SAFEXPRESS

 Safexpress has created benchmark in terms of the “Knowledge Leader” in the Supply Chain & Logistics Industry. With the mission of adopting and internalizing a work culture demonstrating a “We can We will” attitude to reflect in daily responsibilities with exceeding objective towards market dominance., Safexpress has vision of conscious learning organization maintaining flexibility for change for providing the most customized solutions. The company has expanded its reach to 560 destinations across India through more than 3,600 GPS enabled vehicles, across 35 states and union territories delivering 80 million packages a year, with ware house space of over 6 million square feet. With the operations of 24 X 7 in real time Safexpress provides Express Distribution, Third party Logistics services & supply chain Consulting. By Implementing Innovative and benchmarking services, the company has given a new face to Supply Chain & Logistics Industry.

As a service provider of third party logistics, the company allows the clients to focus on their own core competencies. Which means clients can focus more on the expertise of field leaving the logistics expertise to Safexpress. The ever increasing need for technological flexibility is another important advantage of the use of Safexpress as the third party logistics provider. The Company has been able to cope up with the advanced technology coming in the Logistics Industries. Thus outsourcing logistics to the Safexpress reduces the lead time and improves the service level. Safexpress provides Technological Flexibility to the client. The company gives flexibility to the client for the service in the different geographical location.

Investments in coss-docking strategy has given Safexpress The Competitive Advantage. In such strategy warehouses function as inventory coordination points rather than as inventory storage points, so goods arrive at warehouses from manufactures and are transferred to the retailer’s vehicle, so that delivery time can be reduced as much as possible. Thus Safexpress indirectly cuts down  the inventory cost of manufacturer/distributor & decreases the storage time which finally leads  to reduction in lead time. But all in all cross-docking needs an initial investment and startup setups. Still Safexpress has managed to implement it by-
        o   Linking Distribution centers, retailers and supplier by advance information systems

        o   Fast and responsive transport system

o   Accuracy in forecast by multistage information sharing



All these have not only added value to the manufacturer/distributor but also to the whole Supply Chain Process. 

A unique value-added Supply Chain & Logistics Service, Reverse Logistics has reduced the time and cost involved in carrying defective parts. This kind of logistics is generally used for shipping the defective parts from retailer to distributor and finally to the manufacturer. Safexpress directly takes these defective goods under its possession and moves them to its warehouses where they are repaired and re-shipped.  Services such as reverse movement of goods, repacking, re-labeling, refurbishing provided by Safexpress was a step to reduce the time and cost involved in the backward supply chain & prevented customer dissatisfaction, cash lockdown for the retailer and a rise in the distributor‘s inventory. For providing reverse logistics to clients, Safexpress has deployed reverse logistics centers, where they stock thousands of Stock Keeping Units (SKU) of the client and employ well trained professionals to handle the product. Indeed, Safexpress has revolutionized the Logistics Industry in India.

 The writer of this article, Amol Deogade is a PGP student of Indian Institute of Management, Raipur and has done his B.E. from Government College of Engineering, Amravati. Prior to joining IIM Raipur, Amol was working at Cognizant Technology Solutions. Amol can be reached at titanamol@gmail.com

The Power of Trust in Manufacturer-Retailer Relationships

Manufacturers and retailers have almost always been adversaries for each other, each trying to gain leverage over the other for better profit margins. Another fact is that manufacturers have had the upper hand in this conflict for most part of the history, as they are usually huge conglomerates or powerful entities as compared to retailers. Only in the recent times have the retailers gained significant strength owing to the emergence of mega-retailers or supermarkets or buying alliances.

The aforementioned conflict seems like a necessary evil, and obviously has its disadvantages for the manufacturers and the retailers:

1.      The victim tends to have payback whenever there is a change in the position of power.

2.      The victim always tries to find a way to escape the oppression, often harming the other party in some way or another.

3.      This conflict represents a loss of opportunity, wherein the two parties could have worked together for mutual benefits as well as provided greater value to the end consumer.

If the manufacturer-retailer relationship is based on trust, it leads to the following benefits:

1.      The retailer shows more commitment towards the manufacturer, which can be observed from the relatively better performance in terms of sales.

2.      The trust preserves the relationship during patchy times, especially when one of the partners goes against the will of the other.

3.      The two partners can easily share some of their confidential information for mutual benefits. They can also customize their information systems or dedicate their people and resources to serve each other better.

