Management Education World

The ‘Reduction Driven Recession’ Theory

2022-05-17T23:06:00.000-07:00

‘Downsizing’ shouldn't be the answer to economic recession. Because, huge lay-offs means fall in employment and purchasing power adding to the recession impact at a macro-level. Added unemployment scenario will further intensify both, size and span of economic depression. This means, reduction-driven unemployment will further deepen the crisis and extends the recession term. Hence, recession impact mitigation measures should be carefully planned so that employees don’t become jobless. Organizations should take a people-friendly route.

BIM-MBA Prepares for Lifetime Impact

2015-02-12T10:28:00.000-08:00

Philosophy of Bharathidasan Institute of Management (BIM) is that, “Learning is a lifelong process.” BIM believes in imparting learning that will keep students propelling ahead all through their career. The Post Graduate Program (BIM-MBA) does not limit itself to domain specific knowledge or skill set that is required to perform well as a manager, but it extends into the realms of learning such as goal-oriented behavior, and a value system which represents the essence of deep-rooted and time-tested Indian wisdom. Aligned with global standards, the program continuously benchmarks with top business schools around the world.

BIM-MBA is also oriented to establish a strong connect between social culture and organization culture which molds every individual as responsible manager and leader. The program, therefore offers a unique learning environment for holistic development and transformation through enrichment that has impact for lifetime. The program is designed and has evolved over three decades around following concepts.

Preparation for Life Beyond Campus

BIM-MBA extends into the realms of learning such as goal-oriented, change-oriented, -oriented and responsible behavior that will keep students propelling ahead all through their career. The program prepares for all aspects of life beyond the campus including work service and leadership within local, national and global communities. Forums such as ‘Here & Now,’ BIM Discussions, Economistique, Year-Long Program, etc., help grasp the impact of developments happening in the socio-economic, political & technological arenas and the products & markets, the manager has to deal with. Students manage public relations and handle the responsibility of media relations, social media and competition management. The Book club, Film Club, Astronomy Club, etc., cater to the varied interest of students and foster an all-round development. Social inclusion is a tradition in BIM that is reflected by the student club ‘SPIRITED’ which has adopted a local school, an orphanage and works with NGOs in the region for rural development. These activities and responsibilities have enabled alumni to handle a diversity of subjects and issues in their work life effectively. BIM-MBA emphasizes on career management as a life-long process. The program helps students understand themselves developing the SWOT for identifying careers where they would be best suited. Honing the skills of students in making the right choices in their professional careers, the program also identifies the steps to be taken by the students to excel in their chosen fields.

Culture of Initiation & Innovation

Students are continuously encouraged and empowered by the program to initiate new ideas, events and projects in order to challenge and enhance their ability to manage and deliver. Every individual is motivated to think around his/her passion to innovate products, leverage or create technology, improve systems or facilities, implement sustainability programs, work for social impact, develop content, write blogs, run editorials, create clubs, design events, etc. For example, initiatives like BIM App, Green Konnect, 30K Fleet, Zetitica, Snack & Bite, Old Curiosity Shop, Spirited, Crescita, E-Cell, Hackathon, Astronomy Club, BIM Discussions, etc., are some of the outcomes of this philosophy.

Personality Development

Personality development is an integral part of BIM-MBA curriculum. It has several dedicated courses like Personality Growth Laboratory, Business Communication, Public Speaking and Etiquettes. The courses on personality development not only touch upon the ‘exterior’ but also the internal structure, to make the future managers move faster on the maturity-development continuum. BIM-MBA also has various clubs/committees that complement classroom efforts. They provide a platform for all students to work on their personality in real time. All-round development of the personality happens through compulsory participation in extra-curricular and co-curricular activities.

Global Perspective

BIM believes that Managers and Leaders should factor global trends and dynamics in their roles and decisions. Applying global thoughts and practices is central to build world-class organisations. Appreciative of different cultures and their subtleties give them the capabilities required to effectively operate in global environment. BIM-MBA is designed to provide exposure beyond global trends, cultures and practices. Cultivating global thinking and imparting skills to apply in international contexts, is integral to the learning process. The result of this process is that today a large number of our alumni don the top positions in organizations across the world.

Social Responsibility

Social inclusion is a tradition at BIM which extends beyond the program and impacts community and nation at large. Every student is molded into a responsible citizen first followed by responsible manager and leader. National and public interest is the primacy in management thinking and leadership process. The program offers channel through which students of BIM can show their sense of responsibility towards the society and environment

Value-based Education

Down the years BIM has evolved into a pre-eminent management institute in the country. The resolution of imparting Value based education, taken at its birth has only grown stronger with every passing year. As BIM strongly believes that nurturing competent managers and leaders with integrity can enhance quality of life, it has become the central cog of our program. Value based education is at the heart of our management and research programs, which are structured around the concept.

The result of these philosophies of BIM-MBA is that today a large number of BIM alumni don the top positions in organizations across the world. They are the pride and flag bearers of Bharathidasan Institute of Management (BIM).

Fight Recession Without Losing Soldiers

2013-03-06T07:29:00.002-08:00

"Take care of your best people....this is not a time to lose your best soldiers. You will need them when for the next fight when you emerge on the other side"

- Jack Welch,

Former Chairman and CEO

Generic Electric

Whenever recession monster hits business world, conservative firms tend to limit their focus - cutting activity, people and partners. In such gloomy situations, stringent measures like pay cuts and lay-offs are major controls usually exercised to minimise recession blues. Of course such hard decisions are inevitable for sustenance. Further, it is also tough to get going across troubled waters without loosing a few or more people. Apparently, the top leadership takes hard decisions even before depression sets in.

