Operationsmanagementthe5sway/lakshya/kore

Kaizen’s OperatiOns & research entity Presents

Operations Management – The 5S Way

By Rahul utwal 1| KAIZEN’S OPERATIONS& RESEARCH ENTITY

EDITOR’SLETTER “Those who dive in the sea of Affliction, bring out rare pearls”

Welcome to the first edition of “LAKSHYA”, our new monthly supplement designed for people who dare to think above the average and believe in connecting the dots. In an age where technology has taken over every sphere, information is abundant and data is omnipresent, we have conspired to bring to you a collection of thoughtfully created and carefully curated pieces of work by some bright aspiring minds of ICFAI Business School, Hyderabad on the current trends and hot topics in the field of Operations Management and their relevance in different industries.

Everything is growing at the pace of nanosecond and hence it is quintessential to know about every minute change in the eco system. With Lakshya we aim to present our readers with compact yet explicit articles on vivid topics such as Internet, Banking, IT, IoT, etc. A fair share of this edition focuses majorly on the banking systems and payment gateways.

With the constantly evolving technology it will be interesting to ponder over changes that could be seen in the near future.

We look forward to providing you with some valuable insights and inculcate the passion for reading once again within you all. We hope that you enjoy this first issue and do let us know if there are any topics you‟d like to see covered in the future.

Please write to us and become a part of this discussion Email ID: kaizenclub.ibs@gmail.com ADITI MISHRA Joint Secretary – External Affairs & Branding Kaizen – IBS Hyderabad

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CONTENTS Cover Story: Operations Management - The 5S Way

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Payment Banks: A New Era Banking Drive: Small Finance Banks

07 09

Logistics of Federal Express

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OPERATIONS MANAGEMENT – THE 5S WAY BY RAHUL UTTWAL

Hearing all about the behemoth concepts of Operations and Processes have once at least may have made you think that this cannot be applicable in daily life. The interesting and the unnoticeable thing is- that they are right in front of us, because not only in industries or supply chain, but we do many things and activities in our day to day lives without having the knowledge of the inter connection.

For example-We have been told our entire life that we need to keep our surroundings clean and tidy, everything must be put in order, don‟t procrastinate etc. Well a small concept like 5S or the 5 pillars of efficiency and order is as simple as app lying it to increase our efficiency and save time and the best thing is that it does not allow procrastination, delay and makes everything under your control as clean as a whistle. To begin with the background and its origins, it is a Japanese methodology which has been practiced in companies like Toyota, Hewlett Packard etc. The innate essence of Operations is to keep everything in a flow and sequence so that „smart-work‟ or less efforts achieve great results. Not only companies even people like us have already implemented the 5S or are already practicing it without having the slightest clue about it. These real-life practices and activities which we have been performing can be simply be broken down into 5 elements-Sort, Set in Order, Shine, Standardise, Sustain. This concept of 5S has been revolving around our entire lives and even in companies as it only emphasizes on doing the thing most relevant to the current task.

Let‟s take a simple example from our daily lives- An organised and a tidy home or a workplace is best to work in. After all it is quite obvious, who would want to work in a messy, dirty and a place full of clutter and havoc.

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Back then I remember a person whose life was particularly out of order, his room looked like as if there was a tornado hit, and all the files, folders were a complete mess and rubbish and trust me if you tried hard to search for anything in that personâ€&#x;s room you may probably find an old slice of pizza in that mess. The solution to this problem was very simple, using 5S as an idea to control your life. The first pillar or the idea of Sorting the things among that mess can be a very good action to begin with. The things to be done are simple, get rid of all the clutter and waste and keep only those things which are valuable to your work or your life. Simplify the things and keep them under control which is an optimum way to begin with.

Set in order everything after you have thrown everything unnecessary. Remember even if you have removed the clutter there is a high chance that you could become an insane or a maniac as you would rush to find the tools which are required to complete the task. Keeping keys and other necessary items where you can find them easily, and sorting tools and parts at workplace according to the frequency of their use can be some of the things you can do.