Another aspect of trust is that it encourages interdependence instead of independence. This, at first, might not be very comfortable for most organizations, but it is always advisable to develop long-lasting relationships based on inter-dependence. Additionally, no manufacturer can completely trust its retailer, and vice versa. There are at least a few aspects where the two partners can’t trust each other completely, as they do have some goals that are not in synchronization with each other. But these limitations are not strong enough to impede the development of a mutually benefitting relation.

The key to creating trust is to treat the weaker partner fairly, which not only means giving the partner a fair share of the profits and benefits, but also makes it essential for the stronger partner to ensure free and bilateral communication, impartiality among the different partners, respect, courtesy and transparent policies. Besides, complicated and lengthy contracts also hinder a healthy and strong relation.

Another aspect is that such a relationship might not be possible with every partner. Thus it is very essential that the partners be chosen judiciously. An easy way to judge the suitability is to see if the values of the potential partner match those of the seeking organization.

Procter & Gamble and Wal Mart represent an extraordinary example of a manufacturer-retailer relationship based on trust, even though they are both huge and powerful and used to be very tough adversaries of each other. They have gained a lot from this alliance over the years and are representing an inspiring, but not rare case in this regard.

The writer of this article, Akshay Agarwal is a PGP student of Indian Institute of Management, Raipur and has done his B.Tech from Indian Institute of Technology, Guwahati.

Operations & Services- Hospital Industry

In today’s scenario if a customer is ready to pay anything for medical treatment then he won’t compromise on the services even a bit. The question arises does operating a hospital or for that reason any other big chain in the hospitality industry goes without any study or is there a “science” that goes behind managing the show. Well the answer to that is that any hospitality industry has got a dedicated team that takes care that everything goes smooth and the customer gets value for his money. Operations Management in a hospital is one such job that takes care that the process and administration goes smooth. By the fact that hospitals are literally turning out to be more of a hospitality industry the job becomes even more challenging.

              Apollo Hospital, Bilaspur (Chhatisgarh)

Amongst the many hospital chains in India , Apollo Hospitals stands out as a name of trust  in case of any medical treatments.  Apollo Hospitals is a chain of hospitals started by Mr. Prathap C Reddy in 1983 and today the chain has got hospitals in as many as 9 countries across the globe. The chain manages more than 53 hospitals across the globe with each of them having impeccable services. 

Apollo has made it a point to have key international standard certifications under its brand name and this keeps the standards of the chain high. In fact the hospital at Hyderabad was the first hospital outside USA to have an accreditation from Joint Commission International (USA).

 Through a central networking Apollo makes sure that all its hospitals have similar standards and quality is maintained across. Apollo manages hospitals for its partners (non Apollo Hospital) as well and takes over the operation of that hospital in the process. All the partnering hospitals gain from the central purchasing of Apollo Hospitals which in turn brings in monetary benefits to the partnering hospitals. A hospital in Nigeria to which Apollo had given its operations expertise could actually bring in 86% per bed day increase in its revenues.

To keep up to the standards and quality there is lot more than medicine that goes in for the strategy.

Most of the doctors in Apollo will be highly qualified an in many case have experience in western countries.  Apollo makes sure that it maintains a relation with its customers even after they have returned home. A special customer relation cell would take care that nothing from the patient goes unheard. At employee level there is a constant interaction between the management and the staff/employee to make sure that satisfaction levels are high. In case of Medical Technology,  the group makes sure that it has got some of the best medical equipments in the world.

 These are some of the technique which differentiates one from the masses and brings in competitive advantage. Though most of the organizations that excel, have in their roots, the idea of considering the customer as god but this was not a common practice in medical industries in India before Apollo made it.

It was the way Apollo had managed its business and operations that the group towered above any other competitor. But the strategies of giving 5 star hospital services were soon taken by other competitors as well and the nearest rival (Fortis Group) is now gearing up to touch the milestones set by the Apollo group. It is now to be seen that how does the hospital that has been on the top for over 27 years now continues to be on the top. More than its medical treatment was the way it treated its patients that took the group to such heights and it requires another great operation strategy to keep that top place intact.

References-Digitaltermpapers.com, Business India, apolloglobalprojects.com

The writer of this article, Abhijeet Srivastava is a PGP student of Indian Institute of Management, Raipur.