Exercising grave measures as first step to counter recession risks, is not good for industry, economy and public. It will turn counter-productive, dragging recession further. The recession-driven unemployment will extend the recession episode further. The situation might turn still worse threatening sustenance even in limited form. Hence, a prudent approach is required to fight recession in entirety. Market and cost innovations should become the key pillars for such an approach. While confining to core businesses, firms should selectively diversify / invest / focus in promising avenues or segments, where their internal talent can fit into. Investments should be made into recession-proof, allied and performing sectors to create sustained revenues while employing smart ways to contain cost - eventually to meet payroll and other expenses. In a nutshell, a critical approach to contain recession is not right, but a balanced-growth from a holistic view helps conquer recession.

Transforming Shipping Logistics

2013-02-05T09:13:00.000-08:00

While effective planning and control of logistics lay the foundation for smooth execution of supply chain processes, ‘transportation’ offers significant opportunities to maximize supply chain value. As a critical link in the supply chain, inbound and outbound shipping plays a vital role in executing both forward and reverse logistics operations. Various issues and challenges call for transformation of shipment logistics.

Managing transportation, particularly global shipment operations has become a critical & strategic business function for many vendors, manufacturers, distributors, online retailers and carriers. As global sourcing and distribution operations have increased manifolds, several supply chains have blown up in size and complexity creating need for wider logistics networks and vendor relationships, making the transportation management increasingly complex. Simultaneously, supply chain and transportation executives are under immense pressure to keep transportation costs down in the face of rate increases and keep service levels up in the context of capacity constraints. Besides, gaining competitive edge through more effective shipping operations has become imperative.

In addition to the strategic and operational issues, confidential service contracting as an effect of deregulation in deep-sea transport has made vendor management and allocation more complicated. Besides, the rising security issues have put increased pressure on the shippers to uphold firm control over their supply chains. On the other hand, making transportation decisions which are highly significant for operational success have become very difficult due to a lack of information and process standardization across the partners. In view of tight carrier capacities, increasing fuel prices, traffic congestions, dearth for drivers, rising security concerns, hours-of-service(HOS) constraints and increasing lead-time variability, collaborative ‘win-win’ transportation management relationships is emerging crucial for both shippers and carriers. In one of the recent issues of Supply Chain Digest, its readers have also expressed the same set above-discussed problems as today's logistics challenges and issues. Given these emerging challenges and concerns, it is indispensable for manufacturers, distributors, retailers and third party logistics (3PLs) to transform their transportation arena so that their shipping operations become more efficient, resilient, responsive and secured.

Best practices such as centralizing the load planning and shipping operations, mechanize the order consolidation process, taking greater control of inbound shipment and self-invoicing persist to drive value for the shippers. As managing the global transportation has become increasingly complex, retailers and manufacturers can embrace a holistic approach called ‘Transportation Resource Planning’ that redefines the processes (plan, optimize, execute and measure) and technology requirements, of shipping operations at regular intervals.

As noted earlier, various factors such as increasing transportation costs, under-utilization of truck capacities, driver shortages, increased security concerns, more trading partners, hours-of-service (HoS) constraints, and increasing lead-time variability are highlighting the need for the shipper, carrier and receiver to work closely. This creates the need for practicing collaborative transportation management (CTM) in three transaction areas that represent key opportunities for CTM viz., capacity procurement, inbound management and integrated movements, while it helps in weeding out shipping inefficiencies. Present-day web-based Transportation Management systems (TMS) are offering dynamic functionalities for managing transportation network and collaborative processes covering all modes of transportation with a global span.

Emergence of Internet has revolutionized transportation procurement landscape increasing the bidding efficiencies through standardization, and leveraging the analytical and decision support. Breakthrough capabilities in TMS are opening door to the truly integrated procurement, execution and analysis that ensures compliance and security. The next generation TMS will synchronize with other supply chain execution processes and systems in order to develop a holistic supply chain system. Further, adoption of workflow standards in TMS supports global shipping operations, with multi-country/multi-language support and, collaboration within the order-to-deliver/order-to-cash processes, while providing interoperability across systems. On the other hand, automatic vehicle locator (AVL) systems provide a real-time view of the vehicle route in addition to shipment or delivery status by using a blend of technologies such as Geographic Information System (GIS) and Global Positioning System (GPS). AVL across wide range of industries including banks offer a set of logistics applications ranging from vehicle tracking to pilferage control. Adoption of advanced AVL systems also verifies the misusage of trucks, checking adulterations and retrieving vehicles from rough terrain.

Marketing Social Change

2013-02-02T04:46:00.001-08:00

Customary practices to sell pro social behaviors are not considerably successful so far. Scientific approach leveraging principles of management and marketing, promises social marketers the desired social change.

