CRM or CMR?

We all are quite familiar with the concept of CRM: Customer Relationship Management.

Needless to mention how important it is for the organizations to manage the all the touch points with the customers. As the competitive scenario intensifies organizations are pooling more and more resources in order to hear the voice of the customers streamline it with the voice of the processes and provide more value to the customers.

One of the recent trends in the supply chain is of Customer Managed Relationships.

The question that should be coming to your mind will be how it is different from Customer Relationship Management! Well, in case of CMR the customers are responsible for managing their relationships with the organization. Seems interesting right, appears to be one of those flaunted “Blue Ocean Strategy.”

The fact is that it is! With the rising awareness of the “green concern” , “eliminate waste” few organizations have managed not only to reduce the cost of the offerings thus enhancing the perceived value of the products but with “green supply chain” have earned the reputation with which customers wants to associated with. Thus instead of pooling most of the resources in managing customers the organization is much more focused on creating associations which calls for customers managing relationships by themselves.

Resolve Dissolve or Solve – Dilemma

Think about it! What is the best approach to sort out an issue? Should you attempt to solve it, resolve or dissolve it?

I wonder if you have ever thought of all these three option; however my love for process and supply chain management did force to think. So I just thought of sharing my thoughts with you people.

Resolve approach seems to be of reactive kind; you resolve an issue or a problem when you encounter it. Of course doesn’t seem like a good approach when time is resource are limited and results are paramount.

Solve approach seems more active; however the focus here is also on sorting out an issue and delivering results.

Dissolve approach on the other hand though appears to be a reactive approach but imbibed in it is the essence of project management. Here we do not only look to sort out an issue but at the same time moves a step ahead and look forward to the root cause and eliminate (dissolve) it.

My opinion is that embodying “dissolve” approach in your every day activity may initially consume a lot of time but the fruits it will bring to you might cover up much more in the long run.

A case study on Raymonds Supply Chain

The various brands under the Raymonds umbrella are: Park Avenue, Colorplus, Parx, Notting Hill, Manzoni etc. The company is one of the largest integrated manufacturers of worsted fabric in the world and commands a 60% market share in India. Raymonds in India has huge plans of expansion in the retail segment. With this in mind huge investments have been made at its existing plant at Vapi and investments have also been made to set up new manufacturing units at Bangalore and Kolhapur. This goes to show the increasing focus, the company has on distributing its manufacturing units across different regions in the country so as to be able to respond faster to the customer demands.

According to Mr. Gautham Singania, the Chairman and Managing Director of the group, “The difficult part we face is getting the right supply mechanism for materials and the manpower to improve the efficiencies in delivery of the product.” A unique feature of the Raymonds supply chain is the launch of Extranet - a B2B e commerce channel. The thought behind this introduction is to connect the company’s marketing and sales teams with its external business partners like dealers, agents, franchisees in the textile business division. Through this they believe they can speed up and improve the distribution channels across the country. This will give them more flexibility and enable the stockists to place their orders directly on the net. The Raymond Apparel Ltd. a complete subsidiary of Raymond Ltd. has also implemented a supply chain management package based on the Oracle platform. With this, they hope to smoothen out both ends of the supply chain.

Unlike some other garment companies in the industry, Raymonds Ltd. has configured its supply chain based on a pull system. The customers can pull what they want from the manufacturing base of Raymond through dealer based distribution networks. Raymonds has a supply chain that is a vertically integrated composite network of different operations that produces only as per the demand. The problem this could have is increased lead times and fails to address the challenge of quick response to customer demands. Increasing product variety makes the problem even worse. 

A case study on Arvind Mills Ltd Supply Chain

A very distinct feature of Arvind Mills Ltd is the fact that its brands work across multiple channels, price points and customer segments. These are brands that are distinctive and relevant across diverse customer segments. Some of the brands under Arvind Mills are: Wrangler, Excalibur, Flying Machine, Newport, Ruf & Tuf, Arrow, Izod etc and its customers include Levis, Lee, Tommy Hilfiger etc.

The supply network finally reaches the customer touch points through over 275 stand alone brand stores across the country and more than 975 counters selling multi brand retail outlets an key accounts across India. Arvind Mills Ltd is one of the largest denim manufacturers in the world and has configured its supply chain based on “push” system. Under normal operating conditions, Arvind manufactures denim “sorts” based on monthly forecast to stock at various warehouses. As Arvind Mills “pushes” its products (sorts) to ware-houses, actual selling takes place on an ongoing basis with the “sold sorts” are being replaced subsequently. The “Push” system operates under the “make-to-stock” environment.