Clean and maintain to a level that the things shine. In other words, a clean, tidy workplace or a home is the best way to make things simple. Just 5| KAIZEN’S OPERATIONS& RESEARCH ENTITY

like we get our car and motorcycles checked for maintenance regularly, ensure regular oiling and maintenance of tools. At last the only thing remaining to perform is to Standardise and Sustain. These are two different pillars and have different ideas on which they work on, but the method remains the same. Make a timetable, be consistent with your activities and the tasks performed in the workplace and the result would be greater than your expectations. Setting a benchmark or quality standards at your workplace and for homes be regularity in cleaning and being organised will give the place a palace like vibe. Once you feel that how good it feels to work or live in a clean and tidy environment, you would actually be astonished and would incorporate 5S into your life.

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PAYMENT BANKS – A NEW ERA BY RADHIKA GUPTA

The main objective of setting up payment banks is to enhance financial inclusion in the country by providing small savings account and current account, payments and remittance to low income household people, small businesses and other unorganized sector. As we all know opening a regular bank account takes lot of time and documentation work but the process of payment banks is very simple, paperless and it‟s primarily operated using mobile phones. Airtel has become the first ever payment bank. There are many service providers who are waiting to get the complete license but are missing necessary requirements. The number of mobile subscribers in India is more as compared to Bank holders so a payment bank can use the power of mobile and reach the customers across length and breadth of the country.

It took a lot of time for getting approval to these payment banks. This is a completely new concept in India and will bring lot of convenience to people of India. The initiative of Jan Dhan Yojna taken by Prime Minister Narendra Modi was also a very good concept and was very successful and 7| KAIZEN’S OPERATIONS& RESEARCH ENTITY

these payment banks will help in accomplishing the objective of Jan Dhan Yojna as these payment banks will be available in rural areas (as per the guidelines of RBI payment banks should open their 25% branches in rural areas). Today everybody wants service at home and these banks primarily operate through mobiles so it wonâ€&#x;t be difficult for these banks to establish a good customer base at it took years for traditional banks.

A customer can transfer money to his/her family or any other person using this nationally operating payment platform. Customers can now make money transfers, transport payment and many other payments. Ancillary products have also been added to this service.

Let us consider an example of a car driver. As soon as a car driver receives salary in cash, the first thing these people do is sending money to their family through known person or by money order facility. But now the scenario is changing. Many people like them are becoming mobile savvy. A person can make directly payment to a grocery shop which itself is a payment bank retail outlet and his wife needs to just collect the grocery and can also withdraw cash.

The work that can be done by commercial banks then why there is a need for payment banks?

Few years back government introduced Jan Dhan Yojna under which each and every citizen of the country can open an account with zero balance. So just to take this further payment banks were given approval by RBI. This move aims to bring the weaker sections of society under formal banking as most of the people from the weaker sections of the society do not have bank accounts due to various reasons like minimum balance requirement, difficulty in accessibility, lot of documentation work. So payment banks will take away all these difficulties and help them in easily opening a bank account which will ultimately fulfill the objective of Jan Dhan Yojna.

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BANKING DRIVE: SMALL FINANCE BANKS BY DARSHAN GOHIL

More than 500 million people did not have access to basic banking financial services also, but the Pradhan Mantri Jan Dhan Yojna that has a mission to provide at least one bank account to each citizen of India so that the country soon becomes cash less economy will give a great push to financial inclusion. Micro finance institutions have been playing a major role in providing banking services to rural population but the problem with micro finance banking was that they followed group-based lending which does not contributes in financial inclusion because financial inclusion is all about each citizen individually, not about a group. So, RBI came up with the concept of small finance banks.

Their working is similar as to commercial banks but is limited. They can accept deposits and lend loans only to the rural sector of the society. It will cater the need of financial services amongst the low-income group. They can also sell third party products which will help them to generate profits.

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The working model of small finance banks is very simple and is highly beneficial for a country like India because in India most of the sections of the society are not well served so this concept is only for small sector industries and unorganized sector. They will initially provide only basic banking services. They will accept deposits and lend loans only to some sections of the society. This will help those sections to grab this opportunity and avail the basic banking services that were till date only availed by the upper and middle-class sections of the society. They are also allowed to sell third party products that will help them to generate profit. Their main profit generation source will be from the spread between the interest rate of borrowing and lending but it might not be equal to commercial banks because they will at a low interest rate and will end up earning less profit.