Detrimental human behaviors trigger a strong need for massive social change. Social change involves in bringing about attitudinal, behavioral and cultural changes amongst the masses. But how do we do this? Who are the key players? Age-old practices like educational programmes, traditional methods like mass communication and conventional media like radio, television, etc. were predominantly used for changing specific groups/communities. Although these programmes are not cost-effective as desired, they were successful to some extent. They’ve (most), however, failed to inculcate desirable social behaviors. Customary practices and mechanisms being used for social campaigns lack several important elements that are prerequisites for selling desired behavior(s) viz., effective communication and change management. Professional approach was rarely practiced. Firstly, most social awareness programmes didn’t apply the principles of communication and management. Secondly, marketing principles and practices that would have helped sell behavioral changes effectively were almost absent. But, social organizations yet have the option to use management practices for their social campaigns.

Art of Selling ‘Change’

Social organizations and Govt., departments concerned have to assume the role of a marketer, think like a marketer and act like a marketer by applying marketing principles in all their social change endeavors. This approach leverages marketing practices such as marketing mix, market research, consumer behavior, branding, target marketing, promotion mix, media research and planning, celebrity endorsement, multi-cultural marketing, etc.

Social marketing yields a significant influence in the behavior of people. t has been practiced across the world for more than thirty years in the fields of public health, environmental protection and political marketing with considerate success. This technique has been under extensive practice by United Nations (UN) and other NGOs such as Public Service International (PSI) for marketing their international health programmes aimed at preventing and controlling HIV/AIDS, Tuberculosis (TB), etc.

Non-business enterprises like NGOs and Govt., departments have tried using ‘social marketing’ in the areas of drug abuse, family planning, organ donation, etc. For instance, Washington-based Population Services International (PSI), a leading non-profit social marketing firm, through its ‘clever and culturally sensitive’ promotional initiatives was able to increase the condom sales in Myanmar from 2.6 million in 1996 to 40 million by 2005. PSI designed a marketing campaign that involved a customized marketing mix. The marketing mix largely constituted a brand name and image that could gel with the conservative local population; package design – ‘silhouette of a couple at sunset under a palm tree’; use of Burmese language for the brand name and instructions to make the product more familiar to the local population (however later changed to English); and offering quality products at an affordable price. With the support of huge international funds, PSI launched a massive condom-marketing programme carrying its advertisements on billboards and privately owned magazines. To generate brand familiarity and increase its brand recognition, PSI approached a leading Myanmar-based marketing agency to develop its own advertising mascot. To further promote general awareness about AIDS and use of condoms, PSI produced two television serials and two feature films and also began sponsoring TV shows like sports talks and English League matches. With a mission to reach every town and big village, PSI built its own national sales network instead of the commercial distribution system. It has its own full-time sales representative team of 28 persons and a wholesaler base of 50. Further, PSI targeted the pharmaceuticals, hospitals and small retail shops to sell its products. To reach small villages and towns, where a majority of its target population resides, PSI made its products available through various non-traditional outlets like betel nut stalls, massage parlours, guesthouses and barber shops. To increase its market, PSI diversified its product mix by innovating on the existing product to make it more appealing to consumers. As part of this, it has introduced banana and strawberry flavoured condoms.

Developing a Business Case for WMS

2013-01-18T07:49:00.000-08:00

An illustrative business case that analyses both quantitative cost justifications and qualitative intangible benefits can help understand how implementation of WMS solution can make a difference. Deploying WMS results in reduced operational costs of various categories such as inventory, shipping, labor, space, etc., and thereby cutting down the total cost of operations (TCOp). Let us analyze the cost savings usually realized through WMS solution that impacts the TCOp and RoI, along four different dimensions, viz., productivity, inventory accuracy, shipping efficiency, space utilization.

Labor Productivity

Warehouse labor cost savings realized through the implementation of WMS is the major contributor for the reduction of total cost of operations (TCOp) and quick realization of ROI. Each process of the warehouse has to be analyzed thoroughly against the projected time/cost to get the true picture of the labour cost savings. As the use of WMS results in improved labour efficiency, most of the material handling activities such as receiving, put-away, picking, shipping, etc., can be completed within the standard working time avoiding the need for overtimes. Due to system directed execution of operations, time spent on identifying and planning the activities that are to be done is minimized, while time taken to locate, travel and perform the activity also reduces increasing the direct labour productivity. Use of auto id technologies that automatically captures data, such as barcode readers, radio frequency (RF) eliminates paperwork and the data entry activities. Further with the cross-docking ability, WMS eliminates the need for put away, storing and picking operations so that labor resources can be effectively used for other activities.

By the way of improvements in the productivity around 20 per cent, the direct labor will cost much lesser than earlier. Similarly, indirect and administrative labor costs also reduce as the supervisors and clerical staff productivity improves by about 30 and 70 per cent respectively. As the supervisors can proactively plan the day-to-day operations very easily with WMS, they can focus on other activities. Efficiency of clerical staff also improves with the data integrity maintained by WMS, while elimination of paper work avoids handling and managing volumes of paper.

Inventory Accuracy

Lack of true inventory status information leads to over or under stocking, missed sales opportunities, reduced labor productivity, affected customer service levels, etc. Inaccurate inventory data loses the confidence on the warehouse and leads to excess purchases than required to ensure against stock outs. This way additional capital is tied up with the excess inventory and also affects the warehouse capacity.

Warehouse Management System (WMS), with its capabilities such as auto data capturing, cycle counting and self-checking, provides almost accurate inventory data at any time. It improves the material handling and purchasing activities reducing the safety stock requirements. As WMS provides credible inventory information, warehouse managers make informed purchasing that will avoid excess stock keeping. In these ways, the overall inventory level reduces usually by 5 – 20 %. Besides, better visibility into inventory may increase the capability to shift book value to the suppliers.