While the system has worked efficiently at Arvind for years it becomes difficult for a company to follow the same where a high demand fluctuation exists. A Push-based supply chain accumulates excessive inventory (“cycle stock” and “work-in-process”) by the time it responds to the changing demand. In addition, since long-term forecast plays an important role, it is difficult to match supply with variable demand. “Push” supply chain also entails larger production batches, incompatible for catering demand of short quantity.

Another interesting feature of the supply chain is the intense reach Arvind Mills is targeting. With increasing disposable income available in the rural areas as well, the company is trying to

make shirts at affordable rates available at grocery stores and petrol pumps. It has also started selling shirt bits instead of multi meter long rolls which once dominated the retail shelves.

A case study on Madura Fashion & Lifestyle Supply Chain

A division of the Aditya Birla Nuvo Ltd, Madura Fashion & Lifestyle is one of India‟s fastest growing branded apparel companies and a premium lifestyle player in the retail sector. After consolidating its market leadership with its own brands, it introduced premier international labels, enabling Indian consumers to buy the most prestigious global fashion wear and accessories within the country.

 Some of the famous brands under the Madura Fashion & Lifestyle umbrella are: Van Huesen, Louis Philippe, Allen Solly, Peter England, People etc. These brands have an image of attitude, comfort, luxury and style. What makes the supply chain of Madura Fashion & Lifestyle remarkable is the incredible retail presence it has in India. It has over 850 exclusive and franchise stores spread across the length and breadth of the country and over 2000 multi brand retail outlets both within and outside the country. It has also entered into a distribution agreement with the international brand Espirit which is also another feature of the Supply chain as it is used to increase its international presence.

An IT and web enabled organization, Madura Fashion & Lifestyle is the first apparel company to have successfully implemented the ERP, SAP system and the first company globally to integrate Retek ERP with SAP ERP. These are significant features which improves the efficiency, planning process, coordination and information visibility across the supply chain. Another feature of the supply chain is that it has not restricted its suppliers or immediate customers to Indian players. It has for more than a decade now sourced technology, fabrics and garments globally. It is also an international supplier to sophisticated international brands like Tommy Hilfiger and Marks & Spencer‟s.

A manufacturing unit of the company became the first apparel manufacturing unit to win the prestigious quality excellence award, The Ramakrishna Bajaj National Quality Award, instituted by the Indian Merchants Chambers and the house of Bajaj. This clearly goes to show the emphasis on quality the company has in the make stage of the supply chain also.

New Product Launches and the Supply Chain

When we talk about sustainable competitive advantage, we always mention that innovation is the key to it. When all the companies round the globe know about it why still about 80% of the new product launches fail in the market? Innovation is a key competitive weapon in today’s marketplace. And yet, companies have trouble getting their products to market. 

Prominent failures highlighted in the recent press include delays in the launch of Airbus 380 that potentially wiped off five billion Euros of the value of its parent company and Sony’s struggle to make sufficient Play Station 3 consoles for the holiday season. Toy4us was doomed for not meeting the customer’s expectation of delivering toys before Christmas evening.

Studies imply that developing and launching new products is becoming harder. Why is this so? While increased intensity of competition might partly explain this, we believe that the lack of a better understanding of the critical role of supply chain in innovation is one of the key contributing factors.

Traditionally, product launch decisions have been considered a marketing function. The success of a new product and its launch, however, critically depends on all aspects of the supply chain from design to sourcing to manufacturing to distribution. To ensure the success of a product launch, one needs to pay close attention to supply chain design, sales and operations planning, as well as supply chain coordination. The criticality of the various supply chain activities will depend on the nature of the innovation. Finally, companies need to create a launch process, identify key stakeholders (marketing, supply chain, finance, and operations), establish key metrics and develop a dashboard for launch readiness and success 

Business Process Re-engineering Vs Business Process Management

Please do not be misguided; the following discussion is not focused on the difference between the Business Process Re-engineering and Business Process Management but on aligning various schools of thoughts.

Business Process Management is considered to be comprised of four distinct stages:

1. Process Identification and Information gathering
2. Process Mapping
3. Process Analysis
4. Process Improvement

Now we have one school of thoughts which says BPR is a part of TQM, as it is involved in the improvement of the processes just like TQM. This means that already existing processes are considered as important and useful, and improvement is based upon the current “as is” process.  Thus BPM focuses more on continuous improvements.

