company in which the KPI of the production team is to maximize the output which would involve longer production runs and less changeovers, however the KPI of the distribution team would be to be more responsive while carrying minimum inventory, which requires frequent changeovers. These objectives are in direct conflict thus resulting in local optimum and global suboptimal performance.

The objective of any supply chain is to meet the consumer demand with the most effi-cient use to resources. One of the key shifts required by an organization in order to achie-

SUPPLY CHAIN - A CHANGING PERSPECTIVE

“The supply chain monitoring

systems capture the perfor-

mance of all the functions so

as to provide an end-to end

supply chain visibility and

help identify the areas of fur-

ther improvement.”

Authors:

Maynk YadavGlaxo SmithKline Consumer Healthcare 2012-till dateITC Limited 2010-12VGSoM, 2008-10

Prabhat RanjanDr. Reddy’s Labs 2012-till dateDeloitte Consulting 2010-12VGSoM, 2008-10

INDUSTRY


ve this is the concept to integrated supply and demand plan-ning. The various functions resemble a complex machinery where different parts work in sync to produce the required output. The supply chain today is not limited in scope and encompasses all operational functions such as procurement, production, warehousing, and distribution. In order to ensure that all these functions work in tandem the demand and supply planning plays a pivotal role.

In a typical large scale consumer goods industry the planning process starts with the demand planning process which paves the way for the sales & opera-tions planning process, which in turn brings all the stakehold-ers on a com-mon platform so as to bridge the gap between demand and supply most effi-ciently.The process of demand plan-ning consists of generation of statistical fore-cast (basis 3 sigma cleaned data history) which is augmented using various tools and techniques to depict the market reality considering internal & external factors. The future forecasts (next month + 3 to 6 months rolling forecast) is discussed with the sales, brands and marketing team so as to arrive at a consensus forecast which provides a robust base for the supply planning process.The unconstraint consensus forecast is disaggregated basis historical sales to the lowest node-time level. A requirement generation process is then carried out (using various ERP plan-ning softwares) which considers the disaggregated forecast, stock availability & target stock level, supply network and lead times to provide the requirement at the highest node. The production requirement numbers are then discussed with the production and procurement team during the sales & opera-tions planning process which helps incorporate the supply side constraints into the unconstraint consensus forecast. The final constraint consensus forecast is used for the production plan-ning and replenishment process.For the replenishment to be carried out in the most efficient manner, design of the optimized supply network which pro-vides the least landed product cost (basis the demand and sup-

ply constraints) and the inventory strategy (using multi echelon modeling approach considering demand variability, supply variability and supply reliability) is finalized.Post concluding the sales & operations planning process the replenishment starts on the basis of the forecast and defined supply parameters. Alignment of the production planning and detailed scheduling with the supply strategy helps ensure that the backend is geared up for smooth operations. The produc-tion planning is done basis the constraints and flexibility of the production facility to adapt to the changing market demand which in turn decides the production runs and changeover

schedules. The scheduling policy is designed basis the production flexibility and thus requiring heuristic runs so as to align the supply with the demand pat-terns.The finished goods once pro-duced basis the production plans are now to be distributed across the network in an optimal way. This involves distribu-tion planning,

logistics and warehousing. The distribution planning is done basis the forecast, designed network and supply network planning (deployment strategies and truck load building con-straints) & the set inventory norms across various nodes. The physical movement is carried out by the logistics function which negotiates the best cost from the vendors for the trans-portation & warehousing requirements basis the supply plan.The supply chain monitoring systems capture the performance of all the functions so as to provide an end-to end supply chain visibility and help identify the areas of further improvement.The planning process explained above is for the short term demand and supply match while in the long term planning process capacity planning plays a very important role which decides on the future infrastructure requirements of the com-pany and thus the expansion and capital expenditure plan.The supply chain as a domain has come a long way from being just an enabler to become a source of sustainable competi-tive advantage. The days of working in silos have given way to integrated demand and supply planning, and continues to evolve further with the changing business environment and complexities.

FIRST PRIZE ARTICLE


SYNOPSIS:Now-a-days it is necessary for supply chain managers to mitigate the risks in the supply chain arising due to fluctuation in commodity prices and foreign currencies. These situations are very common in today’s world due to economic crisis, recession and political factors. The supply chain manager must know the use of hedging so that he can make correct decisions. Finally we will see how the top two motor companies of the U.S. saw contrasting outcomes due to the use of hedging in managing their inventories.

In this modern world, competition is not between the organizations but among their supply chains. There is overwhelming agreement among academics and managers about the complexity of supply chains and its tremendous increase over the last few years. Many still view supply chain as a manufacturing term, but in reality the supply chain also importantly involves financial flows. But most of the supply chain managers fail to understand how the financial risks affect them.Hedging in Supply ChainLet’s assume that an Indian company is purchasing from a US supplier. The Indian buyer focuses only on direct product cost. The company buys product at Rs.100 and sells it for Rs.150, a 50% margin. In last five months, the company chooses to make no changes. There is a possibility that the margin has reduced though there has been no change in the operations. Why? The answer is the currency risk absorbed. From Jan 31, 2012 to June 25, 2012 the US Dollar appreciated nearly by 21% against the Indian rupee. What once cost Rs 100 would now cost Rs121. Thus 42% of the margin has been lost.As a part of their strategy to keep margins and profits on the higher side despite downturn in the economy, companies like ITC and PepsiCo are hedging aggressively in the commodities exchanges for their raw materials supply.

Financial risk mitigationThere are three ways a company can protect itself from currency move-ments:• Hedge against risk through com-mon financial tools or by generating monetary assets• Moving to a new low cost source can provide protection (Low Cost Hopping)• Ways to protect profit margins by reducing unnecessary costs in downstream operationsBefore making any strategies on hedging, it is necessary to analyze that how do fluctuations affect the operations of a company and

HEDGING: A POWERFUL TOOL IN

SUPPLY CHAIN MANAGER’S ARSENAL

“Hedges cannot hold off rising

prices forever. At some point

the hedge runs out and if mar-

ket prices have risen and prices

stay up, the buyer has to deal

with it. They still may want

to renew a hedge, to protect

against further price rises.”

Authors:

Akash P. WaniMBANITIE, Mumbai

Abhishek TripathiMBANITIE, Mumbai

FIRST PRIZE ARTICLE


whether hedging is a norm in that industry. Those companies with endemic exposure to currency fluctuations should give careful consideration to operational hedging.Procurement risk refers to unanticipated increases in acquisi-tion costs resulting from fluctuating exchange rates or suppli-er price hikes. Exchange-rate risk can be countered by creating financial hedges, balancing cost and revenue flows by region and building flexible global capacity. Toyota’s manufacturing strategy, to cite one example, allows each plant to serve the local market and at least one other market across the world. This lets Toyota shift production if exchange rates fluctuate. Currency HedgingHedging involves the simultaneous purchase and sale of cur-rency contracts in two markets. The expected result is that a gain realized on one contract will be offset by a loss on the other. Hedging is a form of risk insurance that can protect both parties from currency fluctuation. The motivation for using hedging is risk aversion. If the purpose of buying currency contracts is to realize a net gain, then the purchaser is speculating.

Commodity Price HedgingThe meteoric growth of emerging economies has increased the demand and price of raw materials like steel, concrete, copper, and other commodities and energy. With volatile fuel prices and political instability in so many oil

producing regions, price is expected to rise. World’s total oil producing capacity may peak sometime between 2010 and 2030 and drop continually after that, thus creating a crisis. Hence we see that in current scenario the procurer has to learn to deal with the increasing commodity prices. Figure 1 shows a small scenario about what happens in hedging. Hedging can be done by shifting the risk to the customer (via surcharges), to the supplier (via price guarantees), or the market (via hedging instruments). Feasibility, costs, and impact of each option must be weighed.Reduction of price volatility is the main goal rather than to achieve price certainty. Over a long duration, if someone is doing a good job, hedging will probably win half the time and lose half the time. In the end, if they break even and significantly reduce volatility, they’ve achieved their goal.

“Hedges cannot hold off rising prices forever. At some point the hedge runs out and if market prices have risen and pric-es stay up, the buyer has to deal with it. They still may want to renew a hedge, to protect against further price rises.”

Hedging tactics: Contrasting outcomes for the top two auto makers in the U.S.

In 1990, Russia was a major supplier of palladium, which helps to make cleaner emissions from vehicles. Engineers created a tremendous amount of demand for palladium by designing it into the emission control system of cars. Concerns that politi-cal fights in Moscow could choke supplies drove the price of palladium above $1,000 an ounce (Figure 2).Ford’s purchasing group entered into contracts to secure its supply of palladium which locked prices at record highs. Due to engineering changes the amount of palladium required in each vehicle was reduced. Lack of co-ordination between the palladium purchasing team and the engine designing team, left Ford with huge quantities of overpriced palladium. Ford

FIRST PRIZE ARTICLE


shocked Wall Street by declaring a $1 billion write-off of the value of its palladium inventory in 2002.General Motors had reduced its dependency on palladium. GM had roughly 104,000 troy ounces of palladium (worth US$95 million dollars in 2000). GM decided to sell off their inventory of palladium to take advantage of the favorable price. But they would eventually need to buy it back in the open markets. So in mid-December, 2000, GM sold the inventory of palladium to an investment bank and simultaneously entered into forward contracts under which they’d buy the palladium back over the next six months.