Inventory reductions convert into costs savings in several ways. Reduced inventory means reduced capital tied up in the inventory, which obviously is the lower interest payment. On the other hand, minimized inventory levels results in reduced warehouse space needs decreasing the space or carrying costs. Further, the risks such as obsolescence and damages are minimized, while reducing the need for inventory write-offs. Thus, deployment of WMS results in the reduction of working capital requirements and associated costs, carrying costs, cost of risks and inventory write-off costs.

Shipping Efficiency

Errors in outbound shipments can cost the warehouse very much, while delays in shipping/receiving results in the detention charges. Most often, the shipments are expedited to cover their delays, which involve in additional freight and labor costs. Inaccurate shipments ultimately lead to return processes adding the restocking and return freight costs.

In a warehouse with WMS, the accuracy of shipments increases as it provides capabilities such as automated order complete verifications, shipment loading confirmations, etc. As the accuracy and timeline performance of shipping activity improves with the use of WMS, the chances of first time correct order shipment increases. Obviously the volume of orders returned due to incorrect shipment also decreases.

With enhanced accuracy and timely shipment, all the associated costs reduce significantly. Most importantly, the detention charges levied due to delayed shipments decreases. Similarly, other costs such as expedited order costs and returns management costs are also minimized or eliminated.

Space Utilization Savings

One of the significant factors contributing to the reduction of warehouse operating expense is the space utilization. Mis-managed inventory may often create the need for additional storage requirements, which is mostly outsourced. Usually outside storage space can’t be available on demand. It has to be leased out on certain cost for the predetermined period, irrespective of its utilization. When outside storage space is leased, along with the cost of lease other costs such as insurance and transportation costs are involved.

As WMS improves the space utilization, the need for outside storage capacity reduces, proportionately cutting down the associated costs. Usually the cost of lease, insurance and transportation associated with it is eliminated or reduced. Even the associated labour costs are reduced as the volume of stocking or unstocking and the need for transporting the inventory back and forth are minimized.

Apart from above-highlighted quantifiable benefits, other qualitative benefits such as improved customer service, increased customer satisfaction levels, employee satisfaction, etc., add to the savings in terms of reducing the operating expense or optimization of warehouse value. With fast pack back period, WMS optimizes the returns on investments, while increasing the sales and employee retention.

Firms seeking to implement WMS solutions should assess their warehouse processes and identify WMS that meets both current and future requirements. As the return potential of WMS depends on the scope and size of operations involved, a specific project study should be undertaken either by engaging a project consultant or setting up an internal team.

Future of Multi-Sourcing: Will it Change the Outsourcing Outlook?

2013-01-18T07:06:00.000-08:00

With giant firms like ABN Amro, General Motors, Nissan, Procter & Gamble (P&G), etc., from banking, automobile and other major industries opting to outsource their IT functions to multiple vendors, multi-sourcing is slowly gaining traction as a mainstream outsourcing model. Despite several challenges involved, businesses will seek to go with multi-vendor strategy due to the increasing pressures from shareholders to improve bottom line performance. As ‘sole-sourcing’ doesn’t look promising for speedy growth, multi-sourcing strategy is the alternate option to pursue. Though firms would be reluctant initially due to complexity involved in integrating and managing multiple vendors, best practices such as operational level agreements (OLAs), Responsible-Accountable-Consulted-Informed (RACI) matrix, guardian vendor, etc., and the availability of more sophisticated technology with good ROI, are expected to build confidence to pursue this model.

Multi-sourcing will be predominantly adopted in outsourcing projects whose contracts are set to expire in next few years. New outsourcing projects will also opt for multiple vendors as the early adopters become successful. But the corporate world will not give up viewing ‘multi-sourcing’ as an alternate model and would keep watching it while exploring new avenues. As it emerges successful, the practice will be spread to other functions such as HR, Marketing, etc., instead confining to IT outsourcing. The chances to go the multi-sourcing way are very high in case of high-end, mission-critical outsourcing tasks, like knowledge and transformation services. However, ‘access to multiple specialists or expertise’ will be the key reason for opting multi-sourcing in transformation services.

Ultimately, ‘multi-sourcing’ is expected to transform the outlook of global outsourcing as subscribing to multi-vendor creates several ‘mini markets’ or ‘internal markets’ for firms across the world. This would rather make the situation more complex and intimidating for the service providers to manage multiple clients and sustain across those ‘mini markets.’ Service providers will focus on building their competitiveness and may even tend to provide value-added services to their clients. Eventually, it may result in acquisition of small service providers by the big players in order to retain their businesses. In essence, multi-sourcing would result in streamlining and consolidating the global outsourcing industry where only the giant players may remain offering multiple services.

Vendor Managed Inventory (VMI) - Go Beyond the Practice

2013-01-17T10:09:00.003-08:00

Vendor Managed Inventory (VMI) has at present gained the power and support to deliver its ‘true’ promise. Though its adoption continues to grow while posing new challenges, VMI is likely to diffuse to a new set of industries triggering the need for multi-vendor management and cross-vendor cooperation.