After few years with the approval of RBI they can get converted into commercial banks, once their net worth reaches Rs. 500 crores then they can get converted. They are allowed to give 75% of the adjusted net bank credit to the priority sector and from leftover they can give it to borrowers upto 25 lakh.

The main reason behind setting up small finance banks is to give a push to financial inclusion. Commercial banks give preference only to profitable customers. These banks will focus only on small sector people.

They are not allowed to lend money to the corporate sectors and big groups.

This will ultimately lead to the growth of small and unorganized sector. As per RBI guidelines it is mandatory for them to open 25% of branches in rural areas so by this it will convenient for rural population to avail banking services and will give a push to financial inclusion. The main aim of Pradhan Mantri Jan Dhan Yojna is that every citizen should have a bank account, so if these small finance banks will lend at a very low rate then it would be helpful for small and unorganized sector and will also help in financial inclusion and ultimately benefit the growth of the country.

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Logistics of Federal Express BY SHIVANI JHA

FedEx Supply Chain is a third-party logistics provider, leader in non-assetbiased transportation, warehousing and distribution, and value-added services. Founded in August 1971 by Fred smith, a Yale under graduate from Little rock, Arkansas. Fred wrote a term paper outlining a system to accommodate time sensitive shipments and taking into consideration how difficult it was to get the packages delivered within one to two days. Thus evolved the idea of Federal Express. Smith named the company Federal Express because he believed the patriotic meaning associated with the word “federal” suggested an interest in nationwide economic activity. This company has revolutionized global business practices and currently defines speed and reliability.

FedEx Supply Chain, formerly GENCO, provides businesses with a comprehensive suite of integrated logistics solutions, including warehousing, distribution, transportation, e-commerce fulfilment and reverse logistics. GENCO, founded in 1898, leader in value added warehousing and transportation services has the “best reputation” in the reverse logistics business and handles returns for large companies such as Sears Holdings Corp. and takes care of mobile phone logistics for AT&T Inc. In 2015, FedEx acquired GENCO which is a specialist in handling product returns, rebranding it as FedEx Supply Chain in 2017.

FedEx Supply Chain significantly expanded its capabilities and global presence in the years since. It achieved great heights over a period of 2 decades (1980-2000) in terms of technology, reach and their mere existence.

It eventually introduced a tracking system, an electronic customs clearance system, enabled online shipment process. It began its international operations with service to Europe and Asia.

This was the first US Company to reach remarkable revenue of $1 billion within 10 years of its inception without any merger or acquisition; in 2000 the parent company was renamed “FedEx Corporation under which emerged

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the service companies of FedEx express, FedEx ground, FedEx global logistics, FedEx custom critical and FedEx services.

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ABOUT US: The word “Kaizen”, where “Kai” = change “Zen” = good, simply means “change for better”. In English Kaizen is typically applied to measures for implementing continuous improvement. It is an approach to activity organisation based on common sense, self-discipline, order and economy and is a strong contributor and fundamental part of a lean production process model in lean manufacturing. Kaizen- The Official Operations Club of IBS Hyderabad believes in relishing in the essence of "Constant Change and Evolvement" and hence we, as an organization work willingly for the betterment of the student community. KORE- Kaizen‟s Operations and Research Entity, one of our primary wing which flaps to cater to the needs of students and motivate them to soar high by polishing their technical competencies. KORE‟s area of expertise includes Case Based Research, Consultancy, Live Projects and Workshops. LAKSHYA, an initiative taken by KORE primarily focuses on the concepts of operations management and various articles based on the day to day operations and logistics of an organisation - SUHAIL SHAIKH

LAKSHYA is an academic print and is not for any commercial sale. Reliability and Responsibility, for sources of data for the article vests with the respective authors. Please feel free to drop in your suggestions at kaizenclub.ibs@gmail.com KORE: Kaizen’s Operations & Research Entity.

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