For palladium the trading volume is very thin, making it effort-less for a single player to move the market. GM sold the pal-ladium inventory when its price was nearly at an all time high. The prices of palladium fell by a huge amount. GM completed the killer maneuver by buying back their stock at a discount over the next few months.

Conclusion: From the above cases it is clear that mitigating risk due to cur-rency fluctuation based on the type of product and the loca-tion of the manufacturer is crucial for any business. Though hedging is a volatility reduction tool, proper analysis from the stakeholders’ perspective should be performed. Ideally the hedging strategies are set by a company’s board of directors and are clearly communicated to both the company’s manage-ment and the shareholders. Today, majority of supply chain managers don’t use hedging in their daily transactions but in future it will be a differentiating factor in the business.

managers don’t use hedging in their daily transactions but in future it will be a differentiating factor in the business.

References:Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2009). Purchasing and Supply Chain Management, (4th ed.). Lean Supply Chain Management (pp. 594-595) South-Western Cengage LearningLocke, R. Jr., Anklesaria J. (1994). Selection of Currency and Hedging Strategy in Global Supply Management: 79th Annual International Conference Proceedings, Atlanta, GAFeuling, B. A. (2008, January 7). Chinese Currency Exchange Impacts the Supply Chain, Retrieved from http://www.indus-tryweek.com/articles/chinese_currency_exchange_impacts_the_supply_chain_15560.aspx?ShowAll=1McBeath, B. (2010, November 30). Managing Supply Risk Part Four - Hedging Strategies: Approaches, Retrieved from http://www.clresearch.com/research/detail.cfm?guid=7EF9E02D-3048-79ED-9995-783B96BAC6B8The Great Palladium Heist of 2000, (2009, April 13). The Sovereign Society–Vol. 11, No. 92. Retrieved from http://sovereignsociety.com/2009/04/13/the-great-palladium-heist-of-2000/White G. L., (2002, February 6). A Mismanaged Palladium Stockpile Was Catalyst for Ford’s Write-Off. The Wall Street Journal. Retrieved from http://online.wsj.com/article/0,,SB1012944717336886240.djm,00.htmlChatterjee K., (2008, Sep 09). FMCG companies hedge at com-mexes to keep costs down, Retrieved from http://www.financi-alexpress.comCaldentey René , Haugh Martin B. (January–February 2009), OPERATIONS RESEARCH -Vol. 57, No. 1, Supply Contracts with Financial Hedging, Stern School of Business, New York University“Managing in the Face of Exchange-Rate Uncertainty: A Case for Operational Hedging”-Deloitte Research“Summary of the Survey on Canadian Corporate Foreign Exchange Hedging” Bank of Canada Notice—Monday, 27 October 2008”

“Mitigating risk due to currency fluctuation

based on the type of product and location

of the manufacturer is crucial for any busi-

ness. Though hedging is a volatility reduc-

tion tool, proper analysis from the stake-

holders’ perspective should be performed. ”

SECOND PRIZE ARTICLE


From the man who is perhaps best known for his association with the rise of Japan as a manufacturing nation, the words befit the constantly evolving supply chain practices today. While the 90’s witnessed the success of Toyota’s production system, other earlier innovations in supply chain management such as The FedEx’s Tracking System (1979) and the P&G’s Continuous Replenishment (1988) have redefined the methods used in the supply chains around the world. Similarly, the successes of companies like Wal-Mart and Dell have brought out the benefits of implementing a

winning supply chain strategy which gradually led many companies to benchmark their supply chain strategies with the best in class. However, such transitions have not always been successful due to dif-ferences in country, industries and the companies.

The companies around the world have always tried to align their supply chain with their corporate strategy. When we take a macro processes view, to the enterprise the processes within the supply chain are categorized into internal supply chain management (ISCM), customer relationship management (CRM) and supplier relationship management (SRM). Strategic supply-chain planning lies somewhere between the business-strategy formulation at one end and the tacti-cal supply-chain planning at the other end of the decision making spectrum where the term panning decreases from the former to the latter. The article explores some of the strategic planning innovations and decisions that were made at the enterprise level and benefitted some or all of the three macro-processes mentioned above.

INFORMATION TECHNOLOGY

While ERP (Enterprise Resource Planning) has been adopted by many companies it is not an end in itself. The adoption requires large amount of information input into the systems, planning, co-ordination among departments and aligning the company’s business processes with the practices outlined in the ERP which in turn is derived from the industry best practices. In case a company fails to implement any of the above, it would avoid using it and generate a bad ROI especially important since ERP software solution comes with a cost. Thus the following two practices concerns without the use of any ERP software.

STRATEGIC PLANNING INNOVATIONS: THE EDGE IN BEST PRACTICES “To successfully respond to the myriad of changes that shake the world, transformation into a

new style of management is required. The route to take is what I call profound knowledge—

knowledge for leadership of transformation.” - W. Edwards Deming, American statistician

and the inventor of Total Quality Management (TQM) in “The New Economics for Industry,

Government, Education” (1993)

Author:

Pramit DasPGDM (Marketing)IMT Ghaziabad2011-13



Some companies have implemented one central database that is used and updated by all the members of the company. The database contains different elements of information related to purchasing, not in the least on costs for either buying or making parts, preferred suppliers, lead times, etc. Using this, the procurement and allied departments can access the actual costs of the parts they should need at any time and make decisions regarding which parts to order or make internally. In traditional methods, obtaining this infor-mation takes much more time and requires the involvement of several other departments in the organization.Another company has designed and implemented software that has also been extended to integrate the suppliers. This approach facilitates the integration of different traditionally isolated systems like Product Data Management (PDM), Bills-of Material (BOM), automatic generation of production plan-ning and orders, etc. Such a software tool is highly useful for integrating the different actors in a supply chain and help to make communications easier and faster.

INFORMATION SHARINGJeffrey H. Dyer & Kentaro Nobeoka in their paper titled “Creating and managing a high-performance knowledge-sharing network: The Toyota Case”(2000) thoroughly analy-ses the Toyota Production System (TPS) and shows how the TPS framework creates a willingness on the part of suppliers to contribute and share valuable information to alleviate potential supply chain-wide risk. The paper shows how Toyota constantly works to decrease the costs associated with finding and accessing the different types of implicit and explicit knowledge they have throughout their supply chain.Make-or-Buy ProceduresIn some companies, an assembly of representatives from the finance department, technological department, and production department comes together to analyze the deci-sion material and make a joint decision when considering make-or-buy alternatives. This avoids assessments that sub-optimizes the performance of parts of the organization, but

rather arrives at globally sound decisions. If this could be extended to also include representatives from the develop-ment department, the approach could be seen as a variant of concurrent engineering, where the key principle is to make parallel and joint decisions.

USE OF FEW AND CRITICAL INDICATORS OF SUPPLY CHAIN COLLABORATION AND PERFORMANCE Analytics and BI is getting significantly involved in supply chains as companies trim back to only those metrics that measure collaborative and shared performance. Instead of using lagging indicators that are scarcely useful, the compa-nies focus on leading indicators when manufacturers look to gain greater understanding into potential future events. In fact, many have planned to create an event-driven SCM framework that can respond robustly across their entire series of product supply chains.

SUPPLIER-CUSTOMER RELATIONSHIPSometimes the supplier of different small parts like bolts, nuts, sleeves, clamps, etc. keeps a stock at the customer’s factory at the supplier’s own expense. The supplier refills this stock at regular visits and works with forecasts for demand only. The invoicing of the usage from this stock is done once a month. The system is illustrated below. The customer is very pleased with this system, where practically no labour input is needed to ensure the full availability of parts. Furthermore, this system costs less to run than if the customer would have to monitor the stock levels and place orders itself.In a similar manner, a wholesaler of steel keeps a stock of plates ready for the customer when the need arises. The steel supplier works with historical data for previous year’s demand as well as with forecasts for the future. A partner to the steel supplier performs the production planning based on this input. This ensures that the steel needed for a pro-duction batch is placed on stock 5 weeks prior to the finish date for the production batch/order. Invoicing is done once a month based on assessments of the inventory done by the supplier



SUSTAINABLE PACKAGING: The practice that needs clarityBefore analysing how companies could move beyond the marketing and logistical considerations of packaging in its supply chain, it is necessary to understand sustainable pack-aging. Though there are several definitions but the definition by Beth Scherer of Curtis packaging looks at all the stakehold-ers. He defines it as packaging that takes people, planet and profit into account while designing. “If a package is made of 100-percent post consumer waste but is not protecting the product and acting as the silent salesman, then it is not sus-tainable”, Beth says. So reducing the carbon footprint and the environmental impact should be implemented hand in hand with the more common goals of packaging. The PwC’s 2010 report Sustainable packaging: threat or opportunity? profess-es that in future companies that are reluctant to implement sustainable packaging would have its market share eaten up by the eco-friendly packaging competitors who would still deliver the normal functions of packaging but the report reminds that the industry needs to come to a consensus as to what constitutes ‘sustainable packaging’ and how could it

be measured and compared. In 2011, the Consumer Goods Forum released a Global Protocol on Packaging Sustainability (GPPS) framework that could be used throughout the supply chains (of B2C) and provides standardisation for two diverse supply chains. The follow-up of the 2010 report by PWC was the Sustainable Packaging: Myth or Reality in 2012 where PWC claimed that the industry deems ‘sustainable packaging’ as too broad a term at practical level and there is a growing need to focus on real issues and their solutions.Pack¬ag¬ing and repack¬ag¬ing is ubiquitously followed at every step of the supply chain and so it is imperative to analyse the opportunities and difficulties for implementing eco-friendly packaging in the Indian companies. The reasons companies should resort to eco-friendly packaging in their supply chain operations are:

• Significant cost savings through reduced packaging and shipping (which also means shipping more products at one time),

• Improving their environmental profile among the cus-tomers and

• Conserving limited resources that are used up in tradi-tional packaging

Major breakthroughs in the time versus performance graph are sometimes accomplished by introducing practices that are new to an industry through generic benchmarking. They could be incorporating practices from a variety of fields such as:

PROBLEM COMPARED WITH

Long Admittance time in hos-pital

Hotel receptions

Too length setup of machines Formula 1 pit crews

Planning the delivery of fresh concrete

Hot pizza delivery

Unstructured maintenance of power turbines

Maintenance of aircraft engines

But before companies replicate one of the above practices from the table which shows the best exam-ples of time and resource management in everyday life, they have a long way to go given some of their inherent practices that cannot be changed or suf-ficiently customized.