Well, it is no more a concern to ensure adequate inventory or minimize stock-out situations, in their own locations. Now, the inventory manager is the vendor himself. Globally, firms have recognized the importance of efficiently managing their response to customers (so-called ‘efficient customer response (ECR)’). This notion has forced several manufacturers and retailers insist on their immediate suppliers to, assume the responsibility of managing inventory and execution of purchase orders on their behalf. Vendors too are displaying keen interest to assume such responsibility as they find it a better way to either insure or optimize their sales. This philosophy of B2B relationships to realize mutual benefits has placed the vendor in the new role leading to the concept of ‘vendor-managed inventory (VMI).’ However, there are several concerns both current and emerging, which pose a great challenge to the parties involved in VMI. Addressing those concerns should take an institutional approach as delved in the ensuing discussion.

Vendor’s Resilience Matters

A major concern that is very often questioned in VMI context is, the vendor’s resilience. When firms encounter mammoth increases in demand for their end products, the chances that their suppliers can replenish inventory matching the required levels, are usually low. Vendors can be resilient upto their own maximum capacity to which they can serve. However, once the demand level goes up beyond vendor’s maximum potential, right replenishment of customer’s inventory can’t be guaranteed.

Service Disruptions Will be There

Though vendors can replenish their customers’ inventory for any level of variability in demand, ensuring timely replenishment at times of trouble can be a major challenge to the vendors. Every time, when emergency situations arise due to unexpected disasters, keeping up the vendor promise is not practical. System and network outages for extended periods can also make the vendors completely handicapped, taking the inventory management into chaos. When conventional or manual systems are leveraged for data sharing, very often, they result in distorted information that leads to mis-communication, ultimately making mess of customer’s inventory management.

Should Marry Culturally too

Finding the right ‘fit’ between vendor and customer firms is a very rare thing. Value systems, technology maturity, employee mind-set, service-orientation, performance standards, etc., may vary across both organizations. These cultural differences, pose a greater challenge in achieving seamless integration between both parties. Very often, this factor turns out as a major hurdle while executing VMI process.

Impediments in the Way…

‘Information exchange’ is one of the crucial requirements to facilitate collaboration between both parties of VMI practice. Usually, the data with regards to inventory, point of sales (PoS) or demand and sales promotion calendar is provided to the vendor for making timely replenishment decisions. When electronic medium is leveraged for data transfer, data sources and systems of both parties should be seamlessly integrated. However, achieving ‘interoperability’ while linking vendor and customer’s systems is one of the major challenges for successful implementation of VMI. Since data sources and applications are divergent operating on different platforms, ensuring compatibility of such technology integration is a serious issue. As new and sophisticated technologies emerge, or when internal systems are upgraded, convincing the other party of the VMI relationships to upgrade technology is extremely hard.

Information integration is though quite complex and not so a easy task, gaining ‘trust’ between both parties of the VMI is even a greater challenge. Sharing critical information such as demand or PoS data and sales promotion calendar with the vendor is based on the level of confidence and trust that exists between both parties.

On the other hand, personnel of both parties display reluctance to change. In view of the threat of loss of employment, sales force of vendor and buyers or inventory managers of customer organization, resist the move towards VMI adoption. Overcoming this barrier is highly crucial for successful implementation. But, gaining the employees support is not possible without a meticulous employee-benefit program. Very often, such high-level resistance from employees can have a serious impact on the part of VMI implementation team to address the cultural changes required. Both parties should, therefore, explore reliable change management options to overcome employee resistance.

Continuous trend of globalization is leading to the practice of ‘strategic sourcing’ by customers. This will question the viability of managing customer’s inventory, while offering products at a competitive or discounted price.

Bottlenecks Ahead

The ongoing trend of globalization, emergence of extended supply chains, increasing threats and regulations in distribution, and current trends in retail businesses are likely to add few more challenges, predominantly to the vendors and manufacturers. The following are ‘may-be’ concerns that will emerge.

1. Extended supply chain environment is adding new stakeholders like contract manufacturers (CMs) in between vendor and OEMs. This will increase the complexity and distribution costs for the vendor, and creates the need to make changes in their replenishment policies and contracts. Besides, access to inventory data from multiple sources to gain a consolidated view is not so easy task for both VMI parties.

2. Vendors will have to comply with the emerging transportation and distribution regulations in the process of executing replenishment plan, particularly in case of pharma and biotech industries.

3. Similarly, the emerging distribution challenges such as cross-border terrorism or bio-terrorism, etc., should be effectively managed, particularly by the manufacturers when replenishing inventory at distributor or retailer’s location.

4. Retail industry consolidation and the ongoing power-shift from manufacturers to retailers may throw several challenges. One significant challenge could be managing the threat of increased demand for additional services from the ‘big-box’ retailers.

5. Another significant trend in retailing is the emergence of network of multiple retail outlets distributed geographically. As retailer’s operations grow and spread across geography, managing and replenishing ‘islands of inventory’ becomes more complex and challenging.

6. With increasing cost of working capital, vendors may find it difficult to replenish the demanded inventory beyond certain level at customers’ place, at promised rate.

7. As demand variability increases, vendors should make necessary preparations to replenish customer’s inventory, ‘on-demand’. To ensure on-demand inventory replenishment, suppliers should set up distribution centers (DC) or warehouses at customer’s proximity, which may increase the operating costs of the vendor.