Dr. Eliyahu M. Goldratt

Dr. Eliyahu Moshe Goldratt, the Israeli physicist turned business guru was one of the greatest of his time. His death is a huge loss to society; there could have very well been a lot more coming from this polymath. He was mostly recognized for, ‘Theory of Constraints’, ‘Cause and Effect of thinking’ and ‘Slayer of Paradigms’ which are considered his best work along with several business novels.

His book ‘The Goal’ which he took 13 months to write was an effort to improve the efficiency that would in turn have positive influence on the implementation mainly based on the company he was working was a huge success after a initial hick up where it was not received well by the company. But, his continuous efforts to improve the status of the company he was working for didn’t go too well and he was eventually fired. This was the start of the Avraham  Y. Gldratt Institute (AGI) which he named after his father.

The goal for the establishment of the AGI was to promote the Theory of Constraints and help it be implemented worldwide. It was here that the development of his famous works started. According to his plans, he retired from the institute before his 50^th birthday.

AGI is considered to be the birthplace of constraint-based techniques and solutions for business success.

But it is truly to be said that our dead are never dead to us until we have forgotten them.

At IIM Raipur, we pay tribute to Dr. Eliyahu M. Goldratt, author, educator, philosopher, scientist and originator of the “Theory of Constraints”, who passed away at his home in Israel on 11 June 2011.      

The writer of this article, Anshu Katiyar is a PGP student of Indian Institute of Management, Raipur. He has done his B.Tech in Information Technology from Dr. M.G.R. University, Chennai and can be reached at anshukatiyar @ hotmail.com.

Starbucks in India: Creating Sourcing, Quality and Pricing Synergies

Starbucks is finally coming to India. The world's largest premium coffee retail chain announced in January that it has entered into an agreement with Tata Coffee for a strategic alliance.

Headquartered in Seattle, Washington, Starbucks operates in more than 50 countries. It has been sourcing coffee beans from India for the last seven years.

Tata Coffee is Asia’s largest coffee plantation company and the third-largest exporter of instant coffee in the country. It produces more than 10,000 million tonne of shade grown Arabica and Robusta coffees at its 19 estates in south India. Its two instant coffee manufacturing facilities have a combined installed capacity of 6,000 tonne.

Under a non-binding memorandum of understanding (MoU), Starbucks will explore setting up stores in the Tata group's retail outlets and hotels, besides sourcing and roasting coffee beans at Tata Coffee's Kodagu facility.

Tata Coffee, one of the biggest suppliers of Arabica coffee beans, has shipped coffee beans to Starbucks in the past and is now building a structure for a long-term relationship, a joint release from the Tata group and Starbucks.

Retail growth outside the US is now central to the company's strategy. In an investor presentation, Starbucks International President John Culver said the company hopes to operate at least 1,500 stores in mainland China by 2015. He also said that the company sees exciting growth prospects in other emerging countries such as India and Brazil.

According to the MoU, the two companies will collaborate on providing training to local farmers, technicians and agronomists to improve coffee-growing and milling skills. The two companies will also explore social projects in the coffee-growing regions Tata Coffee operates.

“This MoU is the first step in our entry to India. We are focused on exploring local sourcing and roasting opportunities with the thousands of coffee farmers within the Tata ecosystem. We believe India can be an important source for coffee in the domestic market, as well as across the many regions globally where Starbucks has operations,’’ said Howard Schultz, chairman, president & CEO, Starbucks Coffee Company.

In the areas of sourcing and roasting, Starbucks will explore procuring green coffee from Tata Coffee estates and roasting at the Indian company’s existing facilities. At a later phase, Tata Coffee and Starbucks will consider jointly investing in additional facilities and roasting green coffee for export, the release said. 

This is a good strategy for Starbucks to have sourcing and roasting operations in the market which it aims at entering. This integration will help Starbucks to maintain the high quality of its products, customize them to the taste of the Indian palette and achieve pricing synergies. The entire operations of Starbucks India will be streamlined and hence Quality maintenance will not be a problem.

Vishwajit Vyas has done his B.Tech. in Electronics Engineering from Wayne State University, Detroit,  Michigan and can be reached at vishwajitvyas @ gmail . com.