However the other school of thoughts suggests that BPR is entirely different philosophy, as it considers the existing processes as useless and generates innovative process design with dramatic results. Also because BPR is a risky proposition and involves high agility, an organization could not be in “BPR” stage throughout. BPR focuses on breakthrough innovative approaches.

I feel that both of the above thoughts could be combined in figure 3

BPM supersedes both BPR and TQM without a doubt as BPM is more a strategic orientation but BPR and TQM both have strong operational view of process improvement. Though, TQM and BPR both have different approaches towards process improvement but as mentioned that they both have strong operational view of process improvement so they can be separated but will still be inside the superset BPM. 

Borrowing the concepts of supply chain: Where Lokpal could fail, RACI can still work!

If you are one of those Facebook freaks, you sure will be more informed about the aspects of the Lokpal bill, then those who watch the bias views on television.

In case you are geeky person, who is most of the time busy either with his computer or mugging notes; now is the good time to read about the Lokpal bill so that you can understand this new concept of RACI in a better way.

Now for those who think Lokpal is a perfect tool to eliminate corruption think again.

What do we do when we identify a flaw with the system? We find the person responsible, humiliate him, punish him, and then we believe we have corrected the system. Of course we did but temporarily!

Now let me introduce to you our borrowed concept of "RACI".
R : Who is Responsible ?
A: Who is Accountable ?
C:  Who should be Consulted ?
 I:  Who should be Informed ?


RACI says that you should not only be finding the person responsible for the process but also the person who is accountable or owner of the process. System could only work efficiently when the person who needs to consulted and informed about the recent developments are kept in loop and adequate efforts are put on sustaining and enhancing the system.

Now do you feel the difference of how things are done and how should they be done?

Identifying only the first actor solves only the part of the puzzle; we do need to move beyond to improve the system performance and the processes performance.

Supply Chain Vs Value Chain : Do you know the difference

Ever Wondered what is the difference between a value chain and a supply chain?

If you haven't thought about it; now is the time! In case you know the answer then you must be one among the brilliant souls who has ever walked down on earth; In case you don't read on to enrich yourself with one of the management fundamentals.

In common practice, a supply chain and a value chain are complementary views of an extended

Enterprise with integrated business processes:

• Both chains enables the flows of products and services in one direction, and of value as represented by  demand and cash flow in the other.
• Both chains overlay the same network of companies.
• Both are made up of companies that interact to provide goods and services.

Then where lies the difference?

When we talk about supply chains, however, we usually talk about a downstream flow of goods and supplies from the source to the customer. Value flows the other way. The customer is the source of value, and value flows from the customer, in the form of demand, to the supplier. That flow of demand, sometimes referred to as a “demand chain” is manifested in the flows of orders and cash that parallel the flow of value, and flow in the opposite direction to the flow of supply. 

Thus, the primary difference between a supply chain and a value chain my friend is a fundamental shift in focus from the supply base to the customer.

Supply chains focus upstream on integrating supplier and producer processes, improving efficiency and reducing waste, while value chains focus downstream, on creating value in the eyes of the customer.

Integration - Recent Trends in Supply Chain -Part 2

Now that when you have learned the concept of Convergence, let me provide with one more interesting concept which will help you in understanding the next recent trend in the supply chain.

Now we are going to talk about four types of uncertainties which have been haunting various industries for centuries. And in case you can find a break through solution to solve few of the untamed one –bingo, you have earned a billion $$$ my friend.

The four types of uncertainties are as follows:

Process uncertainty, control uncertainty, demand uncertainty and supply uncertainty.

Of course I can provide you with the definitions of all of them, but I am shrewd person who have a personal agenda of not allowing you to become a billionaire. Therefore I will want you to search about them on your own, and maybe, just maybe you may stumble upon some more good pointers which may further help you.   

Now let’s get back to topic.

Organizations have found it easier to tackle process and control uncertainty with a relative short term planning, emphasizing more on cost control and adherence to the laid processes. In order to control the supply uncertainty all work processes have been integrated, EDI has been deployed vastly.