Govern ‘Board of Vendors’

Instituting VMI practice across all suppliers is a herculean task. Particularly, manufacturers find it very hard to convince all part/component vendors to offer the vendor-managed inventory services. In the absence of such multi-vendor managed inventory, it turns out to be very hard on the part of manufacturer to ensure absolute ‘synch’ of inventory across all parts/components. On the other hand, governing cross-vendor relationships emerges as a great challenge as multiple vendors agree for offering inventory management services. This leads to the other challenge i.e., managing synchronization of ‘inventory replenishment’ across all parts suppliers.

Manage Cross-Vendor Partnerships

When same parts are sourced from multiple vendors, what is the chance that all suppliers offer vendor-managed inventory services? Infact, it becomes a tough deal to convince every one on the board. Even if everything goes well, ensuring accuracy of replenishment decisions made by each supplier, in isolation, is hard unless cross-vendor cooperation and seamless visibility into the customer’s inventory are instituted. However, on the other hand, cultural differences and lack of process or technology standardization across vendors may strongly affect continuity of operations.

With advancements in data collection and integration technologies, there will be breakthrough improvements in VMI potential. A seamless integration is possible now that can promise real-time visibility into how products are selling, giving the on-demand and accurate replenishment capabilities. On the other hand, the move towards seamless e-business integration and increased adoption of B2B collaboration, are likely to create a congenial environment for the VMI to flourish. As a result of these, vendors and manufacturers are empowered further to reap the true benefits of VMI.

What it Takes to Transform Lean?

2013-01-17T08:57:00.000-08:00

Five-decades old philosophy – lean management, is now extended beyond the shop floors. It is gaining traction in other functions and sectors too, instead just confining to manufacturing houses. During last three decades, many green field manufacturers have successfully demonstrated the value of converting lean. But the question - how to transform lean successfully, yet remains a complex puzzle.

Successfully converting an enterprise or a function into lean is exceptionally challenging and a special area by itself. While returns dominate the risks involved, setting a reliable stage for launching, creating the essential organization climate and changing peoples’ mindset and culture, are herculean tasks. What is dicey thing to most lean practitioners is, what is aimed at, where to start and how to go about. Setting the right direction is possible only via sheer vision and foresight. And this demands mastery in lean thinking and as well as the art of teaching lean principles across the organization. Of course, instituting a learning culture cannot be ignored in such an effort. Gaining momentum across both, board and shop floor is possible through a holistic marketing effort. Infact it is more than a selling job, to the leadership at all levels. Managing sustenance of lean thinking and as well making efforts in that direction is, of sure, more than just challenging. Some times they fall in quite tricky situations not knowing what to answer when people ask about results of lean efforts. Even at a later stage, after investing so much time and efforts the leaders do have hardly anything to show. And therefore, holding people and continuing them to think lean is a continuous challenge. It is also hard to insure employees’ commitment even after buying-in them at the time when lean efforts were actually launched.

Enterprise Change & Transformational Leadership

Transforming into lean is a continuous journey and just cannot be realized overnight. Moving towards lean enterprise calls for a radical change that - people in the boardroom to blue-collar machinists in the shop floor doesn’t wish to undergo. It involves fundamental changes in the organization’s social system before any process can be improved. In one way, lean transformation is a strategic movement and involves massive organization-wide change. To take it forward smoothly and seamlessly, an extra-ordinary leadership with proven expertise, vision and persistence is critical and forms as one of the pillars of successful lean implementation. Very few leaders have the mastery in driving towards lean successfully. For instance, Eiji Toyoda, as a CEO mastered the art of lean transformation. Toyoda was committed and consistently emphasized on lean principles to transform Toyota into lean enterprise. Though lean principles look simpler to understand, they are quite tricky for the managers to integrate into their daily managerial practice. What should be achieved is often a puzzle before the leadership that comes only through at least decade-long lean learning efforts. A true lean transformation should start with learning the lean tools while applying the principles under the guidance of masters. But this can be done only when we believe in the lean principles.

HR and Culture

While all the enterprise sub-systems are equally important, the role of Human Resource (HR) is indispensable. Workforce participation and their involvement help sustain the momentum and accelerate lean transformation efforts. HR departments should, therefore, play a crucial role in realizing the full potential of HR. They should address the challenge of better engaging their full human potential for successful lean transformation. To ensure a smooth sail, a congenial organizational climate is required. A concrete culture of commitment, teamwork, persistence, learning, communication and measurement should be promoted among the organizational members. Above all, a strong and sustained belief in lean principles should be induced in every organization’s corner. If people don’t see immediate results they simply lose faith in it and may give up. Whether CEO or a machine operator, irrespective of their role everyone who is part of the organization should devote an eye to look for lean opportunities. Along with ‘top-down’ initiatives, ‘bottom-up’ lean ideas should be promoted because that’s where the knowledge for lean opportunities exists. After all it is the bottom-line people, who are first exposed to process hurdles, time delays, idle resources, redundant tasks and unwanted steps.

Sustained Focus

Many organizations start off lean initiatives ambitiously but fail to sustain their focus to complete lean transformation. There are hardly companies that have claimed as lean organizations years after they kick off lean efforts. As lean journey is a never-ending story, the management should change its own mindset first. Organizations aiming to become lean should treat lean as a persistent effort to eliminate waste and an ongoing improvement effort. At the same time, it should ensure buy-in from all the employees. Regular attempts should be made by the leadership at all levels to continue or restart the journey. A culture of review and reinforcement of lean activities on a weekly basis at least if not on a daily-basis, should be instituted.