REFERENCES:• http://www.prestasjonsledelse.net/pub-likasjoner/Benchmarking%20Supply%20Chain%20Management.pdf• https://www.bcgperspectives.com/content/articles/supply_chain_management_manufactur-ing_best_practices/• h t t p : / / w w w . s c d i g e s t . c o m / a s s e t s /FirstThoughts/10-12-03.php?cid=3973

• http://blogs.infobanc.com/blogs-details/how-indian-retailers-are-using-innovative-ways-for-supply-chain-management/24/index.htm

• http://dspace.mit.edu/handle/1721.1/59227• http://erp.cincom.com/2012/07/strategies-for-transform-

ing-your-supply-chain-to-stellar-performance/• http://cmuscm.blogspot.in/2012/02/lessons-learnt-from-

three-successful.html• http://www.itcinfotech.com/erp/erp-benefits.aspx• http://news.thomasnet.com/green_clean/2012/07/09/a-

sustainable-packaging-framework-for-the-real-world/• http://www.packagingnews.co.uk/news/sustainable-

packaging-myth/• http://www.insidecosmeceuticals.com/articles/2012/07/

packaging-trends-people-profits-and-the-planet.aspx

STUDENT OPINION


According to study conducted by financial services firm Avendus the Indian e-commerce market which is estimated to grow to $24 billion by 2015 from the current $6.3 billion. Currently 8-12 million people transact online, which is about the 11% of 80 million internet users in the country. If we see in the near future, every big market player wants to create their own customer base of virtual shop apart from traditional retail. The recent announce-ment by Amazon to start their e-commerce operations at India will not only create the competition but also boost the e-commerce industry growth. Though Amazon has entered the e-commerce business in India as Junglee.com but right now only for market research.

In traditional retail retailer has the capability to force the customer for ‘back to buy’ due to their brand image. At the other hand small retailer create their brand image by providing ease of return, credit facility and last but not least is ‘try and buy’. Cost and quality is always a constant factor in the customer mind before going to purchase. World’s largest retail chain ‘Wal-Mart’ which currently operates in 15 countries with 8500 stores always provide goods at cheaper price. With innovative business solution and excellent sup-plier relationship Wal-Mart also started their online store Walmart.com in 2000 and provides 24*7 online shopping experiences. So for any e-commerce venture it’s hugely depend on their retail operations to become successful in near future. In the e-commerce; retail operations executed in totally different way with comparison to traditional retail. Our focus is on the operations as it supports business to customer activity and how these operations could be affected by e-commerce rather than on the sales through traditional retail. E-commerce operations provide the potential for a funda-mental reassessment of how retailing operates and how retailers behave. Without doubt, the existing ways of traditional retail opera-tions and the associated cost structures with it will be reassessed under the onslaught of new technology and new retail structures. E-commerce has a number of implications for the retail operation and how and where the tasks are performed. A retail operation consists the sourcing of products; stockholding, inventory and store merchandising; the marketing effort including branding; customer selection; picking and payment; and distri-bution of goods to the customer.

For the sourcing of the products retailer makes a good relationship with supplier and bulk buying capacity of retailer directly reduce the cost for customer. Here the gap between the supplier and retailer is null and goods procurement is easy to maintain through electronic linkages. The absence of middle men decreases the cost for retailer. The largest retailers are now pursuing Internet-enabled advantages like ERP, digital channels etc. and cost reductions in operations, which could translate to an enhanced competitive position in process, structure and relationship terms. Secondy store allocation and inventory control; this area needs a retail space but the advantage is that it can be opened at any place with good transport connectivity. Here the cost of stockholding can be reduced by less stock but it will increase the transportation cost. So supply and demand of the product can only be monitored through real time data by using any point of sale application (SAP, Oracle, Baan, PeopleSoft etc.). By opening the warehouses at different places make easier to cater customers of different geographies. It automatically boosts the supply chain operation to

“Amazon, giant of online

retailing, started their opera-

tions in 1995 but only after

2001 it started to make profit.

Between these years Amazon

invested hugely upon tech-

nology, supply chain sys-

tem and infrastructure.”

E-COMMERCE OPERATIONS MINDMAPAuthor:

Anu SinghMBA 2012-14General ManagementVGSoM, IIT Kharagpur

STUDENT OPINION


reach customer fast. E-commerce players like flipkart.com, myntra.com, etc. have their warehouses in different metros. “Opening the warehouse at Gurgaon has smoothed their supply chain operations of North-East India which reflects on company sales” says Sachin Bansal, CEO & Co-founder of flip-kart.com. In contrast to traditional retail which needs to open store at fixed place and assist the customer physically, ecom-merce reduce the cost by virtual store and self-assistance. The marketing effort and brand building is necessity of any business. In e-commerce creating the trust among the cus-tomers is very hard to gain. Here marketing and branding increase the cost for retailer and due to only this thing e-commerce becomes profitable after long time.

Customer has a freedom to com-pare the price at different portal; only trust can force them back to buy. This trust can only be created through highly driven supply chain processes and quality of the prod-uct. Once the customer reached the virtual store, e-retailing pro-cesses change traditional system and picking activities. The transfor-mation from ‘try and buy’ to ‘touch and feel’ eventually cuts the cost. E-retailing separates more clearly ‘order selection’ from ‘order fulfil-ment’ and diverts physicals tasks and their associated costs back to the retailer. Customer has a wide variety of option to choose the product and compare the price instantly at other store which eventually becomes a power of buyer. For example online fashion store myntra.com which has collaboration with more than 180 apparels brand give customer wide variety of option to choose. E-commerce provide all type of payment methods as in traditional retail but cash on delivery adds up a little cost to the retailer. Actually cash on delivery provides a tension free shopping experience and customer has not to be worry. Retailer also wants an innovation in this area which will be feasible for both. According to Manmohan Agarwal, MD of Yebhi.com, “We are working upon mobile cash and card swap at door step which needs a huge investment but in near future it will further decrease the product cost”. The greatest debate in e-retailing, however, probably revolves around the fulfilment and distribution processes. Supply chain developments have focused upon reducing inventory within the channel and improving service levels. E-retailing again requires existing processes and systems to be reas-sessed—will existing supply chain processes are appropriate

or will new ones be required? Actually it needs a huge invest-ment to become sustainable which sore up the cost for the retailer. On the logistics front, many argue that e-retailing will raise customer delivery expectations. The nature of the prod-uct (bulk, fragility, perishability, etc.) will play some role in the delivery process, as will delivery scheduling issues. Now a day every logistic company provides goods tracking which makes convenient to the customer. Most of the e-commerce businesses are using third party supply chain and logistic solutions. In terms of infrastructure we are far behind from

USA and China who are on the top of e-commerce. Although we have a potential of future e-commerce market, only lack of infrastructure puts us behind. Some e-commerce players like flipkart.com, homeshop18.com, yebhi.com, etc have their own logistics but only limited to metro cities. So only the expansion of logistics to tier two and tier three will boost the e-commerce business further. How cost accounts for differ-ent retail item explained here.

At the end it is a great deal of uncertainty and a range of con-flicting views over the future of e-commerce and e-retailing and their impact upon urban and rural areas, assessments based upon product/merchandise sectors limit an under-standing of the future. It is a process of innovation, therefore an approach which explores the processes in retailing and how these differ between fixed store and virtual store retail-ing provides a clearer view of the nature of the opportunity to existing retail locations and operations. Ultimately, the real benefits of e-commerce arise from how tasks and activities are performed within the retail channel, and how changes impact upon ownership, costs and efficiency.

STUDENT OPINION


Since long, the supply chains have competed on price, quality, delivery and availability. They have focused on how to supply a quality product at the right time at the right place and at a price, ruled by the market forces. The cost of manufacturing has increased but the market price hasn’t moved in the same trajectory. As a result, the companies have been fighting on costs to gain competitive advantage over the others.The companies have been under tremendous pressure to reduce supply chain costs. In pursuit of that, the companies have increasingly moved towards adoption of technology in the last few years. Their main focus has been to streamline operations, optimize costs and make the supply chain more efficient. In line with that, Mobility, a recent adoption, has been a game-changer. It is the next level on the basis of which the firms will com-pete. Mobility means ‘being mobile’. And that’s exactly what it is doing to supply chain. It is enabled via applications running on portable mobile devices which allow doing busi-ness transactions while on the move. A manufacturing employee can access his applica-tions from the shop-floor, a sales employee can raise orders from the distributor point, a warehouse employee can have real-time inventory data, a procurement employee can raise and release purchase orders anytime in the day- that’s the power of mobility.