The most difficult task across industries is to take care of demand uncertainty. Excess inventory of finished goods causes overall supply chain costs to go high, on the other hand lack of inventory may create stock outs which has much greater costs. Organizations have now focused in integrating all the members across the supply chain, synchronizing the material flow across the supply chain and finally engaging into a new concept of CPFR (Collaborative Planning Forecasting and Replenishment).

Thus we see that recent trends suggest a movement towards risk adjustment and Integration of supply chain across all members.

Convergence - Trends in supply chain - Part 1

Today I will like to talk about various recent trends that are observed in the supply chains across globes. Although details of these trends could be found if searched on internet, my purpose of mentioning them here to provide a pointer to the information, which else would have take a lot of time to be discovered or identified.

It will be difficult to imbibe loads of information on one go therefore; I will be providing details regarding the recent trends also in the coming posts.

Let’s begin with the concept of vertical vs. virtual integration.

One of the most recent trends is the movement of industry from Vertical integration to Virtual integration that is outsourcing. Of course the concept of outsourcing is not new to anyone but complications involved with outsourcing are immense. Given that so much is outsourced to the suppliers that they truly appear to be an extension of a firm’s own business. Therefore in order to succeed what is most important is to merge their metrics with firm’s own metrics. 

This dear friend is called CONVERGENCE. The phenomenal new trend which aims at enhancing collaboration, reducing costs and improving profitability across the supply chain.

Oil expense Indicator - Symptoms of another slow down?

Recently I came across an interesting concept of “oil expense indicator” and how it has impacted the economies round the globe.

The importance of oil cannot be underestimated.

Oil is a key global cost because it is crucial to every part of the economy, powering manufacturing and the production of food and other commodities, fuelling transport as well as being a building block for industries such as plastics and electronics.

Oil expense indicator is defined as the share of oil expenses as a proportion of worldwide gross domestic product (GDP).

Since the year 1965 this ratio has hovered around 3% and has exceeded 4.5% only during three periods: 1974, between 1979 and 1985 and in 2008.

•          1973-1974: The first global "oil shock", oil prices rocketed after an Arab oil embargo in response to an Arab-Israeli war disrupted oil flows and triggered panic buying.
•          1979: Revolution in Iran affected most of the country's oil output and was followed by a long Iran-Iraq war, bringing a second "oil shock".
•          2008: The burst of house bubble propelled speculative buying of new debt instruments and as a result oil prices exceeded 100$ a barrel and went to as high as 147$ a barrel.

James Zhang, an analyst at Standard Bank, says the danger level comes with the oil expense indicator at around 5%. "$100 per barrel represents about 5% for the 'oil expense indicator', which we think would be a threshold on an annual average level to potentially kill off global growth," he said.

With US default crises, the price of Brent oil has come down to around 100$ a barrel. However if the U.S. government decides third phase of quantitative easing it will result in relative increase in the commodity prices including oil again.

No doubt the consumption of oil has increased to a much greater extent because of developing economies like India and China, but the high price of crude has hardly to do anything with real demand and supply of oil. Speculative trading in commodity has caused disproportionate increased in the price of oil and unless a limit is imposed on speculative trading of oil and other commodities, there exists a good chance that “oil expense indicator” may indicate bleak future. 

Leadership Styles

Leadership Styles

I came across different kind of leadership styles. I decided to collate them all together for audience to refer and to find out which style they fits into and which style they need to work on adapt to changing scenarios

There are different types of leadership styles, each proving effective depending on the given circumstances, attitude, beliefs, preferences and values of the people involved. In this article, we're going to discuss 7 of these leadership styles. Each item in the following list contains at least one famous example of each leadership style. Every famous example of each leadership type showcases the fact that different kinds of leaders can implement the same kind of leadership. The first style of leadership on this list demonstrates this in an extreme way.
For more detailed descriptions of each method, be sure to check out Bright Hub's collection of articles that analyze all leadership styles.

Charismatic Leadership

Charismatic Leadership is one of the modern leadership styles in the changing world. In this kind of leadership, the leader uses charm to get the admiration of their followers. They show concern for their people and they look after their people's needs. They create a comfortable and friendly atmosphere for their followers by listening to them and making them feel that they have a voice in the decision making. Famous examples of charismatic leaders are Winston Churchill, Bill Clinton, Mother Teresa and Adolph Hitler.

Participative Leadership

This kind of leadership is usually seen in corporate settings. Leaders act more like facilitators rather than dictators. They facilitate the ideas and the sharing of information with the end goal of arriving at a decision. The final decision ultimately rests on the leader but all considerations and factors of a decision come from the collective mind of the group under this leadership. A famous example of a participative leader is Donald Trump.