Tools and Practices

Taking care of the human-side is just not enough. Lean success comes only when demonstrated practices are also implemented employing the enabling tools. Practices such as Just-in-time (JIT), business process reengineering (BPR), total quality control (TQC), total productivity management (TPM), continuous process improvement (CPI) and value stream mapping (VSM) are applied on a continuous basis to shape organizations into lean. Six sigma, kanban, Toyota production system (TPS), enterprise resource planning (ERP), etc. are some well accepted tools and/or solutions that enable lean implementation.

There is no hard and fast rule saying that lean initiatives should be started in a big way. It need not necessarily be carried simultaneously across all functions in the organization. Indeed, lean practices and the enabling solutions can be applied based on the objective assessment of available lean opportunities and firm’s goals. Lean transformation efforts can start small in the shop floor or in any function, and slowly evolve into an enterprise-wide movement. But, the real support should come from the boardroom. When lean becomes an organization-wide philosophy, a culture of knowledge sharing in between departments help avoid reinventing cycles.

Solid, Sponsored & Synchronized Intiative

Evolving into a Lean Enterprise will take a firm, almost 18 - 24 months on an average (“Building a lean enterprise” by AME Info, November 20 - 2004). Though a path-breaking strategy to achieve growth, the Lean Enterprise journey is not a simple or easy task. For many firms, it requires more than just changing their functional practices and associated work cultures. A solid road-map is critical to transform into a lean enterprise. Most importantly, lean should be the business priority. Top management support and sponsorship is critical, as the line managers usually resist unless there is pressure from the top. As part of developing the business case, the departments should articulate the need for improvement. Change towards an operational culture should be encouraged, wherein the employees feel empowered to make suggestions without fear. Ongoing reviews such as Kaizen events can help address such challenges. A lean organization should be built around a flexible, demand-sensitive model, where production is driven by customer orders and not based on forecasts. Therefore, to realize lean organization, all activities internally across departments should be coordinated and synchronized. The lean journey should also entail extending operational flexibility and visibility to the supply and channel partners

Fix the New Millennium Challenge

Many green field companies have demonstrated lean success in last few decades. But the situation today is different. Short leadership tenures, age-old facilities designed for high-volumes, real or near-time performance visibility, etc. all makes it hard to practice lean. As the story today is different the lean approach to be applied should be also different. Even if there is a change in the senior leadership, management should ask successors to continue lean efforts with same level of importance as it was. With globalization, for many firms, the business operations are global. Hence, the facilities should be redesigned for ‘high-volume, high-product mix’, so that lean application becomes feasible. Globalization has also given rise to a multi-cultural challenge. A huge challenge, which if ignored will simply jeopardize the lean success. Above all, ensuring early and continuous results is critical to instill faith among employees regarding lean practices. Further, it keeps the drive on by continuously motivating and involving employees. Technology enablers that forms critical support all the way through shouldn’t be ignored. In a nutshell, the mantra to transform lean is ‘people, culture and commitment.’

Business Consulting Gives Transformation Capabilties

2013-01-17T07:53:00.001-08:00

Several organizations simply don't possess the change management capability and resources required to build renewed capabilities. Essentially the explicit resources including infrastructure and technological resources along with expertise required are often inadequate or absent in most firms.

Many studies have revealed that the greatest limitations in achieving such radical changes in the businesses are the lack of, internal capabilities and effective leadership resources to plan and execute. As many organizations simply do not have the change management capability and resources required, they are looking to leverage the knowledge and resources of a third party provider who has a comparative advantage in reforming the business processes that are key to the organization’s strategic growth. Advisory services, are therefore, crucial for any business enterprise wanting to transform, adapt and sustain in today's web-speed economy.

Embracing ‘strategic sourcing’ of management research and advisory services from a reputed consultancy firm or management institution offers the following benefits:

1. Access to specialist expertise and the experienced

2. Quality research

3. Accurate analysis

4. Exact findings

5. Reliable recommendations/suggestions

6. Serves the actual purpose

7. Significant time and cost savings

8. Access to information/data sources/reports (usually required to analyze business and competitive situations)

9. Allows firms to focus on their core business activities

10. Renewed or enhanced competence

11. Access to infrastructure and technology resources

In the absence of full-fledged resources, internal capabilities, expertise, technology, business intelligence, experience and external relations, consultancy services can help business organizations know the right, do the right and move in the right direction. At times of criticality with constrained resources and capability, sourcing of research or advisory services from the right consulting organization, is the best and cost-effective way, being practiced so far by several business and public enterprises.

Are corporate recruitment practices fool-proof?

2011-02-28T01:00:00.000-08:00

Internship Promises Right Selection

Recruitment at entry level needs drastic change in the way it is carried out today. Psycho-graphic test, skill test and personal interview are some of the HR selection practices of corporate world. But are they fool-proof? Do they ensure selection of people with right attitude and behaviour every time? Don’t they let out right candidates sometimes? Though these practices are time-tested, many a times, they were found questionable. Quite often, true qualities of shortlisted candidates expose only after their selection and deployment. Attitude or skills, or both could be found flimsy. If skills match, either attitude doesn’t suite or traits and behaviour will be inept. Attitude, though found to be good, skills may be incomplete.