Mobility is moving the computing power of Desktops/Laptops to the point of work. It is compressing the business processes. It is eliminating wastes such as time which slows down the operations. It is removing the manual entry processes on paper. It is giving more flexible working conditions to the employees and at the same time removing inef-ficiencies in the processes and thus, increasing productivity. It is providing instant access

“Wide displays, high

processing power and

functionalities of smart

phones have been the rea-

son for high proliferation

of mobile devices in the

organizations.”

A MOBILE SUPPLY CHAIN - THE FUTURE IS HERE

Author:

Nishant ShekharMBANITIE, Mumbai

STUDENT OPINION


to real-time information from the shop-floor which can be leveraged for faster decision making. It is aiding in improved customer service levels and increased customer satisfaction.

MOBILITY DRIVERS• The arrival of smart phones and tablets: Wide displays,

high processing power and functionalities of smart phones have been the reason for high proliferation of mobile devices in the organizations

• Availability of wide range of enterprise applications: The incli-nation towards adop-tion of mobile tech-nology is not only because of arrival of smart phones and tablets, but also because of presence of wide range of enterprise applications (which can be customized as per the organization’s need) across a num-ber of business functions.

• The need to stay competitive: The organizations have been optimizing operations to stay ahead of the com-petition. Their focus has shifted to make their processes lean so as to save on costs. This has also contributed towards increased adoption of mobile technology.

• The increased mobility of workforce: The employees are no longer confined to the four walls of an office. They need to be on the move as and when required. And they also need to perform their business functions. This has also led to increased adoption of mobile technology.

IMPACT AND BENEFITS OF ADOPT-ING MOBILITY SOLUTIONS ON SUPPLY CHAIN PROCESSESMobility in ManufacturingMobility offers ample opportunities for various stakeholders in the manufac-turing process. A production personnel can track his KPI’s in real-time allow-ing him to take action as and when required (i.e. in case of deviations from the normal). A shop-floor supervisor can track and manage the work-force. An engineer can act even when he is not near the machine (for example, by releasing breakdown work order from any place), thus reducing unplanned downtimes. A line operator can do

production entries on his hand-held mobile device, thereby enabling real-time visibility about the target production v/s actual production. A quality personnel can transfer the prod-uct testing data from the shop-floor itself, thereby enabling faster results. Thus mobility in manufacturing enables faster decision making and improves response time.

Mobility in WarehousingMobility improves the warehouse processes and makes it more efficient. In the receiving function, the employee, through his hand-held mobile device, has real-time access to purchase order database and can thus compare and recon-cile the incoming shipment in lesser time. This also improves productivity as more shipments can be handled per day. In the picking function, the item which falls below the mini-mum inventory level is immediately notified upstream (rather than waiting to access the WMS application through desktop / laptop), thus saving time and perhaps the cost of delay. The hand-held mobile device also helps in improving order-pick accuracy. In the dispatch function, the real-time visibility of customer order data reduces the chance of wrong shipment

STUDENT OPINION


and also ensures maximum utilization of truck-load. Mobility in TransportationMobility helps connect the transporters and their truck driv-ers to the business applications of the organization. This improves visibility and ensures timely arrival at the destina-tion. Apart from that, the real time availability of truck-load data ensures higher load utilization resulting in reduced fleet size on the roads which ultimately transforms to fuel cost savings.

Mobility in SalesMobility equips the sales force with the flexibility to raise sales orders while on the move. If a sales person-

nel on market visit notices lower numbers of products on the shelves, he can immediately raise replenishment orders rather than postponing and risking stock-outs. Mobility is especially necessary in case of vendor managed inventory.

CHALLENGES OF MOBILITY ADOPTIONThough mobility is regarded as the next game changer in reducing sup-ply chain costs, improved productiv-ity & efficiency, faster responsiveness, optimized operations and improved customer service, it has its own set of challenges as far as adoption by com-panies is concerned. • Security of data and informa-

tion: As the organizations move towards mobilizing their process-es, they would need to give access of their business applications to many employees who would be on the move. The more the number, the more the threat to their secu-rity. So, before adopting mobility, the organizations need to have policies in place to ensure how it would prevent theft of data and fraudulency.

• Choosing the best available infrastructure: It’s no longer “one size fits all” when it comes to choosing the mobile solution. There are a number of solutions available which vary in some respects or the other. The challenge here would be to choose the best one which fits their busi-ness process.

• Integration: Integrating the existing technology infra-structure with mobile applications would require great deal of effort. This would also have to be followed by training.

• Managing organizational change process: As the orga-nizations incorporate mobility in their day-to-day

operations, they need to ensure acceptance from their employees to derive the desired benefits from the adop-tion. They also need to make the experience smooth and hassle-free.

• Periodic technology upgradation: As the technology upgrades and new advancements come in, the organiza-tions would need to upgrade their mobile devices and applications to derive maximum benefits out of it.

The next level of competition is here. It has revolutionized the supply chains. The early movers are gaining competitive advantage. But given the challenges, many organizations have been slow in adopting mobility in their supply chains. The time the organizations come over their apprehensions (regarding data security) and adopt complete mobility solu-tions, they will begin reaping the benefits that will change their supply chains ecosystem. In the future, as the technol-ogy moves to next level, the supply chains would be remotely controlled through applications in mobile devices. The sup-ply chain will become mobile.

References• www.motorola.com• http://www.mbtmag.com/articles/2011/07/leveraging-

mobility-extend-lean-transformations-pt-ii• http://www.tcs.com/SiteCol lec t ionDocuments/

White%20Papers/Manufacturing_White_Paper_Mobility_in_Manufacturing_Industry_05_2011.pdf

• http://www.infoq.com/news/2012/06/Trends-in-Enterprise-Mobility

• http://www.inboundlogistics.com/cms/article/mobile-communications-managing-supply-chains-on-the-go/

H

STUDENT OPINION


World electricity demand is projected to increase from 17 200 TWh in 2009 to over 31 700 TWh in 2035 (International Energy Agency, World Energy Outlook 2011). Electric power is a round the clock basic necessity across the globe, India is no exception. In order to keep up with the power system demands a complete critical range of bottle-necks along with their investment barriers needs to be addressed. At present, the coun-try faces 7.3% energy deficit amounting to nearly 45 Billion units (BU) and 10.6% peak power deficit which is 13.4 GW (Giga Watts). The supply position in many of our rural and semi-urban areas needs substantial improvement. People might manage with scar-city but that is no indicator of true demand for electricity which goes grossly unmet.

While demand had already outstripped supply, the gap is bridged slowly as with the 52 GW capacity addition as per the 11th plan. The overall demand-supply gap during 2012-13 is likely to be around 156 million tones that could adverse-ly affect more than 40000MW of capacity. Policy reform and rising electricity demand prompted private entrepreneurs and investors to enter the sector in a big way and this positive attitude is much-needed. Industry message to government’s world -wide is crisp and clear –focus on promoting invest-m e n t - f r i e n d l y regulatory environ-ment and have the potentially disruptive market reform inappreciable. With 100% FDI permitted in Generation, Transmission & Distribution - the Government is keen to draw private investment into the sector

ELECTRIC POWER SYSTEM ELEMENTS Electricity infrastructure development comprises of multiple facets within itself, like Transmission planning, Transmission permitting, Financing and cost allocation, System modernization and the smart grid. Electricity is produced at lower voltages (10 to 25 Kilo-volts) at generators from various fuel sources; electricity is “stepped up” from these generators to higher voltages for transportation in bulk over transmission lines to reduce transmission and conductor heating losses. Transmission lines are intercon-nected at substations to form a network transmission lines. High Voltage is “stepped down” at the substations to lower voltages for distribution to end users.

ELECTRICITY INFRASTRUCTURE: WHERE DEMAND EXCEEDS THE SUPPLY - CHALLENGES AND THE WAY FORWARD

Authors:

Mohan SornapudiPGDIM 2011-13NITIE, Mumbai

Srikanth AVSPGDIM 2011-13NITIE, Mumbai

“Smart grid users say that

they could change our

electricity consumption

like the internet changed

our information consump-

tion.”

STUDENT OPINION


KEY INDUSTRY DRIVERS AND EXPECTED TRENDS • The trend for future right up to 2030 would comprise of• Rising private participation in power sector growth.• Indigenous coal continuing as the mainstay• Increasing renewable energy through policy push, and• Mobilizing substantial debt and equity funds for the

steady growth of the sector.Our installed capacity falls short by 20 GW even in a situa-tion where the demand is suppressed. To gain a prospective, India has a lowest per capita consumption of electricity among the five BRICS nations.

The inevitable comparison shows that China’s installed capacity is close to 1000 GW while that of India would be less than 200 GW by end of current facial. A similar picture is seen when we compare the capacity addi-tion plants of the two countries. This period also shows a significant private sector contribution taking it to nearly 25% of total installed capacity as of Nov 2011 and expected to exceed 35 % by the end of 12th plan. Land Acquisition and Environmental clearance do poses a significant challenge in the Indian scenarioIn terms of fuel mix, 66 % comes from thermal power with coal alone contributing 55 % while hydro, renew-able and nuclear capabilities stands at 21% , 11% and 3 % respectively as at the end of Nov 2011.