Situational Leadership

In situational leadership, three factors affect the leader's decisions: the situation, the capability of the followers and the capability of the leader. The leader adjusts to whatever limitation is laid out in front of him by his subordinates and the situation itself. Adaptability is key here. The leaders need to be as dynamic as the different situations they are faced with. A famous example of this leadership style is Dwight Eisenhower.

Transactional Leadership

In this kind of leadership, a clear chain of command is established. The leader motivates his subordinates by presenting them rewards and punishments. All requirements for a subordinate are clearly stated with corresponding rewards. If they fail to satisfy those requirements, they will receive a corresponding punishment. A couple of famous examples of transactional leaders are Joseph McCarthy and Charles de Gaulle.

Transformational Leadership

Transformational leaders lead by motivating by their followers. Leaders appeal to their followers' ideals and morals to motivate them in accomplishing their tasks. Basically, these kinds of leaders empower their followers using their own beliefs and personal strengths. Simply put, they inspire their followers. Famous transformational leaders include Martin Luther King Jr. and Walt Disney.

The Quiet Leader

The quiet leader leads by example. They do not tell people what to do. They do not force people to do things that they are not willing to do. They do not give loud speeches, sweeping statements and clear cut orders. They do what needs to be done, inspiring their followers to do the same. Famous examples of the Quiet Leader are Rosa Parks, King George VI, Abraham Lincoln and Woodrow Wilson.

Servant Leadership

In servant leadership, the leader takes care of the needs of his followers first before they take care of their own. Instead of acting like a king to their subordinates, leaders act as servants. The leader feels that they need to serve their followers rather than force upon them what they want. Famous examples of servant leaders include George Washington, Gandhi and Cesar Chavez.
These leadership styles are much easier to understand if you picture the famous example of each leadership style.

Choice: reflection or transformation!!

Try not to become a man of success, but rather try to become a man of value.’: Albert Einstein

We all have been provided with a number of incredible gifts that are often times overlooked. One of such incredible gift provided to you and me is the power of choice.  We all know that at every stage in life an individual is suppose to make choices. These choices represent a fundamental tool that we use to deal with the opportunities, challenges and uncertainties that life offers. This we can safely conclude that the kind of quality of life we have been having and we will have depends upon the choices that we make. 

In order to lead a successful life, an individual is supposed to make right choices. But what constitutes a successful life? Is it the monetary gains that define a successful life? Is it the fame earned that defines the successful life? Is it a satisfaction to have led a respectable, ethical life that defines a successful life? Success is a fuzzy word and means different thing to different people. For me a success is to stick to my ethical values and achieve career growth while clinging on to it. I believe that honesty and integrity are the prime virtues that separate humans from other species. In my life I have experienced that sometimes mistakes committed by me adversely affects others. Thinking back in time and recollecting my experiences I can safely deduce that I always had a choice. One option was to blame my mistake to someone else and let that guilt haunt my heart to eternity. The other option was to own up the mistakes, appease the stake holders and make a commitment to not to repeat it in future. The second option gives me a chance to stay happy and live cheerfully.

If an individual have a strong ethical stand, compassion solution can be figured out easily. There have been instances wherein significant short cuts could have aided me in gaining significant advantages in my academic and professional career. I still not chose to consider any of those choices for a simple reason that I know at the end of the day I am only answerable to my conscience. If my conscience does not allow me to move along a certain path or is in dissonance with short term goals, it will haunt me.

In short I understand the fact that If only my actions, my thinking brings me peace, I can be happy. My ethics matters most to me. I can never move forward with an action that may cause dissonance with my inner self. The question arises how far this conviction will guide me ? The fallen angel "Lucifer" is know as the Satan today, do mere mortals like you and me could really pass through the test of time? Nothing could be concluded in such short interval. It is not that the seven deadly sins have not crossed their path with you and me, but they do have varied in intensity, opportunity and rewards. 

Life was never easy, it will never be. The seduction that choices bring with them, in a short term enhances material gain, but in long term transforms the entire gamut of our personality.

Freedom of choice is a luxury that we have. But are we willing to take the responsibility of the consequences that our choices bring with them? I think answering this question may not solve the issues running in my mind but they do guide me to the right path..don't you think so?