Just an instance of interview may not reveal true qualities of applicants. 360 degree personality cannot be assessed in little time. Conditioned behaviour hides applicants' real attitude during the interview. What is tangible may not be real. Interviewee might pretend to be good and display artificial behaviour. Even the most sophisticated psycho-graphic tests have sometimes failed to capture real traits. Despite selection, past references doesn’t exist for cross-verification. Attire and etiquette, could be either real or unreal. Physical presentation including body language might be artificial. Thus selection methods constrained by time and failing to contain conditioned behaviour will not reveal true personalities of the candidates.

Though aptitude & skill tests are dependable, there are chances of missing right aspirants. Often performers do not carry themselves well through aptitude tests and technical interviews due to psychic or health conditions at that moment. Personal and family concerns might affect psychic state. Any ill-health, at the moments of truth diminishes strength to perform. Factors like ergonomics, unreliable aids, excess room-cooling, etc., may also affect performance. Above all, traveling, long waiting times and restlessness make them inactive or exhausted. With all such possibilities, chances of ignoring performers prevail. Though shortlisted ones possess required skills, their actual performance in real world will remain unknown until deployed. Except academic record, no practical references exist for verification. Hence, even a well planned skill test or technical interview may not qualify every performer.

Aspirants can be thoroughly assessed from all dimensions when they’re exposed to real world. Only through several observations, a person’s attitude, behaviour, knowledge and skills can be determined with confidence. To make adequate observations, it requires reasonable time period and right setup. Ideal testing grounds are therefore, real workplaces. Workplaces offer natural selection environment as they hurl right problems and contexts where true skills, performance and traits are visible. Hence, recruiting prospects as ‘interns’ to work on part-time or full-time (during vacation), is a promising solution. Internships are lengthy and hence opportunities for adequate observations. Reasonable time span of internship mean minimum personal constraints and therefore, ideal for assessing personality. Being manifested as part of the real work, interns’ capability and compatibility with prevailing organization cultures also could be tested.

Manage People or Perish

2011-02-03T22:36:00.000-08:00

Trivial HRM deficiencies can lead to business fiasco. Unprofessional and deficient human resources (HR) administration systems give scope for chaos like irregularities in workforce attendance and leave administration, discrepancies in pay, misused or unauthorized travel expense, errors/delays in reporting, etc., leading to HR, decision-making and performance issues.

Minor deficiencies like absence of adequate attendance tracking systems will result in indiscipline or non-availability of employees and executives. Discrepancies in pay as a result of mismanaged leave or payroll and other grievances arising due to misinterpreted HR policies may cause frustration among hardworking lot declining employee satisfaction and morale. HR staff becomes unproductive resolving unnecessary hassles. Performance appraisal and development systems become dysfunctional affecting professional training and employee performance. Such sticky situations will not only result in productivity issues but also employee turnover negatively impacting employer brand. This limits further recruitment and workforce quality. In the absence of mechanism or work-flows for managing human resources or for approvals and easy-to-use tools to follow HR practices and policies, HR processes will be considered as a hindrance to routine jobs. So manager and employee accountability is lost.

Insufficient or delayed HR reporting makes it difficult for managers and decision-makers to analyze HR/workforce trends, expenses, etc., affecting quality of business decisions. Mismanaged travel expense, salary and benefit administration will impact company’s budget or financial health. Unavailability of executives, lack of professionalism, reduced staff morale and reduced workforce quality -- all result in reduced staff productivity, poor service quality and lost customers or sales.

What It Takes To Be a Total Management Academician (TMA)

2011-01-27T22:20:00.000-08:00

Management landscape is fast evolving driven by globalization and several other trends in industry, market and technology. It calls for meaningful contributions from management educators in various capacities. Academic professionals, in such a dynamic discipline should evolve through 3 different stages viz., Expert, Innovator and Thought Leader. Young, budding and mid-career management teachers should foster innovation, build competencies and nurture qualities crucial to engage in these capacities:

Stage 1: Expert

An expert academician is one who can deliver broad insights and advocate solutions to management problems. To develop as a domain expert one should gain comprehensive, solid and up-to-date knowledge besides choosing right delivery methods. Continuous research & analysis and professional networking aid in gaining contemporary insights and wide exposure required to emerge as domain expert. Innovativeness facilitates multidimensional thinking and development of effective delivery methods while communication, analytical and design skills assist in effective delivery of knowledge and solutions.

Stage 2: Innovator

Management Educators should also craft broad solutions to equip industry professionals deal with emerging issues and challenges effectively. They should as well, contribute to the development of management practice. It requires academicians to identify, understand and analyze problems to develop breakthrough models and frameworks. Research and networking help emerging academicians in knowing real-world management issues while application of analytical and innovative thinking combined with domain expertise lead them to invent widely acceptable solutions.

Stage3: Thought Leader

Evolution of industry and management practice require thought leaders to envisage future, direct thought and offer road-map to the next generation professionals. It involves touting theories based on broad observations, providing right direction and offering guiding principles for further advancement and excellence. While forward-thinking nature drive academicians to frame valued principles, skills like research, professional networking and analytical thinking aid in the process of understanding future.

Three academic roles essentially implies that Management Educators, to evolve as bright, contributing and full-fledged academicians should build six core skills/qualities viz., research-orientation, design skills, analytical thinking, innovativeness, forward-thinking and professional networking keeping abreast with domain knowledge and defining a clear vision.