ELECTRICITY REFORMSIt is imperative that India has a plan and achieve about 8 % growth rate in electricity supply to accomplish the targeted Economic growth (GDP), keep pace with growing population and above all, to ensure an inclusive growth by completing the unfinished task of rural electrification.The reform process in the power sector started along-side India economic reforms in early 90s when power generation was opened to private sector. With the regulatory Act in 1998, unbundling and corporatization of the vertically integrated

state electricity boards (SEBs) commenced with segregating of generation, transmis-sion and distribution. The next big step was the electricity act (EA 2003) which should be credited with freeing generation from licensing, ushering in market competition and regulatory independence, enabling trading and open access for electricity. Banks and financial institute too played a remarkable role in the growth story.

SUBSIDIZATION With the state distributions companies incurring huge looses, coal and gas sup-ply position falling to terribly low levels, and finance getting dearer and scarcer. Widening gap between cost and supply

and rate of return, high level of cross subsidization, lack of fiscal discipline and tariff increase are the main culprits.Some states prefer load shedding to buying from market. Thus, despite energy shortfall of 8 to 9 %, power is not sched-uled even at a rate lower than average cost of supply. Whatever be the compelling reasoned, electricity tariff revi-sion has not taken place as should be reasonably expected.

Commodities such as coal have seen price increase of 58, but electricity prices have been just 2% increase. Under the APDRP (Accelerated Power Development and Reform Programme) industry is yielding some positive results because of high voltage distribution systems. However, slow pace of distribu-tion reforms is an area of serious concern to all stakeholders.

TRANSMISSION AND DISTRIBUTION SYSTEMSContractual Terms: Dichotomy between PPAs and FSAs Central and State Utilities dominate the industry on whole industry. Power purchase agreement (PPA) and fuel sup-

STUDENT OPINION


ply agreement (FSA) are the two key project contracts for power developers. Power prices are regulated but affected by unregulated coal or gas prices to the extent of shortage in supply. Even the tenure of PPA and FSA are different: the developer is bound with buyer through a PPA for 25 years whereas fuel supplier is bound via FSA only for five years. FinancePower is a highly capital intensive industry. 11th plan fund requirement in generation, transmission and distribution sectors were estimated at Rs 6 lakh crore and Rs 1.5 lakh crore and Rs 3.4 lakh crore respectively while the total actual avail-able funds were around Rs 6.56 lakh crore .With the grim picture in the fuel, credit from banks and FIs as well as equity investments is hard to get. Liquidity crunch on global level and worries over fuel shortages and escalat-ing prices has resulted in banks delaying disbursal of loans already sanctioned and squeezes further sanctions.

Competitive bidding and traffic: The spirit and objective behind tariff –based competitive bidding to serve the end-consumers interest has not been truly met. Price volatility of imported coal has made quoted tariffs unsustainable. Power in India is a concurrent subject and in a vibrantly federal democratic set up. It is a mixed bag of serious risks, especially for private developers and reasonable rewards

THE WAY FORWARD: Leap into the huge Business PotentialPublic Private Partnership (PPP) Going with the present contraction of sourcing funds of the corporate, equity market have been less strong and debt market is as well contracted. Corporate are tending towards Divestments. Corporate have been selling assets to reach their capital and fund their further activities.Public Private Partnership in the distribution of electricity was evidently the way forward. However, the success of the PPP model would largely depend on its structuring. PPP model should encompass all activities to electricity distribution in the license area. Smart energy grid: the Future HopeA smart grid is an intelligence internet like network that aims consumers to understand and manage how and when they use electricity. Smoothing the spikes in demand, securing the supply thus saving money . The energy as well as the informa-tion would flow both ways between the utility and our unit, this helps in taking better energy consumption decisions. A home that is constantly finding opportunity to reduce its electricity bills and even to make money selling solar power back to the grid benefits the customer and also the electric-ity company. Smart grid users say that they could change our electricity consumption like the internet changed our infor-

mation consumption. What the smart grid shows is that the world energy faith need not be dictated by energy produc-tion and how much energy we use but also how intelligently we use it , all without increasing the global carbon foot print.

CONCLUSIONWith the government ambitious goals in the 11th plan we have witnessed massive addition plans in the sub-sectors of Generation Transmission and Distribution. A sound compre-hensive Project management framework is very much critical to address the major challenges of the electric sector projects and to be able to deliver them as per the planned targetsDe-carbonization of electricity generation and the other innovating sustainable energy platform will be primal to efforts to reduce global warming. The industry is confident that smart grid technologies will be in place by 2030.It’s time for the renewable energy to compete without the need of subsidiaries. Energy affordability, energy efficiency and sup-ply securities might have positive or negative impacts on the sector and the wider economic landscape in the coming years.The entire value chain of the electricity sector is dominated by state and central governments. For a industry with huge investments a regulatory environment that encourages net-work investment is highly recommended. This would remove the strategic infrastructure planning bottlenecks and would likely see more strategic private sector partnerships between electricity generation companies and utility companies and organizations

STUDENT OPINION


Col-lab-o-rate: a recursive process where two or more people or organizations work togeth-er to realize shared goals (Wikipedia). Collaboration is arguably one of the most overused words in supply chain management. The benefits of collaboration are well illustrated by the often quoted example of the ‘prisoner’s dilemma’. The scenario is that you and your partner have been arrested on suspicion of robbing a bank. You are both put in separate cells and not allowed to communicate with each other. The police officer tells you both indepen-dently that you will be leniently treated if you confess, but less well so if you do not! In fact

the precise penalties are given to you as follows:• Option 1: You confess but your partner doesn’t.• Outcome: You get one year in jail for co-operating but your partner gets five years.• Option 2: You don’t confess but your partner does.• Outcome: You get five years in jail and your partner gets only one year for co-operating.• Option 3: Both of you confess.• Outcome: You get two years each.• Option 4: Neither of you confess.• Outcome: You both go free.These options and outcomes can be summarized in the matrix in

What is the most likely outcome? If neither you nor your partner really trusts the other, par-ticularly if previous experience has taught you to be wary of each other, then both of you will confess. Obviously the best strategy is one based on trust and hence for neither party to confess. Now this whole collaboration approach can be divided into three part WHY col-laborate, with WHO, and HOW? A thoughtful response first must acknowledge it is critical to understand that Collaborative Logistics is driven by a changing corporate vision that views competition and suppliers as potential collaborative partners in logistics. Smart companies are leveraging these rela-tionships to gain efficiencies through shared operations. It is a relationship that is the core differentiator between Collaborative Logistics and all other strategies aimed at improving operations and coordination in the supply chain. And, it can only be facilitated through a neutral entity – the Internet. Is the driving force to establish a collaborative relationship truly a shared goal, like improv-ing on-shelf availability, or is it more selfish in nature such as to improve sales and/or prof-

“Collaborative Logistics

may be implemented

within the marketplace

as a value-added offer-

ing to its members, but

alone, a marketplace itself

is not synonymous with

Collaborative Logistics”

COLLABORATIONS AND TEAMWORK IN LOGISTICS AND SUPPLY CHAIN MANAGEMENTLeveraging relationships across the elements of the supply chain to bring about better efficiencies and higher profitability

Author:

Anjali SinhaPGDIE Batch of 2013NITIE, Mumbai

STUDENT OPINION


its of your company, to take market share away from your competitors, to reduce your company’s supply chain costs, to eliminate or reduce investments in physical assets, to transfer costs and risks to other parties in your supply chain, to create a more flexible and responsive supply chain?The relationship between Collaborative Logistics and busi-ness marketplaces is often misunderstood. Depending on their business model, marketplaces may encourage col-laboration in addition to their goal of demand aggregation. Collaborative Logistics may be implemented within the mar-ketplace as a value-added offering to its members, but alone, a marketplace itself is not synonymous with Collaborative Logistics. And how can manufacturers and retailers organize themselves around a shared goal when they also have many conflicting objectives. Now in this era of highly competitive and volatile market only price negotiation will not serve the ultimate goal of serving the customer.

One of the first things to suffer when the relationship is based only upon negotiations about price is quality. The supplier seeks to minimize his costs and to provide only the basic specification. In situations like this the buyer will incur additional costs on in-bound inspection and re-work. Quality in respect of service is also likely to suffer when the supplier does not put any particular priority on the customer’s order. At a more tangible level those customers who have moved over to synchronous supply with the consequent need for JIT deliveries have found that it is simply impractical to manage in-bound shipments from multiple suppliers. Similarly the communication of orders and replenishment instructions is so much more difficult with multiple suppliers. The closer the relationship between buyer and supplier the more likely it is that the expertise of both parties can be applied to mutual benefit. For example, many companies have found that by close co-operation with suppliers they can improve product design, value-engineer components, and generally find more efficient ways of working together.

It is now expected that ‘being good at managing relation-ships’ is no longer the qualifying strategy but the winning one. Moreover, it is proposed that the fullest benefits of SCM will only be achieved from very close, collaborative relation-ships. Now if we focus on the different vertical of supply chain i.e. retailer, manufacturer and supplier, they will always wants the benefits but none of the risks, costs, and assets. Everyone will try to push these risks to other which will never satisfy the condition of collaboration. When we take into account the potential benefits of a prospective collaborative relation-ship, and how easy or difficult it will be to set up and manage, which type of partner provides the best opportunity for suc-cess? Collaborating with a customer? A supplier? A competi-tor? A company outside your industry? A 3PL?