Digital six sigma effort at Motorola: Cisco helps

Motorola has been known as an innovative and technology driven company. It has been among the early ones to use six sigma quality and 10X cycle-time reduction strategies among its competition. However by year 2000, it started to suffer almost generating no profit at bottom line even though having a sales of USD $27 billion. After initially unsuccessfully trying out the strategies of laying off workers and closing don factories to cut costs, it rightly laid the stress on process driven improvements. This initiative was called Digital six sigma and incorporated Web-based training tools, modelling and simulation tools, digitized process compliance and quality measurement tools. The aim was to do a USD $3 billion cost reduction within 3 years, as there was a lack of profitability.   It was a decentralized business model with a great amount of independence being given in how every unit run their business. For the success of digital six sigma stress was laid on collaborating the various activities happening in company and reducing costs by coordinated buy-ins. Global synergy teams were formed and functional areas for improvement were targeted. Various areas that were targeted were:

·         Customer service and support

·         Logistics

·         Sourcing and supply chain

·         New product introduction

An assessment was conducted to discover where each sector was in terms of self-service capabilities. Exploratory findings were found on not yet identified strengths and weaknesses and opportunities. Cisco help was brought in and Motorola teams attended sessions with them to learn about industry best practices. It was worked upon how Motorola could take advantage of networking and Web tools in areas of service and support and implement automatic contract management, software downloads and update product specifications. Web automation was also implemented for requirement gathering and remote monitoring methods.

As a result Motorola was successful in saving nearly USD $3 billion in less than years by process improvements. This method was termed as digital six sigma.

References : http://www.cisco.com/web/about/ac79/docs/success/Motorola_Final.pdf

The writer of this article, Naman Jain is a PGP student of Indian Institute of Management, Raipur . He has done his B.Tech in Computer Science & Engineering from Vellore Institute of Technology, Vellore and can be reached at namanvit @ gmail . com

The Pepsi Challenge

Pepsi Pennsauken is easing distribution flow by outfitting its sales representatives with handheld computers that instantly send data back to the distribution centers over a wireless network. Sales and delivery capacity have increased at lower costs than before.

A bottleneck at one of Pepsi's biggest bottlers was choking distribution and costing thousands of dollars in overtime pay and lost sales. Pepsi Pennsauken, which serves the Philadelphia and southern New Jersey region, was servicing a booming cola market with an aging, outmoded infrastructure--a common dilemma across the soft drink industry. For the nation's number-two cola brand, though, it was a hard problem to swallow.

The difficulty was, sales reps couldn't get their orders from the field back to the loading docks quickly enough. Workers in the distribution centers would spend their afternoons sitting on their signals. The backlog of weekday orders stacked up so that they ended up delivering 30,000 to 40,000 cases on Saturday--and paying time-and-a-half plus commission to do it. Then the orders would start backing up on Monday, and would go through the whole vicious cycle again.

The scenario was leaving a bad taste in the mouths of Pepsi Pennsauken's customers, too. The solution appeared in 1994, when Pepsi Pennsauken outfitted its sales reps with handheld computers that instantly send data back to the distribution centers over a wireless network. Reps no longer had to waste precious selling time listening to busy signals, and workers in the distribution centers received orders as soon as they were taken. When drivers made it back to the loading dock, their orders were waiting for them, instead of them for their orders. Pepsi had a fifteen percent improvement in labor efficiency in the first months the program was in operation.

Wireless was perfectly suited to the demands of the soft-drink industry. Generally, bottlers sell soft drinks to retailers in one of two ways: on a route sales basis, where drivers take orders and pull cases right off the truck; or pre sell, where reps take orders in advance for later delivery. With the explosive growth of the ultra competitive soft-drink business--fueled by the introduction of New Age teas, juices, and waters—pre selling for next-day delivery was critical to bottlers' strategic planning.

Beginning in May 1994, each of the company's 15 route-sales drivers were given wireless equipped handheld computers. Reps now carry the devices with them as they check inventory at each of the client retail outlets. Soft-drink orders are punched directly into the device as reps stand in front of the counters and tally the inventory. The order is then immediately sent over wireless network to large antennas that forward the order via a landline connection back to the distribution center.

The real-time element of wireless data transfer meant that the warehouse could receive an order almost as soon as the rep could write it. A rep could transmit the order from a radio modem in his car without jammed phone lines forcing him to transmit all the orders at the end of the day. It used to be that one salesperson handled three stores; now one salesperson covers four or five. It helped in increased sales and delivery capacity, and at lower costs than before.

Aniket Choudhary is a PGP student of Indian Institute of Management, Raipur. He has done his B.E. in Mechanical Engineering from College of Technology and Engineering, Udaipur. Aniket can be reached at aniketchoudhary87 at gmail . com