And which model works best, and in which cases• One-to-One within Industry: Direct relationship between

your company and one other company in your industry (customer, supplier, etc).

• One-to-One outside Industry: Direct relationship between your company and one other company outside your industry.

• Many-to-One within Industry: Relationship between your company and several other peers to serve a single, common customer (likely facilitated by a third party).

• Many-to-Many within Industry: Relationship between your company and several other peers to serve multiple common customers (likely facilitated by a third party).

• Many-to-Many outside Industry: Ad-hoc or structured relationships between your company and a network of other companies from different industries facilitated by a third party.

Nissan Motors in the UK have been one of the leading advo-cates of this concept. A key element of their approach is the use of ‘supplier development teams’, which are small groups of Nissan specialists who will help suppliers to achieve the requirements that Nissan places upon them. The overall objective of the supplier development team is to reduce the costs and increase the efficiency for both parties – in other words a ‘win-win’ outcome. One such collaboration approach that has delivered significant cost and service advantages is that created by General Motors and Menlo Logistics. The two companies jointly invested $6 billion of start-up equity, General Motors having the majority share, to create Vector SCM. Vector became responsible for managing all of GM’s in-bound and out-bound logistics and for co-ordinating all the individual transportation, warehousing and other logistics service companies. Underpinning the whole operation is a state-of-the-art logistics information system, ‘Vector Vision’, which enables much higher levels of synchronization across the whole of General Motors’ supply and demand network.

One example of collaboration in the supply chain that is increasingly encountered is the concept of Vendor Managed Inventory.

STUDENT OPINION


E-TAILING IN INDIA - A LEAP AHEADAuthor:

Ashish MehtaMBA 2011-13VGSoMIIT Kharagpur

With an internet user base of over 100 million, Indian e commerce market is growing at a much faster rate than it was initially expected. The common consensus in the industry is that its growth has reached at an inflection point; the key drivers being:• Growth rate of 20% Month on Month, in the internet usage capacity in the country.• Changing lifestyles, with lesser time to devote to offline shopping.• Lesser costs as compared to brick and mortar stores.• Availability of a very wide product range to choose from as compared to offline shop-

ping.• High disposable incomes and burgeoning, very fast and upward mobile Indian Middle

class.• Current e commerce market size in India is more than $ 12 billion with a CAGR of 30%.

The conventional Business model of an e tailing company in India is shown in the figure on the left.

With such good prospects; due to low entry barriers in the Indian e tailing market, the competition is growing fiercely. In addition to this competition, day by day increasing customer expectations of the prices to get further down plus the danger of e tailing giants like Amazon etc. who are waiting at the doorsteps of the Indian markets to soon see the opening up of FDI in multi-brand retailing has forced the Indian e tailing companies to change their busi-ness model to a more efficient one.

On account of this, some of the changes which are/going to take place in the Indian e tailing market:

Reducing the inventory costs by converting the conventional procurement model to a 2-part inventory management model:• Direct Procurement Model:

This model works for low - medium range, fast moving products. In this model, once the discount margins are mutually decided between the vendor and the E tailing company, the vendor sends a purchase invoice (PI) to the procurement team of the E tailing company to select from the SKUs available with the vendor and accordingly place an order to the vendor. Once the order is placed, the vendor delivers the prod-ucts at the E tailing company warehouse and then these products get live on the E tailing website. Over a period, when the stock lasts and procurement team feels the need to reorder the products, the sold and not sold out product detail reports are

“Syndicate Formation

with Big Retailers in India

is the new and attractive

concept in e-commerce to

cater to the growing cus-

tomer aspirations of faster

delivery”

STUDENT OPINION


taken, which provide the SKUs and period wise details for that brand along with last stock-in and stock-out dates. From this data the frequency of selling of that SKU is calculated and accord-ingly based on the desired inventory levels the reorder for that brand is placed.

• Stock Sharing Model (VMI): This model works for high-end, slow moving products. In this model, once the discount margins are mutually decided between the vendor and the e tailing company, the vender sends the list of available stock for that brand in his inventory to the E tailing company, and that stock is displayed as it is on the E tailing company website. As soon as a customer places an order from this stock, he the vendor is informed about this purchase and a just-in-time E tailing company van picks up that product from the vendor’s warehouse and the order is shipped. But there is no such restric-tion on the vendor that he can’t sell the stock available with him at his end, in that case the stock list for every such brand is demanded from the vendor periodically and is updated on the website immediately to avoid any order cancellations.

To cater to the growing customer aspirations of faster deliv-ery etc. and to bring along all the benefits of offline shopping as well, many e tailing companies in India are working on a new and attractive concept of Syndicate Formation with Big Retailers in India.This is a recent concept for the Indian market and the thing which is being planned under this concept is that the e tail-

ing company will do a market research to find out the giant retailers in India (who are having say 100 or more retail stores across the country or a particular region where e tailing com-pany may be having large customer base) and then make a syndicate with them to work on the profit sharing model. As soon as a customer places an order on the company website for a particular product and chooses an option of immediate delivery, the order gets redirected to the syndicate retailer’s retail outlet which is closest to the location of that customer and then a delivery boy from that store will directly deliver the product to the customer location within a span of an hour or so.

The retailer will be getting his share of margin from the e tailing company and along with an opportunity to make the delivery boy carry the related articles along with the ordered product and the customer may buy that article also. The e tailing company will be benefitted by attracting a large cus-tomer base; hence will be able to increase the gross profit

margin. This will remove the major draw-back of online shopping vis-à-vis offline shopping - of product being delivered instantly and hence shall be a leap head in e tailing business in India. For the cus-tomer it will be a situation of customer delight, getting theproduct in practically no time.

These and many other such improve-ments are on their way in the rapidly changing e tailing culture in the context of Indian market. Let’s sit and watch up to what level do all these changes and the CAGR of 30% in the internet user base of India will make the e tailing business in India reach!!

EXPERT OPINION


THE BRAND CALLED AMULBeing legendary as it is, Amul is a brand that has created history by placing India in the global marketplace for milk and milk products. It is a brand which has revolutionized rural India by empowering humble farmers in creating a multibillion dollar enterprise. It all started with 2 village co-operatives in Gujarat, with a milk collection capacity as low as 247 liters/day. Today, 46 years later, it has grown into a mammoth organization, by the name of Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) with an annual turnover of USD 2.5 billion. Its daily milk procurement stands at 13 million liters per day from 16,117 village milk cooperative societies, 17 member unions covering 24 districts, and 3.18 million milk producer members! (Amul)These farmer members form the backbone of the co-operative structure of Amul. Each of these co-operative forms a village society, which supply milk to district co-operatives, also called the Union. All the products of these unions are marketed by GCMMF under the brand Amul. The federation procures almost 85% of its milk from Gujarat, while the rest is sourced from Rajasthan UP, West Bengal and Haryana. The federation primarily aims at providing remunerative returns for the farmers and serving customers by providing quality milk and milk products. Over the years, Amul has widened its portfolio to offer milk as well as valued added milk products. The latter has helped Amul to maintain a steady growth rate of 20%, over the past 5 years. Currently, Amul commands market shares as high as 60% - 85% in various product segments across its portfolio (Exhibit 1). By maintaining presence in all these seg-ments and by flanking the product portfolio, Amul has been successful in keeping major competitors at bay at a pan India level. (Desai, 2012)

There are several success factors which have enabled Amul to be at the center stage of Indian markets. To quote a few are its ‘farmer first’ philosophy, its remarkable network of co-operatives enabling procurement, its high quality products, its robust supply chain network, its co-ordinated marketing practices and its impeccable quality and process standards. The focus of this article is be to emphasize the role of the unique supply chain network at Amul and how the same has been leveraged to transform the business opera-tions and the lives of millions of people.

LEVERAGING SUPPLY CHAIN FOR BUSINESS

EXCELLENCE -THE AMUL STORYAuthors:

Aditi VidyarthiSenior Associate ConsultantInfosysGIM 2011 Batch

Nitin BhatSenior Associate ConsultantInfosysGIM 2011 Batch

EXPERT OPINION


SUPPLY CHAIN MANAGEMENT AT AMULThe business operations at Amul are focused at establishing and operating an efficient supply chain from procurement till delivery to customers. This robust bottom-up supply chain is one of the main competitive advantages of Amul. The supply chain springs at the grass root level with millions of farmers pouring milk into the Village Dairy Co-operatives (VDC). Each of these is affiliated with a district union co-operative. The latter in-turn supplies milk to the State milk federation, which markets milk and milk products (Exhibit 2). Currently, Amul operates in 24 out of 26 districts of Gujarat. In order to cater to the increasing demand for milk and milk products across India, Amul has now started dealing with co-operatives out-side Gujarat. GCMMF has been setting up co-operatives at village levels in UP, Haryana and West Bengal. At least nine new milk plants are planned to be commissioned across India in the coming years, indicating a clear vision to step up production. All this has been possible due to the strategic framework of Amul’s supply chain which has created econo-mies of scale due to operational excellence.The supply chain at Amul revolves around four strategic per-spectives, as depicted below: Farmer Development: The strongest advantage of the co-operative is the farmers delivering on quality and quantity of milk, daily. Because the federation looks after the interest of the farmers, the farmers remain loyal to the federation. Amul has been a pioneer in providing fair returns to farmers over the years. More than 85% of the revenues are passed on to the farmers as dividends. At Rs 32/litre, Amul pays the

highest procurement price in India for milk to farmers as compared to Rs 26-28 a litre by other dairies. Over the years, Amul has added more value added products to guarantee higher price realization for milk to its farmer members. Recently, Amul increased milk prices to ensure higher shares to farmers during times of inflation. With costs skyrocket-ing for the farmers, procurement prices are continually revised to look after their interests. This year, the same has been driven up by 14-15%, reinforcing the farmer centric vision. As a financial policy, the federation always deals in cash transaction, to prevent liquidity issues for farmers. The Federation Advantage: GCMMF plays the unique role

of co-coordinating milk procurement from within and out-side Gujarat, determining the best product mix, regulat-ing inter-dairy movements etc. It works with the objective of ensuring that all the milk produced by farmers is sold in the market. Depending on the individual strengths of each union, GCMMF does production planning and prod-

EXPERT OPINION


-uct mix allocation to ensure fair returns on the capacity of the unions. GCMMF helps in maximizing the network sur-plus form the various unions and maintains equity among unions to develop and market products under the Amul brand. This unique advantage helps in fair price realization for farmers by ensuring milk availability at affordable prices to large sections of the society. (Tirupati, 2003)Interlocking control: The farmer centric vision of Amul is reflected in its organizational structure and design. The Board of Directors (BOD) of each district union comprises of the chairpersons of the village co-operatives under it. One among these directors forms the Chairperson of the Union. The chairpersons of the various unions constitute the BOD of GCMMF. The MD of GCMMF is a professional, who reports to the BODs, who, incidentally are farmers who pour their milk produce to the co-operatives every day. The main reason for developing such a control mechanism (where farmers con-stitute the board) is to safeguard the interests of the farmers at every level of business operations. This also ensures fair representation of farmer interests in business decisions and ascertains a balance in perspective between business devel-opment and farmer welfare.

Technological effectiveness: Milk and its products being perishable in nature, technology is entrenched at every level to ensure its freshness and quality when the products reach the markets. Continuous innovation to equipment and processes is done to deliver the best products at the lowest cost. The most significant in this regard is the process for usage of buffalo milk to produce milk products. Amul was a global pioneer in producing milk powder from buffalo milk. At Amul, technology is yet another competency which adds to the efficiency of the supply chain network. Amul boasts of an ERP based supply chain planning and ordering net-work, automated milk collection center at the dairies and a GIS based data network, connecting villages to markets, to achieve efficiency in milk collection. A unique combination of 4 distribution highways namely ambient, chilled, frozen and fresh are created to deliver quality milk and milk prod-ucts to various markets on time.

TOTAL QUALITY MANAGEMENT AT AMULTQM practices at grass root levels have assisted in develop-ing strong leadership, operational and strategic capabili-ties across the organization, which Amul has meticulously deployed to synergize the operational efficiency of the sup-ply chain network. Some of them are outlined below. 1. GCMMF conducts farmer training regularly to empha-

size the need for good healthcare of cattle during pregnancy. GCMMF has set up 7 cattle feed plants to ensure availability of nutritionally balanced animal feed to the farmers on time. A strong focus is on reducing the number of infertile animals through the Fertility Improvement Program, aimed at improving milk pro-duce.

2. GCMMF conducts Hoshin Kanari workshops, focusing on policy deployment, to make its member co-opera-tives clearly understand its broader vision and mission. This is a top bottom initiative, where the workshop is first done at top management levels and then at village co-operative levels. The main focus is to discuss and set organizational goals and targets.

3. As part of the Amul Yatra program, the distributors are

invited to visit Anand, wherein they get exposed to the co-operatives and are able to understand and appreci-ate their role as socio-economic partners in develop-ment of rural India.

4. Most of the unions are ISO/HACCP certified, which rein-forces quality as a philosophy at Amul.

To conclude, the “Amul brand is not only a product, but also a movement. It has given farmers the courage to dream. To hope. To live.”

Bibliography• Amul. (n.d.). Our Organization. Retrieved 09 01, 2012,

from Amul India Web Site: www.amul.com• Desai, N. (2012, 05 13). Never too old for growth.

Business India, pp. 44-52.• Tirupati, P. C. (2003). Business Strategies for Managing

Complex Supply Chains in Large Emerging Economies-The story of Amul. Case Study, Indian Institute of Management, Ahmedabad

INDUSTRIAL VISIT


In continuation with the Industrial Visit series of ScOpe, a group of 20 odd students from VGSoM accompanied by Faculty Advisor of ScOpe Prof. Ashutosh Sarkar and a few research scholars visited TATA Motors Ltd. (Tatanagar plant) on September 15, 2012 and interacted with the manage-ment of the company. The interaction was quite detailed and students were given a brief overview of the entire operations of the plant as how the commercial vehicles manufactured

are being assembled and were in detailed shown the vari-ous phases of assembly lines. Q&A was quite encouraging & informative and students were guided about the entire supply chain about the automobile industry. It was indeed a very enriching experience. We would like to express our sincere thanks to our students and regards to TATA Motors management to make this happen and giving students a life time opportunity to learn at their establishment.

The Tatanagar plant of TATA Motors has 50 odd different truck models and their production lines. Some are high in demand while the rest are not. This is the reason why they modularised the pattern of truck designs. Sheet metal for the manufacturing of trucks arrives from TATA Steel, Shyam Steel, JSW, Bhushan Steel etc. which are the major suppliers.

TATA Motors has a particular supply schedule which they share with the suppliers. There is: Monthly Schedule, Weekly Schedule and 3-day Drop-In Schedule. The last one is the Frozen schedule; like the order that TML has put in on a 3-day window and is committed not to tamper with that order; the supplier is also taken for granted that they will definitely have enough inventory with them to keep providing 3-day drop in. Apart from that other schedules are indicative in nature including the Annual Business Plan. They have half yearly reviews; this year they are planning to drop their Annual target for JSR Commercial vehicle line from 1.60 Lakh

to 95k as there is an unexpected slump in the market.

The students were also explained how TML select suppliers. The trick is that supplier selection for such a niche segment is rather easy as no much players are there in India with the capability of producing automotive-grade sheet metals. But for other sections the system that TML follows is like:RFI(request for info) --> RFQ(--Supplier comes up with their

quote--) --> Based on that TML engineers visit mul-tiple supplier plants or study their process documents --> TML has an efficient world class Price Panel which (based on the processes described in the document) do a process costing and provide their own suggestions or cross-quotes to the supplier --> This has an extension; Automobile designs are dynamic in nature, depending on demand designs for various parts get changed --> suppliers or providers of these parts many a times find it difficult to come up with efficient technology so as to

meet the TML specs --> in those cases, Price Panel helps the supplier by fixing which technology at which price should the supplier use so as to fall within the TML demanded price tag --> After this whoever wins the bid, starts supplying based on the contract terms --> post-supplier selection TML uses VQR (Vendor Quality Rating) based on 4 prime aspects which must be acounted for while purchasing auto-subparts.

The youngsters from VGSoM were shown all the action in the TATA Motors plant and the future managers were also exposed to the world-renowned Tata Motors methodol-ogy of Lean Production i.e. procurement of raw materials in small lots from nearby vendors. It is expected that students of VGSoM will continue benefiting from the wisdom of Tata Motors professionals, and be inspired to do well in their cor-porate careers.

MANAGEMENT TIPS AT

VGSoM EXCLUSIVE


Vinod Gupta School of Management (VGSoM) is shortly completing two decades of its existence. While it has made reasonable progress on all standard parameters to have respectable stature among the B-schools in the country it has still a long distance to go to achieve its aspired position as a B-school with distinction. Prompted by such realization, certain ideas were conceived which would impel VGSOM onto the new path of progress. One of the ideas was to create a strong base of business and industries, which would provide a repertoire of practice to the school. An exploratory half-day summit of the entrepreneurs therefore was organized on 6 September 2012 from 4-8 pm at the

school. In attendance were the representatives of invitee entrepreneurs, representatives of faculty, research scholars and students. The summit started with a welcome by the Associate Dean, PROF KALYAN GUIN. Prof Guin introduced VGSoM and its activities. He invited PROF DHRUBES BISWAS, MD, STEP IIT Kharagpur to speak about the Rajendra Mishra School of Entrepreneurship and progress made by STEP. Prof Biswas had another seminar to participate in and hence left after his talk.

PROF ANAND TELTUMBDE, the convener of the summit then explained the idea of the summit. He outlined certain unique strengths of VGSOM in terms of quality of students, faculty, curriculum, pedagogy, and research vis-à-vis other B-schools in the country and said that VGSOM is well posi-tioned to set standards in management education. He stressed that management education was unlike any other discipline and required strong base of practice. The case study method in vogue, which was brought in by the pio-neers of business education, the Harvard Business School was in fact proxy for the business practice. Cases reflected business situations and took students into the realm of real-ity during the case discussions. The limitation of the cases however is that they provide a snapshot of practice frozen in time. The real business education ideally needs dynamic interface with practice. This, he felt, could be achieved by VGSOM with the base of SMEs around Kharagpur if we together could create a structure which would promise

ENTRE’PACT 2012 The Enterprise Connect

VGSoM EXCLUSIVE


mutual benefit to both sides. He explained that SMEs provide rich base of practice for learning and could also derive rich benefit from the community of students, research scholars and faculty in terms of problem solving, bringing in new ideas for improvements and strategy for growth. VGSOM, he explained, is placed uniquely to experiment with this ‘ideal’ as no other B-school anywhere. He explained numerous benefits that the SMEs can hope to derive from bonding with VGSOM. He gratefully acknowledged the initiative and support of Mr Sukumar Roy, Managing Director, KE Tex, Kharagpur in bring-ing this idea into reality. He ended with a strong statement of expectation that the Entre’PACT, as the proposed name for this structure will represent an ‘emotional bond’ between the entrepreneurs around Kharagpur and VGSOM.The summit progressed as per a brief agenda. PROF ASHUTOSH SARKAR as the ex-Chairperson of the Management Development Programme introduced his suc-cessor Prof Arun Kumar Mishra and briefly explained the offerings of VGSOM. He further explained how the associa-tion of SMEs and VGSOM could be mutually beneficial. After outlining the expectations and offering by VGSOM, the entre-preneurs were invited to speak out their own expectations. MR. TARUN MULLICK took a lead and made an emotion laden presentation based on his own entrepreneurial expe-rience. He explained the idea of creating business capital through limited funding. A precocious talent himself, he was a national level table tennis player at the age of 15. However, he ventured into the field of Business and has been the pio-neer in launching numerous innovative products such as jute bags, suitcase covers, etc. In his opinion, there are three things essential for a successful entrepreneurship – product, contacts and finance. He said, one must be practical and must be aware of one’s limitations. One must think long term and strive to make all the units profitable. An entrepreneur according to him should have tremendous amount of energy and should not hesitate to do any kind of small work. In his

own words, “There is no risk involved when you really know what you are doing”. He was supplemented by his son Mr Arup Mullick, who following his father was the state tennis champion and now assists his father in business. MR. SUKUMAR ROY, an alumni of NITIE of 1972 batch and an honorable Rotarian was the next speaker. He started his business venture in industrial textiles with a unit in Kharagpur and now has several units running. His company’s products are globally acclaimed and its reach has now even expanded abroad to countries like Bangladesh, Africa and China. His philosophy in business has been simple-“Think New”. Among many important things that he recounted in his speech, he stated that he is never afraid of his employees leaving the company and take the knowhow to his competitor simply because he believed in his innovative prowess. What the employees could take away is the knowhow in respect of products they worked on or knew but they will never know his current range of products because they would have undergone radical change. This insight into the competitive edge based on sheer innovativeness was highly appreciated by the gathering. Mr. Roy, whose son had done a 3 month

course at VGSoM once, also stated that he could find a drastic positive change in his outlook towards busi-ness after he completed the course. He explained suc-cinctly that as SMEs they are not in position to recruit the products of B-school or engage B-School faculty as consultants. He therefore appreciated this idea because the SMEs will stand to gain immensely by having access to rich knowledge base of VGSOM. Every entrepreneur at one stage experiences the need to have this formal input and he expressed his desire even to undergo this course himself at his age. MR. ARUN GOENKA has a family run transportation busi-ness in Jhargram and worked for 5 years with his brother before he decided to quit and convinced his farther to

VGSoM EXCLUSIVE


fund him to start his own business. He soon started his own oil mill, a solvent plant and even a rice mill. He believes that there is a nice business opportunity to start a rice mill in Kharagpur with the help of the local people. He expressed a strong desire to contribute to the community development through entrepreneurship but lamented that he has not been successful in convincing people so far. He promised to assist them with his knowhow of running a rice mill. He said that with an investment of Rs. 2 Lakh an average fam-ily would get more than Rs 10,000 per month as income in addition to growth opportunities. His extension motiva-tion behind the idea of catalyzing a cooperative was much appreciated. Mr. Sandeep and Mr. Pradeep recently started their own venture and insisted that they would like to have training on crisis management and also mentoring from VGSoM. Mr. Dhiraj Mukherjee took 10 years to launch a mirror factory here in Kharagpur. Although his products are of comparable quality to the big players in the industry he insisted on the cost constraints he faces in implementing the latest tech-nologies. He currently doesn’t have a lab facility or a good technology in his mirror industry and expects support from IIT Kharagpur to devise a proper strategy for him. He also expressed interest in formal management input in the form of a short course. Mr. Vivel Kaul, Managing Director of Aditya Varna Private Limited and also an alumnus of IIM Bangalore gave some insights on what he feels India is lacking to promote entre-preneurship. According to him, Indian B schools much like their counterparts in other countries focus more on the question “What” rather than on “How”. India today needs to massively scale-up entrepreneurship and for this it needs its successful entrepreneurs to drive the second phase of it, i.e., facilitating entrepreneurship. He expressed that such initia-tive from VGSoM can be the right step in that direction. Mr. Kalpataru Mallick, a student entrepreneur of IIT Kharagpur who has started his own software firm by the name Biraja Infotech pvt. Ltd also expressed his desire to

be a part of the future sessions of Entre’PACT. When asked about his company he said he does not want to reveal much at this juncture as he has got some specific plans for his firm in the near future and wants it to be a surprise for every-one. Mr. Indraneel Mukherjee, Managing Director of Sisa Communication Pvt Ltd, an MBA himself, shared his experi-ence about his journey on entrepreneurship path. He also discussed the benefits for MBA students to work on projects of smaller companies in comparison to big corporates. He told, there is higher probability of implementing MBA stu-dents’ recommendations by smaller companies than bigger companies. Such foray shall be of immense benefit to new startups and students also would get valuable insight to the nitty-gritty of the business functioning. Thus he concluded that a platform like Entre’PACT is very much required for both, the small companies and B-School fraternity as well and he look forward to contribute to it. Entre’PACT on the whole, thus delivered on its specific motive of learning from the experiences of entrepreneurs and the difficulties faced by them in giving a shape to their vision. The discussion brought out ideas that VGSOM can create some short courses that could be taken by the entre-preneurs. It can act as a knowledge repertoire for the SME community to rely on. It can happen in the mode of posing business problem which then could be taken up by the stu-dents with due support and guidance of faculty. This inter-action will facilitate writing cases, modifying syllabus being offered, enrich MDP offering by VGSOM, and get the SMEs on a stronger footing with modern management inputs for their future growth. In order to sensitize the entrepreneurs with the capacity base VGSOM has, some representative presentations by stu-dents were organized. Three students presented their work during their summer internship with industries as a part of the degree programme. BRAJESH KUMAR, who did his summer internship with JSW, gave a brief presentation on his project- ‘Idle freight minimi-zation of Concorde & Jumbo rakes at Vijaynagar works’. He explained the problem of idle freight which JSW was fac-ing and how his suggestion based on meticulous statistical analysis to do wagon optimization while loading the coil and coil optimization while making the coil could save around 26–53 crore rupees annually for JSW.SHUSHRUT CHOUBEY, another second year student, did his internship with Danone. His project was to understand the dynamics of the direct to consumer channel and improvise them. After speaking to a lot of customers, distributors and push cart vendors about their key issues he suggested Danone to change the salary mechanism and make it more target based, have frequent engagement sessions with the

VGSoM EXCLUSIVE


push cart vendors and distributors, change the push cart vending machine timings. The result of implementing these changes proved to be highly beneficial as the vendors with whom he worked managed to have sales of around 80% more than the average figures of all the other vendors.SAIYAM CHHABRA, did his summer internship with Stanley Black & Decker in the project- Setting up of forecasting process for Industrial and Automotive repair business. As an intern, his role in the project was to study the complete forecasting process and suggest changes to improve the accuracy. After working closely with the team from JDA consulting and also taking their inputs, he suggested SBD to go for statistical forecasting process that will help SBD have a transparent virtual glass pipeline for the flow of materials. His suggestions helped them improve their forecast, reduced backorders and inventory and also improve their fill rate. The entrepreneurs were fully convinced that the VGSOM offering was indeed promising and they should extend their coopera-tion in making the Entre’PACT a success. There is a huge scope for management solutions in MSMEs

and a paradigm shift from the usually intuitive approach of entrepreneurs towards the scientific and statistical approach adopted by management education for better strategy decisions and optimization of supply chain and business processes. With the first session of Entre’PACT becoming a huge success, VGSoM has embarked itself on a new path that is aptly described by the signage in the main building of IIT kharagpur- “Dedicated to the service of the nation”. The summit ended with the decision to create a formal struc-ture for the Entre’PACT, which Prof. Anand Teltumbde would do in consultation with the entrepreneurs. The future course of action will be chalked out by the body that will emerge. There was a strong view that similar meeting should happen in Kolkata, as there is a huge community of entrepreneurs who are not far away from Kharagpur to be excluded. Already there was a significant presence of people coming especially from Kolkata. VGSOM promised to consider this and have some meeting at Kolkata. The summit ended with interaction extended over a dinner at the Technology Guest House.

&

A B H I S A M A Y A2 0 1 2

The Supply Chain & Operations Summit3rd November’ 2012

Venue: IIT Kharagpur

presents

Summit topicThe Expected Impact of FDI in retail on the Agri-Food Chain of India

( E S T D . 1 9 9 3 )

H

Contact Us:

Supply Chain & Operations Club

Vinod Gupta School of Management

IIT Kharagpur

W.B. - 721302

Facebook Page: https://www.facebook.com/SCOPE.VGSoM

Write to us at [email protected]

VINOD GUPTA SCHOOL OF MANAGEMENT

I I T K H A R A G P U R

srrnkhala issue2

Documents

members of scope

activities of scope

pgsupply chain

supply chain managemente

supply challenges

faculty advisorthis

designfree magazine

official magazine